The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
I would not seem that anyone on this board got a ticket to the Mine visits, if they did they are not telling. If you do get to Plymouth in June perhaps we should ask Wolf for a special tour it is only about 5 or 6 miles up the road!! Don't know about you WD but I am fed up with being told to e-mail the BoD about matters, if Wolf were more forthcoming on information release about their plans/targets, nobody would have any need to speak to them privately.
Richam, take your point about 'at risk' and totally agree with your assessment. We may never know whether Wolf were advised in the plant design stage to have alternative plant to deal with fine type material and coarse type material. On the turnaround plans was there one under Russell Clarke and one under Richard Lucas, I think DT 13 dates were referring to the second plan. Anyway lets move on, look to the future and the recent RNS with the Interim H1 Report issued today. Key points - Tungsten concentrate production 791 tonnes income A$20.3m, tin concentrate production 173 tonnes income A$2.78m, total costs A$43.72m, other cost A$ 4.6m, so production loss A$25.25m plus finance costs A$10.15m, consolidated loss total A$35.4m for first 6 months. Perhaps this should now put into the context of what DT13 is telling us. He says 'in profit by end June 18, and nameplate by end September 18'. I can understand that nameplate by Sept means around 950 tonnes tungsten concentrate being produced in the quarter from July 1 to September 30, but 'profit' is a bit wooly. Does this mean production costs and operating costs will balance, and become profitable between April 1 and June 30, or will the company as a whole be in profit by the financial year end on 30 June? Perhaps you could be more specific to us on this point DT13 we can then discuss if this in fact achievable in light of the Half Year Report. Also DT 13 tells us that tungsten concentrate has been delivered to WB&H in Europe as well as GTP in the US, perhaps DT13 you could also advise us of the facts and figures or evidence to back this up, as it is great news if it is correct.
Hi WD43, did you manage to get a ticket to the Open Days in September, seems not many did! Wolf team knew exactly what the Geology of the mine was, there were extensive minerology studies and grids of trial bores all over the site. They may have been advised that a two stage production process for Kaolin type and Granite type materials would have been the most efficient in terms of production, but back in 2013/2014 when APT prices were higher, It seems that they took a commercial decision to approve, or accept a single design solution for the coarser type of material and work through the kaolin at risk. This decision, if it was made at that time became the problem that has been experienced over the last 2 years - poor production due to a plant designed for coarse material combined with an APT price that was not foreseen in 2014/14, a double whammy! The processing equipment did not fall off the back of a lorry, it was designed by GRES for the purpose of nameplate production 3600 tonnes concentrate pa. The question is did GRES (who were engaged as the design, build and commission contractor by Wolf) purchase processing plant equipment that was to the design standards, or were cost savings made along the way that may have compromised the performance standards of the equipment. If Wolf were not made aware of any changes to the Design Requirements they may have a case against GRES, if Wolf were involved and approved any changes they would not have a case. As Wolf have not made any comment yet about GRES being responsible for faulty production equipment, it may be that GRES installed what was asked of them. On the LFN/Re-cladding question, currently Wolf and GRES are working together with the EA to resolve the issues. Wolf may believe the GRES design could be flawed as they have required GRES to reclad the production facility at GRES own expense, and have called for the Performance Bond to be actioned as a backstop. GRES has said that an action with the Performance Bond is not necessary, but they have also passed their interim dividend in their latest Report to Shareholders, citing the Wolf claim as part of the reason for doing so.
Kitty - Interesting news, China does control the tungsten market with about 80% of production, so tariff reprisals against the US are a possibility, especially when Chinese producers are looking for reasons to increase their prices due to the extra costs of environmental controls that are being imposed upon them.
Just to add some balance, republish below another RL comment Operational Update 17 August 2017 - 'We are encouraged by the progress being made on the operating turnaround plan at this early stage, with further improvements planned for the coming months to achieve a sustainable production platform before the end of the year' I am sure we all took that publication very seriously as well, but obviously what was said was not achieved or Wolf would not have had to take on more debt. My point is, do not take what any BoD has to say at any point in time as the absolute truth or you may be disappointed, as we all have been.
Did not think the concept of my comment would be so difficult to take in! To explain further - At a later time not in the past or present (the future), should the price per mtu of concentrate fall back for whatever reason, (low) the markets view is that $275 per mtu would be the level it may reach (a floor) given the current price is approximately $50 above that now, and it has been stable at that price for a period of time.
Metal Bulletin Free Market APT price �322-330 per mtu, up from $319-326 last week. Supply tighter due to Chinese holidays and shutdowns, general view that a future low floor of around $275 per mtu has been set now the price has stabilised above $300 per mtu
So Wolf have had their financial lifeline extended by another �10 to �15 million, which at current expenditure rates will last around 6 months. Senior Debt is �64 million with �1 million paid back yesterday, and Bridge Facility Debt is now �65 million with the possibility of going to �70 million. Total debt will be �129 million and possibly �134 million. The terms of this tranche of Bridge Facility have improved, and overall repayments have been shelved to later dates so this is a slightly better deal for Wolf. Wolf have not advised if this will be the last refinancing required before production reaches levels that are 'self sustaining' (break even) or 'nameplate' (3600-4000 tonnes of concentrate per annum). This is disappointing, as the market needs some projection of confidence from the BoD. (Perhaps they do not yet know themselves when this will be). Almost 2 years after nameplate production was to be achieved, Wolf are still only 40-50% towards that goal. The big question now is can Wolf reach break even and turn towards profitability in the next 6 months in order to start servicing the debt mountain. The market today in Wolf Shares has been quiet, perhaps the view is 'not sure about this, lets see Wolf deliver the goods before any share price rewards are forthcoming'.
Metal Bulletin European APT Price $319-326 from $319-325 last week, very little movement.
Unlucky Maid, no place for me either, the public are queuing up to have a look it seems, anyway good to have you back. Have made enquiries about a third visit for investors. On the shipments question whilst I agree there is a need to determine which shipments fall into each quarter, (thanks adavies for extra info) and the trend to decreasing tonnage in January v December concerning, the overview was to try and find out if Wolf had possibly sent any shipments to WB&H or not. So looking at the overall concentrate tonnages, Wolf reported in the last 2 activities reports covering July -December or H1 of the 2017/18 financial year a concentrate production of 791 tonnes. Totalling up the US shipment tonnages from 5 July - 28 December for concentrate this totals 817 tonnes. Of course there will be some adjustments to do at the beginning of July and January for the transporting time lag, but just on the raw figures for H1 July to December it looks as if no shipments were made to WB&H. We cannot say what has been shipped to who since January, but on balance things have probably remained the same and shipments to GTP are the sum of concentrate production.
Welcome silentinvestor, there have been a few 'silent' readers starting on this board recently, would be good to have more of you posting your views to all.
Thanks Process Guy and adavies for your information on shipments, this has provided some more vital factual detail and please do not stop posting what you know as it builds a picture of what is actually going on. Looking at the actual figures on the U.S. Import Data, from 3 October to 19 December Wolf shipped 475 tonnes of concentrate to GTP, if you put the 38 tonnes transported on 3 October into Wolf's previous June to September quarter this brings the total to 438 tonnes for the December quarter and 361 tonnes of concentrate to GTP for the September quarter. Wolf Activity Reports stated 356 tonnes concentrate produced for September quarter, and 435 tonnes of concentrate produced to December. Is this enough factual information to tell us that Wolf are only shipping concentrate to only one of their offtake partners, that being GTP? If this is the case, they have currently shipped 266 tonnes of concentrate to GTP for this current quarter from Jan to March which we are now half way through. So projecting the same amount to end March that would be around 525 tonnes, unless production is increasing further as we speak.
Evening Kitty 11, Hpbob and all, Metal Bulletin have not posted bulk alloy and ore prices today yet, sometines it is a day late but it may be due to Chinese New Year Hols as Bob said. For those keen to know how APT price may have moved this week the Trade Log, for deals actually made, is published mid week and this indicated prices pretty static from last week so don't expect verey much movement. The Asian Metals price is not a very good guide, as it only shows a percentage movement. In any case Wolf earn income on the basis of The Metal Bulletin European APT price so that is the only one that really matters. Kitty, its good to speak to another Devonian even if you are abroad, not too many around any more. Agree with your sentiments, but Wolf increasing production to nameplate is the only way forward for it now. The last Activities Report said there are some visits being planned to the mine for shareholders/investors, but I am not holding my breath yet because these were planned last yaer in June, July and August but were cancelled. If they happen I will be there to see whats happening at ground zero and hope to see posters on this board there. Keep posting to us!!
Had to lol at an alleged court action potentially being brought against you Richam, I had the threat of being sued a couple of weeks back for posting opinions, so welcome to the Court Club!! ( Without Prejudice of course) Here is some factual information that will not bring any convictions - Metal Bulletin European Free Market APT price today $319 - $325 from $317 - $325 last week.
Thanks Richam, so 78 tonnes concentrate known for January. I really hope not, and I may be overly concerned, but could it be that now Wolf have reprocessed the pre-concentrate that was stored on site, the Q2 production figure of 435 tonnes of concentrate was inflated? Is production returning to the 20 odd tonnes per week they were producing last year? Does any member on this board know how shipments of concentrate to WBH can be established? Seems critical for a view on Wolf prospects.
Richam - are you able to provide any info on total concentrate tonnage shipped to GTP in January from the shipping notes? A 19 tonne week is just not going to cut it, unless a lot more was sent to WBH. Will be interesting to see what next shipping note records.
Richam - Thanks for your in depth study of the December Report, I can not really add any more on the figures you posted, and your overview is similar to my own. At Wolf's own stated nameplate production of approx. 10-11 tonnes of tungsten concentrate per day (3600-4000 tonnes per year) the mine would be cash positive now! By March shareholders will have experienced a 2 year delay, and even now Wolf are not willing to provide confidence by reporting a target date when nameplate will be achieved. No wonder the share price is going nowhere at present. One point, on the base information you use for the assessment model, you say the 2011 Feasibility Study is used. Were you aware that in November 2016 Marten &Co ltd produced a report through Quoted Data, presented on Interactive Investor, that fundementally updated matters in the light of 7 day working. This assessed production figures, income and costs, NAV figures, recovery rates, overall funding, mineral reserves and APT prices. Some of those figures if fed into your model may alter the ones you presented yesterday. For example, they revised recovery rates to be 50% in 2017 with an increase of 5% per year up to a maximum of 67% in 2020. Any views on this?
Frankly, regards my post yesterday (11.50am and yours of 12.11) will you stop telling me what I believe, because you have no idea on my belief's, it is all very tedious and also wrong. My opinions and posts on Wolf may or may not be correct, but it seems that more and more posters on this board disagree with your views and attitude, and your credibility is at a low point. How about some sensible realistic posts to raise your image?
Welcome to the board Tungsten 1, and it is good to see those sensible, Wolf investors who read this board posting their views, lets hear more of them! The only way to challenge those who still wear rose tinted glasses and need a trip to specsavers for a clear view on Wolf is by presenting realistic arguments here. Having a review of the Activities Report, and will post my assessment for you all to consider, also looking forward reading Richam post
Metal Bulletin European APT Price today $315-320 per MTU from $313-320 last week. I may be sued for this post, but I have been very careful to make sure it is not promoting or publishing false information.