Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
Key for a buyer is the replacement cost of the asset ie cost to build now .. that’s got to be closer to $2 bn as MC said at the Cap mkts day. As prices rise to fill the supply gap such that building become viable again buying KMR at a reasonable discount to the RC could be attractive and cash payback would be reasonably quick. The supply demand chart in the webcast is important..
Listened to the webcast.. analysts wanted to ask about WCB timing, and Moz govt taxing the unregulated mines which would be positive. The page on supply/demand balance for ilmenite looked very supportive of much higher prices soon. Q&A raised the 'up for sale' question with one analyst describing KMR as incredibly cheap. MC played a straight bat back saying we won't sell now with prices so low but with rising prices, low supply coming on and recovering demand already KMR should have a better year. Still don't know anything about the Congolone opportunity. One thing that does look interesting is there's at least £150m of working capital on the balance sheet that could be turned into cash in 2024.
Ilukas transcript today was interesting… the view on demand and pricing was more positive than kenmare has described and they also believe conditions will improve during the year. An analyst asked the ceo essentially would he be interested in kenmare and he got the obvious response that they’re happy with their existing growth projects. It was mentioned however that current prices do not incentivise building and kenmare have $1.4 bn in the ground and more post the move.
The Omanis cant block a deal - JOH are on the money here IMO .. I thought the capital markets day and small lot offer was prepping the business for a sale. Lets see what happens. Better ilmenite prices would help..
Worth a read on bloomberg business (free to sign up) - John Authers "Magnificent or Marxist? Passive investing is back on trial" .. both reassuring and alarming but explains why value managers/stocks like KMR are in the doldrums
Outflows I imagine - trouble with the illiquidity at KMR is funds have to sell when the price rises to reduce risk and positions (the unpopular share buy back) and will have to sell as outflows bite i.e. currently.