Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
anyone else see the crescat weekly presentation today(260424)?
in the later third of the discussion(*****on hennigh), mention of a company/technology that could significantly increase recovery from heap leach.
imediately made me think of kounrad and it's possible application there. potentially increasing the overal recovery of metal there and extending it's life a bit could make a big difference to caml. the difference of managing to recover say 80% of the metal from the site rather than 60% would be a rather positive surprise.
obviously i have no idea how effective it actually is.. but sounds like they are working with a couple of sizeable copper producers(freeport and anglo mentioned).
The timing of hitting these lows is a little urprising, as the current quarter may end up being 'all right' imo. I added a few.
But the market doesn't like the fact here that there is a couple of years to wait.. I'm not sure what income streams you are referring to coming online in 2024?
The big problem is obviously the fact kestrel is winding down on spraying the cash it has over the last decade or so and they've not really got anything high calibre enough to replace it. The copper stuff looks decent, but it ain't happening tomorrow.. or the day after.
Hopefully, they'll come out and surprise us all by explaining where the remaining outstanding funds from the divestment of the Narrabri royalty are!! In the context of getting through the next 18 months the sums of money that are 'unexplainedly' missing, would certainly be helpful.
Rio Tinto making a fairly sizeable investment in Guinea (couple of 100km from kouroussa?)
https://www.ft.com/content/80f37963-c718-4f8b-8d77-0f0d5b1c99fe
They've been talking about expansion for a good while, but it sounds like things are gathering pace. I'd welcome a 3rd project, and the potential of exploration in Kaz. Ideally while maintaining the dividend in the sort of 8-12p kind of range of course.
"Management's focus on business development has accelerated during the first six months of 2023, with 22 opportunities reviewed, five non-disclosure agreements ('NDAs') signed and three site visits conducted. Also, during H1 2023, the company entered into an arrangement with a team of experienced explorers, Terra Exploration, which comprises early-stage exploration geologists with international and significant Kazakhstan experience and a proven track record of discovery. The team is reviewing a series of potential target areas using historical data and its advanced database, combined with its analytical abilities, and applications for exploration licences in Kazakhstan have already been made."
Been on holiday, so only just seens the q2 update. And it seems there is *still* a lack of the previously described income turning up from the Narrabri royalty, and zero explaination from management as to why it has not turned up. I still hold fair number of shares here at and average of sub 80p.. but I am extremely concerned as to the ongoing practice of management of not informing shareholders of what is going on. If no further income is realised from the sale of this asset, then they got an *extrememly* bad deal and sold at exactly the wrong time. Communication at the time of the sale was unambiguous as to the expected schedule of further payments, yet here we are, more than 18 months on - being kept in the dark.
As I posted previously(and someone also questioned during the recent q&a), further income should have arrived by now.
Oct 21 rns:
"Anglo Pacific will receive $21.6 million in fixed payments, of which ~$13 million is due within 18 months of the transaction close date. The remainder will be received in annual instalments until the end of 2026."
"Contingent payments totalling $5 million, payable in instalments, will become receivable upon the approval of the Narrabri South extension project by state and federal authorities in Australia, prior to 31 December 2026."
"In addition, Anglo Pacific is entitled to receive bi-annual contingent payments linked to future realised Narrabri coal prices ranging from $0.05/t if realised prices exceed $90/t to $0.25/t if realised coal prices exceed $150/t up to the end of calendar year 2026. Assuming Narrabri ROM production of 4.3-5.0 million tonnes for fiscal year 2022 and 7.0-8.5 million tonnes per annum in the southern panels, the Company would be entitled to receive approximately $9 million in price linked contingent payments, were realised Narrabri coal prices to be in excess of $150/t."
I guess it could be that as of the full year results, they'd had a partial period of income from disposed office/leisure assets that was completely lost with respect the the most recent half yr period.
Apologies if this is a stupid question, but as of the full year results 14th Dec 22, they said they had disposed of all office and leisure assets and were only invested in warehouse. In the same release dividend cover was said to be at 81.2%. We are now half a year later and the dividend cover has slipped to 67.3%.
What has caused this drop in coverage? Increased debt costs?
Agree, but also a low cost producer who has been able to weather lower metal price enviroments previously and still maintain a good dividend. As of last year also debt free, with a strong balance sheet.. last reported at $60m cash I think. And on the hunt for growth opportunities, on which they may also find better deals in a cooling metals market. Longer term, many expect base metals to do alright.
https://www.reuters.com/markets/commodities/coppers-anticipated-supply-surplus-is-proving-elusive-2023-05-10/
The quarter was reasonably decent. And q2 may well be alright as well, helped if some funds come in from Narrabri. In q3 though, how well is the dividend going to be covered with little from kestrel potntially? Debt is presumably going to rise through the year with payments to South32 and possibly further funding for Piaui. They paid down debt with the windfall last yr, but I can help but wonder if they'd have been better of finding something acretive to plough the money into and continued to carry the debt.
Based on the switch to dividends in dollars, as exchange rates stand now this represents a cut to the dividend for UK shareholders. Of course this could change, though many expect further weakness in the $.
I'm glad someone asked the question regarding Narrabri, there is still a significant sum of money apparently due here, though not mentioned at all by the company since the actual divestment(don't say the 'c' word).
I agree that from late 2025 onwards things could be looking quite good. More concerned as to how q2/q3 and beyond may look with possibly little from kestrel. I would say there is very little chance of any rise in dividend at the moment(debt predicted to rise through the year). The first quarter should be pretty solid given met coal prices, but cobalt prices are not where we would wish.
One solution to the 'gap' would be if the company could find a sizeable producing royalty but with limited years of life remaining(hence cheapish). This might be able to act as a bridge to some of the copper assets producing. They have been very lucky with the windfall last year from in particular kestrel, allowing them to reduce debt so meaningfully, but this can't be counted on going forward.
Narrabri South approved. Not sure if that means it's actually likely to produce anything before 2026.
https://whitehavencoal.com.au/narrabri-extension/
But yeah, overall - quite surprising the company doesn't seem to have had any income from Narrabri, gone very quiet on it since the sale announcement at the end of 2021. I wonder given where coal prices have been, how much money it would have made last year if they hadn't been in a rush to sell it.
Hmmm, yes - production and saleable volumes were up c20% at Narrabri in 2022 vs the year before..
https://whitehavencoal.com.au/wp-content/uploads/2022/09/Whitehaven_Coal_Annual_Report_2022.pdf
Further to my last post, they also said in an Oct 21 rns:
"Anglo Pacific will receive $21.6 million in fixed payments, of which ~$13 million is due within 18 months of the transaction close date. The remainder will be received in annual instalments until the end of 2026."
"Contingent payments totalling $5 million, payable in instalments, will become receivable upon the approval of the Narrabri South extension project by state and federal authorities in Australia, prior to 31 December 2026."
"In addition, Anglo Pacific is entitled to receive bi-annual contingent payments linked to future realised Narrabri coal prices ranging from $0.05/t if realised prices exceed $90/t to $0.25/t if realised coal prices exceed $150/t up to the end of calendar year 2026. Assuming Narrabri ROM production of 4.3-5.0 million tonnes for fiscal year 2022 and 7.0-8.5 million tonnes per annum in the southern panels, the Company would be entitled to receive approximately $9 million in price linked contingent payments, were realised Narrabri coal prices to be in excess of $150/t."
Thermal coal has averaged /well/ over £150/t during 2022. Should this not have led to some income? Assuming the mine is actually still operating, which I've not looked into.
On the 31/12/21 the company said(as regards the Narrabri sale):
"The consideration is structured as fixed payments totalling $21.6 million and contingent payments which could generate a further $14million. The fixed payments are to be received in instalments until 31 December 2026, of which ~$13 million will be received within the next 18 months."
The recent results seem to suggest that zero in contigent payments arrived in 2022.. so that would suggest that within the next 5 months they are expecting 'approximately' $13m to come in. Certainly thermal coal prices have been bouyant. Anyone else have knowledge/views on this?
Thanks @OracleofOldham and Just-Another-Bot
Just after I asked I managed to locate the recording on the polymetal website. After having watched it, I am sort of surprised at the reaction in the market over the last few days. I agree the 'possibility' of the loss of the London listing is not great, but they are seeking to avoid this. Whatever happens(barring something bad like assets being siezed or war in Kaz), it seems likely I will still be eligible for any reinstated dividend 'at some point', perhaps this year, perhaps not. Granted in the worst case it may become difficult to trade the shares, but I don't really intend to anyway. I was concerned about the fact I hold the shares in ISA, but loosing the tax benefits would not be the end of the world. And from the post above there is possibility they may convince brokers to not dump holdings out of the wrapper, certainly it appears not against hmrc's rules for them to remian in an ISA/SIPP. It's all complicated.. but probably most people who bought into this share pre or post war did so for the potential dividends going forward.. and those are still on the table. Anyone who bought in since the start of the war, *must* have realised there were considerable risks. My impression is that management are trying to guide the ship on the best course possible, in extremely difficult circumstances.
@ OracleofOldham - do you or anyone else have a link to the call/q&a recording?
My shares are in ISA currently. However it does seem to be about whether HMRC reconise the exchange. And below suggests they do? Though would welcome comment from anyone who knows more about this!
https://www.gov.uk/government/publications/designated-recognised-stock-exchanges-section-1005-income-tax-act-2007/designated-recognised-stock-exchanges-section-1005-income-tax-act-2007-v3
Thanks for responses.. @wakeyinvestor and CleverThoughts
Yeah I could just sell those in the ISA and repurchase outside, but my average is about £3 so from where I stand now I would effectively loose some of my previous ISA allowance. Not a massive deal, but annoying.
Appologies if this has been posted before(it's a couple of months old), but I found it unteresting.
https://www.reddit.com/r/POYYF/comments/z75mye/huzzah_my_quest_for_answers_has_been_successful/
My take on situtation(with somewhat limited knowledge).. is that I'd not be too bothered about what is going on if my fairly modest number of shares were in my trading account rather than ISA.
Thanks for the link to the presentation.
I personally think that concern over the near term outlook given the drop off from kestrel income is having an effect on the current shareprice. Say what you like about the morality of met coal, but kestrel has really dominted the portfolio. I like the copper aquisitions - but there is a bit of a gap between kestrel income decreasing and anything coming in from those. Piaui is also attractive, but again in the very near term it's not likely to be contributing much. be nice to see them aquire something sizeable and already producing, but obviously also hopefully at a good price.
I sold half my holding at £1.80(actually mainly only because I got annoyed that I twice sent the company some questions which they completely ignored), but it's given me a very low average on the holding I have left. I do think the outlook from 2025 is good, but we still need to get there. I may consider adding on weakness though.
I didn't know they were changing the dividend to be $ denominated.