Member Info for dusty42

OMG @ today's apparent met coal price.

Coking coal swap Australia FOB US$635.0/t
Cobalt LME 3m US$82,000/t

This is only from one source, so part of me wonders if it is accurate.. but on the other hand maybe it is just a slightly delayed move relative to what has happened with thermal coal prices. I though $400odd/t was pretty ludicrous. $635/t is insane. Lets hope kestrel is selling a few shipments at this level. And also cobalt at $82000/t is pretty sweet, I think it was at about $52000/t when they completed the aquisition of the stream.

Great news.. You'd hope they are throwing anything they can at this to get it producing even on a small scale asap.

@ Cacher - the way things look right now, I think they are highly likely to go for the increased BRN investment which'll make it really quite significant. Option possibly to sell down equity stake once it is fully ramped up. Assume finding other 'good' deal in current climate might be tricky, though on the flip side maybe there will be more choice if everyone is looking to get new projects going. And the beauty of it.. non of the increases in operating costs will be hurting apf. Perfect storm.

@ CT - yeah, still about 3 weeks to go, but I think a 3rd record quarter in a row is already baked into the cake. Met coal and cobalt have been in very nice places. Sorry to see you departed caml, but appriciate kounrad is a little uncomfortably close to Russia. However, I would argue to a degree that if we go from inflation > deflation(recession), caml's low costs make it safe(ish) in that respect. Time will tell.

This seems utterly bizarre - why would power plants not just burn the higher quality coal.. if it's cheaper. Assume met coal price will have to rise, unless I'm missing something.

Thermal coal swap Australia FOB US$443.5/t vs US$313.0/t
Coking coal swap Australia FOB US$420.0/t vs US$410.0/t

Just to point out there is no direct exposure to thermal coal here. They completed the divestment of the Narrabri royalty at the end of last year(see rns on 31st dec). But it will be intresting to see what bearing the movement in thermal coal price will have on met coal prices, which were already rediculous.

Thermal coal prices do have some impact on how much money apf get back from the Narrabri divestment, so are a boon in that respect.

But the big picture here for income in the short term (in order of importance) is:
- Coking coal!
- Cobalt
- The other stuff

And at some point this year nickel could start playing a meaningful role. With Brazilian Nickel(Piauí project) potentially starting to ramp up production in May(as Cacher referenced below) and apf having an option to invest a further $70m for a more meaningful income stream once the plant is fully developed. Believe they also have an equity stake in the company. Assuming this makes it to full production, the original investment here could be the most savvy in the company's history imo.

I personally don't want any rise in dividend/special dividend right now. Better they try and grow the future pipeline while they are doing so well off the high prices in key commodities. Dividend is decent anyway.

Not only copper but also zinc on fire at the moment. I think this is looking very cheap. Sure a bit of uncertainty around the russian situation.. but I would expect worse case they would just find another route/customer for their copper.

From an apf perspective what's said is entirely correct I would assume. Though, I'd assume that the standards / processes empoyed by wheaton are probably more rigorous as are likely the calibre / experiences of their team. So apf participated in the deal, but can't exactly claim they negotiated the whole thing.

They said 'transformational' again :(

The 2016 report still mentions a crinum royalty and suggests it was based on land ownership(like kestrel).
https://www.annualreports.com/HostedData/AnnualReportArchive/a/LSE_APF_2016.pdf

Looking at the old rns I also saw reference to a royalty not only over kestrel but also the crinum mine. This was oporated by bhp and stopped production quite a decade or so ago(uneconomic I think). However it has since been sold and the new owner is looking to return it to production. There was an accident at the end of last year which has delated restart.

Sadly I can find much information on what APF actually own(not sure if what ever royalty they had maybe only covered open pit and not underground or something). They are not great at actually listing exactly what they own. I would still like to know what happened to the groundhog royalty. Though obviously these things do not fit with the 'look at us we're a super clean battery company narative'.

Ah, ok to be fair four mile predated him too and despite difficulties may have actually have performed ok.

Very decent results, a little ahead of what I expected. And strong short term outlook. 'Amazed' the SP is still lower than it was at points during h1 of last year. The price enviroment is a really fortunate thing at the moment as it will be good to see debt come down and hopefully further meanful income streams added. Piaui could contribute meaningfully and assuming things develope as planned the intial royalty and equity investments there could be proven to be a good move, the upsize option potentially making it a core asset.

I'm not so fussed about JT going. I'd have been happy for him to stay too. The absoute core here is kestrel and that predates him. He's made some good moves I would say, LIORC has turned out well, Voiseys Bay so far has performed well(though I would argue is not without risk, given possible developments in battery chemistry). Narrabri and Four Mile arguably have not been so successful. I think he's improved a lot, but I'd also say he is not the best at selling the company. I also get irritated with the excessive use of the word 'transformational'. I think truely, it'll take 10 yrs to really say how well he has done. I still think he should have looked for something sizeable in copper when it was cheaper.

I was looking back at some old rns and found this from 2005 relating to kestrel:
'coal royalty receipts from the Kestrel and Crinum mines, operatedby Rio Tinto and BHP Billiton respectively, were £5,313,000 (2003: £3,376,000). The independent valuation of these interests at the year-end was A$141.3 million(£57.6 million)'

Lol at that valuation. Obviously the £ has devalued a fair bit since then, but still. A big part I think of kestel turning out so powerful has been changes to the way queensland royalty rates are calculated, possibly also increases to the reserves/lom, improvements in mining tech. I wonder on what basis it was initially aquired?

@ CT nah it's still good to know and tbf direct income from thermal coal only stopped about 20 days ago. Plus it's price has a real bearing on how much money we get back from the Narrabri royalty. And these prices clearly do not exist in a bubble - very high thermal coal has got to have some affect on met coal. And yes it primarily met coal and cobalt at the moment, but could see nickle become a decent contributor in the next 6-12-18 months. Copper, I wish they had more tbh. Be great if the mine in peru listed in the early stage stuff atually got built. I value your posts on caml/atym, here.. keep it up.

Good news given the terms of the divestment of Narrabri, but afaik we don't have direct exposure to thermal coal any more. I guess may also have some influence on higher quality coal prices.

That said, met coal now @ a crazy $432/t
And cobalt up $1500/t to $72000/t

Met coal @ $430/t will be something to do with it. I've never seen prices so high. But hope kestrel has not suffered any weather related disruption.

Beyond that, probably just general anticipation of a very good last quarter. Far too early to start saying this q could be another record.. I'll wait at least until the end of january for that!

Ignore me, the article I was looking at was out of date I think, so no evidence kestrel is affected at the moment.

Seems there is a record high met coal price at $415/t, but unfortunately due to disruption at mines in north america and austrailia. I think kestrel has been evacuated due to heavy rain. Though not sure if it has affetced the actual mine or just access routes and the evacuation just a precaution. I guess that if they can get back to mining relatively soon the boost to prices could make the situation a net positive.

My guess at the average FOB price in q4 would slightly more conservative, somewhere in the range of $300-$350. But yes, I agree that the SP is not reflecting the change in outlook since mid year. In fact in h1 the SP was higher at times.

@adv11, no worries.. I just didn't want to misinform. So far as I can remember it came up as a question at the end of the recent interview they put out.

Not that I am aware of. It was due to the cobalt stream aquisition last year.. I think they said they expected the schedule to be normalised this year(I think it was in some recent interview, but don't have time to look now).

So 2021 started slowly here, modest h1 portfolio income of £16.2m. But then q3 was pretty nice(a record) with income at $23.6m(or £17.3m at todays rate). Based on relevant commodity prices during q4, assuming production was inline with expectations.. seems to me we've a very good chance of beating q3. So first 3 quarters bought in £33.5m, my guess q4 might be in the £20-25m range. So that'd see the year at £53.5-58.5m, just short of the 2019 record of £59.5m.. that said - quite possible I am underestimating kestrel! So not impossible that record could get broken.

And met coal now @ $408/t is a _very_ nice start to 2022.

From what I've read the unrest has largely quietened down now. Not to say it can't return at some point, but maybe enough has been offered to placate the protesters for now.

I didn't really expect this to impact kounrad, as it's not near a large urban area - but of course you never know. In this case the anger seems to have been against the government rather than foreign businesses within the country. The mine probably employs a decent number in the locality and has other economic benefits, so possibly unlikely to be targetted(not that things always unfold logically in situations like this).

I bought a few more today. I still think caml has great prospects and was probably undervalued before this even kicked off. Once they get to debt free, assuming no aquisitions in the mean time, they'll be making a lot of free cash. And if they can find another(decently priced) aquisition, that'll be good too.