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If I had a choice between having to sort out the milling and the mining I would opt for the former every time. So the good news is that RMM seem to have now got the mine in a shape where it can produce enough ore to meet the current capacity of the mill. Toby B was explicit in the last RNS: 'Our mining is now at a rate that can support the designed plant throughput...' Looking at the mining numbers they were 35,535 dmt for last month. Now is you take 30 days that is only 1,185 dmt so below the milling capacity of 1,350 however there is a stockpile of 22,500dmt at the mill so it may be they have not mined at max. The daily dmt mined is also on an up having been 1,073 in Mar, 1,091 in Feb and 813 in Jan (assuming every day in the month was worked). So I will chose to take TB at his word that the mine is no longer a restricting part of the process which is an ENORMOUS achievement.
So now let us turn to the mill. The output of copper to sell is broadly dependant on 2 factors: how much ore you feed in and the grade of copper in that ore (there is also the recovery % but that seems to be stabilising at 95-97% so I will leave that out other than for calculations.
In Apr the RNS tell us that 30,195 dmt were milled with 9 days at or below 800 dmt because of the crusher issues. Noting that the RNS says at or below 800 I have run calculations with an average dmt for those 9 day of 800 and of 750. With the former that means 7200 dmt were mined in those days leaving 22999 tones to be mined over the other 21 days of the month. That would therefore be 1095dmt. If they did not work Easter day that would be 20 days therefore 1150 dmt p.d.and if they also did not work good Friday that would be 1210dmt. With the later (750) that means 6750 dmt were mined in those days leaving 23445 tones to be mined over the other 21 days therefore 1116 dmt p.d, if 20 days 1172 and if 19days 1234.
It is important that we do not know:whether the days above 800 dmt were all full days or whether it was a gradual ramp up to full production, whether rented crusher was used in lieu of the normal crusher for some of those 21 days and if so how its capacity compared, and we do not know whether for the half of May when the rented crusher will still be on site whether it will be possible to use it in parallel with the normal crusher and therefore boost throughput.
So turning now to grade. TB tells us in the RNS: '... we will now optimise the feed grade to the mill'. Is is therefore hopeful that we are going to be significantly above the 1.46% grade of Apr which was due to working a specific zone for reasons other than grade, and at least at the 1.6% of Mar. We might get to 1.7% and perhaps even 1.8%. Now this being mining they might have the option, increasingly likely with the increasing number of stopes, of chasing to mine even higher grade but I will hold off on that upside scenario.
So for calculations I will do it with 1100, 1150, 1200 and 1250 dmt per day and with grades of 1.6%,
... for RMM to have a positive share price today?
Well leaving aside the broader market sentiment and of course all in my humble opinion, the RNS itself was broadly as expected with the notable exception of the grades and the RNS explains that as:
The grade was lower than initially planned in April due to mining out of planned sequence to install additional ground support in the Upper Footwall Zone. Grade is expected to pick up in May.
Had the grades been 'normal' then everything in the RNS would have been in line with my expectations with some positive upside like the daily throughput peaking above 1400 which shows us what it could be with the wind behind us.
So why the reaction? Well firstly we were unlucky with the backdrop of stock market sentiment today/ at present which amplifies sentiment. But why is the sentiment in RMM so poor today to start with? I have scratched my head on that and looked inward to try and find an answer - in other words why am I just a little bit nervous today rather than rushing out to buy more. The answer on my personal account, and I extrapolate from that to the market, is that 'there is always just one more thing'. Now we need to keep this in the context of 'this is mining'. Normally companies report quarterly at most and the monthly reporting, while probably right in the current context and certainly called for by many on this board, does exacerbate the unpredictability that would otherwise smooth out over a longer period.
So ultimately do I/ the market trust TB? Well I will now leave the market out of it and answer just for myself. I don't know TB other than having seen him on the market calls. But it strikes me that he has had a mountain to climb and step by step, with a few slides backwards, he has been making it slowly upwards: mine pumped, infrastructure invested in and refreshed/ upgraded, 4 stopes now running, hedge cleared, financing sorted several times (I would have preferred once), new team in place, COVID navigated, mining now sufficient to deliver 1350 per day and just being held back by the extraction part of the process, extensive further drilling to find what grades are where which in turn will inform the mine plan...
I have no doubt forgotten a few and I am sure others can fill in for my oversights.
But the point is this -TB's track record at Rambler strikes me as pretty impressive and I think he can be trusted to navigate the final steps to the key base camp of the 1350 output. Now that will not be the end of the journey and he needs to get us to base camp soon but on what I see I trust him to do that and from there I trust him to continue leading us upwards toward the future camps and eventually the summit.
Obviously all of this is just my opinion and I would be really interested to hear views that are either in accordance or divergence with mine.
Best wishes on what I know has been a difficult day particularly for those with large holding,
Prof
Two reasons mining the low grades strikes me as logical:
1. If you have got to mine them in order to enable other essential work to be done (which is what they basically said) then it makes sense to do that and have a low output month now rather than be on an upward 'confidence in the company' trajectory and then have that cratered by a poor month.
2. If you are going to have a poor month of grades then it makes sense to do it when you are constrained as to how much ore you can convert into copper - i.e. this month because of the crusher issues.
Onwards and upwards in May I suspect (or is that hope?)
Best wishes,
Prof
https://www.youtube.com/watch?v=1y2SIIeqy34
'Why Won't They Ever Learn'.
Marlene Dietrich, Peter Paul and Mary, The Kingston Trio - they all did great versions but Pete Seeger wrote it.
MatesRates,
Thanks for sharing your thinking and numbers. Very helpful to see.
Best wishes,
Prof
Strummer,
I think MB sums it up well in saying that with the shares you have accumulated you are going to do well if/when this takes off.
The key question is always but what if it doesn't - how much of a difference would it make to my finances and my life.
Fingers crossed for all of us. I really do think this will come good but none of use can account for black swans.
Best wishes,
Prof
Strummer,
Sounds like you are growing as an investor!
I am in the same boat as you. I am sorely tempted to increase my already large holding, given the current price, but that would defy all laws of diversification. So I daily fight the temptation and so far have avoided it. If these falls further I will praise my wisdom and no doubt if/ when it surges I will curse my lack of conviction.
There are some films that you have watched a few times and although you know it will turnout OK, it doesn't make the bit you are watching any less scary.
I can't help feel the same about Centamin. I am pretty confident it will turn around but that doesn't make the current level of production and therefore AISC as well as the ensuing reaction to the SP any more pleasant to watch.
Let us hope that this is indeed the nadir and that hereon in we are sailing to a better place.
Best wishes to all,
Prof
Hi Antharry,
I suspect that you are right that it is several periods of delivery that will see more people pile in.
I also think Xenor is right that most people on yesterday's call were already in, some quite heavily.
Bought a few more yesterday after the RNS and am now pretty topped up here however very confident this will rerate - just not sure when.
Best wishes,
Prof
Morning Sotolo,
Let us hope indeed that CEY is starting a long rise up. You have called it right on the way down so am hoping you are equally accurate now for the up.
Best wishes,
Prof
Hi DG,
I would love for your explanation to be right. However the person asking the question on risk followed up with 'well tell me the top three things that keep you awake at night' and there was not an answer on that either. I get that TB will be very busy getting the mine in shape however thinking about what could go wrong and planning accordingly is, for me, part of that.
Best wishes,
Prof
Clearly lots of good news in yesterday's call. Not so concerned about the CEO not quoting an AISC figure for production as you need to sort out your accounting assumptions first and with a new CFO she will no doubt be working on that, aided by the new finance system.
On reflection I am very disappointed that the CEO could not only name the top three risks for the company but did not appear to 'get' the question. If a CEO is not thinking in that way then it is worrying. Hopefully I am making too much of this but it has been knowing at me since the call.
Now showing 160 for the sell and actually offering 162. Let us hope the rest of the day continues on the upward path and this morning's pricing was just a blip in THS' rerating based on its success.
Not surprised by the market's reaction but then I have very low expectations of the market.
A few production problems that are now sorted and still a stonking quarter, just not quite as good as the previous record breaker.
Like Sotolo I hope that over the next few days the market will look forward to the great things to come and price accordingly.
Very happy with holding here. My only nervousness is the macro-economic situation. A worldwide recession is likely to see a reduction, in the ST, in the industrial demand for PGMS which would reduce the price.
Best wishes,
Prof
Morning Xenor,
I particularly like the 5th bullet point:
'Cash positive operations, now including sustaining capital '
Should be a good day for the SP.
Best wishes,
Prof
Reposting the response I put on the SLP.GB.PL board where you asked me a question, possible in error, wanting to do it on this one:
Hi Sotolo,
Think you might be on the wrong board - unless you used this one because I last posted here!
In any case in answer to your question:
I really haven't got a clue.
I bought into both SLP and THS because the PE seemed ridiculous particularly given the outlook for commodities. I bought into SLP at an average of 127 and THS at an average of 147. At one point SLP was in the low 80s and THS was just above a pound so I was underwater in c.30% on both. Since then THS has had a remarkable recovery to now leave me in profit by 7% excluding divs and about 10% if you include them. My SLP performance still looks pretty awful to the extent that dividends only make a marginal difference.
I confess I don't understand, other than a fall in commodities, why either dipped so much initially since I bought them, nor why THS has recovered so well but not SLP.
I do think THS is very professional, as shown by the fact that its Investor Relations monitor the BB and respond to questions as and when appropriate. As I have previously responded to them, I really think they are world class and are a lesson to other companies as to how to do it.
So I continue to hold both - delighted in THS' performance and somewhat depressed by SLP's.
Other than CEY, HOC and FRES I am also holding significant shares in RMM and JLP.
What about you?
Best wishes,
Prof
Hi Sotolo,
Think you might be on the wrong board - unless you used this one because I last posted here!
In any case in answer to your question:
I really haven't got a clue.
I bought into both SLP and THS because the PE seemed ridiculous particularly given the outlook for commodities. I bought into SLP at an average of 127 and THS at an average of 147. At one point SLP was in the low 80s and THS was just above a pound so I was underwater in c.30% on both. Since then THS has had a remarkable recovery to now leave me in profit by 7% excluding divs and about 10% if you include them. My SLP performance still looks pretty awful to the extent that dividends only make a marginal difference.
I confess I don't understand, other than a fall in commodities, why either dipped so much initially since I bought them, nor why THS has recovered so well but not SLP.
I do think THS is very professional, as shown by the fact that its Investor Relations monitor the BB and respond to questions as and when appropriate. As I have previously responded to them, I really think they are world class and are a lesson to other companies as to how to do it.
So I continue to hold both - delighted in THS' performance and somewhat depressed by SLP's.
Other than CEY, HOC and FRES I am also holding significant shares in RMM and JLP.
What about you?
Best wishes,
Prof
Hi Sumo,
Looks like one of those auto generated articles to me. Having said that, this does not take away from the positivity of the numbers they quote.
Best wishes,
Prof
Morning Langford,
What you flag is always a difficult one for a company in distress/ turnaround. You have to pay significant money/bonus/LTIP to get a class act in to do the turnaround but turnarounds take time so until it takes effect and shareholders benefit it is very frustrating for the shareholders.
My personal preferred model to align interests is greater use of LTIP with vesting based on the results of the turnaround however this can result in enormous payouts in case of success which can then also frustrate shareholders.
Best wishes,
Prof
We buy a stock because we think it is undervalued but then get frustrated with the market when it does not revalue it, the day after we buy it, to where we felt it should be or would like it to be.
We buy a miner that is in recovery but get exasperated when the recovery hits road bumps - recoveries do.
Sure yesterday was another road bump but it wasn't a brick wall.
The reason RMM is still valued as it is most likely because of the road bumps. Those of us invested think they are less high than the market on the whole will invest. We hope we are right but we could be wrong.
Best wishes,
Prof