focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Of course they don't actually have any silver reserves though, and a lot of the resources are in the inferred category, with the rest indicated rather than measured... if they do ever actually;y mine anything the silver will be a by-product of the lead and zinc production anyway.
Personally I don't think you can. really compare those others that you mention - which are real silver investments - to highly speculative miners, especially ones that have never achieved anything much despite burning through large amounts of cash (including previously here as FCR). As for UFO, it may have risen but in terms of its silver prospects, some of those it has had for around a decade and never managed to get into production even when silver topped $50/ounce! Good luck anyway - I just think shareholders here get very badly treated by the BOD, and have done for years!
Great to see his level of confidence in the company and him increasing his shareholding via the placing - he now owns around £15k worth of shares in total. At least Myles Campion has a massive £30k of his own money at risk here!
That still doesn't explain though why you think they raised money at 25p and would now be using it to buy back shares at more than a 20% premium to that? Especially given that the company is loss making
Would be bit of a joke if they were using the funds raised at 25p just a month back to now buy shares back at a higher price - wouldn't exactly inspire much confidence in the board and their business acumen!
HUR just one example - when that reached £1 billion market cap the SP wasn't actually much higher than where it was before the first Lancaster drill. A lot comes down to how the remainder of the money is raised, especially if that is largely via equity.
The way in which the remaining part of the funding is financed will play a big part here - still a fair bit needed compared to the market cap and I'd hate to see this become a success but only after those who've been holding long term get badly diluted, as has happened elsewhere. In terms of nickel, I'm bullish on that long term, it is just always hard for these small companies to fund a big project and retain a decent chunk of it for existing holders. I'm hopeful that this will come good though and currently it is my only natural resources stock which I hold which isn't already producing decent amounts - rare I invest in anything this early stage.
Interesting how GGP played out as originally was all about Ernest Giles and it took a big hit when Newmont pulled out, so Havieron turned out to be a bit of an unexpected bonus, but doesn't mean they will repeat that elsewhere.I'm happy just to keep on holding HZM, as I've already been doing for a couple of years, and see if it can ultimately make it through to production.
Just be aware that no matter how good these companies look there is still plenty of risk and things could still easily go wrong for HZM, despite the great progress that it has made towards funding (always the biggest risk with any small miner that need large amounts of Capex to get a project off the ground).
I remain to be convinced that anyone will make a bid for this whilst their is a breach on contract suit against it with damages potentially in excess of C$2 billion being claimed! Without seeing the contracts we will never know for sure, but prior to the virus really kicking off there was mention that the agreement was pretty watertight and even included pandemic clauses to prevent either party breaching the agreement on that basis. Just unfortunate timing that CINE agreed to play that amount just before the cinema sector collapsed - plus it needed the additional money that was being raised as part of the Cineplex deal (in addition to the transaction amount). A lot will now come down to whether there is a serious second wave this autumn, and how quickly a reliable vaccine is available.
As someone else has mentioned there may also be clauses which require them to purchase all of the debt at the same time, but without seeing the full bond prospectus we can only guess. In terms of paying the debt as it comes due - oil prices will play a big part, as the going concern statement mentions that in certain scenarios it won't have the free cash to repay the debt as it comes due. I would expect that the SP here - in the absence of further operational updates - will be highly geared towards the oil price movements.
Buying back their own bonds would depend on covenants allowing that to happen - also need to remember that the debt isn't callable so they can't force anybody to sell and given the yield to maturity doubt many are selling down at these levels which would assume are being set more by what potential buyers are prepared to purchase the debt at. There s nothing to stop the company dong so - although the pricing of the bonds implies that the market doesn't believe that the company has the spare cash flow to allow it to purchase a sizeable chunk of the debt early and pay off the rest when it comes due.
A lot will come down to how much of a downgrade there is to reserves and the amount of recoverable oil there is now at a manageable water cut - which will in turn determine how long the EPS can actually produce for. Hurricane were the first to drill one of these basement type plays in the UK, so I suppose there were always likely to be some issues, but they're now a long way from where they were 12-18 months ago when all was going fairly well.
$100k minimum I believe. Most bonds are tradeable, although for many you need to be subscribed to see live prices (I got the HUR price from someone I know who trades bonds and has access to the prices. The debt on the likes of ENQ s trading at a similar discount to par and similar maturity date. Although you also have cos like GENL where it is actually trading a fraction above par, with the 10% coupon being attractive compared to the debt risk.
JAdam, no need to feel sorry for me as I did rather well out of this one, apart from my last trade from low 20s which I took a loss on at around 17p when it became clear the operational issues were more serous :)
maybe check out the prices that the HUR debt is trading at... Anyone can buy it and there is a market for it. Currently offers a 52% return by 2022, assuming it is all repaid.
The $230 million corporate debt is trading at just 48c on the dollar, and given it matures in 2022, that sort of yield to maturity suggests that debt holders aren't too confident here! Certainly doesn't bode well for equity holders and one to be careful of - especially if the eventual full field development is impacted. It also raises questions about ROI on the FPSO if reserves are materially impacted, plus it looks as though the water cut issues aren't exactly improving. Shame as it is a company I had very high hopes for when originally investing at around 29p prior to the Lancaster drill when few had even heard of the company!
Best of luck to you as well. I'm shorting purely on my perception of value of the business, especially over the coming year or two - and the fact that anything commanding such a large premium to the profitability of the business needs to be showing very high levels of growth to come close to justifying growing into that valuation. As we have seen with other companies though, the market doesn't always reflect that and can continue to over-value (based on the financial metrics) companies significantly for long periods of time (Tesla and Ocado for instance).