Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
Not sure why the bond holders would have any sort of clout here currently as interest payments are being made on time and the company currently has around $160 million in available working capital - plus whatever free cash flow is being generated. It is also within its debt covenant ratios. That could change in the future if things don’t improve for diamonds, but for now I personally don’t see how bondholders could have any influence here.
I'm fully aware of the potential here having covered this company since 2016 and also being a shareholder with an average of 1.9p...
I suspect the constant commentary on the share price that some are giving here is more likely to put off investors than attract them! It makes it look like the sort of thing you get on the bulletin boards on pump and dump junk!
Yes I’ve got a holding here - some at low 9s and then added mid 8s. Needs something that changes sentiment - a big diamond would be very handy at the moment! By my reckoning it still has some room before the covenants become a problem, and am sure that at some point it will refinance the debt anyway as long as life of mine supports that. I still see a chance of the market improving near term for the type of stones that Petra produces. I still see recovery potential currently
At least the weaker Rand should help a bit (almost 15.4 to the $, compared to the 14/$ that the projections in the trading update and 2020 guidance mentions). I’d like to think that most of the negatives are already out in that trading update, but seems to be a complete lack of buying pressure at the moment so could still react negatively to the final results when they come next month (Sept 16 I think).
Articles 12 and 18 of Georgian oil and gas law cover the use of gas (can’t remember where I first saw 60 days stated). Burning of the gas is explicitly prohibited other than during drilling/testing. Strange that the company announced it had restarted production rather than commenced further testing. Link: https://matsne.gov.ge/ru/document/download/18424/22/en/pdf
They are opex costs not capex, and it states that they are largely fixed costs. The 1288bopd was used to work our opex per barrel, not necessarily that total annual opex costs were proportionally linked to that figure (the fact that they are largely fixed costs suggests they don’t fluctuate proportionally with differing production levels)
1000bopd would generate gross revenue of a little over $1.55 million per month at $60 Brent ($51 per barrel expected for BLOE’s oil as per the CPR) - so not sure how BLOE is going to make a net profit of £1 million per month from that, once opex costs have been paid and the govt has taken it’s share!
Based on the $2.4 million expected Opex per annum at Rustavi, that would by my reckoning only give a pre-tax profit of around £700k per year, at most, once you allow for corporate costs, if they were only producing 300bopd average over a 12 month period.
Not sure I’ve seen that figure. At 300bopd it would generate total revenue of around $5.6 million per year (based on a $9 discount to Brent mentioned in the CPR). So a maximum recovery of $2.8 million for opex and capex before any profit split (the remaining 50% of opex costs would come out of BLOE’s share of that 50%). Obviously that improves at higher production rates - also assumes a constant rate over 12 months, which is unlikely given the decline rates forecast in the CPR.
You're forgetting though that it also only allows for 50% recovery of operating costs, before the 50:50 split of the remaining oil occurs, as per: 'The provisions of the agreement would include that cost recovery of both capital and operating costs is limited to 50% of the revenue from sales of hydrocarbons before sharing with the government. The government would pay all taxes from its share of Profit Oil. Profit Oil is to be split 50/50 until payout, defined as the time when all cumulative revenues from Cost Recovery and Profit Oil exceed cumulative capital expenditure, including the historic cost recovery pool. After payout, the Profit Oil split would be 60% for the Government and 40% for the Contractor.'
The guy he claimed that he always wins and never gets it wrong! Quoting all sorts of silly SP targets and didn't even understand what a PE ratio was! He used to love posting about how wrong I was about this share for being negative/bearish on it - it has only dropped around 85% since then :)
Anyone who followed my published share tips on this one - buy at 3.5p (July 16 2018, market cap £8.7 million) and sell at 11.3p (July 20 2019) - will have banked a nice profit on this one! The posters here who resort to abusing anyone with alternative views, rather than refuting these points with facts/debate, sound like many of them are sat on sizeable losses...
I doubt there are many shorts here - most providers don’t even offer this for shorting anyway (unborrowable). Any big shorts would show up on the FCA short disclosures list (only need to be around £150k - 0.5% to be notifiable). Personally don’t think it would make a very good short anyway as like most of these small cos, they can be prone to sudden spikes and risk versus reward isn’t worth it most of the time as a binary play.
I’ve reported the company for discrepancies in their RNSs (which I believe constitute a breach of AIM rules) - they will investigate any such complaints. As has happened with several other companies that I’ve reported this year and which subsequently had to issue RNSs (one resulted in the broker being sacked by the company)
It will be interesting to see if AIM Regulation see anything wrong with the previous RNSs that were issued - received a reply the other day that they are investigating the discrepancies which I highlighted to them. The company itself could easily have issued an RNS by now to clarify the situation.
From the spud RNS: “The Jethro-Lobe prospect, which will be drilled from a conventional drill ship, is a lower Tertiary stratigraphically trapped canyon turbidite in approximately 1,350 meters of water. The targeted prospect is estimated by the Company to hold 214.5mmboe of gross unrisked prospective resources (P50) and the Chance of Success is estimated to be 43.2%.”
Given that net pay was comparable to Hammerhead and in the same zone and close geographical proximity, I think it bodes well and could turn out to be bigger.