Member Info for HarChris

These last six months were strong enough to not only survive without a cash raise (despite starting with just €200k) but also enough to meet all loan maturity repayments, in part due to a significant build up of inventory that has now been sold.

So yeah it's that combination of CPO volumes and sales price that is now key, the latter continuing in our favour... need margins maintained until cashews are generating cash too rather than placing pressure on cash reserves and we will see a rerate here.

No permanent damage has been done yet from the recent failures but management won't get away with it forever.

Argo's volume is actually far higher than every AIM share I track, and I track a lot.

it's small compared with NA miners though.

‘Was all going well until the raise’

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We don’t know when the next debt maturity deadlines were so this raise might have been essential , give or take a few weeks.

And imagine a big sell off prior to a raise? They’d be in serious trouble. I’d say it’s good to have it out of the way for now to guarantee survival to the halving / a couple of months post halving.

So I sold my trade for a small but nice profit first thing yesterday then smugly bought back in earlier at 18.5p.

Basta** sell off!

It is totally impossible to prevent anyone finding out anything. In this instance all you’d need to know is that there isn’t going to be a dedicated cashew update this quarter to conclude that they are lumping it in (the bad) with the good stuff.

There’s always going to be someone in admin that gives someone they know a little heads up - I’ve seen far far more obvious and egregious selling before news than this though.

At such small amounts it’s another non issue. The issue is operational performance and that’s what deserves criticism.

The share price stayed within a tight trading range right into results so it’s hard to come to any concrete conclusions like that. There were also some big buys so much more likely that some were punting on good results whilst others less positive played it safe.

Now if the directors were dumping I’d be mightily concerned but they continue to maintain their large shareholdings.

On the plus side to all this palm oil prices and outlook remain very positive. We're now seeing the Red Sea crisis start to have an effect with international CPO prices up around 7% in just the past week, not to mention El Nino expecting to play its part through 2024.

Despite the constant management missteps if the cash inflows keep coming then the share price will eventually recover. This time next week/month/quarter folks.

Hear hear.

I am fortunate enough to have a low average and to not have been here as long so as to give them a pass on certain fronts but I'm as annoyed as anyone with the cashew update today - we were some positive progress away on that front from seeing a meaningful recovery here in terms of share price. Now we've back to sitting, waiting and hoping.

And for my sins I've added so got that little but more on the line now! GL, hope it comes good for both of us.

For those interested Largo puts out a production and sales update, usually in the third week after the quarter, and then a good few weeks later a far more detailed financial update. So next week (possibly the one after) will just be the more general overview such as whether they hit their (revised) guidance or not and also an overview of where the vanadium market is at, but without the hard financial metrics.

As for running out of cash I'm not sure, they had $39.5m as of Sep 30th. Will be very interesting to see just how tough Q4 was but we have to remember that V is ticking up now so the quarter is likely to be the nadir in terms of cash burn. They have an even mix of sales to Europe, US and the rest of the world so the Europe V rises might just have come in time...

I'm not sure I am, i'm just realistic and know how the game works. CEOs get paid handsomely, there aren't any altruistic managers that put shareholders before themselves, there just isn't.

if they instead start taking shares instead of depleting the very modest cash reserves then I would usually see that as a positive. If directors own 22% I consider that heavily incentivised, they have the opportunity to get mega rich if and only if they make a success of this and turn it around.

They are going to get paid one way or the other unless they we kick them out at AGM or Dekel goes under.

He is the CEO and he will pay himself handsomely, if he instead takes shares and they keep going down he has lost out.

Obviously a CEO of a listed company is still going to do *okay* and better than the proles investing in them but there is still a significant financial incentive.

I don't actually think how you acquire them does actually matter all that much. It is now their money and so their financial future will be largely dependent on the success of DKL now, more so than myself with my own personal small allocation to this company anyway.

'Entry here and lower seems reasonable for them to correct in time.'

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You're getting a hell of a lot for £10m mcap. Raises to acquire and get the cashew project up and running were done at a much higher price (5p, 3.1p) and the last main placing was also at 5p. There's considerable cash generation being seen from CPO and PKO and there's room for non capex growth.

On the downside there's a management team that have continually underdelivered so the gamble is whether you think they learn from their mistakes and take advantage of the setup they now have or if problems will persist. I believe the directors hold something like 22% of the company shares so it's not that their interests are unaligned, it's just a failure of execution up until now.

I bought more today but that's my lot - there is risk.

Thanks. That aligns with what I said as I’m working from the assumption that all cash generation through h2 pays off short term loans/those with near term maturity. Plus used for any unexpected capex like we’ve seen today.

In other words net debt is roughly the same as debt because the cash position will remain very low.

Ha I’ve just had a little top up so average is below 2p now. I’ve never had particular faith in the management but I’m still confident I’ll see a healthy return from here.

And if I don’t? Well I’ll save my moaning for my therapist!

The risk is DKLs debt. As of 30th June it was $31.5m. A strong H2 and considerable stockpile sales brings that down to about €25m, paid off in cash, but until the group is consistently profitable the risk will remain and be a drag on the valuation.

Fortunately the big ticket capex for the cashew project has already been sunk.

Not true CC. Prices well down on 2022 but production up 51.7% and 32.7% respectively.

It's the combination of healthy (well off ATHs though) prices and vastly improved production that has resulted in this year's success.

There's a lot of reporting on the effects of El Nino on Indonesian and Malaysian palm oil (the world's major regions)... forecasts are therefore for prices to rise through 2024 rather than decline.

CC fair enough, I'll hold at this valuation (my average is only 2p anyway) as CPO business is throwing off cash with those €36m revenues and forecasts are for CPO and PKO prices to rise through 2024.

Won't see a rerate until/if cashew fiips to cash break even but I'm happy to take my chances.

I'm happy with the profit making from the palm oil business, enough to deal with cashew issues directly from cash flow. At this valuation it's a buy and hold although admittedly frustrating that the issues with the cashew project are ongoing.

Prelim q4 update next week though, let's see where they are after that!

Q3 saw $44m revs and an overall group loss of $12m, q4 will be close to $35m revs so that group loss could exceed $20m for a single quarter. What's for certain is revenue falling below operational costs for the first time in a long while just as debt is starting to balloon (debt increased more than 4 fold Sep 30th 2022 to Sep 30th 2023).

Yay my sub 20p buy today looks like good timing after all! ETF approval could potentially have Argo opening back at 30p, fingers crossed.