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Most warrants belong to BurggrabenH, Kitelake and Meridan. Thereof BurggrabenH is below reporting threshold. I doubt warrants will lead to huge selling in the coming months.
The CLN convert at 40P but share price needs to be 60P for it to be converted.
40000 carats with sales price 450$ and cost 250$. That is 8m$ or 5.9m£ operational profit. In my view those numbers might get out-performed. Cost of repayment CLN 2.5m£, #BRD just need to repay and share price will multi-bag.
I asked Manolo about this some time ago and he said that the oil from block107 can get barged and be sold through ONP or Brazil. The barges from nearby block (Los angels?) to 107 pass by Bretana. Petrotal also expect Block 107 (constition prospect) to be light oil which they would blend with Bretana oil to make it fit the pipeline requirement. THis would improve Bretana netbacks also since the do not need to buy this lighter oil for blending.
Run-rate now 40-45k carats, sales price 450$, 50% margin->2022 9m$ operational profit. The outlook is fantastic with this price/production. Hopefully BRD can deliver in next quarters and stabilize business and be able to pay-off the convertible loan rather quick.
Agree that Management has not done their job here. But regarding interest rate payment it is a fixed cost on the Teichmann loan, overall almost 1m£ to be paid at the end before retirement or it get converted to shares. The Delgatto loan will hopefully just be used now and repaid quickly. The Teichmann loan is for 3 years thus BRD got some time to build cash buffer before repayment. Only if SP goes above 60P they can convert to shares. BRD requires much more patience than I initially though but hopefully they can resume operations soon again.
Petrotal deliver to Station 1. I have never heard that Station 1 got taken out thus Petrotal have some flexibility to deliver to Station 1 storage, Iquitos and export via Brazil.
Viable: I think you are not correct that 1 more water well is needed shortly. I looked through the last RNS and they commented a lot on this, see below.
RNS from July 20th.
PetroTal completed its second water disposal well (“3WD”), thereby potentially doubling its produced formation water disposal capacity to approximately 100,000 barrels of water per day (“bwpd”) once the CPF-2 facilities are completed;
And from August 26th RNS:
The water disposal modifications are still being completed and water disposal capacity has returned to an estimated 80,000 bwpd with water now being injected into both the 2WD and 3WD wells. A new 10? pipeline connection to the facility water tanks was also installed to increase water injection rates. When completed, total available water disposal capacity will be 100,000 bwpd.
And from RNS 29th Sep:
Bretana’s average field production for the ten days ended September 27, 2021 was 15,494 bopd;
Demonstrates success of the revised water disposal strategy, allowing full water disposal into the two disposal wells
That sounds to me like they are fine at the moment and will also get an increase of 25% of capactity once CPF-2 is completed
I also have both JSE and Ptal in portfolio but more Petrotal.
Jadestone got Excellent management that do acquisitions of both late-life and development assets. They get premium against Brent and also have very high netbacks. On the other hand Capex per barrel is much higher (D&A ~20$/barrel )and they also pay roughly 40% corporate tax. This makes only roughly 1/3 of EBITDA filter down to net profit and FCF.
Petrotal: High netbacks, ramping up production quickly and low Capex per barrel (D&A 7$/barrel). 1 field operation but huge upside from 3p case. No Corporate tax for first 300m$.
Comparing 2022 outlook for Jadestone/Petrotal, I see both producing around 20k bopd, I see Jadestone higher on EBITDA but Petrotal net profit will be significantly higher. Petrotal has had a ridiculous high risk premium due to some past issues. For the future both companies have some nice growth prospects (JSE development assets, Ptal exploration assets) so both have large upsides if successful.
People here clearly try to talk down the share price. Superroty was long just a few weeks ago now sold out. The finance agreement with Teichmann was done in May when the company situation was challenging, nothing new to talk about really. Since May the diamond market recovered further and BRD found a 58.6 carat diamond (unfortunately the condition was not perfect but still sold for 585k$). New plant is about to get commissioned. The find of the 58.6 carat diamond confirm that diamonds of this size exists in the pipes. What if they find another one or several with perfect condition (it could sell for a large part of the mcap/EV) on top of the normal production flow which will soon double.
The Convertible Loan has been known since May, at that time BRD was in a much worse situation but operational development and pricing (cash flow) improved a lot since that. If for some reason there is an issue with the Convertible loan, BRD would need to make a placing instead. But it is kind of just the same effect as if Teichmann would later exercise the right to convert to shares. Overall shareholders should look at this as the 6,5m shares to Teichmann will get issued sooner (placing) or later (exercise of warrants from convertible loan). At 20m shares and Share Price 50P Company would have Mcap 10m£ and be in a strong financial position. Then look at the fundamentals and potential for large diamonds, BRD can easily make 10m$ annual profit from operations (450-225)$*45000 carats.
The Convertible Loan has been known since May, at that time BRD was in a much worse situation but operational development and pricing (cash flow) improved a lot since that. If for some reason there is an issue with the Convertible loan, BRD would need to make a placing instead. But it is kind of just the same effect as if Teichmann would later exercise the right to convert to shares. Overall shareholders should look at this as the 6,5m shares to Teichmann will get issued sooner (placing) or later (exercise of warrants from convertible loan). At 20m shares and Share Price 50P Company would have Mcap 10m£ and be in a strong financial position. Then look at the fundamentals and potential for large diamonds, BRD can easily make 10m$ annual profit from operations (450-225)$*45000 carats.
I did some financial modelling last year on BRD. I calculated NAV 28m£ assuming 200$ margin 45k carats for 10years (10% discount rate). See link on my twitter https://twitter.com/henrik115/status/1296457832678789121?s=21
Large Diamonds like the one from yesterday (If it would Have been perfect Quality ) could get a value larger than the current Mcap.
The reserves are also likely to support 15 year mine life rather than 10 year.
This is a longterm hold for me as you never know when another large Diamond pops up.
Could easily see BRD going to 150P Or more once the full potential gets visible with 45k carats production and finding a few more large gems.
I can understand some of the concerns that you raised but you also need to put in perspective that BRD will soon operate a mine that gives 15-18m$ (350-400$*45000 carats) in annual revenues and gives an operating profit of possible as high as 6-9m$ (130-200$*45000). The expansion project was need to improve the scale and profitability. The resource upgrade to 10mt, 10-year mine life was also done. This upgrade does of course cost money, and as long as production was not large enough it did not provide cash flow to support the growth. Once the final stage of the mine is reached it will generate free cash flow. I am sceptical to how the Management have done the project planning of this and it would probably have been better to make a large funding with equity and bank loan at an earlier stage rather than this placing every six month. I bought after the last placing at around 40P, so share price back to my price paid now almost. Still think this is a good investment to buy at this level.
Agree with your points Bmeister. BRD is now very close to an inflection point and will during 2021 reach the final stage of the mine where they will have annual revenues of 15-20m and profit from operations of 5-10m depending on diamond sales price. With reserve life of 10 years and a potential 5 more years. There will be a huge free cash flow from 2022. I think the share price will consolidate around this level and start to move up again in mid/late Q2.
I think the higher AISC is related to that they mined lower grade in Q4. Look at the ore volumes mined vs. gold poured in Q4 and Q2. They mined larger volume but got less gold. Grade can go up and down depending on which part of the mine they work on. Does anyone have details on the cost structure? Does the exploration program impact before they can upgrade the resource?
Edale Europe Absolute Master Fund increased holding to 8.97% , that was the two large 50-60k buys in the last week.
Diamond Trade Is Roaring Back Thanks to Stuck-at-Home Shoppers
https://www.bloomberg.com/news/articles/2021-01-24/diamond-trade-is-roaring-back-thanks-to-stuck-at-home-shoppers
Bluerock will ramp up to 45000 carats run-rate from Q2.
45000 carats with average sales price above 300$ , cost per carat will drop to ~200$
45000 carats with 100$ profit -> 4.5m$ profit from operations
Mcap 5.5m£
PetroTal recommences oil sales into pipeline, as the social issues affecting the Northern Oil Pipeline, operated by Petroperu, have now been resolved.
Petroperu has commenced pumping oil from Pump Station #1 to Pump Station #5, thereby allowing the awaiting barges to start unloading PetroTal’s oil.
Upon full ONP operations, expected to be by mid-January 2021, the Company will increase oil production to approximately 10,000 barrels of oil per day.
Station 5 returned to government pipeline to open soon.
http://proycontra.com.pe/estado-recupera-control-de-estacion-5-del-oleoducto-norperuano-de-petroperu/