Member Info for highlandmatt

Funny. The price went up today. Almost like the market knows KMR is undervalued.

http://www.iii.co.uk/alliance-news/1509539380854620500-3/central-asia-metals-cleared-to-complete-lynx-takeover-on-monday-alliss-

Ilmenite prices holding, Zircon advancing. Moving in to cash generation.

Kanmere. I was attempting to answer greeno' s question re profit and debt payment. My conclusion was that due to restricted shipping we probably broke even in cash terms but accumulated stock which has significant worth. So quite a boring quarter, but not a bad one.

Been crunching some numbers, which are guestimates only. Shipment / sales - 208kt, using BFs prices = $40.2m Production - 278kt should cost $36.4, but due to low grades, required more work, extracting equivalent to produce 322kt. Pro rata gives costs of $42.8m So probably generated very little CASH in Q3, HOWEVER, unshipped zircon is worth $6m and unshipped Ilmenite $9.6m, so $15m of stock to the good?

https://simplywall.st/news/2017/10/08/best-in-class-lse-undervalued-stocks-2/

Oh FFS. Directors Talk interviews dot com...!

is www.***************************

Positive comment from Savannah in relation to a ilmenite development in Mozambique with Rio Tinto. "I am pleased to report that we are currently seeing prices for titanium feedstocks such as ilmenite and rutile rise, which suggests that this is an ideal time to be developing this project. We look forward to establishing Mutamba as a globally significant ilmenite producer in conjunction with Rio Tinto." http://www.***************************/savannah-resources-plc-interim-results-2/412737144

Take a look at Aminex (AEX).

SP holding up. Are these really sells? Or are there some buys mixed in that I can't see?

Not saying it is right or wrong. It just contains some interesting figures and analysis.

The placing price of 230p represented a 9.6% discount to the pre-suspension closing price plus a discount of 7.8% for the interim dividend of 6.5p, which is due to be paid on 27 October. If the reverse takeover is completed, CAML will be left with a significant debt burden relative to the two companies� combined 2016 net profit of $52m. However, this should still be below my screening threshold of 4x net profit. I don�t see this as a concern given the cash-generative nature of these businesses. Director selling Perhaps the biggest surprise is that CAML�s largest shareholder, Kazakh businessman Kenges Rakishev, has used this deal as an opportunity to halve his stake in the firm. Mr Rakishev sold 10.6m shares at the placing price of 230p, collecting around �24m. His interest will fall below 14%, resulting in his non-executive directorship being terminated. I�m not sure if it�s wise to read too much into this. One interpretation might be that Mr Rakishev, who is prominent in Kazakh business and politics, wants to keep his capital invested domestically. Will CAML stay in the SIF portfolio? CAML shares only returned from suspension on Monday. And although the placing to fund the Lynx deal has been completed, the reverse takeover itself needs shareholder approval and isn�t expected to complete until Q4. As the deal is roughly 50% funded by debt, I expect it to be earnings per share accretive. But repaying the debt seems likely to sap the combined group�s free cash flow, potentially reducing dividend growth. Pre takeover broker forecasts for 2018 are flat. As a result, the group�s rolling PEG ratio has risen to 1.9, above my screening threshold of 1.2. I think it�s stretching my remit too far to wait and see if the new-look CAML qualifies for my screen again. So the stock will leave the portfolio this week.

Central Asia Metals As copper prices rose during the second half of August, Central Asia Metals� share price followed, gaining 20% in two weeks. It looked like the stock�s lacklustre performance this year would be boosted in the nick of time. However, the shares were then suspended on 4 September, pending a potential reverse takeover, and things became more complicated. The group�s interim results -- published on 22 September -- were good, in my opinion. Although copper production only rose by 2% in H1, the average copper price achieved per tonne rose by 15% to $5,659 per tonne during the period. So despite an increase in cash costs, pre-tax profit rose by 36% to $20.4m. Adjusted earnings rose by 41% to 13.5 cents per share and the interim dividend was lifted 18% to 6.5 pence per share. In my view, these figures were consistent with full-year consensus forecasts, confirming the high-yield attraction of owning this stock. The $402.5m question Alongside CAML�s interim results, the company announced plans for the $402.5m acquisition of Lynx Resources Limited. This would have to be executed as a reverse takeover, due to Central Asia�s smaller market cap of about $390m. Lynx owns the SAS zinc-lead mine in Macedonia, which is described as a �low cost operation with � a reserve base supporting production until at least 2032�. In other words, very much a similar type of asset as Kounrad, CAML�s copper mine in Kazakhstan. According to the company�s statement, Lynx�s zinc equivalent cash cost of $0.39 per pound puts it at the bottom end of the second quartile of the Wood MacKenzie 2017 zinc industry cost curve. That seems fairly positive to me, although it�s not as cheap as Kounrad, whose costs are apparently in the lowest 10% of global copper producers. Is the deal good value? This is a cash plus debt transaction, where $402.5m is the enterprise value of the deal. Lynx generated an operating profit of $33m on revenue of $66.7m last year. These three figures give us two useful measures of valuation and profitability:  Operating margin: 49.8 percent  Earnings yield (operating profit/EV): 8.2 percent Both figures seem attractive to me. Importantly, both are comparable with CAML�s equivalent figures from last year (49.4% and 10.6%). So the valuation looks reasonable, and margins should remain stable. Funding: The deal is being funded with about $203m of new equity and a total of $187m of debt. The debt is for five years on a mix of LIBOR +4.75% and LIBOR +5%. This seems fairly reasonable to me.

Not bad, thanks Delano. And you? I never went away, and added to my holding recently at 260-something and 240-something. Glad to see the SP finally catching up with reality of a profitable business. Hopefully this will be sustained in to the next set of results, and not fall back again.

Incontinence pads? ;)

So, we are a company with a market capital of £250m / $330m. We buy a business worth $400 / £300m. So, the combined Enterprise Value should be £550m? $187m of debt, $50m owned by Orion. = £180m off, = £370m (is this the correct treatment of the Orion element?) So, 50% extra shares, at the current SP, equals 50% extra market capital = £375m. So that adds up. So, we can expect no significant hit or boost to the current SP based on this deal? However, will this new market capital result in a move of market, and greater attention (buying)? Thoughts on my workings?

Not much on their website, but hadn't pinged the silver - another $6.8m at spot. https://www.lynxresources.com/company.html I reckon we could say that SASA brings in $100m per annum. If EBITDA margin is 60%, then costs are around $64m. Finance around $7m. So profit $30m minus tax and overheads? So $400m is certainly 10x earnings. The key point for me, is the scale this now gives the company and the platform for the future. As has been said, a main market listing beckons, and with it, institutions will have to start buying in.

Correction - replace 'facts' with 'numbers'. Happy to for others to contribute / validate / challenge.

Well, I've not been able to find their accounts, so putting a few different sources together I've come up with a few basic (and I mean basic) facts. Hopefully someone can fill in a few holes: Zinc sales = 22.5kt @1.41$/lb = $63m Lead sales = 29kt @1.12$/lb = $65m Turnover = $128m - probably lower if contract prices are less than spot Debt = $67m. payments should be less than $7m per annum Zinc costs $0.39/lb, so $1/lb gross profit = $45m gross profit on the Zinc alone (costs $18m?). EBITDA margin apparently 61% Given that this was the best deal of 150, and out BOD have been pretty solid, I'd say Lynx will not be a drag.