Member Info for Indy0105

LW, I raised a number of points when the updated was provided that got shot down by yourself and others that are obviously in too deep.

The CEO stated everything was ok, then 2 days later released an RNS that sent the stock price down 20%. Your deluded if you think the directors are to be trusted after that. The share price speaks for itself.

DK, they are actually around 7.5%, Euroclear show all potions including those under 0.5%. Anyone can access this information!

Short positions actually reduced last month as per Euroclear data. This drop is obviously due to more bad news being leaked. Last 6 weeks this company has lost over 300 million market cap. This is not all manipulation I am afraid.

As I said something was going on and news had been leaked. Once the water problems are confirmed this is a dead duck. Sorry for all those still invested. Most will be lucky to get their money back.

I don't post often but there are a few concerning points that I’m worried about. They only ran the 7Z well for 25 days. The 6 well has been run for much longer, nearly 2 months. Did they stop testing the 7z well early because they found increasing water cuts? In the latest update there is no mention of perched water. I would have thought if they were still confident the water was perched, they would have reinforced this point. But they didn't. What also doesn't sit well with me is the fact the 6 well was dry and now has "minimal water cut". So there is some water being produced by the 6 well.

Finally why put this statement in the update “The Company intends to discuss the data acquired from the separate well tests and the subsequent combined flow at the Capital Markets Day on 25 March 2020, unless at any time prior, that data is outside of expectations." Outside expectations? They have now also added future provisions in the update covering themselves for any bad news.

Now if the share price had dropped 20-30%, I would have been concerned but still have clean pants. Something is going on. The big boys are getting out and the shorters are circling. 60% drop in 2 months is not normal, not even for AIM. I know it’s a fractured basement and it behaves differently but after 3 months of testing water cut is increasing. I hope I’m wrong by if this falls further next week, its will be clear to me that inside information has been leaked and bad news is on the horizon. This share is not 100% price of oil dependent. The massive fall has been due to the water cut issues which are still not explained.

I'm not picking fights with anyone, this is my opinion and after 10 years+ of investing I've seen this happen before. I hope I am wrong but I have a gut feeling I will be taking my losses on this very soon and moving on.

I have been sitting on the sidelines for a while. Took a small position last week. I’ve now substantially increased this position. I suspect we will see some buying momentum of the next few days.

Losing money on your short every day Nickel. I said silver was looking bullish. This will smash through 600 tomorrow and then the breaks will be off! 750 before end of jan.

History shows January is the best month for PM's. Especially after a good December. I expect a risk pull back in the next few weeks which should be good for silver and gold prices. Silver has been lagging gold when compared to historical averages which should correct itself at some stage.

Fres has been performing really well of late. looking good for 650 short term. I expect 600 to be broken this morning. Some would make you think the company is overvalued and the millions of rare mineral ounces in the ground are worthless!

NI is obviously short, myself and Carvegyber are long and Rastuss is sitting on the fence. Lets see how this plays out but i feel confident we will see 750 before 400. I will humbly get my coat if I am wrong.

PM's holding up very well considering the positive nature of the markets currently. Correction coming in Jan maybe sooner!

sound like a broken record.

NI If you really looked at the cash flow statement you would see the $689m to $362m is from H1 2018 to H1 2019, Not YR end 2018 to H1 2019! It actually dropped from $560m to $362m. This as per cash flow statement is a drop of $198m! in 6 months of which $123m was a dividend!

You are beginning to

Rastuss, as per the figures i provided, cash flow will be fine in H2. If they were really worried about it cash they would have raised further funds by now as protection which they have not. Anyone can pick and chose numbers from a cash flow statement. Its the details which truly show whats going on.

Look at the markets today. Usually with the type of news flow we have had PM would be down and down a lot taking Fres with it. The fact that they are slightly up as i type says a lot. FRES bounced off 600p resistance as i thought it would. it may retrace back down to 530ish or lower but i would not be surprised to see this touch 700 in the short term either. All depends on how long this buzz around the election results and news about a mini trade deal last. I have half my holding in oil which is doing well today. I plan to ride this next wave up before switching back in to PM.

DC2007,

Euroclear provides data for all stock out on loan. It wouldn't surprise me if there are some undeclared positions above 0.5% as my fellow investors on the PMO forum have recently found out. The latest figures for the end of November show stock out on loan around 28%.

https://my.euroclear.com/apps/en/monthly-stock-loan-data.html#month=eq:10&year=eq:2017&limit=0&search=1

Access as guest and select Novembers data.

NI, I guess we will find out soon enough. Well done on your short, Fres at 1500 it was overvalued, at 800 it was overvalued, at 500 its good value at 300 its a steal. As i said i will be topping up along the way up or down.

Be aware though, nearly 30% of this stock is on loan, there are not many shares left available to short. When the MMs decide to bail from overvalued shares the always jump into PMs. I hope you don't get caught in the squeeze when this happens.

GL with all your investments, other than you short here in Fres ;)

Nickel; Let’s go through the cash flow.
Year end 2018 cash and other liquid funds were US$560.8 million. H1 results reported US$362.1 million. Cash flow in H1 was US$316.1 million. So yes you are correct in that they spent US$198.7 million of the 2018 year end cash in addition to the H1 Cash Flow (Well done clever clogs for being able to use a calculator)
Now let’s delve into the detail. Dividend payments were US$123.1 million and Taxes and Employee Profit were US$140.1. This accounts for more than Net cash decrease. No dividend payment in H2 and taxes are also inherently H1 geared.
Now let’s look at production, the cost of production and the price of gold and silver in H2 compared to H1. Based on H1 production (27.6moz silver & 432koz gold), Q3 production (13.6moz silver & 209koz gold) and estimated lower range production guidance (55moz silver & 880koz gold), H2 silver production is pretty much 50/50 and H2 gold production is slightly higher. That shoots down your lower H2 production statement to pieces!
All in sustaining cost for H1 was $11.83/oz for silver and for gold was $1025. Realised H1 silver price $15.25 and for gold was $1,320.74. H2 average price for silver are around $17 and for gold $1,460. All in sustaining costs should be lower in H2 but let’s say they will be the same as H1. This equates to additional cash flow of US$48 million for silver and US$60 million for gold based on H2 production guidance. This gives H2 cash flow of US$340m+ after Interim dividend of US$19.2m, Taxes of US$40 million a (conservative) and interest payments of US$20m.
H2 capex is estimated to be US$407m. There’s more than enough cash and H2 cash flow to cover H2 capex and a final dividend of US$100m. This is a smaller final dividend than the last one, but still a dividend during a high capex and growth period and they will still have US$150-200m in cash in the bank. H1 PM Prices will start 2020 higher than H1 2019 so I estimate worst case for 2020 is that we eat into the cash and maybe drop the dividend.
However I expect silver prices will hit $20+ next year and gold also looks well positioned for a good rise. That’s more cash for Fres.
A good company is one that can grow, within available cash resources and free cash flow and provide dividends. Fres is doing this at the moment all be it very poorly. Bringing cost down over the next few years will help reduce all sustaining costs. Let’s be honest, it couldn’t get much worse at some of its mines. 2022/2023 Fres should easily be making over US$1000 million in free cash flow.
I am in for 200k and will double that over the next 12 months. I’m not concerned with daily movements and it wouldn’t surprise me if this hits low 500s/high 400s. But in the medium to long term this will be 1200+. PM will have their bull run and when this happens Fres will be very well positioned.
GLA

HH 1000 shares issued 39p a share would mean the company would be worth £390. Based on a 42% dilution each share would now be worth 27.5p with the total number of shares issued increasing to 1420 If I had bought 7 shares at 39p, I would have paid £2.73 Based on the RI I buy 3 more shares at 21p for 63p. I now own 10 shares for which I paid £3.36. At the diluted price my 10 shares are now worth £2.70. Regardless of where the money has gone, the shares holders are worse off. I suspect after RI the price will stablise around 30p which is the equivalent of 45p before RI

Sorry I meant 18.75% equivalent dilution

I guess on a more positive note, as long as you can afford to buy the all allocated shares for 21p based on your current holding without selling then you will effectively only take a dilution hit for 16.6%. Problem for many I guess is that they can’t do that without selling.

Results do not make pretty reading I am afraid. Worse than I expected.