Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
As they say in yes minister - very brave
There are probably better companies to short out there particularly coming into a very dangerous winter
Saw listened no answer to question - why do m&a when oil and gas price is high?
Why do M &A when oil/gas prices are high?
Harbour is an oil and gas company. They are not a nuclear company
They have plenty of very good opportunities to spend on improving and developing the assets they have.
Generate cash, operate efficiently and effectively (remember tolmont poor execution and probably a lot less complicated than building a nuclear plant) distribute to the shareholders.
What could be simpler?
They have plenty of very good opportunities to spend on improving and developing the assets they have.
Generate cash, operate efficiently and effectively (remember tolmont poor execution) distribute to the shareholders.
What could be simpler?
There is enough risk in drilling oil and gas wells without investing in untried technology yet to be proven on s technical and commercial basis.
Pay down debt/return money to shareholders/drill and develop in proven fields we have many
Simple
Safe part of the world - look at your windfall tax bill
Strange share
Sold out but still interested in this
Making a large positive cash flow every month. Should be debt free very soon as original debt free calc done on usd 100 per barrel but now holding usd 120 a barrel but with the downside of a windfall tax when usd 100 calc was done
Now all else being equal this would be a good bet
Problems are
1. Cannot trust major shareholders as some of them are being squeezed and will not act to maximise shareholder returns
2. Cannot trust management as they see no value in and care little for the shareholders
3. You have a weak government in charge of a large part of the reserves and production. If the management were strong they would push back against that and do everything in their power to to maximise the shareholder return and push back against that government (in a smart way)
If you had a smart management that wanted to maximise shareholder returns this would, after the weak holders were pushed out, be a hell of a share
Hard to bet on this one!
What a dog!
Premier or Harbour it makes no difference.
The institutions play their games and you lose - the government gives into the mob and after taking the risk and giving away the windfall taxes they now want to tax to banks you lose - the management collect their 4 millions and millions and millions and millions and deliver squat to the shareholder you lose
Tomorrow tomorrow tomorrow i read here
Get a grip and move on
Sold the lot.
Wish you all the best in the future.
Having made the poor hedging decision it is important that the Harbour Board does no stupid deals. The share price is low and should not be used as an acquisition currency. If they just concentrate on running the business, avoid poor on the ground management as shown in Tolmont and concentrate on infill and effectively guaranteed drilling without the need to spend huge amounts on infrastructure and pay down debt thus saving interest costs in an increasing interest environment then benefits will come to the shareholders. Basically run the business right and then give a 10% to 15% dividend to the shareholders the price will increase dramatically to reflect this. Just manage the business and the assets in a competent manner.
You cannot be conservative with hedging and aggressive with acquisitions and transactions without destroying value.
There are a lot of long suffering shareholders here who deserve a management deliverying for them and not creditors or institutions.
As regards a windfall tax logic would dictate that Harbour us not making a windfall profit. The parties at the other side of the hedges are making a windfall profit not Harbour. .
The windfall is being made by the parties on the other side og the hedges - one thing you cannot accuse Harbour of is making windfall profits
Tullow and Enquest down similar percentages oil down 5% probably explains it
With a 20% market share of titanium feedstock production, it is, however, also the heavyweight titanium producer and given that it is capitalised at $130bn, Rio Tinto could easily gobble up Kenmare, which is currently capitalised at €600m. This would give Rio Tinto a dominant 27% market share.
The second biggest company in this sector is one focused only on titanium feedstock production, Iluka Resources, which is more than three times the size of Kenmare, with sales of $1.6bn and trading profits of $520m.
Iluka shares are on a dramatically higher p/e ratio of 13 times – double that of Kenmare – and the Australian company is capitalised at $4bn. It, too, could take out Kenmare without much trouble and has previously expressed interest in buying the company.
This would dramatically increase its titanium feedstock market share and make it a far bigger player, in contention with Rio Tinto, turning the company into a price maker rather than the price taker that it currently is.
Another factor in the attractiveness of Kenmare these days is that Ukraine is a producer of titanium feedstock and the war has been a factor in pushing prices up even further.
underrated
Kenmare is today probably one of the most underrated stocks in the market. It has no borrowings, no capital expenditure obligations of any scale and a strong and increasing cash flow. Whether it is taken out or not, the 30% increase in its share price since Moneybags last looked at the mining company still leaves the shares at €6.50 on a dramatically underrated 6.5 times p/e multiple.
There seems to be only one way these shares can go and given that the Sultan of Oman has signalled that he is a weak holder, then any of the big players should be able to pick up his 21% stake for little more than the market price and use this to drive a bid for the company.
A recent update shows that in the first quarter of this year, production was up a further 5% but mineral output was down due to poor weather. This should, however, come good in the current quarter and Kenmare looks to be on course for another impressive year in which the shares can gain real momentum.
Losses incurred in 2014 and 2015 of a combined $200m pushed the company up to net debt of $387m by July 2016 when somehow Carvill jumped free, getting the bank to write off $109m of debt in lieu of $40m of equity, on the promise of raising new funds, with the Oman sultanate putting up $100m. That new issue represented 91% of the enlarged share capital, causing serious equity damage.
At €5 a share, the new Sultan of Oman, Haitham Bin Tarik Al Said, was clearly tempted by the chance to double his money on the 2016 buy-in price, even if this significantly discounted the intrinsic value of the shares. The 12 million shares he offered up, which were accepted, realised €60m ($65m) and left Oman Investment Company with 20 million Kenmare shares for what is a net investment of €33m. These are currently worth €130m.
Carvill’s buying-in of company shares at €5 last November, when they were worth more like €10, is clearly in the interest of Kenmare’s remaining shareholders. What is disappointing is that Kenmare’s now retiring chairman, Steve McTiernan, has not advised shareholders what was behind the decision of the company’s effective controlling shareholder to sell out at a discounted €5 and thereby reduce its stake from 29% to 21%. Carvill, likewise, has nothing to say on the subject, despite its significance. There is not a peep either from Tony McCluskey, who has been Kenmare’s finance director for 31 years and earned an impressive $750,000 last year (not too far off Carvill’s $1.1m).
big demand
The relocation of the huge 7,000 tonne wet concentrator plant requiring the building of a 30km road to take it from the Namalope part to the north of the six-billion-tonne ore Moma mine to the higher grade Pilivili zone in the southern end of the mine was successfully implemented in 2020. This meant that with its three dredgers working flat out, Kenmare has been able to achieve its planned production of 1.2 million tonnes of ilmenite last year. This is a core titanium material and in significant demand.
The 48% increase in production in 2021, together with higher ilmenite prices, drove revenue up 87% to $446m which, in turn, pushed operating profits up by a factor of five to $153m, returning trading margins of a whopping 33.5%. This leaves Kenmare Resources right now in the sweet spot, with no significant capital expenditure on the horizon, while all the plants are working flat out and the global demand for titanium feedstock is rising.
Haitham Bin Tarik Al Said
Haitham Bin Tarik Al Said
big dog
Kenmare is now one of the world’s most attractive titanium feedstock producers, accounting for 7% of the world’s titanium feedstock supplies. It therefore must be hugely attractive to the other big players in this market. The big dog in this sector is the Rio Tinto mining conglomerate, whose core businesses are iron ore, aluminium and copper.
With a 20% market share of titanium feedstock production, it is, however, also the heavyweight titanium pro
KENMARE RESOURCES FINDS ITSELF IN A SWEET SPOT
Date: May 5, 2022 - Moneybags
Michael Carvill
Michael Carvill
LAST YEAR (see The Phoenix 7/5/21), Moneybags noted that investors in heavy sands mine operator Kenmare Resources would be “happy to sit tight for the next 12 months awaiting the impressive returns set to be delivered to shareholders this year”. This has indeed proved the case but it looks like Kenmare is only getting going in Mozambique and given the possibility of a take-out by one of the big players, the shares at €6.50 are looking decidedly cheap.
In examining the Kenmare business, Moneybags suggested, “Increased production will push sales in the current years towards $400m … This should have a total impact of pushing last year’s $23m pre-tax profit to a lot more than $150m”.
The actual outturn saw sales almost double to $456m, while the pretax profit was up to $137m. On the back of this, the shares have risen 25% to €6.50 today but with the company now debt-free and the shares standing on a price-earnings ratio of just 6.5, this means that as a pure titanium play, Kenmare looks like a juicy morsel for the big boys such as Rio Tinto or even a smaller titanium-focused outfit like Iluka Resources. Any battle for control could end up pushing the Kenmare share price sky high.
While this is good news for current shareholders, it must be remembered that a lot of early investors have been very badly bruised. The shares are currently trading well and appear to have risen over the last decade. This is not actually the case, however, as Mick Carvill pulled a 200-for-1 consolidation in 2012. This means that in the current terms, the shares were then trading at an effective €140 each – nearly 20 times the current share price.
KENMARE RESOURCES
Although he has paid himself a lot more than $1m a year, Carvill’s own shareholding has been decimated too and is today only a fraction of 1%. Any investors who came on board in the past two years, however, have more than doubled their money and could still be in line for a real bonanza.
Last November, in a very strange move, Carvill announced a tender offer using $83m of surplus cash to buy in 13.5% of the company’s share capital at €5 a share. This was despite the fact that the shares were trading above this level at a time and Kenmare was heading for earnings per share of €1, which put the shares on a prospective p/e of only five times.
The only explanation was that Carvill believed that a significant party wanted to sell a chunk of shares. In the normal course of events, a share buy-in always carries a premium so a penalty for sellers is unheard of.
What we now know is that the Sultan of Oman, through the state’s sovereign wealth fund, was eager to cash in a chunk of his 29% shareholding. Using a vehicle called Oman Investment Company, the sultanate had been the lead investor in a $255m equity raise in July 2016, landing an effective 29% stake at €2.40 a share.
Losses inc
Any legal claim against the builder for the last Tolmount contract delay?
The tax refund is paid, the excess cash is halved (so no buyout), the Egyptian assets are poor (the only question is are they worth a little less than paid or a lot less than paid) and the Board’s decision making is questionable at best with not a lot of trust left with the majority of investors.
Not a lot going to happen in the near term - maybe that simple
How about a purchase of Barryroe owned by Providence Resources
Cairn have the funds and credibility to develop that on their own
The timing could not be better as Ireland has no nat gas ship unloading point, is importing gas and crude (which will only increase as Mayo reserves run out) and the field is near Kinsale subsea pipelines etc.
Regretably a lot of bad decisions