The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
What makes you say that Maverick?
It's a lot but they are getting 98m barrels of reserves. We will just have to wait for the details. I doubt AA would make any deal that was against shareholders interests.
With all the cash fxpo is generating they must have a plan for growth in the 2020 results. I think investing $400-500m to target 15m tonnes per year would be a good goal. Also investing in automation etc to bring down the costs per tonne. But it looks like they are on that with the recent appointment.
I've read through the rns's and tried to piece together what 2020 should look like, their debt situation:
2019 - Cash Balance - $131m, Net Debt - $282m, Gross Debt - $413m ($9m added from 2018), Dividend Paid - $111.91m
2020 - Cash Balance - $270m, Net Debt - (-$4m), Gross Debt - $266m ($143m paid off in 2020), Dividend Paid - $194.37m so far
In the 2019 full results they mention a $400m PXF facility that amortise at $33m a quarter. That roughly matches the amount of debt paid off in 2020 (started in Q1 2020) and based on that rate, it will be completely paid off at the end of 2022.
On his post from 12th of Jan he mentions Barclays forecast $1.4B of cash for FXPO in 2022. If iron ore prices remain where they are they can easily achieve it imo. Holding FXPO is a no brainer, eventually cash will make the current valuation unsustainable and it will have to start moving up. FXPO even pay you a great dividend yield while you wait.
The thing is, if they are issuing shares for Araguaia, it also dilutes Vermelho as well. I think it would have to be a big premium to the current share price, as Vermelho is the one with the bigger NPV and the one linked to battery minerals.
I might be wrong, but I think I read the company pays it directly. So I'm not sure there is much HL could do? As mentioned before, you can reclaim a few years at a time. I'm just going to claim in a years time, or whenever I will sell my ISA holding.