Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
G-Man, I wouldn't get too excited about high season as we are about to enter the low season. The harvest for this year is what it is, about 40% down on a normal year.
As I first noted in April when the RNS's were still promising jam tomorrow, it was fairly clear then that our "high season" had come very early this year - back in November/December/January when we saw record FFB's collected in those months. Thankfully, the high international CPO prices have saved our bacon.
The thing we can get excited about moving forward is the ramp up of cashews, which I believe the market have so far completely ignored.
Nice little puff piece today with Lincoln Moore on director talk for anyone interested.
https://www.***************************/dekel-agri-vision-record-annual-production-commodity-pricing-in-sustainable-agriculture-video/4121071007
Indeed Fk1, that and the markets fixation on FFB levels collected above all else would signify more doom and gloom in the short term. Looking ahead though for those of us here for the long term either by choice or circumstance, the much vaunted good news end of the tunnel appears to be not far away with the cashew facility now in to full swing - which so far has been totally ignored by the market - and this time next year, assuming a more normal harvest, FFB's collected each month should be up 200% on this year! No gok wan required on those RNS's and puff pieces, that's for sure.
Thanks rugs, one point I will be emailing Lincoln for consideration (although one would hope they have already considered this) is we already have the local drop off points for FFB's at Ayenouan - could the Tiebissou facility be utilised as a secondary hub with its own local drop offs nearby?
These FFB's can then be transported to the Ayenouan facility, although there is the timescale factor for processing before it goes off, it appears to be about 6 hours by road.
Tiebissou may be in the wrong geographical area for production, but if successful as a trial, it could open up other possibilities further west in the country and get us closer to our 70k, I mean 60k, total capacity of the mill.
I believe the value will out here, it's just a matter of time.
The lack of a decent FFB harvest alongside market sentiment is against us at the moment, but we're now making money and I'd rather be here with the financials and low SP versus where we were in the past losing money with a lower SP.
The cashews are our gravy and are only just coming on stream. The market will have to recognise that at some point.
On the plus side, no more dilution of shares lately - perhaps the message is finally getting through? If anybody wants shares, they should buy them pure and simple.
Look forward to the reporting from the 3 wise men at the AGM?
Good to see MP Evans have announced a share buy back, in contrast to DKL who keep issuing more - although this appears to have temporarily stopped of late, I suspect as soon as a 'good' piece of news is released then that will be a good day to bury bad news.
nomlungu, yes we are already past the usual 10th of the month so more likely to be tomorrow than Tuesday.
It's all about whether the colour sorter has finally arrived - it was promised in the last RNS to arrive on the 25th May, then 3 weeks to become operational. That has to be up and running by this Wednesday without further delay.
The first 11 of the 21 shelling machines, scheduled to be shipped from Italy in late May, are they finally on the way?
In terms of the FFB's, I've already written off this year's harvest, but would welcome a pleasant surprise.
The problem with the BOD saying the high season runs from December to July, is that investors will actually believe it.
Therefore, at the risk of being accused of "deramping", I'm of the opinion now that this years harvest has probably either been and gone (up 77% in November, up 110% in December, up 20% in January) or is not going to be forthcoming.
At least with that thought process, I can not be disappointed this time next month when the May figures are released. If the FFB numbers are down 40% for the rest of the year, I'm not too bothered as long as the CPO selling prices are at or hopefully even above current levels. Clearly, we'd all like normal/higher FFB, but the weather is what it is.
On that basis, with FFB's collected being vanity and our bottom line being sanity, I see no reason other than to hold at the moment with the global pricing so far producing what could possibly be a record H1 if I'm not mistaken.
The cashews on top of that are our gravy.
I agree it's been a disappointment so far, but that's only because we're running a year behind schedule, or rather the shipments are.
Having been a holder of DKL like many here for probably the best part of a decade now!, I've learned to become a very patient investor and also to take the forward guidance with a pinch of salt.
Initial capacity of 10,000tpa cashews is 13 million euros revenue. Whole nuts sell for 6.5-7 euros per kg for whole nuts and 5 euros per kg for broken nuts. Purchase price of RCN is 0.7 euros per kg.
Those figures are from the latest investor presentation here:
https://www.***************************/dekel-agri-vision-investor-presentation-2022/4121047868
According to several of the puff pieces, the financial potential of the Cashew side of the business is the equivalent of the best thing since sliced bread and way above anything that the CPO plant currently produces. DYOR.
Glengarth, yes if you refer back to the last conference call (remember them?) in September 2021, Lincoln basically said that with RSPO certification they were working through audit points. There was a call scheduled "within the next 1-2 weeks" (so 8 months ago now) to see where we are in terms of readiness. We believe we are ready for them to visit and are trying to book the certifier to visit. "Very close to the finishing line".
Indeed rugs, and the market are looking too closely at the FFB figures. It would appear that we have another annus horribilis the likes of 2018 when it comes to harvest, albeit with the high CPO pricing saving our bacon. This could actually be a good thing in that we get it out of the way when prices are astronomical which buys time before the cashews finally get up and running.
The colour sorter and other parts are taking far too long to arrive.
Scooby, yes I got the same message via ii and thought that it wasn't worded very well at all. It's a standard message, but anyone who hadn't seen the recent RNS on the 27th April would certainly be spooked by receiving such a message.
Thanks Rivaldo, it may well be that these high global prices save our bacon if the local harvest is not forthcoming at the expected levels. We also need to see material progress with the cashew facility asap.
I've just topped up a few more this morning on this drop as it's non-sensical for me and there were two key lines in the RNS:
1. "Revenue for Q1 2022 remains higher than last year with the current lower levels of production being more than offset by higher CPO extractions rates and higher CPO and PKO prices".
2. "Timelines to move towards full production are now becoming more certain with the final assembly period taking place through May and June which should see production levels materially increase during this period".
FK1, yes and we must remember the deal that DKL and others in Côte d'Ivoire did with the locals last year to protect them from the higher pricing. It guaranteed, in turn, higher pricing for the company for longer and it looked a great deal at the time but with hindsight perhaps not so.
However, with these levels of pricing surely they can just switch to more exports?
Having said that, we do need to keep the locals happy first and foremost, I feel.
Vog, today's rise is clearly most welcome, but FK1 is correct to note that it has come off the back of no official news from the company. That's not deramping, it's just fact.
If next weeks RNS doesn't back up the increasing global CPO pricing with some solid production figures, then today's buyers will be next week's sellers. Not deramping, just a hunch.
I think you'll find FK1 and others here (including myself) correctly call out the bad as well as the good when it needs to be said about DKL. I like to hear both sides of the story.
Separately, I note on the DKL twitter page that there is an interesting post which, on its own, is not news. However, they have taken a snippet from the last production RNS and highlighted in white something which may be of interest to holders. This should not in any way be seen as ramping, so DYOR.
https://twitter.com/DekelAgriVision/status/1499331455859802120