Rusty, we are in POG since 5-8p range, and I told everyone it’s a multibagger when even Peter Hambro and Pavel were not convinced. In comparison with Polymetal, Poly went to £20, so probably above £10b mcap with debt above a billion dollar. POG looks undervalued where per ounce cost goes down when increased production.
Rusty, there are some bottlenecks in POG business model, but underlying potential is better than Polymetal in some areas like POX hub more capacity than Polymetal. IRC with just $50m investment can double its production which is very much possible now and Peter Hambro was keen about it, though they need an Accountant/Economist. Best is POG can appoint me an independent Director
Current year POG will be achieving $1817 Gold sale price if there is no massive surge in GOld price. Yes if they revised production above 500k ounces, minimum 430k ounces own production, that will sure be a good news to £4billion mcap
Sometimes ago, research@Krss had predicted UGC doesn’t want dividends against the prevailing market view. Results can not be poor, even third party concentrate imo was secured before Covid, so merging should be reasonable. Right now , buying third party has high downside risk, that’s why Co is in risk averting mode
Rusty, IRC produces around 2.6m tonne , if they manage to achieve $200 per tonne, even propped up cost go to $55 per tonne, So revenue around $520m, $143m cost of sales, $100m other costs. Yes is $250m is possible to achieve . Also IRC is benefiting from low libor and weak rubble.
Current Fe 62% jumped to $229, and Fe 65% jumped to $263, Even with 40% hedged at $175, IRC is still in massive mojo. Anyway, on average they will be able to achieve sale price between $180 to $220. Revenue between $500 to $600m. IRC has very good profit margins.
IRC’s real issue is bargaining power, not hedging because it’s impact on balance sheet is nominal, hedging is just Peter Hambro likes to speculate or it had some justification when iron ore prices were low to cover the downside risk. IRC’s Bargaining will improve now because they can move from maximum production to optimal. Secondly, POG increases its stake in IRC, because that diminishes the downside risk.
Rusty, Pavel wanted to get rid of not because of commercial reasons, but political reasons or self serving, I think KPMG will comment on it. No one envisaged Iron prices that high, even downward correction in iron ore, IRC will still remain in profit. Since long, even 3 or 4 years ago, my view was that POG should t/o or increase its stake in IRC. You know what, in this case IRC’s bargaining power will get better to achieve high sale price
Rusty, this discussion is because Iron ore prices are significantly higher, what if they reach 400, IRC just released results, LIBOR is record low. And looks like a small percentage of there sales they have achieved $175 per tonne. After having more than 30% shares in IRC, POG doesn’t need permissions to increase its stake.
After crossing 30% or 50%, mandatory t/o offer should be made, POG already holds 31%, so up to 49.9%, they can increase without mandatory entire share capital offer. 40% gives no more rights?? Anyone holding between 40 to 49.90% Controls the company, because you can appoint your own CEO and Directors without taking over.