Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi ScoredAgain,
methinks the more relevant model here is similar to a retailer that keeps opening shops, or a Food chain that keeps opening restaurants. There will be a starting point amount of revenue, then a few weeks later another bit, etc. At each point there will be a realisation that "oh there's more".
A sell on news approach might solicit some extra profit, but when I'm long term in a share I work on the principle that during 2022 for example there may be 2 or 3 days when our sp jumps quickly. I wouldn't want to be out of it on those days, as i'd never catch up on the lost ground. Or to put it another way, if our sp goes up 22% during 2022 the majority of that might happen on 3 particular trading sessions (and often by 8.01 am giving no chance to catch it)
I'm enjoying the journey so far; even with the weather and delays :-)
but then a 30% lower average buy price than the current SP will always have that effect!
There is a counter view I've heard argued before which sort of makes sense. MM's have almost the opposite view of the world to us. The theory goes like this:
mmm I'm holding too many xyz shares for comfort. I will raise the price
mmm argghh I'm running out of xyz shares, I have to keep the market running smoothly. I will lower the price
muggins here (that's me) often buys shares when the price goes up
I try to withstand the urge to sell when the price goes down
but those two behaviours are what the mm's rely on to manage their stock of stock
perhaps that's why they call it stock
bored waiting for news. anyone got any non-weather related jokes?
Many thanks Mole and others
An exciting week indeed.
Just running the intial numbers on the flow rates of Blythe and Elgood they seem to bring in £900k a day at £1.88 per therm. I'm sure our CFO can do a lot of masking of previous overuns with £900k a day :-)
Even at 25% FDP overrun the delta between 45p and 188p means this £76.4m overun is paid off by the delta in 112 days
No wonder they're working nights
I'll share more of my workings later; but there have been some fantastic posts with similar detail over the previous weeks here. Thank you.
For what it's worth, I've been digging around in the TR-1's and looking at some of the history of IOG. I've put a few thoughts here: https://lemming99.blogspot.com/2022/02/learning-more-about-iog.html
any inaccuracies; please let me know and I'll review + update.
my 2cents is that the psychology of investor behaviour is interesting. Personally I feel a powerful desire to buy more shares when the price is going up. The logical side of the brain tells me that if I believe the real value of IOG is e.g. 60p then anything south of that I should be buying, and particularly when the sp has dropped (e.g. because a large shareholder in administration needs to cover some costs but is a long term believer; so much so that it might have burned them, but hopefully they'll have a better 2022)
I would expect that up to the last RNS, IOG probably were of the mindset "let's just let the revenues do the talking". Give them a couple of weeks and i think that's where they will be again. Essentially as investor excitement has peaked we've probably become quite needy for information.
Once the back gassing has been done, the taps are open and the flow rates are known, they'll be able to nonchalantly mention large amounts of cash acruing into the bank account and how they've hedged a percentage of 2022 production at these prices.
At this point, I think the psychology will change, as anyone with a calculator will be able to work out number of days to break even, how quickly the loan can be paid off and the potential for profit.
And let's face it, if the previous break even calculations were made at 45p best case price, then 4x should reduce the break even timeframe to less than a quarter of the previous time (given the different behaviour of fixed costs and variable costs and how that impacts the maths). We all know how compounding works when paying off debt early :-)
yes perhaps a little understated .. 20 or 30 sound better? :-)
Many more and I think we'll hit an interesting phase for the sp
Viable, here's my 2cents for what it's worth :-)
The funny thing about top-ups is that the price always feels toppy for a few days/weeks. I had a top up at 24p and given that was 6p above where I'd first started buying it felt expensive. Then the same at 33p where I've had 2 or 3 topups, first time it went straight back to 29p, 2nd time it went up (yippee), third time was this time so that bit of the story hasn't been written yet.
On the whole though, if you're able to work out what you think the price should be today/ in 6 months, then factor in a bit of market mood (sometimes ahead of where it should be sometimes behind) then if the price you end up with is higher than today's then you should be laughing after a few weeks or months.
During 2021/22 IOG has been moving a bit like house prices; i.e. up a bit, flat a bit, up a bit, down a tiny bit. It's quite encouraging to see.
I don't think we've got a rampaging following yet like AEX does; but that we're perhaps half way there. Also first gas might bring in 2 or 3 new investors. If you think you can beat 36.03 for your top up between now and 21st Feb (from memory) then perhaps hang on.
I've long thought 100 views in 24 hours is equivalent to being quite hot. So with 44 I guess that's half hot.
I hear Bacton is lovely this time of year Denis. Come for a walk along the sand bank :-)
just curious: if you're reading this please click recommend so that we can all see how active we are.
My guess is that we won't get over 20 by the weekend.
we're definitely building up momentum. A quick look at daily volume since Dec 1 gives the average volume at 1.158m per day. From memory I think it was more like 0.6m a few weeks ago.
I've got some other tests I can try to take the temperature of the market for IOG
Hi Edgar,
Thanks for sharing that video from 1/12. Interesting to see. did a quick search for the premier miton holding and found this from earlier in the year
https://www.lse.co.uk/rns/IOG/tr-1-k3rq7qifumuekr4.html
I've got a feeling they topped up over 10% in the mid 20's ? sound move if my memory is accurate.
But they they might say that about the mid 30's in a few months
Hi Ninya,
many thanks; I probably should have re-worded my post - it was more of a question as I'm not super familiar with the numbers here. It would be spectacular though if we had revenue of £150m in Q1 when our marcap is £166m. I'm all for that!!
Although I guess our marcap won't stay there long ;-)
thanks itsriskythat. So our marcap is £166m, we might get £150m in Q1 from the fields; I guess half of that goes to Messrs Buffet et al. Perhaps we lose a few weeks in the ramp up; so £75m becomes £50m. From memory I think we have 70 employees. I should know this but how much debt have we got?
So if we could clear 1 x £50m and 3 x £60m turnover as prices drift lower in the summer that's £230m for the year. Given that most of our plans must have been based on a sell price of £50 anything around £300 to £400 per therm and we're laughing
I just saw on Bloomberg that Jan '23 futures are looking very robust too.
seems like the Russians are sucking gas out of Europe
https://www.reuters.com/business/energy/russian-gas-flows-germany-via-yamal-europe-stop-gascade-data-shows-2021-12-21/
I'm continually amazed about the underlying gas prices for January onwards
https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5863521&span=2
up a mere 15% today. They are volatile, but let's face it, they were 300 a few days ago, now 429 for Jan.
What is it we're going to be selling again in Jan? was it salt water, sand or gas?
Don't let a little overhang put you off. these are on sale at the moment, and against my better judgement I've just bought some more (already had too many).
This is a good link to see pricing for delivery in Jan, Feb etc
https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5863521&span=2
doesn't show values out of market hours.
Jan contracts are up 9.375% today
We should be able to fulfill some of those :-)
And once the gas starts a-flowin' as I recall we're going to do some sensible hedging to bank some production at these prices. Hopefully with the right advice/ knowledge so that we buy the correct contracts. (I seem to remember a firm buying the wrong contracts earlier this year?)
Wondered why the uptick with 400k volume today, then spotted 2m traded yesterday. Mm's must be running out. Come on LOG feed the market; or have you sold enough to show that you're taking your administration role sensibly.
Can't wait for any Dec gas landing (more likely Jan) and then some sort of OMG moment when the calculators come out. But we made all our plans to break even at 50. What did you say the price was? 62? No.. 262. Cripes that can't last. So we could do 12 months planned revenue in 9 weeks. Job done by Easter?
Enjoying this :-)
Thanks Peakview. I just had a look and today was the 5th session in a row of around 1m traded. Roughly 2 or 3 times normal volume.
https://www.sharesmagazine.co.uk/shares/share/IOG/historic-prices
thanks scored again. I'd randomly spotted prices going up 10%, but given the craziness of the last few months didn't bat an eye (and I hadn't seen the German decision). It's quite nice when your one product keeps going up in price isn't it.
https://www.theguardian.com/business/2021/nov/16/germany-suspends-approval-for-nord-stream-2-gas-pipeline
I seem to remember someone saying a few years back that starting a UK bank and getting a banking licence is no mean feat. To have built a bank that regularly tops the charts for favourite bank is a great accomplishment; after all great customer service is what made banks like First Direct so successful. Customers stick with banks that they like for decades; as such the new customer acquisition is probably the more difficult thing (compared to keeping hold of customers)
I think that the above is a good basis for deciding whether to buy shares in any company. Do they have a good product offering.
I wouldn't mind betting that most UK banks and possibly some other organisations have a file on Metro Bank (and other potential acquisition targets). As such there will no doubt be many board room go/ no go discussions for further analysis and discovery work happening over the next couple of days.
Afterall if you can buy £23bn ish of assets with £22.something bn of liabilities (I believe the delta is around £600m) it's a rather fine investment for less than half of that £600m. In the right hands, the true value is probably north of that.
Perhaps Scotland would like a new flagship bank to get behind
Perhaps there'll be a Metro Virgin win win
Lots of connections in the US, perhaps BH will have a look
Or perhaps Carlyle will go it alone and put a formal bid in before November is done
If Vernon Hill was considering buying back his offspring then might have to get skates on
It'll be an interesting few weeks that's for sure