Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Well, they are !
Just to remind, I think I said entirely foreseeable that there would be no EU grant, but that shares were now at long term buying point - but not to be chased.
Don't know why the collywobbles on here. We should all have known that timetables in Africa (quite apart from for a complex business like planning, agreeing, and getting around to doing a power project) are not only flexible and elastic, but floating on erratic waters. An investment here has always been - 'in the event that something solid happens it should turn out profitable for those who got in at the right price'. So just sit down with a nice cuppa tea and then go and do something else.
Mine has been taken down as well. Pathetic - whether by some inadequate who doesn't like what is said - or by LSE's system glitch.
What did I tell you. All foreseeable to anyone thinking things through.
You haven't the slightest idea how these projects work have you. Any contract is awarded by the special purpose vehicle set up to manage the funding and construction. Its nothing to do with GCM, which is the 'sponsor' - NOT the owner. The project owner will be those who put up the $3.5bn in the form of loans and equity, and of the latter, GCM will only have the (very small) share it has already paid for by way of work done, plus whatever new funds it puts in, which will have to come from shareholders. There is no such thing as 'free carries' for power generation projects.
On the announced NPV and irr, indcates a capex around £15m. Looking at UK Power Reserve's existing 20MW plants (via Companies House reports and accounts for all their 30+ subsidiaries)) indicates historic capex at least £10m, and annual cash flow around £1m - £1.5m pa. So for each 20MW plant, after tax and Med's 35% minority, don't expect more than £0.8m-1m pa to Kibo. That's about 1/3rd its cash drain until first (hopeful) dividend from any of its power projects in at least 5-6 years time. So how many such plants, and how is Kibo going to finance them, if not needing yet more dilution to Kibo shareholders ? But I;ll bet trying to nail LC down to an answer will be like trying to ail a snowflake to the wall. Hope someone tries at the meeting. I've tried asking similarly vital questions before, only for them not only to be ignored, but not even acknowledged.
Because too expensive this far ahead, and too much value-setting news still to come . But would dip a small toe in a bit below price now.
Agree their mining / oil analyst produces he worst 'research' I've ever seen - and I've seen a great deal. He merely re-puffs what is already known, pads out his reports with repetition, and never, ever, backs up the assertions he makes. I could give chapter & verse if not for LSE's fear of Sue Grabbit & Run.
Did I not read somewhere that some stockmarket analysts were skeptical of the reported figures. Not many analysts are 'forensic' enough when commenting on listed companies (or, are under pressure not to ask hard questions) and just rely on the 'audited' 'headline' figures. But an experienced business analyst ( a management accountant for instance) can sometimes unravel the wheels within wheels that auditors are not trained to do. In my early days in the City very few fund managers bothered to understand balance sheets, which often offer clues.
BeesH I don't think its possible to project a share price here with any accuracy. GCM is a tiny company with a toe-hold in massive projects which depend on equally massive companies to get financed and built. Its like a dinghy with a line to a drifting supertanker for which it hopes to claim $zillions in salvage money. But a small shift in the wind could drift the tanker onto the dinghy and crush it. If it wants to retain any share of the fully financed project, GCM is going to have to raise large amounts to pay for all the feasibilty etc studies still needed and to 'buy' any project share over and above what its historic spending will. I haven't been following this in enough detail yet to know what has been clocked up - did I see a reference t some $60m in historic costs ? (not shown in the balance sheet because the auditors don't think its worth anything !) The total equity is likely to be $1.5bn. $60m is 4% of that. To repeat. Shareholders will not be 'given' any free share. And no value for GCM on the number of its shares that will then be in issue can be known until financial close - which isn't likely for 2-4 years, if that. Its why shares like this shouldn't be chased. Ask Kibo shareholders !
Sorry honeybee. Its you are missing knowledge about how these projects are financed. No one (including GCM) gets a 'free' carry or free stake. The whole of the capex has to be met from debt plus equity - and equity is provided by the shareholders in proportion to their 'share' of the project. GCM may well have 80% now, given that it has spent most of the relatively small costs to date. But for the full financing (not known until financial close probably at least 2-3 years from now) it will either have to stump up 80% of the full (c$1.5bn equity proportion of capex - impossible for GCM of course) or its share will be diluted down by that of the majority financiers. I suggest you do some research. There'e plenty on the web about power project financing. And plenty of recent news about financing for eg ORCP and NCCL. In all cases, the sponsor company (ie GCM) has to raise funds to pay for its share of the equity. The only 'free' share it gets is credit for its historic spending on the project.
Something to be wary of are the tiers of intermediate companies involved, the key one being the Special Purpose Vehicle set up to manage the funding and the construction. It is totally different t o the listed GCM and often confused with it - especially by journos reporting on 'shares' of the project , I have been writing about and producing research (and doing all the maths) on such projects for institutions for many years, so don't think I have missed many points ! Thank You.
Whyast1695 - Quite ! From GCM's and its shareholders' points of view there will be absolutely no difference from any project financed solely by a bank or by equity shareholders. Its merely that the govt will stand behind whatever loans are provided. They won't stand behind the equity shareholders, because that's what equity (ie GCM and the myriad others who will be needed) is. They take the risk. So I'm not quite sure what point you are making.
You will note, manwithyour wifi, that all my recommendations (mostly to sell) over the last four years here and elsewhere have proved correct and saved many punters loads of dosh. I post where I see absurd share price targets, whether low or high, in shares that few punters seem to properly understand and which some ramp to fantastical levels. So my posts are not for the likes of you, but for the intelligent.
OfficeM - Do you have a problem? I post where I see a share price out of line with reality. Sorry if its not your reality.
I promised to post my reasons - but didn't get round to it. But I see others seem to have been doing the same calcs as me. So I've posted mine where thy can't be deleted.