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"Martin, many companies are valued on potential. Look at UKOG or Angus."
In my view, there's a difference between solid future potential (eg HUR) and vague concepts about how a company might or might not choose to evolve at some point. That's just wishful thinking.
"A new mining operation, within the next three to five years seems a logical step."
Logical, sure. But you can't value a share on that yet, can you?
"Martin the long term better investments you mention below, would your preference be for SXX or ARB?"
I'm not going to deny being burned with SXX. It's one of those rare projects that I would dearly love to turn into a game changing business. I was in it very much for the long haul (25+ year timeframe), but there's clearly now a chance that existing investors might be wiped out if they can't deliver alternative finance. I'm a little bit over invested, but you take your risks, right?
ARB are only a small part of my portfolio, but I find them quite an exciting opportunity nonetheless. I previously had crypto exposure via XBT trackers, but ARB has taken over most of that now. I think a little bit of exposure to crypto is sensible and ARB are highly profitable as things stand.
I'm not pretending to be anything other than a private investor with an interest in managing some of my SIPP myself though, so what do I know :-)
"Martin, I really am baffled by your post! Can I ask why you bought BRD shares in the first place? As I can’t understand what has changed for the worse this year for you to decide to sell at a 20% loss when the company is about to turn profitable and is producing a record number of diamonds?"
I first bought into BRD around 18 months ago now and a lot has happened since. For a long while I was about 70% down, despite averaging down as the price fell. The dilution in November last year and again in May this year were pretty much terminal from a value perspective for me.
I can't remember what the lifetime of the mine is, but a total lifetime return of 7.3x current market cap (over what period?) doesn't feel like enough to me.
I'm retaining a small holding, but given the history, I'm pleased to get back to a position where I might just recover my initial investment.
I was assuming that additional profits would be wiped out by unforeseen servicing costs and increased mining costs for the last 20% of value. Warrants might bring increased cash, but also increased dilution. I don't know that there's much of a dividend on the way here, and with a limited lifespan on the mine what will drive the share price up?
I'm not saying it's a bad company, just that growth/return potential seems limited to me.
Latest RNS confirms that the total lifetime revenue is 24x the current market cap. Profit margin of $130 per tonne (30%) suggests that total lifetime profit will be circa $37m max, which is 7.3x current market cap - a tiny bit higher than my 6.5 estimate.
I'm continuing to reduce my holding (still 20% below breakeven) on that basis. There are better long term investments elsewhere IMHO.
Yep. Ignore the sodding charts and show a bit of patience :)
How many of those are FTSE250 trackers that will be forced to sell? Anyone know?
SuperRoty: how exactly do you calculate your target price of £2.75? I still have the whole lifetime value of the mine at £6.50 on the basis of the price history and cpht.
How about an ICO? :)
I would also be interested in the bond, provided it was accessible via SIPP (HL) and the bond at least covered the £400m required to de-risk the shaft (with the cash guaranteed to be spent on doing so).
I've put £25k into SM shares and am 83% down currently, but still believe in the long term potential of Sirius and the mine.
Back in July before the consolidation, I posted "So with 1,629,001,910 shares in issue, there's a potential total lifespan return per share of $0.0166 (1.66 cents / 1.3p)"
After the 500-1 consolidation, the lifetime return per share I calculated becomes £6.50 - only 5x the price today.
I suppose not everyone here is sitting on the 76% loss that I was back in July :)
I'm pleased at the share price recovery over the past couple of months. I've taken the opportunity to sell 75% of my stake at a small loss, as I'm still not convinced on the long term profitability of the mine.
Assuming the price move is knowledge-based, and assuming the news is only bad enough to take 10% off the price, I'd take that.
All things considered, it could have (could yet) been a lot worse.
Actually the cached page on 11th Sep shows a 5% coupon rate, so I guess that's part of the bidding process? (For everyone asking me to decipher, you're asking the wrong guy!)
8.5%, but convertible
The page on cbonds was new on 11th Sep. On that date Google's page cache shows the full $400m outstanding.