Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
RF must be selling otherwise one or more of these conditions (from the original RNS) would have no chance of being fulfilled:
a) the maximum amount deposited and outstanding being not greater than 10% of the market capitalisation of the Company at the time of the deposit.
b) the maximum amount drawn and outstanding being not greater than a 15x multiple to the 10-day and 20-day Average Daily Traded Value of the Company's ordinary shares.
c) maximum amount deposited and outstanding being not greater than £1 million prior to the deposit.
The trouble is, the more I read these conditions the more I am confused as to what they actually mean. Is there a difference between amount deposited and amount drawn? I can't think what it is.
Could RF have been allotted more shares for the first or second deposits without us getting an RNS? If not, I can't see how the existing deposits can be under £1m outstanding?
Anyone got any answers??
Strange goings on this afternoon with prices quoted.
I can't get a quote to buy any at all, and its 33.2p to sell over 10k.
So why is there a 10k sell at 31p? And the huge recent trade must also be a sell.
Is a very big buy in the pipeline?
I think even 20 p in the next month or so is very unlikely.
From the evidence of Friday's massive volume, if the price to buy drops below 30p there could be enough buying to easily clear RF out of their current holding. (I will certainly buy a few more.) Yes, I know they will get more, but You've got to think in terms of percentage drop from where we are, not absolute drop.
More than 160k traded today, I think . (LSE makes it £153k)
So that bumps up the moving average to over 60k over the last 8 days. (Before that a string of low volume days.)
A 60k average equate to £0.9m drawdown, though.
I can't see how we're going to average £69k of trades over the next 12 days, though.
There's another "problem" with the 4th instalment of £1.4m
It's size will be restricted by the clause about the 15x multiple of the 10-day and 20-day average traded value of the shares.
A quick estimate on current volumes gives me an instalment of between 0.75m and 1m
So SAR may be a bit short of funds earlier than expected.
Sog - don't worry about the interest problem it doesn't exist. There is no interest payable until any later tranches, see initial RNS:
" No interest is payable on the First Deposit, the Further Deposits and the Fourth Deposit. Interest on any Future Deposit shall be mutually agreed between the Company and RiverFort."
So the rot in the CCL vs RCL had already set in pre-covid.
RCL had a much smaller dilution then CCL after lockdown, and has come out stronger, likely to pay dividends earlier, and so consequently has a higher analyst rating, and has recovered SP more rapidly.
The question is, "Will CCL ever be able to catch up?", even to the 2019 relative position? I reckon that would require a 40% rerating of CCL or the equivalent downrating of RCL.
Day off yesterday at grandsons!
My first thought s on this is Pubs. JDW took a big hit at covid (lost 2/3rds) and has only recovered to 50% down. But You'd have to look at whether there was significant dilution, like here. Also take a look at WTB. Not so badly hit and now about 25% down.
TheAccountant - I would not expect more than 10% rise in the coming year.
However if RCL was valued in the same way as CCL, then I reckon it's SP would be around $80 at present. It is in fact almost £130.
So, if CCL had the fear factors removed and a Zack's rating of 1 as well, I could make a case for an SP of £21-£23 for CCL for end of 2024.
I don't think this will happen, because I think RCL is overvalued.
Botbot- I lifted the number of shares from annual reports (19 and 23) which seem from betterlife's link to reflect the mid year numbers rather than the year end numbers.
I suspect CCL's analyst ratings reflect the fear of further dilutions to pay off debt, coupled with the alternative fear of no dividends for 5 or 6 years instead.
So I think CCL sp will not rise much until these fears are alleviated.
In short, yes.
Shares in issue Dec 2019 were around 688m, it's now 1263m. This is a factor of 0.545, i.e. 83.5% dilution.
So only expect your £32 pre-covid sp to be £17.50 now to give an identical mcap.
This is part of the reason why I can't see a sp of over £17.50 until there is a realistic prospect of enough debt being paid off to allow a return of a decent dividend (say of 20p or 25c per quarter)
It may well be that RCL is grossly overvalued rather than CCL undervalued.
I've done my number crunching for the year end and come up with a mean estimate of good value for CCL of £14.20
I would sell part of my holding above this price, and would not buy more above £10.60
As for £20, some time in 2025 at the very earliest.