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What happens is that the results come out and are different to what was expected. In the run up to the results analysts have competed with each other to make ever more outlandish estimates for the numbers, not least to attract attention. On the day the price falls, but the day after the results the analyst cycle starts again and the price recovers.

Credit Suisse today reiterated outperform and raised their 12 month target from 640p to 675p. JP Morgan reiterated their overweight recommendation, but dropped their price from 650p to 640p. Which is right? Price will be better or worse than expected? 27% gain or 35% ? Neither of them think it will fall though eh? Click the broker ratings button here to see what utter nonsense analysts are guilty of.

Personally I think Glencore are well positioned with income hedges against whatever happens next. Nickel, Lithium and Cobalt plays if electrification takes off as expected, coal and oil if it doesn't. They are also positioned for offtakes rather than mine operations if the market for any commodity collapses, and make a profit in any market state.

I bought more between 3 and 4 pm yesterday, I got a pretty damn good price. I'm happy to hold until I get at least a 20% return, and will reconsider then.

26% increase in revenue translating to a 250% increase in EPS, some racy analyst expectations then.

So... Its hard to imagine how the results could be better. Effectively now debt free with revenue and profit up across the board. Dividend up, share buy back program in place, likely to add further value with acquisitions, and rising demand for the metals GLEN trades.

Given the price has amazingly fallen, what would the company have had to do for the market to have reacted positively?

Any order, including yesterday's, can be cancelled. The A350s are RR engined?

Specifically this isn't even the largest order for Trent XWB engines, that was Qatar Airways when they ordered 80 aircraft. This is just the largest order for the latest XWB variant, the XWB-97 .

Not to be picky, its the biggest order for this engine type, not RR's biggest ever order. I think the biggest ever was for the 50 A380s ordered by Emirates in 2015, they have four engines each in case its not obvious. That deal was valued at $9.2Bn at the time, fairly safe to assume that this deal will be around half that in value plus inflation.

PSK - a few years ago I used to run a Rolls-Royce business unit. My target gross profit margin across my business was 56%. Corporate allocations, the ITDA part of EBITDA etc would generally erode that down to somewhere between 12 and 18% net. Every deal has its own margin, but the leaders of any of the business units, or of any engine program, have a margin target set by corporate finance. Failure to make it is generally career limiting.

To those saying they sell engines at a loss to make a profit on parts and servicing, no. Not since the 1990s. Rolls-Royce now in general does Total Care contracts where they don't sell the engine at all. The details have not been disclosed for the Air India deal, but I would assume its a set of Total Care contracts rather than engine sales. The duration of the TC could be 10 years, and the actual price depends on the forecast usage profile, fuel burn guarantees, failure penalties, availability etc. The reason RR was hit so hard by the pandemic is that most contracts are based on a 'power by the hour' principle, customers pay for guaranteed power per flying hour. Reducing the flying hours means reducing RR income directly, similarly flying hours picking back up increases revenue pretty quickly.

Put it this way, it really isn't like buying beans from Tesco. The value on to the order backlog will likely be somewhere between $2bn and $5Bn. When I was there the order backlog was around £50Bn, so its not an insignificant amount to add to it.

Any plc has closed periods when directors can't buy. News can be good, bad, or indifferent. You still can't buy on a whim. If there is M&A ongoing the closed periods get even more complex, I was in a company where I couldn't buy shares for over a year.

By the way, as far as income goes don't Alba own 11% of Horse Hill? Or did I imagine that?
https://www.ukogplc.com/page.php?pID=60

The fund raise in November also covered general working capital. They have two years or so cash on hand. Any new mine working at GROC or Clogau will require investment, either loans or dilutive equity. A new mine is not going to magic up out of maintenance cash flow. I'm not sure why this would be a surprise to anyone though.

Still a big seller dumping shares. A fund has decided they want out for whatever reason, it will be interesting to see who it is of it gets TR1

For the hard of thinking, a Trent Xwb engine is worth approximately $20m. Ordering 80 of them is worth $1.6Bn, the options for 20 more round that up to $2Bn. Air India are / were a Total Care customer, so the service agreements are likely worth that much again.

GE got orders where RR didn't compete, pushing out P&W on the narrow body deals. RR didn't win the 787 contracts, not that big a surprise given the Trent 1000 history.

So yes, it's a big deal.

The bumper agreement for Derby-based Rolls-Royce includes orders for 68 Trent XWB-97 engines, used in the Airbus A350-1000, plus options for 20 more, and 12 Trent XWB-84 engines, used in the Airbus A350-900.

Financial details were not disclosed, but the agreement makes Air India the largest operator of the Trent XWB-97 in the world.

To be clear, I was saying Tony Seba was in favour of decentralised power, it may not have read that way

Governments are not generally led by scientists or engineers, neither in general are most businesses. Accountants (CFOs), Salesmen, and a few ops people normally float / scramble to the top.

What's a lot less obvious is what to do when both science and engineering tell you that you are screwed if you stay where you are, and moving is impossibly hard.

The simple facts are (as partly put in the presentation) we are past peak oil, even if climate change wasn't such a threat there isn't enough easily accessible oil and gas being discovered to continue with the cheap energy systems we have had.

Similarly transitioning to a low(er) carbon environment is constrained by a fundamental lack of new high concentration mineral discoveries and the blockbuster mine investments needed to exploit them. Shifting to electricity for everything will need big vision, even bigger investment, and big engineering.

That leaves goverment in a awkward spot. No electorate wants to believe a leader that tells them they are screwed, its a childlike expectation that the adults will come along and unscrew us. NIMBYism also rules, no one wants tidal barrages, wind turbines, or a new hydroelectric scheme in their backyard, and greens want to protect the bats / newts / otters / sticklebacks / hawk's displaced by big projects.

So. We are up **** creek, and not only don't we have a paddle, we haven't got a canoe either.

Still, transition metals, copper, nickel, lithium, neodymium, etc, will be in progressively higher demand. So we can Nero it up whilst the cities drown rather than burn, although the less restive ones may do both.

Tony Seba in 2020, doesn't call it democratisation by name...
https://www.utilitydive.com/news/100-solar-wind-and-batteries-is-just-the-start-the-super-power-they-p/588412/

Slightly older but still tha same valid concept :
https://www.renewableenergyworld.com/solar/energy-democracy-in-4-powerful-steps/

I love presentations like this, it's just like watching a magician. You know there is a trick but it's hard to figure out where it is and how it works at first.

1. He says right at the beginning 'everyone wants to be like Norway', the 'to be' state. But then uses world averages for electricity generation carbon emissions in all the subsequent graphs, and also keeps the data at today's values for extrapolation. The missing chart is 'what would transition minerals production emit if it was being done in a highly renewable energy environment like Norway'

2. He uses energy transition interchangeably with talking about electrification of cars. They are not at all the same, and in fact barely related. He rightly points out that cars are a small overall part of CO2 emissions, but then focuses almost all the presentation on cars. What about trains, road transport (trucks, buses), aircraft, ships? Primary power generation shifting from coal to renewable or buclear is probably the biggest single effective measure but barely mentioned.

3. Talking of Tony Seba, he assumes a persistent central generation model rather than democratised and distributed generation and storage. What restrictions are there on a massive uptick in distributed solar and reconfiguration of energy grids to cope ? The amount of additional copper needed is relatively marginal.

4. Any execution plan based on long term aggregated data is bound to fail. Going back 100 years for data is a clue. What does the actual transition plan look like? Will rich countries transition first (like Norway), or will poorer ones build renewable first? The all at once, one way to do it model plainly isn't real, but what is?

It's one of the smartest presentations I have seen in a long time, but it definitely was predicated by a goal. I agree on mining being a bottleneck, as is oil and gas production. We are on a 'burning platform', we don't get to carry on on the same trajectory with impunity. The only way ahead is massive infrastructure change, and defining the shape of that is the challenge of our generation. I guess there will be plenty of people selling books about how we can / can't / won't / didn't do it.

Ignoring Clogau for a moment and just valuing GROC, I would suggest the best comparison can be made to ACP who are also trying to raise funding for a grpahite mine, but in Tanzania rather than in Greenland.

ACP owns the Mahenge Liandu graphite project in south-east Tanzania. The Project has a high-grade JORC compliant Indicated and inferred mineral resource estimate of 59.48Mt @ 9.8% TGC , so 5.8Mt contained graphite. The mkt cap of ACP is £12m at the moment, although was over £25m in the last 12 months.

GROC on the other hand just RNSd a total inferred, indicated and measured JORC Resource for the Amitsoq Island Deposit of 23.05 million tonnes (Mt) at an average grade of 20.41% Graphitic Carbon ("C(g)"), giving a total graphite content of 4.71 Mt. Current market cap for GROC is £5m. Unless I have it wildly wrong ALBA's GROC equity is worth more or less the mkt cap?

So ACP has just 20% more graphite, but at 50% of the concentration inevitably making extraction and processing more expensive. GROC I would argue is significantly more valuable than ACP on that basis. If they can't raise the cash themselves and have to JV or sell to build the mine, then the asset value should be reflected in that transaction.

It would be easy to claim an asset value of £30m or more for GROC at a transaction, attributing 50% of that to ALBA gives a premium of at least 60% over the current ALBA mkt cap of £9m.

I assume this has all been said before, but just the GROC asset value means ALBA is at a discount to where it should be.

This is the article. There is a section to leave comments https://masterinvestor.co.uk/commodities/waiting-for-goldot

The article appears to be an attempt to justify previous incorrect analysis rather than a balanced view on the company.

Well that was a the worst post in a while. As wasa says, fully diluted with all options and CLNs executed the NPV to mkt cap ratio is somewhere near 3:1 at the moment excluding A2 and Vermelho. That's what the market is currently ignoring and investors are buying into.
Incidentally, if the company chooses to it can repurchase the CLNs with interest paid, so there is still a chance of lower dilution than expected.

Hardly overwhelming support stating a 200p target, but its at least some coverage rather than the crickets we have had for ages.

Probably the matched trades we saw go through. Will be interesting to see who the buyer is, I half expect Glencore.

SINT trades are often off market negotiated matched trades. Sometimes happens when a fund manager has a seat and wants to move shares from one fund to another, or is negotiating on behalf of a client . Fundamentally they are trades that do not go through the market makers and therefore no MM bid / offer margin is applied.