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Last yyear the full year results cam out on 30/06, which is a saturday, so this years should be 29\06. In these I would hope for some clarity on the strategic review, and some breakdown of production costs.Obviously the plant breakdown is going to alrer production levels, but we should get a full month in April, and hopefully some clues for what they might have done in May. If there is no info in the ACU final year results, ZCI bring out there final year results at the same time, I would certainly expect some kind of update there.
They may well be, but I like others want to know how long they will need to rely on the bank of ZCI before they become a going concern. I am prepared to cut them some slack regarding the failure of the Ball Mill pinion shaft. However I now want increases in production to over 1000k mt per month, and answers to what exactly our costs are, and when they can expect to become profitable. This is outside the strategic review, which has now been going on for 4 1/2 months, for which I am prepared to give them another 6 weeks, (up to my holiday) which will be 6 months. I consider this is enough time for them at the very least to inform us of any interest they have had in a full or partial sale.
Personally I don't think it makes much difference, I guess the price would be based on an average sp over a certain period of time. Regarding the interest charged, it seems fair, I doubt ACU could borrow the money at a lesser rate, if it all in the current economic climate. It is all about the strategic review, though any increase in production is not going to do us any harm. They can have a stick of rock each if the sp goes above 10p. On balance I still think ACU have some fantastic assets that should command a decent price in any sale. The only sticking point is what is your definition of a decent price. I would be deeply concerned at anything less than $200m, and looking at other sales a price nearer $500m would seem more realisitc. Though in reality it is out of our hands. Hopefully there may be some clues in the full year results which are due out within the month. But the wait cannot last to much longer now, I would guess the very fact that the strategic review is still ongoing says something is happening in the background.
I am going on holiday on 20th July, it would be nice if they could get it all tied up for me by then. Give me some money to buy a stick of rock for the kids to share.
Yes I ded recieve a reply, whicj implied a detailed breakdown of costs will be in the full year results. They said they where in a closed period and couldn't go into details. For what it is worth ZCI have been a majority shareholder for some time now, they have never showed any malicous intent, and have far more to be gained with ACU doing well than we do. If ZCI wanted to take full control of ACU for next to nothing, they could have done so easily. I have long believed the reason they haven't done so is they want a full or partial sale, the process we are now in. As WTI and other are finding, starting a copper mine up is fraught with problems. Saying that I want a number of questions answered, what a the costs per lb required to be in profit, what are the costs per lb now, and at what point will htey be self sufficient. I await the full year results, if my questions are not answered then, I will contact them again.
To be honest, whether it is paid off as a loan, or taken in shares, the money needs to be paid back. This will be either through a full/partial sale, or the company needs to be profitable,which at 10k mt a year, and rising, it must be soon or why would ZCI put more money in. The full year results are coming out soon, we could get some further info there. However the stategic review has now been going 4 1/2 months, it cannot go on indefinately. So we have a lot going on. Lets hope one or all of these will lead to a signifcant increase in the sp.
Also remember this from the RNS dated 22\0512 "This will allow the plant to run at a higher throughput once the Mill is repaired. Some contractors whose equipment hasnot been performing to expectation will, in the meantime, be required to stop activities so that they can maintain their equipment in preparation for higher productivity when the Mill restarts." Looking at all the info I would hope we would breach the 1000 mt per month figure.
It is not the sp that is relevent (though it would be if you paid 70p and still hold) it is the market cap.The sp is affected by how many shares are in issue the market cap isn't directly. I am trying to work out what ACU is actually worth, and what it will go for, as most AIM mining companies have supressed sp's at the moment The paid $10m for a 5% stake, meaning they believed it was worth $200m at the time, that was pre-porduction, so if ZCI sell out you would hope we would get at least that figure minus debt. Obviously this doesn't actually mean it will go for that, if it go's at all. It could be more it could be less, who knows, but MRI know there copper and that is what they thought is was worth in 2008. Pozz I don't believe they are buying copper at a discount, or even know if they still hold any shares, as this pre dates ZCI's interest in ACU. I am not aware of any conection between MRI and ZCI. As far as I believed MRI are a far bigger fish than ZCI and buy copper of companies all over the world.
I have mailed the company regarding what the costs are per lb to produce and what they need it to be to make a profit. I will let you know if they reply Thoug as I was digging through some past RNS's for some figures I cam across this, which we should bare in mind. "Marketing In January 2008, African Copper signed a five year, renewable "Take or Pay" off-take agreement with MRI Trading for 100% of all copper products shipped from the mine. Treatment and refining charges are based on annual global benchmarking. As part of the off-take agreement, MRI invested US$10 million and have a 5% holding in African Copper." MRI paid $10m for a 5% stake in ACU, this was prior to production comencing.
I must admit I would like more information regarding what exactly their costs are to produce. if I remember correctly from quite some time ago pre ZCI they quoted a price of about $2.50 per lb, but ZCI have never really given any figures regarding this. there must be a point where it become self sufficient. i will email them to find out.
"Daily production is progressively increasing and management is looking to exceed the record production level of 809 Mt of copper in concentrate that was realized in March 2012." This is the interesting bit from todays RNS. There are companies on the AIM who would give their right arm to have access to the funding ACU does. Though I would rather we had no debt obviously.
I doubt the recent mechanical issues will put any prospective purchasers off. It was due to be replaced anyway, and whoever is interested in buying ACU will be taking a long term decision, particularly if it's the chinese. ACU are selling copper in decent amounts, ever increasing decent amounts, like other companies in this position they are playing their cards close to their chest. I have seen other copper companies do similar things to ZCI/ACu and the process took 6 months, we are three months into the strategic review. I'm not saying it will be six months, could be sooner, could be longer. No news is not bad news,. or good news, it is just no news.
Of far more interest is the ongoing strategic review, we should be due another cautionary announcement at the end of this week (Friday if my sums are correct) As of yesterday we are now three months into the process,
"China has said it will take measures to boost demand and investment amid fears of a slowdown in its economy. On Wednesday, the government said it will encourage private investment in sectors such as energy, railways and telecommunications" All of the above will require lots of copper.
"With global demand for copper expected to outstrip supply, and the price of the red metal down from its highs of nearly $4 earlier this year, now may be a good time to move aggressively in the market. There are already signs that copper producers both large and small plan to forge new alliances and press ahead with buyouts in anticipation of greater demand." http://copperinvestingnews.com/10984/time-may-ripe-copper-ma-flourish-anglo-american-bhp-billiton-glencore-xstrata-ivanhoe-rio-tinto/
135tph works out at 97k tonnes per month. as opposed to 72,829 tonnes in March, which was their record month for production. So looks like they are continuing to increase production levels, which bodes very well indeed. Even more so when you consider the following "so that they can maintain their equipment in preparation for higher productivity when the Mill restarts." ACU sale or not, looks like things are actually starting to look quite positive for ACU (At last) Though these are very quick calcs, if any thinks differant please feel free to correct me
Well spotted
In todays market, any AIMer gets nailed on any bad RNS. Whether anyone gets in at a bargain price does not matter much now to be honest, it is all about the stategic review.
I think ACU have actually been quite lucky. It was due for replacement in early June 2012 anyway, with a replacement ordered ten months earlier. Things break, and the Mill will be out of operation for a couple of weeks. Not exactly earth shattering stuff. Though the markets will punish any bad news. The sale process is still on going.
Well all I can do is go by what is in the public domain, if they are a couple of months further down the line than we are led to believe all the better. The news will arrive, when it arrives.