Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Nice mention of BLOE in today’s video from Sarah Lowther: https://youtu.be/OxKZ2akDl68
Yes, it makes no sense at all Jimbl, and I have never encountered the term AISC margin before, only AISC, and neither does it feature in the interims so perhaps a slip of the tongue in the Q&A.
One thing I note from the interims is that post the period end they achieved ‘‘Record sales in August 2022 of 700t (40% in excess of budget) and repeat forward orders resulted in extended mining campaign to produce additional tonnage”. Those sales would have been around the time that fertiliser prices really spiked up but if we just assume that they got $450/ton, that would have brought in around $315k to add to the cash at bank of $440k they had at the end of June . Add in say another $3.5m under the sales guidance from 01/09/22 to June 23 and we get to $4.259m less Opex of around $1.55m netting down to c. $2.7m. I am therefore pretty confident that they won’t have any issues in meeting the next payment on the purchase deal.
Jimbl, further to your earlier post I have since done more research on the fertiliser markets and now accept that DAP does nor refer to direct application phosphate despite the term being used in the Shard note, so thanks for helping with my education.
I have also spent an hour re watching the video of the investor event and at 34 minutes in Graham states that synthetic products were currently selling at c. $1000/ton and that KRS were currently selling at about 50-60% below that so why not use a figure of $450/ton ? That would produce receipts of c. $3.5m against a cost base of c.$1.55m and leave more than enough cash to pay the next instalment to the former owners and fund another modest mining season.
Jimbl you are wrong as DAP refers to direct application phosphate, not Di-ammonium phosphate as per this note from Shard: https://www.shardcapital.com/wp-content/uploads/2020/09/Shard-Capital-Keras-9-9-2020-R-1.pdf which has several references to it.
Further the note indicates that in year 1 Opex would be around $229/ton decreasing to around $92/ton at peak production., so let’s be generous and assume that this year’s opex is around $200/ton. Based on sales of 7750 tons that would amount to $1,550,000 set against sale revenues of $7, 362,500 based on the prices in the link I posted. We need to recall that the selling prices suggested in the Shard note are now over 30 months out of date and phosphate prices have spiked up considerably since then, so the prices quoted in the link that I posted are entirely plausible.
Just came across this article on fertiliser prices: https://www.agfax.com/2022/09/30/fertilizer-prices-remain-considerably-higher-than-last-year-hurricane-ian-could-worsen-outlook/
This has the price of the direct application phosphate (DAP) that KRS produce at $950/ton as of September last year. KRS have provided sales guidance of 7500-8000 tons for the period from September to 30th June this year, so let’s use the midpoint at 7750. If they achieve that gross revenues should be in the order of $7.362m. Take off AISC of say $90 per ton and that nets down to $ 6.67m.
Not bad for a company with a market cap of only £2.6m, eh?
Some interesting news from Togo: https://www.togofirst.com/fr/gestion-publique/2703-11605-togo-faure-gnassingbe-appelle-a-accelerer-la-mise-en-uvre-de-la-feuille-de-route-gouvernementale
Is the President wising up?
In earlier RNS’s the uplift payment on Glenover sale is stated as £5.2 m ( subject to exchange rate variations) but today’s RNS states that: “ The Company anticipates that the above suspensive condition will be met by 31 July 2023. In the event that the suspensive condition is not fulfilled by 31 July 2023, interest will be payable at the prime lending rate of the South African Reserve Bank (basic rate of interest that commercial banks charge their customers) less 2% on the remaining purchase consideration of ZAR300 million (GBP13.3 million) from 1 August 2023 until the suspensive conditions are fulfilled or waived, as applicable, prior to the longstop date of 30 April” so which is correct?
The 246k @3.09certainly looks like a buy to me Chesh, and would explain the tick up.
Looks like the pullback might have completed today Chesh, so I bought myself another tranche this afternoon.
I see that our Foreign Secretary has been out in Georgia last week talking Turkey with the Georgian PM and his aides: https://georgiatoday.ge/pm-meets-james-cleverly-discusses-strategic-partnership-between-uk-and-georgia/?fbclid=IwAR2HQP3XaJH2bnQXsh0Wd_613J-1swijgc7vk7KeBV0xaz_01df98-znCvY I wonder if BLOE got a mention….
No trades since 13:10 so it looks like the seller is out now.
Anyone who’s just looking in because of a rise, the Glenover thread explains it. Way to go yet imho.
14 trades now although 4 of them look like rollovers.
12 trades already. Maybe the Ministry has approved the Glenover deal.
Not a chunky buy, but I helped myself to another 115k this afternoon after very reluctantly slicing one of my other stocks. As it was a telephone trade my broker is now aware and might share with colleagues and clients, so if volume picks up you know why!
Pete, I guess some only look at the boards when there’s a RNS or a volume spike ,but if everyone here buys a few tomorrow and it ticks up that might encourage others to look in. Unfortunately I only had enough cash in my account to buy 83k but if one of my other stocks ticks up a bit tomorrow I’ll be in for some more.
Here’s the link to the decision of the Competitions Commision: https://www.compcom.co.za/wp-content/uploads/2023/02/Statement-on-the-latest-decisions-by-the-Competition-Commission-03-February-2023-.pdf
See para 1.7
Approval by the Ministry of Mining must be a mere formality now.
Looks like we’ve had a few weeks of stealthy buying here now. Nothing big enough to really set tongues wagging, but friends and family would be first to know if the winter sales programme has been successful.