The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Also, the gold rise will make mining of lower grade refractory ore profitable. The demand for POX should rise considerably meaning better margins in the negotiations...
Yes, gold on a stormer. Think Mr Grim said it was looking a 'bit toppy' just a few days ago.
Anyway, just some basic maths shows how much cash pog is generating now. Around 460koz of own production and I would guess 15% margins on up to 300koz of 3rd party so another 100 million or so.
Interest payments dropping, debt coming down due to the conversions.
Pog also growing as a business not just riding the gold price. As Pavel said in the 2019 results a 7% rise in gold led to 47% rise in ebitda. Imagine what an 80% rise in gold will do to cash generation.
Anyway, adding a few more. Buy the rises buy the dips. Seems to work.
Whatever view you take, pog is massively undervalued. I actually don't object to the UGC move. Funny, when I first started investing in POG last December, I recall so much negativity on this board and the sub-text was fraud by management. Now you have the opportunity to investigate the transactions for the last 3 years and everyone is saying don't vote for it. That's nuts. I have for the sake of clarity and for the sake of credibility going forward.
But each to their own value system.
I'm not PVA grim, that's your title not mine.
So what you're saying is that you've got some right and some wrong.
Bit like my mum going to Tesco or Aldi.
Anyway, for a chartist all you need to do is get 51% right to be one of the richest in the world. The difference between 49% prediction and 51% prediction is what it's all about.
Grim, as it ages it becomes richer.
So now you might take a position. But all of your posts have been to the opposite.
Anyway, whatever works, but you can see from the posts on here that credibility is quite low. You don't it seems do your research and giving support and resistance stats means very little if you can't predict direction.
It's a bit like retired banker in a way. He/she always wanted certainty quoting historic p/e ratio's etc. But the market moves forward not backward.
Gold 3000 this year is my bet.
At that rate, pog will be generating nearly twice it's market cap in profit. And if the usurpers get in they want 50% of free cash flow to be paid in dividends. So that's a divi of more than 30%. I don't mind that at all as it will give me some 200k a year in dividend payments.
All this nonsense with the boardroom is just nonsense.
You get fantastic management and fantastic directors but the problem is the company doesn't make any money. It's all about cash generation and the rate of cash generation.
And of course it's all a gamble. You can't have certainty and make a return.
100% in cash means your money isn't working for you. Buy, short, do what you want. But don't do nothing surely...
I continue to buy pog. With gold set to push through 2000 and then some, pog is just too cheap.
Debt has come down with the conversion of the bonds.
Looking great if you ask me..
It would be in breach of every company law rule for the board to agree to process UGC's concentrate on the cheap. It is the duty of directors to act in good faith and in the best interests of the company not the shareholders. Breach can result in disqualification, fines or criminal prosecution.
Traditional volume set to reduce to around 200koz a year.
You need to see pog as an industrial processor. Everything now geared for that purpose. It's unique in the gold mining world really.
It has a million oz capacity.
The margins on Pioneer floatation ore are huge.
Some people trade psychology, I just buy the cash generation and rate of cash growth and hold on.
Worked OK from 7p, despite the negativity.
My votes in.
Continue to buy. Buying cash at a discount here.
Look at HGM production 300koz, no POX facility. Price 1.2 billion. Pog production 700koz with a billion pound POX setup. Value 1.2 billion. That's nuts. But the market takes it's time. I can wait.
Updownflat,
You need to read QandA transcript for the results to understand the issue with POX. Pog it seems lost 2 significant contracts for 3rd party ore. That's why it was under utilised in Q2. Since then they have secured enough supply for the 150 tonnes predicted for this year. That equates to 300koz for high gold concentrate ore.
If you add on pog's 440koz I think we'll see over 700kz produced for end 2020.
With gold at 1950 and looking to move higher, I don't see what the issue is. That's around 500 million profit a year for pog assuming 20% margin on 3rd party gold. And the company still growing rapidly.
The bonds are no longer a problem either. The choice is to repay or refinance. More likely a combination. Revolving credit facility at 3% interest is easily obtained with a company generating the cash that pog is. A saving of more than 20 million a year.
The vote/coup thing is a nonsense. I don't see the conversion mooted on here. Votes heavily stacked against the usurpers.
Operationally, once pioneer is finished they are looking to build another floatation plant at Malomir. By 2022 there will be no 3rd party processing if that happens.
Apologies for the metrics. I continue to pick up shares at these ridiculous cheap prices.
Gold at 1900+. Insane level's of cash generation for gold producers.
OK, I'll stop saying 'metrics'. I'll just say POG is too cheap and growing too quickly if that makes it easier.
I continue to add to my position.
Mr grim,
I've never considered a chart in my life. I'm up with geared spreads some 1200% this year and I'll be collecting more than 100% in dividends from pog going forward.
I don't care about who gets my money.
I note your sales though and your advice.
grim,
2p intraday is nothing.
I see you've sold out completely, but that's up to you.
Remember the comments from the last trading update.
' I am pleased to report we remain firmly on track to deliver on our 2020 guidance for gold production of between 620koz to 720koz, with between 430koz to 460koz produced from our own higher margin assets'.
I like the words firmly on track.
I get some 300koz for third party this year and say 440koz from pog. That's 740koz for the year with gold at 2000.
poly valued now at 9 billion, cey with 500koz worth 2.6 billion. pog 1.2 billion.
I will continue to purchase this gift horse.
IRC announcement soon.
Gold going through 2000 soon enough.
Sleep well Mr Grim.
grim,
I don't care about a few pence up or down. Within 12 months pog will be paying a dividend of about 10p a share, which will be 120% my initial investment. That's the gearing the market offers.
And pog on any metric is way undervalued given it growth and high tech profile.
So do you still think gold is about to crash?
I continue to add on the highs and the lows. A rapidly growing company has a rapidly rising share price.
There are many gold plays out there but how many are growing some 80% a year. Most are on the tide of gold.
I expect to see a share price north of £1 soon enough.
But each to their own
workingstiff,
The slowdown in production was done to difficulties securing third party ore. Also, Q1 benefited from 15koz carry over from 2019. I was concerned with the problems highlighted by Pavel with 3rd party contracts. Everyone assumes it's easy to obtain large amounts of 3rd party concentrate with high gold content, but it isn't and the main competitors are the Chinese.
But I'm assured now from the comments from the trading update that sufficient concentrate has been secured for the rest of the year. Plus pioneer floatation plant will soon accelerate our own POX production. I fully expect final production to be near 700koz come year end given this and the usual stronger H2.
I continue to add.
Rusty,
Pog's intention is not to have to process any third party ore by 2022. So there will be no split to have to consider.
I'm surprised you can't see at least a 50% improvement in key metrics for the 12 months to end 2020. Ebitda is set to rise probably to 500 million. Net profit to 350 million (that's up some 600% on 2019's 50 million.)
As for the million oz that was RB's figure. But if we ever get to produce that with gold at 2000, I certainly can see a valuation of more that 4 billion.
The comparison with poly is perfectly clear. They are valued at over 8 billion with 3x pog's debt and they produce around 1.4 million oz or so... with growth mainly dependent on the price of gold...