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IC review of KMR results from August a bit old now and nothing new for us that follow the company but it's always nice to read another view thought it would be worth posting.

https://www.investorschronicle.co.uk/news/2023/08/15/kenmare-resources-revs-up-shareholder-payouts/

Broker comment

The quality of CAML’s asset base came to the fore yet again in H1 2023 as the group maintained an impressively wide EBITDA margin despite the twin challenges of weaker base-metal prices and inflationary pressures on costs. The robust financial performance enabled CAML to declare a 9p interim dividend, maintaining its position amongst the top yielders in the junior mining sector. Capex requirements should reduce materially from next year.

Decent results in my view considering capex of approx $30m expected this year with only about $12m being sustaining capex the rest going on solar and back fill projects.

If look at the five year Cu price it's doing just fine, Zinc has pulled back to traditional levels from a unsustainable peak, Lead is in an upward trend for the last Twelve months.

Imo cash would have been stable without additional capex even with increased inflation costs.

Moran's review of the company worth your time to peruse the details.

https://moram.substack.com/p/guide-to-the-lng-market-sericas-tailwind?utm_source=substack&utm_medium=email

Hi Isa, although not invested here at moment still lookin now and again to see what's going on, I thought the results were good net debt down now at low levels, drilling to extend mine life close to the existing mine, okay full year guidance down a little maybe the market doesn't like that, the other projects progressing.

With all their projects on the go and now lithium while it's great to grow the company how will these be funded going forwards some from cashflow plus debt plus share issue? that might cause some caution.

Still looking good, not checked if there is a presentation explaining in detail the way forward which would address funding issues.

Positive broker note out today.

Kenmare Resources (“KMR”) has released solid interim financial results, supported by higher ilmenite prices and shipments. Despite a poor operational performance at Moma in H1, semi-annual EBITDA was US$110.4m, +12% vs H&Pe and +5% YoY. Net profit also beat our estimate by 13%, allowing KMR to declare an interim dividend of US17.5cps, +58% vs H&Pe and +59% YoY. As previously mooted, the Company has also confirmed a US$30m share buyback

Https://www.reuters.com/business/energy/nigeria-turns-natural-gas-fuel-petrol-prices-rise-after-subsidy-removal-2023-08-03/

Shell looking to sell assets in Nigeria but it is not Sepl?

https://worldoil.com/news/2023/7/31/shell-resumes-talks-to-sell-stake-in-nigerian-oil-natural-gas-fields/

First impression from those pictures taken after the ballast tank refurbishment had been carried out, it looks clean and in good nick albeit at a distance, its beginning to lean towards some pipework issues/leaks associated with the pipework circuit to the alarm rather than a breach of integrity between the two tanks, as per the example of a similar issue on the oil tanker.

Still we won't know for sure until the nest rns either way this issue will be resolved one way or another engineering wise it can be rectified, so another set back.

This highlights the necessity of regular planned maintenance and testing of circuits and systems to guarantee functionality.

Criticism is easy when issues arise its the ability of the management and engineering personnel that counts when rectifying these issues certainty JSEs management have been tested of late.

As you rightly point out Saudi Arabia needs higher oil prices to implement the changes needed to alter it's economic landscape, however it makes me wonder why they are so keen on cuts without others being encouraged to cut in alliance with them, it couldn't be because they have declining supply could it?

In the past when increasing supply they missed their target, keeping a watchful eye on Saudi, on day when Goldman increased their oil demand upwards due to firmer prospects in the US and India.

A quick glance at the five year Cu chart shows copper has done remarkably well imo going up from $2.77 in Jun 2018 to $3.96 today, factor in paying off Sasa into the bargain and being debt free Caml poor sp performance seems unwarranted, as Caml sp at that time was around 225p while languishing at 185p seems a disconnect.

Some good news for all companies as demand is forecast upwards.

US bank GoldmanSachs has raised its forecast for global oil demand this year, driven by a firmer economic outlook in the US and India. It now sees demand averaging 101.8mn b/d in 2023, up around 550k b/d vs its previous forecast and 1.5mn b/d vs its 2022 estimate.

Assume another release from the spr.

Going back to the rns is this adjacent tank to 4s a oil storage tank? and it's vapour from this triggering the alarm in 4s, we don't know and if gas can transfer from one tank to the other is it possible for water to go the other way? badly written communication after stating better communication with pi's is necessary to restore confidence.

The only saving grace here is the upcoming development of the gas project and the increased revenue that will bring, it should be noted if that project didn't exist then the issues with the fpso wouldn't be as big a deal as jse would still be cash rich there is a lot of capex being spent which in time will push Montara importance as a cash generator down the pecking order.

I would laugh if this turned out to be a faulty alarm, with what has gone on here you could never rule it out.

The problem is that until climate change due co2 is revealed to be a hoax which it is, the Greenland ice cores show co2 increases after warming not the other way round, then our politicians will follow the corrupted science and wrongfully target any fuel that goes against their misguided agenda whether gas coal or oil.

All our institutions are corrupted unis, medical, media, climate the list is endless just have a look at were their funding comes from to see this.

All the evidence is out there, the wft is a farce when given thought, if some item was increasing in price to bring it back in line you would normally produce more not ensure by a ridiculous tax regime we would get less.

I don't for one minute think our politicians don't know this so it's all a planned agenda which seems like a conspiracy but I can't come to another conclusion.

Not the best written rns imo, what does the woffle actually mean? that there is a hole in the tank wall with an adjacent tank letting gas seep into ballast water tank 4s and that is why the alarm went off, as it should do.

Communication between tanks? what's that a hole or failed repair? appropriate repairs suggests more welding to a tank that was inspected and repaired by Nov 22 see rns dated 17th Nov 2022.

Is this bad luck, or is the fspo a rust bucket? or the repair crew not having their welds non destructive tested?

All is not well management under severe pressure with this incident which suggests even when this is repaired how long before something else crops up which to my mind means more resources on the fspo to deal with planned maintenance at higher levels than would normally be expected until full confidence in it's operation has been proven.

This is a good example of never putting your eggs all in one basket regardless of how promising the investment case or reputation of the management, like footballers your only as good as your last match.

So in a country that is known for its corruption these leading financial institutions have an opinion in which both are in agreement and they have no influence why do they bother?

For reference those who think the World Bank and the IMF have no influence in Nigeria.

https://www.reuters.com/world/africa/nigeria-gets-world-bank-funding-social-program-ahead-fuel-subsidy-cut-2023-04-05/

https://www.premiumtimesng.com/news/headlines/580711-imf-urges-nigerian-govt-to-remove-fuel-subsidy-by-mid-2023.html

Https://www.thecable.ng/should-nigeria-join-the-brics

I think there are a few things to ponder over in those results, the company seems to be well run, keeping an eye on opportunities to refinance or pay off debt early which is good seeing net debt has increased.

$20m costs for the litigation expenses, let's hope we have seen the back of those, and the increase change to capex I see as good.

The overlift is part of jointly run operations so nothing untoward there, i can't see what the non cash adjusted items to EBITDA are, with the reduced operating profit down to lower oil prices and FX losses.

Drilling is a bit behind schedule, with a recovery programme implemented.

Not long to wait for the ANOH gas processing plant now over 93% complete.

The MPNU transaction still ongoing with the board confident.

Guidance maintained, with hedging minimal.

Dividend declared US 3cents.

As I have stated previously my concern is not Sepl the company but Nigeria as a country and that is were I will be be watching.