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bald_eagle - it is certainly what I hope .... but high quality information from this BoD has been in very, very short supply these past couple of years. I do however feel there is much more upside potential than downside here
The mention of $40-50m capital investment to get to 1Mt pa extraction is the joker comment in an otherwise very encouraging results announcement - it seems totally out of place ... but then what isn't with ALTN BoD.
Looking back at the 2019 results the 3yr plan seemed to be to get to 850k extraction rate by spending 18.3m in 2020 ; 9.6m in 2021 and 8.7m in 2022. Then after running for 3yrs at 850k a spend of $45.7m to get to 2Mt over 6yrs. In this set of results they still allude to 850k as the short term goal and have capex of $15.7m in 2020 ; then 11.4m in 2021 and 4.3m in 2022.
So it would appear we're a little behind on capex in 2020 (not surprising given Covid) but intend to catch-up in 2021 and maybe even have lower total expense to get to this initial target in 2022. The critical bit from 2019 results was "The plan consists in operating the Sekisovskoye Mine at 850kt annual capacity for three years then ramping up production to 2Mtpa over a six year period. This will be achieved by increasing the capacity of the existing processing plant to 1Mtpa from 0.85Mtpa for US$8.4m and constructing a new 1Mtpa metallurgical plant and tailings dumps for US$45.7m"
So IF, and as ever a big IF, you believe the well written 2019 report is more accurate than this peculiar statement - then we would appear to be on track for 30-40k oz production by end of 2022 so long as they manage to process and sell everything they extract. ... and again if they sustain this level of extraction / production for 3yrs it would seem quite plausible that they spin off sufficient cash from operations to be able to self-fund the $40-50m expansion to 2Mt production.
What do I think this implies - well if it believable (and I still have some faith) then sp should rise back to £2-3 on 2021/2022 activity and up towards £10 on the target 2Mt extraction = 80-100k oz p.a over the next six years.
But does anybody else believe this plan will be stuck to ?
The strange thing is that for all the lack of communication it does seem as though the past 12-18mths have been largely moving this plan forward on time(ish) and on budget(ish) ... I'm staying overweight.
British - always good to hear from a familiar name .... why don't you think this is similar to POG in 2015 ?
Seems to me the underlying operation is quite sound but the level of debt hard to sustain. the dilution for PI's is similar we got to keep 7% of Petropavlovsk, here its 5%. By buying into the RI I managed to claw back losses on POG and eventually make some good money. I only took a punt here a few months ago at 2p knowing this was a risk, but it is hugely cash generative ... I felt that a competent BoD could negotiate some new funding to replace the convertibles. I think the CB holders, fearing this was going to happen have put the squeeze on the BoD to renegotiate early for their own advantage. I'm happy to risk some more here to get back what I'm down since January .... but I have lost everything on a few of these death spirals - like INTU !!
The stock market is becoming more and more like gambling and less and less like investing - anybody playing in it needs to have a loss threshold worked out before they get involved
Am I correct in thinking that in late 2019 this had a share price of 40p and the same 2bn shares in existence .... so valuation of £800m. This is a classic bondholder shafting ... but the only hope for small private investors is to take the loss and move on OR if you believe the company has a future double down at the new price to reduce your average - I've gone for the latter GLA
Just took a punt on this having got wind of the company from a thread on another BB.
Looks to me this might be a turning point in the company fortunes.
Seems as though Parris has put some genuine skin in the game.
Does anybody happen to know who bought the convertibles ?
... or who Morton family ; Richard Edwards & Nicholas Clark are ?
Looks to me as though all of these new investors are buying into the company at around 22p once the warrants are taken into account, so for private investors like myself to get a bite at the cherry at under 30p where the convertible warrants kick-in seems quite worthwhile.
My guesstimate is that we need to hit around £1m in revenue to cover the admin costs and break-even and then high gross margins make profitability pretty easy. Feel that starting from such a low base with a few insider individuals in the know putting up their own money that tis is a better than evens bet that we double our money instead of going to zero.
Got a few of these badly wrong in the past ... but also got some right - PRD has gone from £8m to £33m market cap in the 3mths I've owned it ! GLA
DD77 - not at all, in fact I top sliced another 10% at 10p today.
I'm very happy with ITX - over the course of the past year I've turned a £20k loss into a crystallized £40k gain and it is still a Top5 holding in my SIPP. I've just seen too many sudden 50% rises & falls to care to stake everything on this stock.
Don't imagine many on this BB were brave enough to load up on this last April when it was <0.6p like I did - so I have no desire to be buying at 10p. Good Luck all - but I know I'll be holding a smaller position if this hits 100p and will be happy with the money in the bank rather than the paper profit on the statement
Quite agree - the borrowing costs comment really stood out to me too.
That within 18mths of Pavel re-financing at over 8% we can get sub 4% when our production has declined just shows what lousy rates the old BoD were getting. Likewise the near complete removal of 3rd party concentrate processing tells me this really was a very marginal profit activity (atleast for us) - the one thing I would have liked to hear was that they intended to increase the use of zero cost collars, maybe to 35k oz per month so that the vast majority of our production would be protected from downside risk whilst allowing some upside exposure. Selectively buying these collars when the gold price is high and rising would mean we could lock in ever higher margins.
This is something I've been thinking about recently. I bought into several housebuilders back in 2018. They have served me pretty well even through Covid, although the loss of special dividends was a shame. I originally bought PSN / BDEV / BVS now VTY / CRST and GLE. I still like BDEV and will continue to hold ... but on analysing TW. / BKG / BWY & RDW I'm tempted to switch from PSN / CRST & especially VTY into TW. & maybe BWY & RDW.
PSN seems to generate way more net profit than it should, which makes me nervous. CRST & VTY don't seem to be capable of sustaining decent net margins.
The outlyers are BKG & GLE. BKG focusses on high end properties around London ; GLE on affordable properties in the North ... I'm very torn as to which strategy will be more successful in the next 2-5yrs. It's been 20yrs since I first thought London property market couldn't continue to outperform ... and I've been wrong for most of that time ; so if you believe in mean reversion back GLE if you feel the trend is my friend then BKG looks cheap
Good luck with your own research
TbTT - I accept that £1.5bn mcap is far fetched ... but surely you must concede that a 100k oz producer, which HUM has proven itself to be, must be worth £150-200m not less than £80m ?
... and that further exporation assets make it even more attractive !
Hey Kenj - haven't seen your name on the POG BB for quite some time - did you sell out and invest elsewhere ?
I took my money from TSG and punted on a couple of pre-production miners Orosur and Galantas as well as a left field financial called SYME. Past 12mths has been very good for me, glad I diversified from POG into some PGM miners like SLP / JLP & THS. Also made out like a bandit on EUA - I've locked in six-fold profit and still hold a position valued at more than my initial stake just in case the buy-out ever happens
Kallumama & TBTT I think your observations are valid but I just don't think we're going to see this continued acceptance of free delivery for online items with so many people abusing this and ordering 5 items to keep just one. This is especially true for bulky, low cost items like kids shoes. I've said before that the entire high street will have to be decimated before in person shopping for £10 kids shoes is not the primary sales channel. I'm happy to wait 24mths to see this return to 125-150p if necessary ... I have very few places where I believe I will confidently double my money in under 2yrs ... this is one to just leave alone and let management do their thing
This dropped from 2.3p to 0.85p during the big Covid sell-off in the markets from Feb-Mar 2020. Most stocks are 50% + above their Mar '20 lows and many are back to or above their Feb '20 valuations. RMM has plenty of upside .... 1.5p could almost be considered as just returning to normal without taking account of copper prices, cost reductions or any new discoveries.
simplethesis - maybe it should "make perfect sense for us too" ... why would any intelligent BoD want to provide aggressively optimistic forward projections in a volatile and unpredictable market and regulatory environment - especially when you are engaged in a sustained, long term share repurchase program with your surplus cash. With a PE substantially below 10, this BoD are obtaining for all of us shareholders a return on cash in excess of 10% by simply keeping the share price low and using cash to buy shares ... please tell me where you would get a guaranteed 10%+ return if they increased the dividend to you.
I'd like a little faster capital growth, but I'm happy to wait for us to drift back to 1600p / 1750p and I'm sure when our FY revenues are 800m+ and net profit 350m+ we might even hit 2000p all whilst having bought back thousands of shares at an average around 1600p
Buster - don't think I've been invested here as long as you but I have suffered for over 5yrs now.
I still use my gambling analogy to support why I'm heavily invested ... and that is that this stock could go bust or go to £3 on the next piece of news ... if you think those are 50:50 odds then as a gambling man you would be prepared to buy below 150p.
I happen to be much more optimistic, but the market doesn't share my sentiments (yet). I feel with the re-financing our chances of going bust are under 10% ; our chances of just drifting along at under 5k oz p.q production is around 25% in which case our current price is about right (maybe we get to 150-180p) ; but our chances of sustaining 6-7k oz p.q production is now around 33% and our chances of growing to 10k oz p.q producer in the next couple of years is also around 33%.
So my revised gamble is 0.09 x 0p + 0.25 x 150p + 0.33 x £3 + 0.33 x £5 = fair value 275p.
They're going to report 2020 results showing that revenue grew from $14m to $27m, which will catch people's attention ... if they can also report that Q1 '21 production was 7k oz and that they additionally milled some of the surplus mined ore from q2/q3 last year and so report Q1 revenue around $17-18m then this gets very interesting ... if they can finally credibly state that 2021 production guidance is 30k oz then this doubles in price instantly.
Problem is I've been waiting 2yrs for them to make those statements and they have failed to deliver ... but maybe this is the year it all falls into place !!! GLA & DYOR
Mickey - sometimes you want quiet BBs ... too many are full of drivel, ramping/deramping and useless "non" information.
ALU is operating under the radar and going about its business steadily. My Jan prediction of 100m revenue 10m profit looks quite achievable after the interim results and steady growth from there should continue. Given my average (below 100p) I'd like to see this providing a stream of 10%+ dividends for many years to come and a little sp growth on top
It's very easy to buy in here, there is plenty of liquidity today ... you just can't buy at yesterday's closing price of 4.125p.
What alarms me is why the 30% movement on no news ... this smells like some insider info has been leaked ... and that's always a bad sign for genuine long term small private investors.
I certainly hope BoD get an RNS out a.s.a.p.
I've kept faith with Live for a couple of years now getting my average down from well over 25p to a shade under 7p now and can see a bright future as restrictions lift, but trading activity in advance of news is not good for reputable companies.
Human nature dictates that most people hate losing money much more than than like making it. Unless you have huge risk tolerance you would probably do better to sell 1/4 to 1/3rd your initial holding, lock in some profits and basically have free money riding on the future. You'll still see plenty of upside if everything goes well, but if it all implodes, you know that you have made a healthy return on your investment. Consider how you felt when the price rose from 2p to 8p in January then fell back to 5p in March ... if watching your paper profits disappear made you really anxious then now might be a good time to get some real cash back in your account
I saw my first £15k invested in ITX turn into £1k, but then saw a further £10k investment turn into £70k, there is no telling where this is heading next - good luck whatever you decide
Lots of euphoria after the results announcement today, so I'm going to dampen a few of the ultra positive holders, especially those new to this share.
I top sliced again today at 7p and will continue to do so at 8p / 10p if we get there. I started top slicing at 2p !!!
I've been invested in ITX since the Revolymer days when they tried flogging nicotine gum in desperation !
For those who don't know the history this company listed 25m shares in July 2012 @ £1.00 giving a total market cap of £53m, the highest it has ever been. I bought my first shares at around 50p before the first dilution in June '16 @ 37p.
I then watched this basket case decline all the way to 5p in early 2018 when it had a market cap of under £3m.
The shares were suspended in the summer of 2018 and then a monster issuance in July took place at 2p, a 67% reduction on the prevailing price .... market cap after that stiffing of existing shareholders was under £5m.
At that point I decided to double down heavily and got my average to around 12p.
But even 2p wasn't low enough for ITX, last year in March '20 it dropped below 0.5p and a market cap of under £1.5m.
This was when I lucked out and took the plunge to treble my holding by purchasing 1mm shares for £6500 ... reducing my average to a tolerable 1.8p from which I thought I might be able to recover my losses if the turnaround ever happened. By December I was back around breakeven and I've been top slicing ever since so that now I've recouped my initial total investment and still have a holding worth more than that ... yes it would have been much more if I had held tight but I still don't have great confidence in this basket case ... here's why.
Today's 156% increase in revenue has blown people on this BB away because it is much higher than expected ... so let's assume we deliver 50% growth for the next 3yrs and move from £3.5m revenue to £12m revenue , manage to maintain a 33% gross profit margin and management stayed disciplined and keep Operating Expenses to £4m (fat chance) ... that's still only breakeven. Another 2yrs of 33% growth and we get to Rev £21m ; GP £7m ; Net Profit maybe £2m. That equates at current market cap to a p/e of 15 hardly earth shatteringly cheap for 5yrs of stellar growth. Furthermore, if the prospects for some of our products is really explosively good then I suspect one of the big chemical companies would be looking for a pull back in the share price to below 5p in order to put an offer in at 8-10p and subsume into their own much larger operations.
My prediction is that the £53m market cap on the date of the IPO in 2012 will not be achieved by an independent ITX.
That's my opinion, I've backed it up by a rational analysis and I look forward to hearing some constructive opposing points of view ... but I suspect I'm just going to get the usual '****ging off' from all the partygoers.
So here is a recast of the Plus500 revenues for the past 4yrs
2020 Customer 997 ; Trading -125 ; Net Revenue 872
2019 Customer 382 ; Trading -28 ; Net Revenue 354
2018 Customer 548 ; Trading +172 ; Net Revenue 720
2017 Customer 540 ; Trading -103 ; Net Revenue 437
... it's pretty clear that trading losses are highly material to the group results and have run +/-30% of Customer Revenue
Now lets look at 2020 by quarter
2020 Q1 Customer 236 ; Trading +80 ; Net Revenue 316
2020 Q2 Customer 320 ; Trading -72 ; Net Revenue 248
2020 Q3 Customer 240 ; Trading -24 ; Net Revenue 216
2020 Q4 Customer 201 ; Trading -109 ; Net Revenue 92
... even more volatility in the "trading earnings" than in previous years
... and finally let's look at Bitcoin prices at 31st Dec 2019 and each subsequent quarter end
Q4'19 $7.2k : Q1'20 $6.5k : Q2'20 $9k : Q3'20 $10k : Q4'20 $29k ... Q1'21 $55k
So if Bitcoin trading is the main source of our trading losses and a price move from $10k to $29k in Q4 caused most of the -$109mm trading loss then no wonder the market is waiting for the Q1 results before re-rating this share price higher !
Are we going to see weaker Customer Revenue of $180m and larger Trading Loss of -$150m = Net Revenue $30m or are we going to see higher customer activity, say $280m and better risk management, say Trading loss only -$40m = Net $240m.
Pretty hard to put a convincing value on this stock when quarterly net revenue could change by a factor of 8 !!!
For my part, I'm still over-exposed to PLUS ; I'm encouraged that quarterly customer revenue might have shifted higher to the $200m +/-$50m, so if we can limit trading losses to just $100m p.a (forget about flat over the long term) then we are still looking at a p/e <5 which is just crazy for such a cash generative business