I suspect the BoD already know in essence the results for the year ... the Screwfast Acquistion allows them to combine this additional revenue stream and so boost the Revenue and PbT figures, but also means they can hide an assortment of pieces of bad news. The real news we will need later this month, early next when FY is announced, is the prospects for 2022. If they can show that a return towards 100m revenue and 7-8m profit is on the cards then this could easily re-rate and rise 50%. I'm happy to wait a month or two to see if that happens.
Hard to believe that I first bought in last October at around 230p .... have managed to get my average down to around £1 now and see every prospect of getting my losses back before long. I think management know what they're doing and have a worthwhile product to sell. Margins in this business are fantastic so its all down to the salesforce now to keep expanding the business, which I'm confident they can do
Hi Lawrence, hope you're not getting too stressed by all the POG sheenanigans - it won't do you any good. This saga will play out regardless of what you or I think or do. However I'm happy to stick by my conviction that getting rid of IRC will ultimately benefit us. First, lets all take a deep breath and say that if we could all wind the clock back 12mths and buy a portfolio of stocks at Mar / Apr 2020 prices knowing what they are worth in May 2021 then we would all be multi-millionaires. Even in my own SIPPs I have a handful of stocks that are up 1000% in that time frame (sadly I didn't buy them on Mar 19th 2020, or whatever was the Covid induced market low). IRC was a sixth the price it is now when this deal was struck and so anybody who is now saying this deal is now worth $110m is effectively saying it was worth less than $20 at the time. If giving away $10m of value to remove $240m of debt obligation was the price Pavel had to pay then I certainly don't blame him, neither then nor now.
As for IRC I've just looked on Yahoo Finance and they have y/e 2020 results posted for IRC (look up HK:1029). I'm assuming these are accurate and $100m net profit is the figure. But on a cursory review of the Income statement and Balance sheet I see a few anomalies. Cost of Revenue is identical to 2019 but Revenue 25% higher, plausible if output is unchanged and entirely due to iron ore prices but not that likely. Much more concerning Interest Expense has almost halved y-o-y but total debt is only down about 10%. Alarmingly "accumulated depreciation" has gone backwards ... I would personally think this is an accounting impossibility if you applied any sort of recognised Accounting Standards but it wouldn't surprise me that a bit of creative accounting has been used to manufacture around $75m of these "profits"
Why don't we let the spivs and shysters manipulate the hell out of IRC and we take $10m plus $240m debt obligation reduction and concentrate on gold mining .... maybe even try to get back to being a 500k oz p.a player
Even my simplistic modelling suggests if we went from 450k oz to 500k oz miner we would add over $150m to market cap.
Isn't that where current management should be focussing their attention ?
I too would like to see a return to 20p and think it possible, but the Elephant in the Room which didn't get addressed in the presentation was the "royalty" that the Tanzanian Govt want to extract from mining companies. Whilst the new Gov't seem more amenable to mining and foreign investment, it doesn't mean they don't want a sizeable cut. If 50% is demanded like with Acacia then this is quite fairly valued if under 20% is Gov't % then we certainly have much scope for sp improvement. But until there is greater clarity around this, I can't see many Institutional Investors taking the risk on a large position.
I'm heavily invested in about a dozen gold & PM miners and SHG is my 3rd largest holding, but I have to consider that the market isn't pricing in the value that I initially thought was in this company and the only real concern I can find is the size of the 'bung' we have to pay to be allowed to operate
Valuation - what "day and age" are you referring to ... the current one of rampant crony capitalism, with more opportunities than ever before for criminals to commit scams and for insiders to lobby for favours with little consequence
Just to say, I have quite a large holding here at around 2.25p average so I'm losing money. I'm quite tempted to average down with the price at 1.30p but I fear the market insiders are aware of the nature of the funding and I suspect it isn't going to be pretty for current shareholders. My gut tells me that we're going to see a private placement to BoD, friends and insiders of around 2billion shares at 1p. £20m capital will be enough to start funding the project and probably attract £40m more convertible bonds paying 7.5% coupons with conversion rights at maybe 2p. This will mean that 80%+ future growth goes to the new shareholders. I hope I'm wrong, but I've seen this scenario play out too many times before with gold miners
Only bought in here in late March when I sold TSG, so doubling money in 2 mths is very nice, but I think I'll lock in some profits. I wonder whether some investors aren't confusing CAD$ for £GBP. The private placement and warrants are giving 50% of the company away at around 17-22p a share so not sure why the price has rocketed so much. Could understand if the warrants were at 40p but they're not. Think this might fall before back quite a lot before rising again when we hear more about the actual quantities they are going to be able to mine and how soon
Well - having been lucky enough to get into this at 3p back in nov '19 I've crystallised quite a profit on EUA as well as still hold a decent quantity for a big uplift on sale .... but this "sale" has dragged on for almost a year now .... so here is what I think is going to happen. I think getting a multi-billion dollar valuations on the whole Montrachundra & flanks licences has proven too much for anybody to swallow. I believe Suschov & Co will sell the entire rights to these assets for around £500m which will be returned to us shareholders via a special div of around 20p. EUA will then be a mid scale PGM miner based on real West Kytim assets and hopefully moving from 64k oz miner to maybe 100-150k oz. EUA lite probably worth around £500m or 20p per share plus the 20p div means we walk away with 40p equiv and still own a decent growing miner.
The new owners, whoever they are, get the reserves and resources in the flanks for £500m and the potential to turn that into £5bn over the next decade or so with their own further investment ... I suspect as a side deal Suschov might well use his £100m share of the special dividend payout to buy himself a 20% stake in the new business ... that way he gets a win-win as well as closure on this saga. I think its as good a guess as any !
CofE - I believe all Gold miners are out of favour and so trading below fair value - but I don't believe that POG is especially lowly valued by any means. I have my own fairly simplistic calculator of fair value across different miners and see about 25% upside in POG at current prices and output ... whereas I see >50% uptick in HUM & SHG to name just a couple of other miners.
I think we need to show some patience, but even so, unless there is a massive rise in gold price or some highly unexpected new source of mineable ore I don't see a return to 40p in the next couple of years. Not a deramp, just a realistic assessment ... for my part if the price goes from 25p to 30p this year I'll gladly take the 20% return ; at 35p I'll almost certainly be top slicing again
This does indeed stink - but that is the world of investing in these times of crony capitalism.
I took a punt on this in January and doubled down last month, but have decided to crystalise my losses and bail today.
The BoD has no desire to try to find alternate funding or let production produce cash to put this in a better position before the debt comes due in 2022. The FCA doesn't care about such behaviour - so it will happen.
I've put a limit order in to buy back all my existing shares and more at 0.2p, should HUR stay solvent.
A company with $100mm in the bank should be worth more than $15m ... whoever gets to own these assets will do very well, its just not going to be us existing shareholders. God Bless cronyism, lobbyists and insider trading ... almost makes an aging Thatcher's Child like myself yearn for the Chinese System ... almost, but not quite ! GLA
Its great to see that IRC share price has almost doubled in the past 2 trading days ... but let's not forget that the sp is now back to almost exactly the price it was at in Feb 2015 when we had the Rights Issue here ... and iron ore prices are now 3x as high as then - sign of a quality outfit. I'd still happily support our BoD if they sold the IRC stake below market so long as they lost the guarantees at the same time.
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.
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
... and above 15p to sell so I did !
The problem with SHG is we don't fully know how much the Tanzanian Govt want as their cut
... if it's 50% like with Acacia then this doesn't look nearly so rosy
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