Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Big Blue - Hopefully it will end soon for everyone - Ukraine is losing up to 1,000 of its troops killed or wounded in Donbas every day, with 200 to 500 of them killed on average, Arakhamia has said today.
WASHINGTON. June 16 (Interfax) - The Ukrainian-Russian talks have currently been virtually halted, and Ukraine does not see much sense in resuming them in the current situation because of its weak negotiating position at the moment, David Arakhamia, head of the Servant of the People ruling parliamentary faction at the Ukrainian Verkhovna Rada, said in an interview published on the Axios web portal.
"Our negotiating position is actually quite weak, so we don't want to sit at the table if we are in this position. We need to reverse it in some way," Axios quoted Arakhamia, a member of the Ukrainian delegation to the negotiations with Russia, as saying.
Arakhamia stressed "the need for a counter-operation to regain lost territory," it said.
Arakhamia said formal negotiations are currently frozen, and "both sides clearly realize that right now, there is no place for negotiation." At the same time, Arakhamia said he and his team speak by phone with their Russian counterparts "one or two times per week."
While the idea of negotiations with Russia is harshly disapproved of in Ukraine, Arakhamia suggested that the conflict should eventually be ended through "compromise."
Arakhamia said also that Ukraine lacks weapons and ammunition, while its partners, especially those in Europe, have been focused increasingly more on replenishing their own stockpiles rather than on arming Ukraine. In particular, he said the German government is reluctant to approve export licenses for arming Ukraine, Axios said.
Ukraine is losing up to 1,000 of its troops killed or wounded in Donbas every day, with 200 to 500 of them killed on average, he said.
The Ukrainian "military people" strongly object to the idea of demining Ukrainian Black Sea ports in exchange for Russia allowing grain exports, as they see "no guarantee" that Russia would not use the corridors cleared of mines to attack from the sea, he said.
Arakhamia is currently leading a Ukrainian delegation visiting Washington, Axios said.
I am invested in Polymetal and Evraz and I have been keeping an eye on Petropavlovsk as well since the invasion. I recognise a lot of names here from the Poly board. As per the RNS 7 June states 'As announced on 20 April 2022, Gazprombank ("GPB") demanded immediate repayment of approximately US$201.0m (including accrued interest) due under the Company's Committed Term Facility Agreement (the "Term Loan") with GPB, and subsequently assigned all its rights under the Term Loan to JSC UMMC-Invest. That process is continuing; however, it is highly unlikely that any return will be secured for shareholders as a result of that process given the level of the Company's indebtedness.
Did anyone comment on the below as there are too many posts to look back on.
https://interfax.com/newsroom/top-stories/79390/?sphrase_id=112064
UMMC might acquire Petropavlovsk, files application with regulator - paper (interfax.com)
MOSCOW. May 23 (Interfax) - Ural Mining and Metallurgical Company (UMMC), one of Russia's largest producers of nonferrous metals, is considering acquiring gold miner Petropavlovsk , national daily Kommersant reported on Monday, citing sources.
UMMC has filed such an application with Russia's Federal Antimonopoly Service (FAS), one of the sources said. UMMC might also buy other assets in the gold mining sector, another source said. UMMC, Petropavlovsk and its shareholders refrained from comment.
If Ural Mining Metallurgical Company (UMMC) who are one of the top Russian producers of major commodities have applied to acquire POG and earlier acquired the rights to claims against Petropavlovsk on a $201 million loan, plus interest, from Gazprombank, will shareholders get any money back from the sale if UMMC buyout POG as they will also buy out the remaining debt or do anyone here think another company will buyout POG? Seems to be no communication to shareholders from the board.
https://seekingalpha.com/article/4518083-polymetal-worth-it-as-a-medium-term-speculation
As per the above website from the other day, they think that Petropavlovsk is going to get eaten by the details of sanctions regimes and could well have no value to shareholders at all.
Good luck to everyone invested here and hope it gets bought out and the SP increases back to where it should be, but be careful if UMMC do buyout POG you might not get any return on your investment as per the latest RNS's.
Redmoor - Yes Evageny comes across as a top bloke, very quick in his response, but I would say the whole board all come across great, how they have kept us all up-to-date over the last few months. The recent Investor Day presentation is very informative if anyone here hasn't yet watched it. Below is a link from Seeking Alpha who have done a piece today on Polymetal, which sums up what a lot of people on here have been saying for a while. It also thinks Petropavlovsk could well have no value to shareholders. I think Pete said it last it week, just be patient and you will be rewarded in the medium / long term.
https://seekingalpha.com/article/4518083-polymetal-worth-it-as-a-medium-term-speculation
DYOR
All quotes and figures are state on here are from either Polymetal website or from Evageny Monakhov. Please see his response this morning (very quick at getting back to me, but I have been at work) regarding production guidance for 1.7m oz for 2022.
Hi , good morning,
Thank you for your email – we appreciate your long-term commitment and support.
Happy to release my answers to the LSE forum.
Q1 Are sanctions now stopping your employees producing gold in your Russian mines or have you managed to acquire spare parts / mining equipment in order to keep producing in line with your guidance of 1.7 million oz for this year?
1 . In general, on equipment procurement side we began preparing for the exit of some of our equipment suppliers in March. Mostly, the area that has been impacted by sanctions are underground works (1/3 of our output), where the equipment manufacturers are mostly EU-based (Finland, Sweden, Germany, Belgium, etc). Some of these suppliers have announced since March that they will be exiting Russian market and ceasing supplies to new contracts/orders. Existing orders are all honoured in full. We’re fully stocked with spare parts and necessary materials for 2022, given our policy of having sufficient supplies at our mine sites for at least 6-9 months of operations (covid-related protocol), hence there is no threat to our 2022 production guidance (1.7m oz). While supplies last we are actively soliciting equipment from China and are confident of securing orders for new equipment and replacement before 2023. We will provide an update re: this on 21st July, when we report 2Q production numbers.
Q2. On the 25 April Vitaly Nesis said 'We continue to believe that splitting the holding structure for assets in Russia and assets in Kazakhstan is likely to create considerable value for shareholders'. Would splitting the holding structure be a last resort? If the company splits, what would happen to my x shares, would I have x share in Poly (R) and then would I get another x shares for Poly(K)?
2. Asset ownership restructuring is something that we’re evaluating right now, carefully studying the pros and cons of splitting the company’s assets along geographical lines. None of this is voluntary. It’s a situation that has been forced on us by the geopolitical risks, war in Ukraine and its fallout. It’s way too early to speculate on outcomes at this stage. So forgive me for not providing a definitive answer to your question. But we do believe that restructuring should restore value destroyed by the war and subsequent devastation of Russia/West relations.
Hope this answers your questions, please let us know if we can be of further assistance.
Sincerely,
Evgeny Monakhov, CFA
Head of Investor Relations
Polymetal International
Yes, I quoted Motely Fool as I think it was a good piece on the price to earnings ratio and the production guidance. After todays e-mail I am also now eagerly awaiting Q2 update.
DYOR
Good post Celtics - Polymetal is planning to invest $130mn in construction of power plants in Kazakhstan for its own needs, the company's president Igor Finogenov said. Like Panda says they cant be having trouble raising finances for their Kazakhstan operations.
https://www.fool.co.uk/2022/06/08/down-86-polymetal-shares-are-tempting-me/
Motley Fool 'Polymetal certainly looks cheap if we take its price-to-earnings ratio, which is just over one. The firm made $1.16bn in pre-tax profit for the year ending 31 December, but is only valued at £1.1bn. The miner still expects to produce 1.7m ounces of gold this year — 1.2m oz in Russia and 500,000 oz in Kazakhstan. That’s the same as 2021, and gold prices are currently above the 2021 average. I’m eagerly awaiting the next production update to see if Polymetal is actually producing in line with expectations. If it is, I think we’ll see the share price shoot up despite the risks. Will I buy more? I actually doubled my holding in April as I was reassured by Polymetal’s updates. I may even buy more at the current price, but I do accept the risks here. The company also has an attractive portfolio of assets that should be hugely profitable right now. Mining firms, with the exception of those with sizeable exposure to Russia or Ukraine, have gone from strength to strength this year on the back of higher commodity prices. In fact, if it wasn’t for the war, I’d expect Polymetal to be doing very well right now'.
Auditor to be completed by the end of this month, with EGM called after.
Q2 update July which will inform everyone what impacts sanctions have had on the Russia assets, hopefully they have enough gold to sell from their inventory whilst they wait for alternative suppliers / manufactures / equivalent replacements.
A roadmap could be unveiled by July for the Poly (R) Poly (K) split.
Any talk of dividend will be announced in August - more than likely will be postponed in order to sustain the stability and liquidity of the business depending on the impact from sanctions effecting Russia in general. Win/win either way if paid or not, if you are here for the long term.
No talks of buy back on their recent presentation and they only have 473m shares in issue, which is already low for a top 10 in the world gold producing company. They state they would prefer on paying dividends. Orcel said "We will continue to monitor the operating, funding and regulatory conditions in which the business operates, hoping that stability is restored, improving visibility which would allow us to return to our cash distribution policy."
Remember 75% of the free float of the shares are with II's and Private Investors and many II's are not currently buying Polymetal, but Nesis stated in their presentation that they are in talks with II's to get them to buy again. If they do, this will increase the SP.
DYOR
Good post Redmoor - Like I said earlier on in the week - The board will do what the board thinks is best for business & shareholders, with a superb track record. This is a top 10 in the world gold producing mining company. Looking forward to Q2 results and personally I don't want any split, too many great growth prospects in Russia. Enjoy the weather and try not to be on this chat forum all weekend.
Panda I half agree with what hes saying, but the main problem for Ukraine is can they defend Donbass from Russia. From last nights news 'Ukraine’s soldiers face 200 daily casualties with desertion on the rise (telegraph.co.uk) Shortage of long-range missiles means depleted Ukrainian forces at risk of being fully encircled by Russian offensive in Donbas'. Ukrainian military casualties are now between 100 and 200 a day according to a senior advisor to Zelensky. Speaking to BBC World Service, Mykhaylo Podolyak says one of the main reasons for high casualty numbers is the lack of parity between Ukrainian and Russian military capabilities and states Ukraine needs hundreds, not a handful of the most powerful artillery systems the West can provide. (USA have stated they will provide 4 HIMARS, and UK only 3) Germany said yesterday they wont be sending theirs until end of the year.
Ukrainian soldiers in Severodonetsk are fighting "one of the most difficult" battles against Russian troops since the start of the war, Zelenskyy said yesterday, adding the fate of the whole Donbas region rests in the eastern city. In his evening address to the nation, Zelenskyy said the battle for the city was "very fierce... very difficult. Probably one of the most difficult throughout this war. 'In many ways, the fate of our Donbas is being decided there'
Zelensky is stating he needs more weapons, but other ministers are now voicing their concerns about the grain issue.
United Nations, Secretary-General Guterres added his voice to increasingly dire warnings about the conflict's impact. "For people around the world, the war is threatening to unleash an unprecedented wave of hunger and destitution, leaving social and economic chaos in its wake," he said.
Lavrov's Turkish counterpart Mevlut Cavusoglu called Russian demands for an end to sanctions to help grain onto the world market "legitimate".
As he hosted Mediterranean ministers for talks on the global food crisis, Italian Foreign Minister Luigi Di Maio warned "millions" could die unless Russia unblocked Ukraine's ports.
Lavrov is very careful in what he is saying "We are ready to do this in cooperation with our Turkish colleagues," Russian Foreign Minister Sergei Lavrov told reporters in Ankara.
Putin said yesterday the West will not be able to cut itself off from Russian oil and gas for several years. He added that nobody knows what might happen in that time, so Russian companies would not be "concreting over their oil-wells". It comes as a US official admitted that Russian profits on energy may be higher now than they were before the war. The EU currently imports around 40% of its gas from Russia.
At the moment I would say Putin has the better hand, will Zelensky fold, or will he try and wait until the HIMARS arrive but it may be too late for the Donbass area by then.
Auditor to be completed by the end of this month, with EGM after. Q2 updates July We will get to know how the sanctions have effected us in the
Big Blue No I am not in a spread bet syndicate, I am just a private investor fully aware of the risks due to the war for this share, however I personally think the reward in the long term outweighs the risk. I am here for the LONG term not for quick small profits.
Re: Nationalisation (Reuters) - Russia's ruling party, United Russia, said that a government commission had approved the first step towards nationalising assets of foreign firms that leave the country in the wake of economic sanctions over Ukraine. As I stated Poly are not leaving.
https://www.youtube.com/watch?v=LcBjosCcZns
Re: Sanctions: Above is the link which is an interview with Vitaly Nesis explaining Polymetal's debt and bank financing. He states all debt for 2022 is covered by cash balance.
https://www.republicworld.com/world-news/russia-ukraine-crisis/zelenskyy-says-he-is-willing-to-examine-erdogans-notion-of-3-way-talks-if-putin-agrees-articleshow.html
The Ukrainian side is willing to consider Turkey's President Erdogan's suggestion of a three-way joint phone discussion if Putin agrees.
https://www.theamericanconservative.com/articles/theres-no-easy-answer-for-eu-and-ukraine/
The link above is a good read for a Tuesday morning. Zelensky may need to face facts Ukraine will not be joining the EU and NATO for a long time and why France and Germany may not want them to join. Zelensky said the country has to face the reality that talks with Russia will likely be necessary to end the war. Since Ukraine is a relatively big country, including in its population, it would immediately impact the E.U.’s institutional balance in voting-power in the Council and the number of members in the European Parliament. In addition, if Ukraine’s accession happens in brotherhood with their Polish engagement announced recently, the together some 80 million Poles-Ukrainians would become a strong alliance that distorts the current French-German dominance in the E.U.'
https://www.euronews.com/2022/06/04/we-are-facing-a-great-famine-pm-of-slovakia-said-about-blocked-seaports-on-the-black-sea
Above is another good link re: The Wider Impact of Russia's Aggression in Ukraine.
Zelensky stated yesterday 'Sievierodonetsk and Lysychansk are ‘dead cities’ and admitted that Russian forces have the numerical advantage in the battle for the eastern city of Sievierodonetsk
Big Blue there will not be WW3. It will end in talks, France and Germany know this, which is why Macron has repeatedly spoken to Putin by phone in an effort to broker a ceasefire and negotiations. Unfortunately no side is winning at present and I think Putin has no plans to talk until he has destroyed Donbas.
I agree with Just Another Bot - The board will do what the board thinks is best for business & shareholders, with a superb track record. This is a top 10 in the world gold producing mining company. Looking forward to Q2 results and personally I don't want any split, too many great growth prospects in Russia.
DYOR a
There has been a lot of non Poly discussion over the last few days on this chat, so for anyone looking to buy this share:
COMPANY - POLY earned more than $2.89B in revenue last year, made $904m in profit and has more than $2.2bn in assets and is on track to make more than $2.9B in revenue this year.
DIVIDEND - With a potential dividend yield (once and they will recommence) of 31% at current SP (as its the weighted average price you paid for the shares, not the share price when any dividends are declared). Any dividend paid in August will be paid from cash flows from Cypress and Kazakhstan. If they manage to find alternative suppliers/distributors and another good quarter, no reason why a dividend cant be paid as an interim dividend will remain at 50% of Underlying Net Income for 1H (subject to absolute Net debt/Adjusted last twelve months EBITDA ceiling of 2.5x) this will help push up the SP.
RISKS - Many risks have been priced into the stock during its fall from £15+ to £2.44 per share. However the fall in the share price has nothing to do with how the company has been run. This is still being run as a £15+ company, top 100 FTSE company.
REVENUE INCREASE - Revenue increased 4% in Q1. Poly said it still expected to produce 1.7 million ounces in 2022. Cash flow is highly seasonal with Q1 traditionally the weakest quarter (still earned $616m in Q1) with Q2 results weak (I predict could be $680m for Q2 with Nezhda mine now in operation) with the bulk of free cash flow generated in the second half of the year.
They will also be selling silver from May and Kutyn mine to commence from Q3. Sales structure 30% Kazakhstan - not effected, 35% Gold bullion - Not selling to Russian banks, but exporting, 33% GE in concentrate and ore Russia - Main customer Kazakhstan so not effected.
AUDITOR - Tendering in place with a tier 1 and 1 tier 2 auditor and be completed by the end of this month, with EGM called shortly after to approve the appointment. Should help push up the SP.
TAKEOVER - They believe no risk of any takeover as ICT is still the largest shareholder with 24%. Very little risk of Nationalisation as Putin has stated he will only do this if companies are thinking of moving away from Russia resulting in Russians losing their jobs, however no risk of any job loses of the 13,000 staff Poly employ.
SANCTIONS - Pretty diversified with numerous banks, mostly and exclusively bank on bilateral basis so we don't have public debt security, we are such advantageous position and use collateral to the bank in the form of physical gold in order to get low rate interest rates (majority of loans already on a fixed interest).
DEBT - They stated all debts for 2022 are covered and confirmation peak of the debt will be the end of 1st half of this year, then the debt will start to reduce. Also trying to push $400m from the Cypress debt to Russia.
Still a fantastic opportunity for PI's to accumulate shares at this SP before II's are able to invest again.
DYOR and
Roxy - Don't get Polymetal mixed up with Petropavlovsk, yes they both produce and sell gold but Polymetal is in a different league. Its like wanting to buy a football ticket to watch Liverpool but you buy a ticket for Lincoln instead. Petropavlovsk is prohibited by sanctions from selling gold to GPB, which had acted as the main off-taker for the Group's production. The Group continues to explore options for the sale of its gold, including to other potential buyers, and has applied for a new licence to export gold.
As per POG's Q1 update:
§ As per the Company's announcements on 25 and 30 March and 14 and 20 April 2022. sanctions enacted in relation to the Company's largest creditor, Gazprombank ("GPB"), prohibited the Group from making interest and principal repayments under a US$200m committed term loan and US$86.7m in revolving credit facilities ("RCFs"). GPB has notified the Group of demands for early repayment of the term loan and RCFs and of the assignment of the term loan to JSC UMMC-INVEST
§ Petropavlovsk is also prohibited by sanctions from selling gold to GPB, which had acted as the main off-taker for the Group's production. The Group continues to explore options for the sale of its gold, including to other potential buyers, and has applied for a new licence to export gold
§ In light of the above, as well as legal restrictions that limit the Group's ability to transfer cash out of Russia, and keeping in mind the US$500 million 8.125% guaranteed notes 2022 issued by Petropavlovsk 2016 Limited (of which US$304 million remains outstanding) maturing November 2022, the Company has appointed AlixPartners UK LLP to assist the Board of Directors as it explores its options and determines the Company's course of action in the best interest of all stakeholders, including creditors and shareholders.
POG have appointed AlixPartners UK LLP which is not a good sign. They specialize in solving the most complex and critical business challenges. Mostly when companies are on the verge of bankruptcy.
However Polymetal will already have an export licence as they already export - sale structure for 2022:
30% Kazakhstan - Sales not effected
35% Gold bullion - Not selling to Russian banks, but exporting
2% Silver bullion Russia - Not selling silver bullion at the moment
33% GE in concentrate and ore Russia - Main customer Kazakhstan so not effected.
The presentation also talks about New 2022 guidance for TCC $oz of GE, AISC and Capital expenditure if a split.
Production 1,150k RU / 550k KZ
TCC $oz would be 950 - 1050 Rus / 700 - 800 KZ
AISC $ oz would be 1350 - 1450 Rus / 900 - 1000 KZ
Capital expenditure 1350 - 1450 Rus / 900 - 1000 KZ
Auditor - Formal tender in place, 1 big 4 company, 1 second tier & exploring additional auditors as well and they state they will have appointed by the time they are needed.
No share back, focused on dividend as a way to distribute to shareholders.
Time re: restructure after 1H results, July if ben
(Reuters) - Russia's largest lender Sberbank said on Tuesday new European sanctions would not impact its operations after European Union leaders agreed to cut bank that was already under sanctions from the SWIFT messaging system. EU leaders agreed in principle on Monday to cut 90% of oil imports from Russia by the year-end and on other sanctions, such as cutting Sberbank from SWIFT, in an effort to punish Moscow for what it calls a "special military operation" in Ukraine. "We are working as usual despite the new sanctions," Sberbank said in a statement, adding that the main restrictions on its operations have already been in place.
The United States in April imposed sanctions on Sberbank, which has over 110 individual customers and holds one-third of Russia's total banking assets. Back then, Sberbank also said the penalties won't have a significant impact on its operations. "The cutoff from SWIFT is not changing the current situation in international settlements. Russian operations do not depend on SWIFT and will be carried out by the bank in standard mode," Sberbank said on Tuesday.
https://www.youtube.com/watch?v=LcBjosCcZns
Above is the link which is an interview with Vitaly Nesis explaining Polymetal's debt. He states 'We mostly and exclusively bank on bilateral basis so we don't have public debt security, we are such advantageous position and use collateral to the bank in the form of physical gold. Which the bank love and why they an can low rate interest rates. Vesis goes on to state Polymetal is an established company, with strong financial results with a stable business model. He states there is a general shortage of high quality banking clients globally so we can leverage our position with multiple banks and able to rollover our debt portfolio, even in during much financial difficulty. The clip goes onto the debt structure on the 'Investor Day' presentation which confirms the cash flow is highly seasonal with Q1 traditionally the weakest quarter (still earned $616m in Q1) with Q2 results weak (I predict could be $680m for Q2 with Nezhda mine now in operation) with the bulk of free cash flow generated in the second half of the year. Kutyn gold mine also to be in operation from Q3 which will increase revenue. They are still wanting to push $400m from the Cypress debt to Russia as they state funding is still available in Russia, therefore we can finance the debt when its due. Majority of the debt is set at a fixed rate prior to the invasion, but Nesis has stated one of the reasons why the Dividend was postponed was 'Mounting uncertainty with availability of funds due to sanctions on Russian bank and economy. Higher working capital needs as a result of liquidity crunch and supply chain limitations. Balance sheet constraints imposed by lower credit availability as well as significantly higher cost of funding. However the main point is if this war continues through out the year our existing cash balance covers all of 2022.
DYOR and GLA!
Big Blue - I think people would rather take advice from Berenberg who are one of Europe's leading privately owned banks, focusing on the business divisions Wealth and Asset Management, Investment Banking and Corporate Banking, than you or me.
Berenberg downgraded Polymetal to ‘hold’ from ‘buy’, citing heightened uncertainty around the Russian assets and saying it has changed its valuation to be based on the NAV of the Kazakh assets alone. The bank, which slashed its price target on the stock to 300p from 500p, said the share price has become detached from the underlying business.
"We are currently attributing no value in our NAV to the Russian assets given uncertainty about Polymetal’s ability to remit funds from assets in the country to other parts of the corporate structure," it said.
Berenberg said the company faces a number of material headwinds in terms of negotiating the sanctions that have been applied by the West on Russia and vice versa.
"There is the risk that Alexander Nesis, who holds a majority interest in ICT, the company’s 24% shareholder, will be sanctioned," it said. "The company may also need to secure debt from either domestic or Chinese lenders to replace the debt that is currently held with European banks, with higher borrowing costs. The company will face challenges importing spares, specialist equipment and skills from Western suppliers.
"Russian companies are now not allowed to remit dividends to offshore entities and so any dividend in the future will need to be funded from free cash flow from the Kazakh entities. A key decision that will need to be made is whether to split the business into its Russian and Kazakh assets, with the latter accounting for 35% of our NAV and 30% of group production."
Berenberg have changed its valuation on Kazah assets alone and still value the company at £3 per share, not even taking into account the rest of the assets in Russia.
Panda - Yes sanctions and logistics are a problem for now, but they have stated they are working around this.
There is a lot of risk buying this share at present but for me personally the reward far outweighs the current risk.
DYOR and GLA!!
https://www.marketbeat.com/instant-alerts/lon-poly-a-buy-or-sell-right-now-2022-05-2-3/
Last Tuesday 'Polymetal International (LON:POLY - Get Rating)'s stock had its "hold" rating reiterated by equities research analysts at Berenberg Bank in a report released on Monday, Marketbeat Ratings reports. They presently have a GBX 300 ($3.78) target price on the mining company's stock. Berenberg Bank's price target would indicate a potential upside of 24.33% from the company's current price.
Other analysts have also issued research reports about the company. Citigroup reaffirmed a "buy" rating and set a GBX 1,400 ($17.62) price objective on shares of Polymetal International in a research note on Monday, February 7th. Royal Bank of Canada reaffirmed a "sector perform" rating and set a GBX 1,250 ($15.73) price target on shares of Polymetal International in a research report on Monday, February 14th. JPMorgan Chase & Co. dropped their price target on shares of Polymetal International from GBX 1,650 ($20.76) to GBX 1,400 ($17.62) and set an "overweight" rating for the company in a research report on Monday, January 31st. Morgan Stanley reissued an "overweight" rating and issued a GBX 1,450 ($18.25) price objective on shares of Polymetal International in a research report on Monday, February 14th. Finally, Deutsche Bank Aktiengesellschaft restated a "suspended" rating on shares of Polymetal International in a research note on Thursday, March 3rd. Two equities research analysts have rated the stock with a hold rating and three have given a buy rating to the stock. Based on data from MarketBeat.com, Polymetal International currently has a consensus rating of "Buy" and a consensus price target of GBX 1,161.67 ($14.62).'
Yes some of these ratings were prior to the Russian invasion but as per the Investor Presentation, they have stated its business as normal, so no reason why this SP will not rocket back up to £10+ a share. Someone asked about dividends, these will be paid once they can figure out to pay the Russian shareholders (about 22% of the shareholders) invested in the MOEX. Any talk of dividends being paid this SP will increase rapidly and we all know any talks to peace deals, again the SP will move up fast. Only approx 7 weeks for Q2 update.
DYOR and GLA!!
Timydogy - My wife sometimes calls me a stupid git, but as I said the other day I am only on this LSE chat forum. Nesis stated in the presentation very little chance of a takeover.
Big Blue - All my posts are facts from the companies website or quotes from the presentation which is why I always tell people to Do Their own Research on every post, as people on here always seem to have an agenda. Personally I am here for the long term as the dividends alone will be like an extra pension when I retire. I am not interested in a quick 5% profit here and there as you will end up having to keep buying in at a higher price. If you read my posts I am happy with accumulating shares. I am happy for now, may buy some more after the Q2 update in July but who knows what the SP will be in July. Nobody on this chat knows what the SP will be end of today, end of next week, end of July etc. However with the current inflation and cost of living I would rather invest in a strong robust company. The only IF I have stated is when they will pay dividends again. I still believe it is more of a WHEN than IF as well. Revenue for Q1 was £616m, Q2 for 2021 was $681m, Q3 for 2021 was $819m and Q4 2021 was $800m, don't forget this year they now have the Nezhda mine producing gold so more than likely the revenue for 2022 will be even higher this year so they will have to pay a dividend.
Big Blue all you seem to write is we should start World War 3!!
DYOR and GLA!!
gg19, look on joptom's link to show how much you can make on dividends alone, why I think they will pay a dividends again is because this company was one of the best FTSE 100 companies that makes loads of money!!!!! The SP has dropped due to Russia invading Ukraine, it was nothing to do how it operates and Polymetal state its business as normal.
I personally believe price of gold will be near or over $2000 by the end of the year. Inflation and Basel III (which will come into effect in the UK from January 2023) will cause gold prices to increase.
Polymetal earned more than $2.89B in revenue last year, made $904m in profit and has more than $2.2bn in assets and is on track to make more than $2.9B in revenue this year (despite the limited sanctions on Poly at present) that you can buy for £2.37 a share! This year they have enough capital to cover all costs, however if their revenue keeps increasing, Zezhda gold mine now producing gold they will start paying dividends once they can resolve the issue of paying Russian shareholders which they are looking into.
As per their website 'Strong capital discipline - We engender a strong focus on capital discipline throughout the business; maximising risk-adjusted return on capital is our priority in all investment decisions. We do not retain excess cash and return free cash flow to shareholders through substantial dividend payments while retaining a safe leverage level.' They have stated its business as normal,
Also as per their website 'with a view to increasing transparency in dividend decision making process, adding predictability into capital allocation approach while aiming to maintain an above sector-average dividend yield, the Board has approved an amendment to the Company’s dividend policy, which replaces special dividend with a modified policy for final dividend payment. As a result, the revised dividend policy is as follows:
Minimum final dividend of 50% of Underlying Net Income for 2H (subject to absolute Net debt/Adjusted last twelve months EBITDA ceiling of 2.5x).
In addition, the Board will now have discretion to increase the final dividend amount to a maximum annual payout of 100% of Free Cash Flow (provided that it is greater than 50% of Underlying Net Income). In making this decision, the Board will consider, among other factors, the macroeconomic outlook, debt position and future investment requirements of the Group.
Interim dividend will remain at 50% of Underlying Net Income for 1H (subject to absolute Net debt/Adjusted last twelve months EBITDA ceiling of 2.5x).
Polymetal will pay dividends twice a year on a semi-annual basis.
No talks of buy back on their recent presentation and they only have 473m shares in issue, which is already low for a top 10 in the world gold producing company. They state they would prefer on paying dividends.
DYOR and GLA!!
At the moment at todays current share price if Polymetal do eventually start paying 75p dividend a share again (and they will do), if you buy at todays prices the yield would be 31.64% (as its the Weighted average price you paid for the shares, not the share price when any dividends are declared), therefore in just over 4 years as I personally don't think/expect they will pay any dividends this year you would get your investment back in dividends alone, as well as potential share growth back up to £10+. This is a solid company, Polymetal has 10 gold mines and 6 growth projects and 6 exploration joint ventures.
If Poly increase the dividend to 95p (the dividend) a share once they commence paying a dividend, at todays SP of £2.37 the Yield for your shares if you buy today would increase from 31.64% to (0.95/2.37) 40%, therefore if they did increase the dividend you will get your money back even quicker in dividends alone. As per their website 'Strong capital discipline - We engender a strong focus on capital discipline throughout the business; maximising risk-adjusted return on capital is our priority in all investment decisions. We do not retain excess cash and return free cash flow to shareholders through substantial dividend payments while retaining a safe leverage level.' They have stated its business as normal, any positive news on peace talks / negotiations will also help the SP.
Remember 75% of the free float of the shares are with II's and Private Investors and many II's are not currently buying Polymetal, but Nesis stated in their presentation that they are in talks with II's to get them to buy again. If they do this will increase the SP, any talk of peace talks and these II will be wanting to buy in ASAP which will again increase the SP.
DYOR and GLA!!
https://www.cnbc.com/2022/05/26/russias-central-bank-cuts-key-interest-citing-decreased-stability-risks.html
I am not sure if this has been mentioned today but The Central Bank of Russia on Thursday cut its key interest rate from 14% to 11%, citing a slowing in inflation and the recovery of the ruble. Following an extraordinary meeting, policymakers opted for another 300 basis point cut, the Bank’s third since an emergency hike of the key rate from 9.5% to 20% in the immediate aftermath of Russia’s invasion of Ukraine, and the imposition of punitive sanctions by Western powers.
Russian interest rates nearly back to pre invasion levels which will be good for Polymetal in the long term if they are to try and push $400m of the debt from Cypress to Russia.
GLA!!
Thank you dontlooknow for the update. That would fall nicely into the RNS on the 21/7/22 for Q2 production results as per their website. So should be an interesting RNS!
Ogaden - Also read POG's RNS 16 May 'Petropavlovsk continues to explore its options to determine the Company's course of action in light of recent events and their impact on the Group's financial position in the best interest of all stakeholders, including creditors and shareholders. As announced on 14 April 2022, these options include the SALE of the Company's entire interests in its operating subsidiaries as soon as PRACTICALLY possible. That process is continuing, and it remains UNCLEAR WHAT RETURN, IF ANY, may be secured for SHAREHOLDERS or the holders of the Group's listed debt securities as a result of that process.'
The part where it states unclear what return, If any.... doesn't sound good to me and listen to Vitaly Nesis response to buying the POX HUB regarding Petropavlovsk , it doesn't read or sound good.
Hi Echo1 - If you haven't already I would suggest you read the Q1 update and watch the Analyst and Investor presentation too.
No major updates but confirmation its pretty much business as usual and no significant impact.
They stated all debts for 2022 are covered and already found alternative suppliers/distributors.
Revenue increased 4% year on year to $616m. Polymetal said it still expected to produce 1.7 million ounces in 2022.
They will also be selling silver from this month and Kutyn mine to commence from Q3. I still think gold price will be $2000 per oz by the end of the year.
They are confident a new auditor will be in place for when they need it. Shortlisted a One tier 1 and 1 tier 2 auditor and also looking at another company.
They believe no risk of any takeover as ICT is still the largest shareholder with 24%.
Confirmation peak of the debt will be end of 1st half of this year, then the debt will start to reduce. Also trying to push $400m from the Cypress debt to Russia.
Any dividend paid in August will be paid from cash flows from Cypress and Kazakhstan.
Still a fantastic opportunity for PI's to accumulate shares at this SP. Once II's are able to invest again (Nesis stated in the Investor Day that they were talking to UK brokers who have banned buying to get them to buy again) and any talk of future dividends in the future will also help the SP but this is the time to accumulate your shares.
I still think this is a risk at present but the long term reward of this top 10 in the world gold producing company far outweighs the short term risk and any talks of peace and the SP will be a lot higher than todays SP.
GLA and DYOR!