Member Info for saintsforever

Tom Stevenson’s regular column in the Telegraph today suggesting copper price is winding up for strong growth over the coming years as a result of supply shortages v increasing demand. Witness also BHP going for Anglo American. All suggests Ecora is in the right place and patience will be rewarded.

The underlying assets appear to be discounted by something like half and that based on depressed commodity prices. Patience will pay off with this little gem and in the meantime steadily accumulate shares with an attractive dividend.

Fingers crossed but the dividend looks fairly secure and the future revenue streams look pretty solid. At some point over the next year or so they will start to contribute . Given the underinvestment by miners generally over the last ten years or so and the lead time to deliver new mining projects the moment the world economy shows a glimmer of growth commodity prices will rise and Ecora will prosper,.

Assuming this deal completes the current £7 share price will be effectively covered by cash leaving the other half of the £14 nav in it for free.

The bod have a nice conundrum ….. any bets on what they choose to do?

With prices as they are the BOD have a bit of a quandry as APF must be throwing off cash like no tomorrow. I expect a minimum final divi of 5 pps and that will use about £10 million but they must be earning close to that each month. Pay down debt or what..... I guess we find out next week.

The key for the short to medium term now is how much more kestrel mining is on Anglo royalty land.

Given the kestrel output and net coal price my bet is that q4 is very close to rest of year combined. Q4 trading update next week I think so get ready for a blockbuster.

I’m struggling to see how APF isn’t considered hugely undervalued. CEO has said Q3 Kestrel prices averaged $210, or thereabouts, whilst Q4 have been around $350 per tonne. Given that that additional revenue is at the 15% royalty rate and tonnage was broadly similar at around 500,000 per month its hugely difficult to see how Q4 can’t be anything other than a bonanza.
Add to that steadily increasing cobalt price the only cloud I can see is how long kestrel will last. I think I read somewhere that they were moving away from APF royalty lands in early 2023, recent years output has been around 90% on APF royalty land.

Coming coal and cobalt prices are strong which will flow through to record royalties in Q4 yet the share price remains subdued.

Is it the baleful influence of coking in a post cop26 world........ its fill your boots time.

A cautious estimate of 200,000 tons per month is covered by royalty due to apf would give apf close to $8.6m per month at $350 per tonne .