Member Info for ShearClass

This was one of the most obvious buy and holds I've ever seen. There are loads of shares to trade, this isn't one of them in this gold price environment. From the moment I found the 2012 Telfer MRE & discovered 5moz had been removed due to 'economic factors' my conviction has been through the roof.

The best thing about today's release is that it's still prudent IMO. Cannacord's note discloses that;

"Based on the company's disclosures, changes to 'spatial constraints' account for ~58% of the increase in contained gold, while 'economic factors' account for ~38%"

So only ~1moz of the increase appears to be due to 'economic factors' i.e. adding lower grade ounces which were uneconomic at a lower gold price. I suspect there is a lot more to come once they have a bit more time to assess things. To have come this far in just 15 weeks is incredible execution.

Cannacord stubbornly refuse to completely bridge the 2027 gap yet, but that looks inevitable with infill drilling converting inferred resources into M&I. Even so, they've raised the target price to 20p whilst retaining very conservative gold pricing ($2662 FY25 gold price, $2776 FY26 gold price). Should gold remain at current levels or continue to move higher then the current forecast numbers will get blown out of the water.

Key Assumptions;

Gold output per annum 374koz

Average Selling Price $2800

Copper output per annum 13kt

Average selling price $9500t

AISC $1454/oz

Total revenue $1.17b

Operating Profit $626m / £482m

Assume a tax rate of 25%, that leaves Profit after tax of £362m

Divide by 13b shares = ~2.8p earnings per share

If we keep all other factors equal, but increase the gold selling price to $2900 then we get EPS of ~2.95p

So at 9.5p we appear to be trading on a pro forma PE ratio of under 3.5x

Of course, there will be exploration expenses & other bits and bobs, but it's all immaterial and may knock a few % off EPS. Even assuming it takes off £50m, EPS would still be ~2.4p

What have I missed?

It's simply extraordinary value if the above is anything close to reality...

It's extremely bullish for the IC. Even they can see that annualised EPS is likely to hit ~2p in 2026 as Telfer will run for whole year, all we need is the updated MRE later this month to confirm this fact. We'll then own a gold producer on a PE of

Max buy quote is 200k shares at 9.18p, be surprised we don't move significantly higher this afternoon.

I'd make 2 very simple points;

1. Remember that at present the brokers and wider market still think Telfer only has 15 months worth of ore from December start up, then there will be no revenue until Havieron comes online. The Telfer MRE is due before the end of March, if it extends mine life into 2028 then forecasts & valuations will get a major bump. If you are trading and not holding when that RNS lands then you could lose a large chunk of any holding.

2. Cash is king. The half year results evidenced first cash generation, however this will be dwarfed by H2 revenue. If gold averages $2900 from here to 30/06 then over H2 it will average $2868 vs the current Cannacord forecast of $2621. EPS for the 7 month period could easily beat the 1p forecast.

It's very cheap vs peers, with near term catalysts & strengthening fundamentals. If gold gets close to $3500 then this will be a cash machine.

How is the market hard to please? If you upgrade guidance and then miss the lower end of ticket sales and come in just above the lower end of revenue growth (11.33% vs the range of 11-13%), then it suggests weakening momentum. If they had hit the top end of guidance they would have beaten market expectations & shares would likely be in the 330-350p range.

I expected a ticket sales beat, so was relieved to exit on the bell. Ticket sales guidance was upgraded to 12-14% in October, the figures reported today show growth of 11.55%, which they have rounded up to 12% in the release! I can't help but think they would have said 'above the top end of guidance if they had been 0.5% above... 5295 * 1.12 = 5930, so they've missed on sales by some £23m. That type of miss is significant when you have competition like Uber eating into their pie.

H2 2023 UK revenue was £118m vs £102m reported for H2 2024

H2 2023 international revenue was £33m vs £20m reported for H2 2024

Trainline solutions growth was strong, but it's unclear what the dynamic is here

Given the above dynamics & GBR overhang, I can't see why this should trade for more than 15x PE, which is £2.55

@johnnyrh, most other companies don't have a catalyst in the next 8 weeks which could catapult the share price significantly higher. Some profit taking may happen, but the L2 order book has remained solid over the last week, indicating that plenty of demand remains (and the uptick over the last 2 days evidences this too).

I'd also add that uncorrelated equity stories like PAT have become like gold dust given the issues in the US. Further, the entire international arbitration asset class will also be far more attractive than it was last year.

We are in the sweet spot by the looks of things & plenty of eyeballs are fixed on 16th May, it's going to be an exciting few weeks!

MAD1, it's really not that hard...

Today's RNS

"Closing cash position of £71.9 million (30 June 2024: £4.8 million)"

22nd January RNS

"Cash & liquidity: Closing cash balance at 31 December 2024 of A$145.0 million and undrawn A$75 million working capital facility"

The balance has been converted from australian dollars to GBP, because the company reports in GBP...

As for the £48m concentrate shipment, just be happy with cash equivalent to 5% of the market cap rather than trying to be clever and work out the sold price without knowing how much had been sold!

It's just the start of the re-rate, two excellent articles over the weekend have got PAT onto many more radars. In the closing auction there were 2.8m shares on the buy side 450k on the sell. Demand is through the roof as there is clear and obvious upside + a huge near term catalyst.

5toamillion, last night you were speculating that the claim value might be $5b, tonight you mention 14.5p, did something happen to your shares today? ;)

Oh and for context, if you want to buy PAT shares but don't have a UK broker like HL, AJ Bell etc, then the only way is via the auction process (or some other convoluted means). This is why the auctions are very relevant and year to date but volume is now likely >10m shares

@Deck, yes there is very significant demand in the L2 auctions, this is no surprise given that Swen's audience will be from all over the world. Look out for the UT trades, so far we've seen just under 500k shares bought / sold via the auctions. Remember that these auctions don't involve market makers as a middle man, they are peer to peer.

It's current NT to buy more than 50k shares at 11.5p, stray sellers are providing a bit of liquidity but it'll be the Singapore fund who are the main source of shares for the market makers right now. Once those run out, I think we'll see a further rise into the teens.

The newcomers, the statement of claim could land any day, but it's most likely to be 16th May or a few days before IMO.

It's certainly going to be an exciting run towards 16th May!

And another one published yesterday off the back of the Undervalued Shares article;

https://triplesinvesting.substack.com/p/monteroindiana-resources-20-panthera

"III. Why India Is a Superior Counterparty to Tanzania

Companies settled with Tanzania because it had minimal foreign assets to seize. India faces existential risks. There are hundreds of billions of dollars the Indian state has outside of the country. BIT awards against India are enforceable in 155 countries under ICSID. Post-Cairn, India knows defiance is futile – hence paying $1.06B despite initial protests.

IV. Conclusion

Panthera offers a rare combination. Asymmetric upside with potential of 10-30x in settlements, claims that are enforceable unlike many ICSID claims, and multiple near term catalysts in 2025. Unlike Tanzania, India can’t hide."

Agree on the manipulation, you've just got to let them play their game though. They are using the price of gold as an excuse to drop shares & try to shake out weak hands who don't understand the valuation / fundamentals. Happy days as more cheap shares for those that do.

Volume is excellent again this morning, I don't agree with your 1-2 month consolidation view Gallmat and it also doesn't align with how this has traded since Tuesday.

Let's assume you wanted £100k in the placing but only got £35k (500k shares), which we were told by VSA to be the case, and has been reflected in the trading so far. Are you really going to flog half your holding at 9.5p leaving only 250k shares to run, worth less than a quarter of what you originally wanted? Sure, you've banked £12.5k but again, is a family office or HNW individual going to risk £100k on a litigation case to make that kind of return? Not IMO.

I agree with Marcin's excellent synopsis of the situation on X, what to do to derisk is a dilemma, but 14-20p is a far more attractive point for slicing as it represents 100-200% upside from the financing level (a la EML, which got to 1.9p vs a placing price of 0.63p).

Also are you really going to get many sellers before the SOC size is known? I don't see the logic personally unless shares get substantially higher.

Onwards to 10p+

It really is outrageous how much JBER are controlling this. Every time I look at the L2 order book they are on the offer and pushing lower. It takes 2m shares+ to move them off it, yet one decent sell the other way and they take it down almost immediately.

It's fairly obvious they are conducting things for the big investment banks (UBS, Goldman, JP etc) and Aussie funds, the plan is to kill retail sentiment and get as many to sell as possible. Thus the banks will be selling the spikes and mopping up the dips

We should be flattered really as it shows how much they want the shares

Interesting that the 40p VSA target price (valuing PAT equity at £96m) is based on a claim midpoint of $447m which they got to via $96oz * 4.7moz of gold (must be some slight rounding there, as that comes to $451m)

The relevance being that a significantly higher claim appears very likely and would presumably lead to a large upgrade in price target...

Buying has been excellent all day, once again there is no quote for more than 25k shares at 8.5p

Probably explains why you can't buy a bean on the open market right now...

Max buy is 20k shares at 8p...