Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
I wonder if we have tested for Germanium? Rockford just found it in their zinc/silver/lead deposit in Greece.
If earnings stay the same, EPS post consolidation will increase to 65p. This lowers the P/E ratio to around 6x. If we assume the current P/E ratio of 8x is fair, this implies the share price will rise to 520p - which is in line with Deutsche Bank's share target (their analysts are pretty good on the insurance sector).
From an individual perspective immediately post consolidation your number of shares held goes down in the ratio 76:100, and the market value of your investment goes down by approximately the same amount as the cash returned to you. So if you had 1000 shares before you will now have 760 shares + £1,000.
Post consolidation annual dividends per share rise to 30p+, and the yield to c. 8% at today's price of 400p.
For many years I was an equity analyst for Bank and insurance stocks. Would I buy Aviva on an 8% yield: absolutely. Years ago during a market correction an old broker told me nobody ever lost money buying BATS on a yield of 7%. The same applies to Aviva on 8%, particularly in a rising interest rate environment that favours financial stocks.
The best strategy here is to take the capital return and reinvest it in Aviva shares.
I think you have overestimated smelting costs. At their worst they were $750/tonne, but fell to around 450/500 for GFM during the last reporting period. Hard to tell where they are now, but guess GFM is currently getting more like 3600/3700 per tonne. On a rolling 12 months, with $35m revenue contribution from precious metals, revenues should be heading towards $200m barring further setbacks. So circa 20p pretax EPS. I stand by my previous estimate of 175p for GFM given China discount,but really with the $18 BN metals in the ground, mining heading towards 1.5 m tonnes/year and robust commodity prices this should be (but isn't) valued at around 250p.
All looks lovely to me. With digging started in the new zone, rolling 12 month production should approach the 1.5 million tonne mark. Zinc at 4,000, gold at 2,000 - it is a money machine. Pretty certain cash flow will support a divi for 2022/23 plus expect another buyback programme. I think the broker price target of 150 reflects financial year, not rolling 12 months from now. Got to be worth 175. However, I did sell a bit of GFM at 120 last time ( still holding 125,000) and have just bought POLY at 130: worth at least 700 just on Kazakhstan assets and free cash. Divi in May 40% yield - think it will be paid but may be cancelled if a cash flow crisis
Mothercare and Stanley Gibbons. I think the latter, and his residency, puts him in with the Jersey set and my guess is that he is a Board representative of Griffiths who has close to a 20% stake. Merchant banking background gives me hope he is there to achieve a substantial exit for the Griffiths funds. Not sure of his China experience: the China VC and securities firm he is involved with are basically dormant/shell companies. Possible MBI??
I can see absolutely no reason for the shares to be at this depressed level
No but that also puts votes into insider hands. I just wonder what the exit route is for the BoD given their ages: new MBI supported by Griffiths, cash takeover by major. Hope it is something - perhaps in 2 years when they are running at 1.5 m tonnes and printing cash. Griffiths, who has put £60m into this business, must have something in mind.
With gold and zinc firm and no known production outages lower smelter charges GFM is minting it. Broker has 180p price on the shares, which is lower than fair value on my models. So I can only assume the MMs are under orders to keep the reported price low to continue to flush out frustrated sellers, mopping the shares up in treasury.
I have not done the calculation, but if they buy all £10m they want into treasury it will be another 5%+ under management control. I believe this, together with management holdings, and the Griffith's stake will give control over more than 50% of voting shares. This is both a takeover protection, and gives control over a friendly merger or public to private deal. Must be some majors licking their lips over GFM as it is an undervalued, debt free and significant resource. Time to buy back the 25% of my holding I sold at c. 150p
I am a bit higher than this - see my post of 14 January. I have seen nothing to change my mind. I think it is all positives for GFM for 2021 and 2022, particularly if zinc and gold hold above $3,000 and $1,800 respectively. Thinking SP of 200p + by end of 2021, and 300p + by late 2022. Confident we will get there with or without a bid.
With zinc back above $3,000, gold back above $1,800 and mine production running at 250,000 tonnes per quarter and rising, GFM is minting it. Not especially interested in 2020 numbers, only rolling 12 months and evidence to support my valuation models for 2021 and 2022. At 140p this is so undervalued it is laughable. 200p, 250p and 300p are all reasonable targets by end 2021, mid and end 2022.
MMs keeping the price low, punters think the action is over, and GFM hoovers up the shares. Well they are not having any of mine!
Wonder what GFM will do with the shares. Buying the shares takes money out of distributable profits. Cancelling the shares decreases share capital = increases EPS. However they can also be used to satisfy the exercise of options. Given the BOD have lots of options at below market price, using distributable profits to buy shares at, say, 130p then selling them to Directors at, say, 30p is a transfer of distributable profits from one set of shareholders to another = effectively a targeted dividend.
Happy to see the momentum traders and short term holders selling at these levels and being mopped up by the company buying back its own shares. There may be further selling on H2 2020 results, but frankly they are pretty irrelevant. I am more interested in the rate of growth in mined volumes and current ore grades
Sell not seek! Sorry!
Just amazed people want to seek into large investor (Griffiths), and management (share buy back) at these levels. All the news points to an intrinsic value in at least the mid twos. Insiders and quasi insiders are happy to hoover them up!
Good point. Maybe the broker is warehousing the underlying shares.
The 1.8 million share sale on 25th was brokers selling the block they had sucked out of the market to Griffiths. He has increased his holding by around 1.8 million shares. I reckon he has about 10 m shares to go to get to 20%
Todays RNS exactly as I said on 24th Feb post
I am in general not a great fan of buybacks. £10m is not going to move the needle much on a £250m market cap, although it will allow them to mop up small sales by short term holders. A small dividend and a progressive dividend policy would have had a much greater impact on the share price. I imagine the shares will trade sideways until we start to see 2021 operating results (2020 finals are pretty irrelevant except for students of balance sheets). However, the shares remain significantly undervalued given the doubling of mined volumes through 2021/22 and the significant uplift in the resource estimate.
With a large institutional holder, maybe the MMs have been lowering the price to suck shares out of short term hands, and then packaged a £1 million block for them transacted off market to be reported if they cross another threshold.