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Simon Thompson points out that the company’s 2P reserves are valued at US$1.72 per barrel. However, in my opinion, that’s using a conservative estimate of its actual reserves. For example, Trinity calculates its reserves based on the immediate geographic area around each onshore well. However, the 3D seismic purchased from Heritage at the end of 2020 will probably change that estimate. As will the drilling of high angle and horizontal wells that it plans for H2 2022. While Trinity's East Coast offshore resources also look set for a major revaluation when it makes a final investment decision on its TGAL project (It also expects dynamic modelling to have an impact on its 2P assets). For now, it estimates that the group’s net 2C contingent resources are some 31.06 mmbbls. In my view, it seems quite likely that a substantial proportion of this will be converted to 2P reserves before the year-end. So, investors are paying far less than US$1.72 per barrel for the company’s 2P reserves.

Simply reading between the lines of its latest RNS. But I suspect that due to the high levels of volatility, trading is very brisk for CMCX. However, it’s too diplomatic to admit as much. So a £30m share buyback programme funded by “Excess capital” is far more palatable than a special dividend. Especially in this highly emotional environment where volatility and war are entwined. As for its guidance figures, I have yet to come across a company that the market punished for exceeding guidance.

My suggestion is that the reform or scrapping of the SPT regime is likely to be announced in H1 2022. Why? An uncertain fiscal environment will deter prospective bidders. As we can see from Trinity, the fiscal regime determines the pace as well as the type of drilling. Incidentally, the raised threshold before SPT kicks in will cease at the end of the revenue year 2022. So, presumably, a decision will need to be made on what to do with SPT. Why wait until the end of the year?

Incidentally, I have yet to come across anyone who views SPT as a positive for Trinidad’s oil industry. My only concern is whether politics may get in the way of this reform.

A crude analysis, I know, but this is my broad understanding of Polymetal’s situation:

1. Its primary output is Gold: Homogeneous, international, portable and expensive relative to weight and mass. In a crisis, Gold prices are likely to remain high, while it’s virtually impossible to stop its sale. It’s difficult to imagine an environment where Polymetal will be unable to sell its Gold output.
2. There appears very little that can be done to disrupt its production. That includes the harshest of sanctions. The only potential disruptor seems to be the lack of semiconductors and the impact that is having on the supply of complex equipment. That has nothing to do with sanctions and is an industry-wide issue. There seems to be no key input that could be used as leverage against the company.
3. No sanctions have been levelled at either Polymetal or the broader mining industry in Russia.
4. Its registered office is in Jersey and it's listed on the LSE. While its largest institutional shareholder is Blackrock. Defining it as a Russian company could be problematic.
5. London is the world’s premier market for listed resource stocks, especially miners. Sanctions against companies based upon the actions of the Government where their assets are located will, in my view, set an appalling precedent.
6. It has substantial debt but it also has substantial cash. It’s not dependent on the banks for its survival. Regardless of the sanctions imposed on Russian banks, it’s largely business as usual. It may owe to Russian banks but it’s not the other way round.
7. The company has not indicated a change in dividend policy. With all-in sustaining costs for 2022 expected to be no more than US$1,200 per Gold equivalent oz., it’s very profitable. Moreover, I would suggest a dividend cut is unlikely.

For sure, these are uncertain times. But on balance, I think that the company will come through this, operationally and financially unscathed. It looks extremely unlikely that sanctions could halt or seriously hinder its production or even its development projects. As for its Gold output, Gold prices are to some degree inversely related to global stability as well as inflation expectations. The bigger the crisis, the higher the price of Gold is likely to be. And the market for Gold is global and secret. I would suggest that stopping Russia from selling its Gold (And getting paid) is very improbable. Much the same could be said for its Silver production.

However, should this turn seriously nasty. Aside, from the tragic human cost, it’s impossible to know how events will play out. The company could, in theory, be delisted. But apart from the UK making a grand, and very expensive gesture, what will that achieve? The bottom line, in my view, is that any sanctions will not impact its operations or its revenue. But they could determine who will benefit from this well-run business. Russian oligarchs or Western investors?

Guyana’s Kaieteur News has just published an article covering Guyana’s International Energy Conference and Expo 2022. According to this, an attending geologist from Trinidad's MEEI suggested that Trinidad’s next onshore bid round would commence “In the next month or so”. Why point this out? In the latest presentation given by Trinity, it was made clear that the success, or failure, of this round, was largely dependent on reforming the fiscal regime faced by onshore operators. Presumably, reform or even scrapping the SPT regime will be announced before the start of bidding?

Considering the sharp rise in Gold prices, genuine surprise is the only way I can express the lack of trading volume for CMCL . In my view, the management has delivered on what it has promised stakeholders. For starters, its ESG credentials are excellent. It was doing ESG before ESG had become a widely used marketing tool. At the same time, it has delivered for shareholders.

Based on figures from Stockopedia, its operating margins are around 33%, its return on capital employed is over 20%. It’s debt-free and offers a yield of around 3.7% (That’s covered more than three times) and is paid quarterly.

As for operational delivery, when the Blanket mine was acquired from Kinross in 2006, its production for Q3 was 6,475 oz of Gold. By Q3 2021, that had reached 18,965 oz. Its Central Shaft project was key to its development. Going to a depth of 1,200 meters (London’s tallest building is the Shard at 306 meters). It took five years to complete and was delivered on time (Slight delay for COVID) and within budget (US$67m and self-funded). Not only does it gives the company greater operational flexibility but that feeds into higher production and lower all-in sustaining costs (By the end of 2021, this had fallen to US$909 per oz) and a substantially increased mine life. It was designed to increase production to around 80,000 oz of Gold by 2022. Last month, the company issued an RNS with guidance at 73,000- 80,000 oz of Gold for 2022.

As for growth, it’s looking at further development in Zimbabwe. That includes its Maligreen asset in the Zimbabwe Midlands. This has inferred resources of some 940,000 oz of Gold. Importantly, it estimates that some 712,000 oz is at a depth of less than 220m. So an open-pit operation is likely. Of course, this will involve extensive drilling over the next couple of years. But the company has a reputation for delivery. Maligreen cost US$4m and Caledonia is planning on spending some US$1.6m over the next two years on drilling. That builds on the considerable exploration that has already been carried out on the asset.

It’s also worth noting that Zimbabwe has “Use it or lose it” laws in place. In my view, that puts Caledonia in a very strong position. It doesn’t sit on its assets like many others. So there are likely to be other attractive investments on the horizon.

For sure, the jurisdiction is risky. But most Gold miners operate in jurisdictions that could be considered risky. Both Russian and Chinese companies have significant investments in Zimbabwe - so it's certainly not off-limits. And Gold is the country's largest export by value.

A broad impression but lifting oil production without a substantial change in the SPT regime may have been an unwise move. As it stands, Trinity has recently renegotiated the terms for both its onshore and offshore fields. If, as seems likely, there is further SPT reform, any successful drilling will prove to be far more profitable than it would have been.

In a nutshell, it appears to have been biding its time. Largely debt-free, it’s a low-cost oil producer (Break-even of less than US$30 per barrel) with hedging in place to protect against the downside. And the backdrop is a country that wants to remove the stranglehold the majors have over oil production. Trinidad is also very focused on avoiding stranded natural resource assets. In my view, as the largest independent oil producer in the country and viewed as a local champion, it’s in a strong position. But much is dependent on SPT reform.

For sure, in a bull market, Ruffer Investment looks pedestrian at best. But we may no longer be in a bull market. Around that, inflation may not be a temporary blip. If that is the case and I believe it to be, then the Ruffer fund, in my opinion, is an attractive investment. For starters, it has relatively high exposure to both inflation-linked bonds and Gold (Through bullion and equities). At the same time, it holds stocks that it regards as having substantial resilience, including BP and Shell. The upside may be fairly limited but it goes out of its way to protect the downside through various shorting tools. It’s also largely unlimited in terms of what it can do - it’s not benchmarked against any particular index and has a multi-asset approach. That flexibility was demonstrated last year with a very successful trade in Bitcoin.

Do I think it offers stellar returns? No. But I believe that we may be entering a period of low returns for most investments. And this reminds me of a comment by Warren Buffett - rule number one in investing is not to lose money. In the current investing climate, simply protecting what you have, at least in real terms, may prove challenging.

Agreed. The lack of liquidity is irritating. But, using Stockopedia figures, this is a very profitable business. Its operating margins averaged some 40.3% over the last seven years. While over the same period, its return on capital employed averaged 24.5%. Not forgetting that its Central Shaft project, commissioned in April 2021, took about six years to complete, cost around US$67m and was self-funded. Unlike most AIM-listed resource stocks, there has been very little equity dilution since it was listed. In my view, it's not a smoke and mirrors outfit.

By the way, as a result of the Central Shaft and the subsequent increase in production, its all-in sustaining costs have dropped 19% to US$909 for Q3 2021 (Compared to Q3 2020). While it's still increasing production as it fully exploits the Central Shaft, so those costs could fall further. And it's now in a position to focus on its Maligreen Gold project in Zimbabwe.

It's also worth adding that its recent listing on the Victoria Falls Stock Exchange in Zimbabwe comes with a significant upside. It will now receive a greater proportion of its revenue in US Dollars. That benefit will also impact any potential revenue from its Maligreen project. Of course, it's based in Zimbabwe and it comes with risk. But, in my opinion, the same could be said of most resource stocks. I certainly would not put all or too many of my eggs in any one basket.

Am a Tad surprised that the market has only just woken up to the comments made yesterday by Stuart Young, Trinidad’s Minister of Energy, at the World Petroleum Congress. He mentioned that Trinidad will put a further tranche of onshore and shallow-water blocks up for auction in 2022. However, it’s the changes to the time frame that caught my attention. It intends to make a decision and allot the blocks in nine months. As he pointed out, “We need to get on with it”.

Trinity is the largest independent oil company in Trinidad and with considerable experience in onshore, as well as offshore shallow-water, oil production. I would suggest that it’s in a good position to benefit from Trinidad's push to avoid stranded oil and gas assets. While the timing of the process could create a strong pipeline of projects with TGAL planned to go into production in 2023.

For sure, if oil prices collapse it’s on a hiding to nothing. But with a consolidated break-even of under US$30 per barrel, it would need to be a very sustained collapse to cause significant damage to its balance sheet.

Last night’s Proactive presentation gave me the impression that further fiscal reform in Trinidad’s oil sector is on the cards. Listening carefully and it becomes clear that Trinity’s future onshore drilling programme will be influenced by the country’s tax and royalty regime. As for the farm-down of TGAL. This is much the same - the ultimate deal will be shaped by the fiscal environment. Whether SPT reforms will be extended to offshore producers, I have no idea. Nevertheless, Trinity is perceived as a local champion and produces some 6% of the country’s oil output. At the same time, the Government appears keen to develop its independents. And why not? The UK has done so. Fiscal reform could be a way of unlocking the grip that the majors currently hold.

In my opinion, the upshot is that fiscal reform is likely to benefit smaller operators and will probably add significant value to the TGAL project. It may also be the cue for Trinity to resume onshore drilling.

Incidentally, the presentation also highlighted the speed at which the authorities agreed to the Galeota Field Development Plan. Not only agreeing to the company’s suggestions but also recommending an expansion of those plans. Basically, they appear keen to avoid stranded resources. So, fiscal reform would seem to dovetail with those aspirations. And, of course, Trinity has some US$165m in tax losses that can be utilised for the development.

Simplistic, quite possibly. But CMC Markets was listed in February 2016 at 240p per share. Its turnover for 2016 was £169m. Using its guidance figures, which historically have been accurate, it has reiterated a net operating income of £250-280m for 2022. Its balance sheet was strong when it was listed and remains strong now (Its net asset value has more than doubled - its capex spending since the listing is almost £64m). During that period neither Peter Cruddas nor his wife has sold a single share. Incidentally, the company has issued a minuscule amount of stock over that time. There has been virtually no dilution of shareholder equity.

So the question I ask is this. Do you think that the company is more valuable today than when it was listed over five years ago? I pose that question because the market seems to be telling us that it’s worth about the same as it was when it was listed. I beg to differ, I believe it’s a larger and more diverse business with more avenues for growth.

For sure, like any other investment, it comes with risk. It could be scuppered by regulation or financial markets that remain range-bound for a lengthy period. But I would suggest that any heavy-handed legislation will hit smaller operators (The competition) in the same sector far harder than CMC. As for financial stability. It’s my view that we could be heading into some very troubling (Volatile) waters. Providing the company can manage the risk associated with this volatility, it could profit when other businesses are struggling simply to survive.

CMCX is a company that I have done well from in the past but I was a little reluctant to get back into it due to the lack of volatility in the financial markets and concerns about how its client base will perform in a market crash (Too much volatility). That said, I did get back in and today’s news is most welcome. But giving this some perspective. The company was listed in 2016 at 240p. Its turnover for 2016 was £169m but for 2021 it was £410m (Yes, I know the rise was not linear). While its dividend over that period has increased from 8.93p to 30.6p per share. Again, over that time, its average operating margins and average ROCE have been excellent. And the company has become more balanced with global expansion as well as a move into non-leveraged products. In essence, I think it became, and still is, undervalued. So the proposed sell-off of part of the business, in my view, has a lot of logic to it.

The possible reform of the SPT regime that was alluded to in Trinity’s LSE Presentation was not announced in yesterday's budget. However, Trinidad’s authorities did announce that it was about to embark upon “A comprehensive review of our oil and gas taxation regime to ensure that Trinidad and Tobago remains an internationally competitive hydrocarbon province”. It also went on to state “Simply put, oil or gas in the ground is of little practical use to anyone. It must be produced and sold profitably, and the profits derived from its sale shared equitably, to have any intrinsic value.” The impression I get is that Trinidad is about to make its oil and gas sector more fiscally attractive. As an oil producer with many irons in the fire for growth, that seems to put Trinity in a strong position.

Incidentally, the company estimates that the farm-down of its East coast project will take 6-9 months to conclude. That appears likely to dovetail with the outcome of Trinidad’s fiscal review of the oil and gas sector. Basically, the backdrop looks to be very favourable.

Just expanding on what I suggested earlier, I’m still interested in getting back into CMC but the conundrum I have is this. The company benefits from financial market volatility. But that doesn’t mean that its clients will also benefit. With some 67% of its retail customers losing money when trading CFDs with CMC, should they be on the wrong side of a major market adjustment, they could find themselves in no position to continue trading. While around that, its Trade and Risk Data Intelligence System (TARDIS) was developed internally and launched in late 2019. So its hedging policies survived the oscillations of 2020 e.g. Volatility in the price of oil and the short-term stock market correction in early 2020.

But I would still feel more comfortable knowing that both its client base and its hedging systems were robust enough to survive something more extreme. And, of course, the Fed is pumping some US$120 billion into the financial system every month while interest rates are at historic lows. It’s difficult to know what the next financial crisis will look like and the counterparty problems that will entail. Too little volatility and CMC has no business, but too much could take it, and its clients, into unknown territory.

Although I no longer hold CMCX stock, I still believe it to be a well-managed business with much scope for growth. As I pointed out earlier, when viewed internationally, it’s a small company in a potentially huge market. My main concern is what will happen in a market crash. Just how exposed will the company find itself? Its hedging strategy will be crucial. As it happens, I suspect that it will be in a much healthier position than most of its competitors. But I also suspect that its stock price may get caught up in a market maelstrom. That said, Peter Cruddas still owns almost 57% of the company so it seems reasonable to assume that he will ensure that it's not over-exposed. But what about its customers?

CMC often refers to “Cohorts” of clients. With each year presenting a new “Cohort”. Considering just how exotic and esoteric the financial markets have become, it strikes me as difficult to predict how the latest “Cohort” will perform in a crisis. Around that, the last serious financial crash was in 2007/8. Many of its clients may never have experienced a market meltdown. In what financial shape will they be in at the end of a major market adjustment? And that leads to CMC’s revenue position post-crash. If its client base comes through in fine fettle, there are no issues but that’s out of the company’s hands. And around that is the question of how much its clients need to trade and how much they choose to trade? Beaten down psychologically and financially they may be unable or unwilling to use the company's services.

Nevertheless, I'm still interested in the business and I intend to get back in as an investor. But I'm inclined to wait until there is a market correction and the position of its client base is clearer.

In an industry notorious for lengthy time frames, in my view, AAZ stands out for its ability to rapidly monetise its assets. Its Ugur open-pit project is a case in point. It went into production within one year of discovery. It cost around US$5m to develop but has generated some US$50m in EBITDA over two years. It’s looking at putting Zafar into production next year (Within a year of getting a JORC-compliant report?). Moreover, it also has other near-mine development opportunities that can utilise its established production facilities. It doesn’t need to spend big to grow or maintain production. And that leads to another stand-out point, at least for the AIM market. It has not diluted shareholders’ interests.

Over the past ten years, the high-water mark for its debt was around US$52.8m in 2014. That debt has been repaid. At the same time, it has not wallpapered the world with placings. Over the same period, it has only issued around US$450,000 of new stock.

Of course, it's based in a potentially dangerous part of the world and that brings risk. But at an operational level, I believe it to be a well-run business. While the real game-changer is the restoration of the contract areas as a result of the recent awful conflict. I still don’t think the market has factored in the potential upside. Even at today’s lacklustre Gold prices, it’s a profitable, debt-free, dividend-paying enterprise. It even gives exposure to Copper - very much a metal of the future. Depending on how the restored contract areas play out, that exposure to Copper could grow considerably with Kashen estimated to hold some 275,000 metric tonnes of Copper reserves.

However, the stakes are very high. The restored areas are a great prize. There will be winners and losers. Nevertheless, the Board has a wealth of political/diplomatic experience. Given the sums involved, I suspect they will need those skills in abundance and, of course, a lot of patience.

Bruce was clearly an inspiration. However, and I say this as respectfully as possible, I received name cards from both Bruce and Jeremy Bridglalsingh, then Trinity’s CFO, when attending a presentation. They sit on my desk right now. But I couldn't help but notice that they both had email addresses for Jeremy Bridglalsingh (One slightly different from the other). While Bruce’s name card had a UK telephone number and Jeremy’s was for the Trinidad office. Of course, there may have been logistical reasons. And I don’t mean to diminish Bruce’s role but I get the sense that some investors may be assuming that Bruce was CEO. The reality was that Jeremy ran the operation on a day-to-day basis. He was appointed Managing Director in September 2020. I don’t think he has the presenting skills that Bruce had but he has always struck me as being very on the ball.

Incidentally, I’m aware that Jeremy is an accountant and Bruce was a geologist. But Pan African Resources has been a very sound investment for me. It’s run by an accountant and not a geologist. I’m far from convinced that geologists are the right people to run companies in the extractive sector.

Again, I say it with respect but Trinity has many irons in the fire that can go ahead without Bruce. The market’s initial very negative response, in my opinion, is probably an over-reaction

Hopefully, progress is being made on the restored contract areas. With industrial action impacting copper production in Chile, the Kashen open-pit operation, located in the Kyzlbulag contract area looks increasingly valuable. It appears to hold between 100,0000 to 275,000 metric tonnes of copper. While the Vallex Group seems to have spent at least US$130m building an ore processing plant nearby. Putting that into perspective, Central Asia Metals, a company in which I am also a shareholder, has around 140,000 metric tonnes of recoverable copper and now has a market cap of around £440m. Of course, Central Asia has another major operation in North Macedonia. But the point I’m making is this. The upside for Anglo Asian, within a reasonable time, could be substantial. And that reasonable period is likely to be far shorter than it would have been building the plant from scratch.

It may not be comparing apples with apples but viewed internationally and CMC Markets is still quite small in terms of its market capitalisation. Robinhood Markets was recently floated in the US with a valuation of some US$32 billion. CMC may have grown in many ways but, in my opinion, there is still scope for upside when one views it from a global perspective.