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Excellent interview from Adam. Key takeaway is the HWM1 on two shifts is currently producing 2000-3000 tonnes per day. That is a good step forward from January when they were trucking out 1000 tonnes per day. Equates to 30ktpm - 45ktpm clean coal. Looks like they are opening the taps somewhat. Crazy that the Roasters failed to ask him this question on Monday!
At that level of production 80p has to be the bottom end of what BEN is worth today with major upside when sentiment returns leading up to MM / HWM2 news.
BobB I totally agree they have done well so far and am realistic on timescales for ramp up. The fact it has taken 6 months and HWM1 is still no where near the quoted full production of 40ktpm would suggest it will take at least this amount of time again to get HWM2 into operation and up to full speed. The UNREALISTIC expectations of full production by July/August are being created by the interviews with the Sunday Roast. All I'm saying is when they demonstrably fail to meet these targets the market reacts negatively.
I think it's your numbers that are way off - where do you get 44k stockpile from?
Actual production in 6 months from Dec 21 to May 22 has been 21k tonnes ROM sold plus 30k clean tonnes and 5k tonnes ROM stockpiled. That's an average production of less than 10k per month. We are moving in the right direction with the trains but lets keep it real - it's been a very slow build up on HWM1 why do you think we'll be able to get straight up for full speed on both within the next 2 months. We don't have a permit on HWM2 and missing 20% of the parts to be able to remediate it. BEN is far from proven at the levels you're talking about.
I think the lack of explanation of where the cash raised has be spent and why ACTUAL production has been much lower than the numbers Adam banded about is what is holding back the share price. I'm sure we will get to 70/80k production eventually but if it is by August I'll eat my hat.
Market not agreeing with you on good progress. I thought it was telling in Adam's interview where is was talking about production ramping up 30k, 40k, 50k, 60k, 70k. I'm guessing 30k is where they aiming for in June which would imply 70 would be November at best. I'm still fully invested here but I do think a trend is well established of over promising and under-delivering on timescales. I also think considerably more has been spent on remedials than has been published when you think that the c $8.4m income from sale of 21,000 tonnes of ROM has been spent together with the $6m raised in February. Now a little worried what the March accounts will show.
The fact they have spent the $6m raised in Feb and had no cash prior to drawing down $5m dollars on this loan arrangement would also back up the fact they have had no income and not been trucking out coal since 10 March.
BBB I'm not suggesting they go from zero to 20ktpm. 12ktpm clean tonne equivalent was produced in the month to 10 March which was trucked out. The RNS on that date suggested a move away from ROM to clean tonnes so I assume nothing collected since then prior to the train. That being the case production remains at c 12ktpm rather than a ramp up to 20-30ktpm. If they have sold more ROM since 10 March they should have / would have told us about it.
I agree it is great to see the first train and I'm looking forward to the MM / HWM2 updates. I was just trying to answer the question posed about the share price drop.
I'm putting the price drop down to the following:
- I was expecting production to be c 20k clean tonnes per month since 10 March based on the last coal production update. One HWM one shift. Based on the 35k tones produced in nearly 3 months its been only just over half of this.
- We were led to believe 2 trains had already been over the weekend with a 3rd imminent. I now seems it is just one train every 10 days.
- What has happened to the $6m cash raised on 18 Feb. My understanding was integrity would pay $100 per tonne for coal produced but not collected covering our costs and that the $6m was being held in reserve for potential further expansion, land purchases etc. Why allow such dilution at 60p when cash is coming imminently?
- A 10% drop in coal prices in the last few days.
Jsmith once 2nd HMW fully operational in next few months (production 80,000 tonnes pm) annual profits expected to be c £170m pa at current coal prices. So Luqs valuation is based on 5-6 times earnings. By end of the year we will be a dividend paying company and potentially looking at HWM 3 and 4 too so I actually don't think he's far off with this. The IPO was massively under the value of the plant acquired and reflected no production - the company has come so far IPO price is just no longer relevant IMHO. DYOR.
Amazing news, this is a huge step and will make BEN a much more low risk investment for II's, huge cash cow, divs this year and huge potential for continued rapid growth. I expect big money to start flowing in here over the next few weeks.
Jam tomorrow. No mention of the Volz assembly line. Pathetic.
It was an error and I have apologied for my part in it. You have a short memory though as it's only weeks since your 'basic error' on the HWM1 double shifting. To err is human, we are all invested here and want the best for BC so perhaps a more considerate response wouldn't go amiss.