Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Lack of information in rns is an issue agreed. However management have come out are doing a q&a investor presentation and all the questions will get answered I assume so that seems a responsible and effective way of getting all the information out there to shareholders.
Clearly buying cycle has changed somewhat for farmers. Q4 traditionally quietest quarter so not sure why we would have had a huge carry ons from q4 21. It seems war with Ukraine which started mid to late June had an significant impact in q1. 30kt sold on 28th feb. War started 24th and people were aware of potential a week or 2 before. If I was a farmer and knew Russia supplied a large part of worlds fertilizer and we’re heading to war I’d be trying to stock up on my fertilizer supplies asap. In the month of March we sold 40kt. This ties in with that. Yes First 6 weeks of year sales were up 1000% or whatever it was but these are on very low volumes. Not sure there’s much more to it. Just my opinion of course.
Whether the company knew about the huge increase in sales they were going to get in q1 or not, (I don’t think they did) I don’t really understand why it matters tbh. We’ve sold 117kt going into strongest quarter traditionally. Company stated we’re going to exceed target and ramping up production to 200kt. With 2 price rises already this year. Really not sure what’s not to like?
Not sure I follow with the lack of sustained sales in Q2. Obvisouly we had some pull forward of demand q1 as farmers wanted to get ahead and guarantee fertilizer supplies. However at 47kt tonnes for q2- is 165% increase on q2 2021- after the pull forward of some orders in q1 this year. Pretty impressive if you ask me.
117kt for the year is already a 40% increase on last years total 85kt and we’ve 6 months of the year left- with traditionally q3 being the quarter we sell the most product. Company stating we will exceed 150kt. Even if we matched the 47kt of q2 in q3 we’re sat at 164. Add in q4 and I would imagine 175-180 kt is a very realistic expectation. If we achieve those numbers- q2-q3 and q4 sales would equate to a 35% increase on full year 2021 85kt figure. This is all after the big q1 70kt update. So for kp fertil product is clearly growing on its own merit from farmers who have tried previous years and every single one comes back for more.
Don’t like predicting share prices too often but I suspect those buying and holding this for the next 3 years will see £150m mcap+ and up near £1 share
I really hope your correct! I remember mark heyhoe suggesting in February 2020 in crux investor that they were selling at 200 reis. That year we had covid trouble so very much doubt we increased in 2020, 21 we may have increased but no communication at all was given to us so I’m going to assume we sold at 200 also last year.
Now the story has changed and I believe we now have some pricing power as sales and the kp fertil brand starts to take off. Again I hope your right, would be great. I would prefer to come at it from a slightly more glass half empty and be pleasantly surprised to the upside!
We also have to bear in mind a small paercentage of product sold may have been ordered last year on 200 reis terms. Something to think about. Which ever way you crunch the numbers I can’t find anything else on the stock market like it. Whilst very hard to predict share prices, I agree with a 50p plus sp this time next year
Personally can’t see a sales price of 80 usd tonne swingy. We were selling roughly 200 reis last year- circa 40 usd. Since then 2 price increases let’s assume 20% price rise each time. = 240-290 Brazilian reis or 48-55 usd tonne. This in my view is much more realistic. I’d suspect the opex you have used though on the contrary would be cheaper than the 15 usd envisioned - due to economies of scale and the solar instillation.
Super exciting time for the company! Anticipating q2 numbers this week.
The thing that really stands out as you guys are pointing out is the distance people are willing to ship the product. The company have stated many many times that just within a 300km radius of arapua there is over 3m tonnes of potential demand- JUST FOR COFFEE! Of course I’m not saying we will capture it all.
The fact is thought the product is getting shipped and becoming recognised well beyond that 300km radius which can only be a good thing for product awareness and it really shows the farmers willingness to have our product.
We’re are at a huge inflection point in the business where I believe we will really see some hefty sales growth figures. Can’t wait for q2 update in next week or two.
Nice looking chart and the bull flag suggests 20p within next couple weeks.
The article the company tweeted this morning is excellent - Brazil, a top producer of soy, corn, cotton, sugarcane and coffee, is the world's fourth-biggest consumer of so-called "NPK" chemical fertilizers -- nitrogen-, phosphorus- and potassium-based.
It imports around 80 percent of its total supply -- and 25 percent of that from Russia, whose exports have now been targeted by Western sanctions over the Ukraine invasion.
That is causing farmers in the South American giant to turn to alternatives, including remineralizers, or "agrominerals" -- pulverized, nutrient-rich rocks that are spread on fields before planting.
Brazil, which authorized remineralizers for agricultural use in 2013, is the world leader in the technique, which is also used in the United States, Canada, India and France, among others.
"Brazil is a tropical country, and the rains tend to wash away soil nutrients. Rock powder rebuilds the soil and renews it," says Marcio Remedio, mineral resources director at the Brazilian Geological Service.
The technique also "allows plants' roots to develop better and capture the nutrients they need to grow," says Suzi Huff Theodoro, a geologist at the University of Brasilia.
"We have rocks with the right profile in various parts of the country, and the cost is significantly cheaper" than chemical fertilizers, she told AFP.
A study last year found around five percent of farmland in Brazil used remineralizers.
That figure looks set to jump this year: the country's 30 suppliers report they are seeing unprecedented demand, says Theodoro.
"Most of them have already sold their entire output for the year, to all kinds of farms -- from industrial to mid-sized to small and mostly ecologically minded," she says.
Farmer Rogerio Vian has almost stopped using chemical fertilizers altogether.
Vian, who runs a 1,000-hectare (nearly 2,500-acre) soy and corn farm in the central-western state of Goias, was an early adopter of alternative technologies.
He started out nine years ago making his own products from microorganisms found in native forests.
He pulverized them and applied them while planting to protect against parasites and help his crops absorb nutrients.
Now Vian, who founded the 700-member Association for Sustainable Agriculture (GAAS), is using remineralizers, too.
"I've cut my fertilizer and seed treatment costs by 50 percent, with no loss of productivity," he says.
"Brazil is a mega-biodiverse country, and that holds enormous potential in terms of tools and techniques for our work, which we're only just starting to discover."
About as bullish as it gets in my opinion. ATB
Couldn’t agree more swingy. Back then the market and myself included didn’t realise how long it would take to get the farmers to take up a brand new type of fertilizer. That was on me for buying a £30m mcap 4 years ago. The board other than aggrocerado and the geocile investment have done everything they said they would do and more.
Fast forward today the company is completely different. The hard work of the last 3/4 years working with the farmers and having to work hard to convince them to try the product is behind us. They love our product. Simple. I estimate we will be in the £4-5m profit region for this year. With the potential to grow again hugely in the next few years (due to the huge market on our doorstep) without having to issue shares and raise, which is the key!! Whether that money is paid out back to investors or used to bring on the limestone asset- which would be my preference, the company is in a great way. I can’t see a better investment out there for my money.
Very interesting to read that there is actually no shortage of fertilizer from Belarus and Russia this year at all. If farmers want to buy traditional fertilizer from Belarus and Russia the opportunity is there.
If you go on YouTube and watch verde agritechs latest presentation and go to 52mins in- the ceo explains it within 5 minutes and gives evidence to back it up.
So actually this is an extreme positive in my opinion and just validates the product even more. Farmers are wanting more of our product after seeing the results it has given them. Brazilian government are pushing to reduce their imports of course and to become less dependant on foreign exports. The 1000% increase in sales orders the company announced at the start of the year and the 70,000 q1 sales orders appear not to be linked to the Ukraine war and sanctions. Mentally it may have made farmers realise the risk of relying on foreign imports but the opportunity was there to buy it seems. Seems the risk that some people thought when the war is over will everyone go back to buying traditional is squashed.
Bottom line is farmers love our product, we have an enormous market right on our doorstep literally and this is the way farming is going. I can’t wait for q2 update and the next few years. Also starting to dawn on me the potential of our limestone asset when we get that up and running - more limestone is used in Brazil than traditional fertilizer… if we can sell limescale to the farmers we already have as customers you could look at doubling revenue straight away. Why wouldn’t farmers just buy their limestone off us alongside their ongoing kp fertil purchases, maybe even a slight discount to buy both. Really a great future ahead.
Also go and watch “kiss the ground” on Netflix if you haven’t. I really can’t think of a better company to have my money in. ATB