Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Thanks gotabesirius. If we’re selling anywhere in the region your suggesting kp fertil should be sold at then the profit numbers would greatly exceed my expectations. I’ve been working on a 70 aud sales price (50 usd) half what your suggesting.
For sure a certain portion of the sales for this year would have been agreed well in advance so would get a lower price for that. Very encouraged to hear that though and bodes very well. Chique might need to update the options for a higher selling price in the calculator ;)
Very encouraging, I may try and go through and find verdes 25kg bag price and compare to their 1 tonne price to see if we can make an educated guess how much per tonne kp fertil is selling based off using their 25kg selling price.
The chart is looking rather good at the moment and suggests 22p the next stop before resistance. That would be all time highs. Would imagine a very positive q2 number and guidance could send us well beyond those ATH. Great time to be a shareholder in my opinion. All the best.
Yes easyp, the run up from 4.5p - 18p was fast with little retracement. If you study any chart no matter what it is when you get vertical moves in the charts and price without fail they come back and retrace at least some part of the original move up.
I’ve been here since 2017 and added to my investment significantly during the 3p lows in 2020 so I’m here for the long term and my ultimate thesis for buying has been for this excellent fundamental reasons! I however understand the market has to move in certain ways and as the price explodes up sellers appear. The chart has to retrace to find new buyers and smart money never buys the top. These retracements allow sellers with shorter term outlook to sell and book profits while the price comes down to allow buyers and smart money to benefit for a longer term view. I have been calling since 18p for the price to retrace to the 13/14p area. If I had it my way the price would shoot up vertically to 40/50p which is fair value to me based on the fundamentals, however the market doesn’t work like that. Right now we’re sitting on the 50% retracement, trendline support and pretty good horizontal support dating back to 2018/2019. The 61.8 fib retracement is sat at 11p. I see the more likely outcome we bounce here. The risk reward set up looks great here in my opinion, fundamentally and technically on the charts. As ever DYOR, just my opinion. Cheers
Wouldn’t think they’d need to explore for more at arapua- 100years at 400kt a year. They will be spending on the limestone project to bring that up to production if feasibility study’s show its viable which I suspect it will be but that would be a major plus and in time receive cash flow from that project too
Agree chique, I urge everyone to just look out 18 months… I see us selling in the region of 350kt in 2023. What’s this based on? 200kt this year looks likely in my opinion and company have mentioned that figure.
Verdes growth as they became bigger and sold more did not slow down, the growth rate rose. The size of the Brazilian market allows for this.
Our growth rate from 85kt last year to 200k this year is well over 100%- in my mind there’s really nothing stopping us growing again at say 75% next year to 350kt with the 12million tonnes potential market just within 300km. Farmers clearly love the product, certified fertilizer, new limestone project potentially coming online 2023. At 350kt next year = £9m pre tax profit with my figures. Or third of our mcap right now. Dividends will be paid, 100yr life of mine, new projects to add to arapua, Brazil looking to reduce heavily reliance on imports. I try to see both sides of the coin always and not live in dreamland but I’m really struggling to find any negatives. Would welcome the discussion if anyone could come up with some.
Chique… “In Brazil, the world’s biggest soybean producer, a 20% cut in potash use could bring a 14% drop in yields, according to industry consultancy MB Agro. In Costa Rica, a coffee cooperative representing 1,200 small producers sees output falling as much as 15% next year if the farmers miss even one-third of normal application. In West Africa, falling fertilizer use will shrink this year’s rice and corn harvest by a third, according to the International Fertilizer Development Center, a food security non-profit group”
“What Can Farmers Do?
Farmers aren’t sitting idly by. Those who managed to secure fertilizer ahead of the latest run-up are being more strategic about how much they use, including leaning into “precision agriculture.” That means collecting more data on their fields, monitoring crops for increased efficiency and rolling out other data analysis tools. Farmers are increasingly testing soil for lingering nutrients and applying exactly as much fertilizer is needed, rather than an overly generous ballpark — a practice that’s been in use across some places like the U.S. and parts of Brazil for decades but isn’t yet commonplace in some other parts of the word.
If a soil tests high for phosphorous or potassium, “often little to no fertilizer is needed at all,” said Carrie Laboski, professor and extension soil scientist at University of Wisconsin-Madison. For some crops like corn, growers might apply a little bit of “starter fertilizer” when they’re planting, which is like insurance if soils are testing high for crop nutrients. When it comes to nitrogen, “they shouldn't eliminate it, but cut back,” she said.
Read more: How the world’s farmers are learning to grow with less
Some farms are also exploring controlled-release formulations, like tiny capsules of nutrients that dissolve slowly over time. Although not a solution for many commercial farms given their large scales, others are exploring alternatives to chemical fertilizers, including animal waste.
“Compost and sewage sludge and biosolids or organic nutrients become more valuable,” said Mark Topliff, lead analyst for farm economics at the Agriculture and Horticulture Development Board in the U.K. “The supply of those has been stretched” as more growers turn to alternatives.
Agreed Damian, however the chart had run up significantly the last 3 months from 4.5p- 18p. A pullback to the 13/14p area did look on the cards. Definitely hasn’t been me selling- the opportunity is too good for the medium to long term to even think about selling any and I’ve a 4.5p average. But having an understanding of the charts and looking at a chart that’s gone vertical- the price invariably comes back somewhat. Can’t see lower than 13p personally. Very much undervalued here IMO- I’m here for years not months :)
https://www.newscientist.com/article/2317136-rock-dust-can-meet-half-of-the-uks-net-zero-carbon-removal-target/amp/
An interesting read and I wonder if the company would be looking to do some testing around this and how kp fertil contributes to carbon capture. It has been mentioned by the company before.
£5.3m EBITDA - even to be ultra cautious and half that - £2.6m profit- would value us at 12 PE, with over 100% yr on yr sales growth, extremely hot sector, with competitors valued at many multiples of us, granted they are 2 years ahead and targeting 700kt and have extremely large ambitions but on the flip side our margins appear to be better. And to top it off due to the terrible events in Ukraine, the shortage of fertiliser will see many farmers fast track and flock to harvest this year... the benefit of course being that in Brian's own words the farmers that have come back and bought larger quantities the following year is circa 100%. Doesn't get much better than that IMO
I'm using:
72.5 AUD selling price
12 AUD opex
200kt sold
14.5m AUD revenue
2.8m AUD yearly overheads
2.4m AUD cost of sales
9.3m AUD EBITDA
This doesn't take into account any money that may be spent on the limestone project
Mark Heyhoe who tasked with operations around the mine build and worked at the company up until last summer , in his crux investor podcast at start of 2020 stated opex would be 7.50 usd per tonne as we hit the 100kt. Since then the brazillian currency has weakened therefore opex could come down more. I am using the 8.50 figure or roughly 12 aud to be on the safe side, fuel needed for our trucks would have gone up so i think 12 aud or 8.50 is a safe conservative number to use.
Severely under valued for so long chique. Recent pullback was due to the huge run up since start of year, pullback for sellers to take profit and new buyers to gain a good entry point and onward again. Still only £34m mcap!
Quite impressive intraday reversal from verde agritech today. Now sitting at £310m mcap… for sure they are 2 years ahead on their journey and have publicly stated a big ramp up in capacity. However sitting at a tenth of their mcap really does highlight the potential for significant gains over the medium and long term. Very intrigued to hear our q2 sales numbers and I’d expect the company to be talking about an additional 320kt capacity in the near future. Extremely bullish and very happy to hold for years to come! ATB holders.
Whl2 I did message David burton on twitter and ask him when the comment was made. He said he’d get back to me. I assume he tweeted it from an old quote from maybe last year, and now realises it’s out of date potentially.
https://www.bloomberg.com/news/articles/2022-04-13/fertilizer-shortage-could-bring-farming-emissions-change
Interesting Bloomberg article this morning. Especially liked the bit about how more and more farmers are testing the soil and understanding the importance of healthy soil - plays right into harvests hands with the excellent affect our product has on the soil.
“In Brazil, where fertilizer use has been growing faster than in the U.S., the demand for soil testing is at an all-time high this year, says Renato Alves Filho, chief executive officer of Laboratório Solos & Plantas, the biggest agronomic analysis chain in the country. The company processed 21,000 samples in the first 90 days of the year, compared with 12,000 for the same period in 2021, he says”