Member Info for the_shareminator

Write ups in both Mining Journal and IC, hidden behind paywalls but no doubt increasingly on people's radars

https://www.mining-journal.com/miners/news/4357306/caml-revenues-rise-strong-base-metals-prices

https://www.investorschronicle.co.uk/content/0f379aee-d6fa-5f20-9c9e-70f7d6c3d8f3

The geo-political outlook has worsened since October 7th wouldn't you say? This is no longer a contained Gazan insurgency but a much wider conflict incorporating the state of Iran, their proxies in Lebanon, Iraq and Syria, the Houthis in Yemen, strikes on shipping in the region. The increased presence of Western forces in the region. The uncertainty of the US election and how much support Israel can rely on beyond this year will factor into possible escalation risks. There doesn't appear to be a short term compromise either side can reach. Israel's enemies only want it's annihilation whilst Israel want to destroy Hamas. October 7th though horrific in it's brutality and atrocities was not the all-out multi-state war that is unfolding. I think for this reason primarily market participants are more risk adverse now than 11 months ago on that dreadful day.

"Total capital expenditure for the year amounted to US$172.4 million (2023: US$113.0 million), which resulted in an increase in net debt to US$106.4 million, relative to net debt of US$22.0 million in the previous financial year.

Cash holdings declined to US$26.3 million (2023: US$34.8 million) due to project-specific capital expenditure, while net cash from operating activities declined to US$90.7 million (2023: US$100.1 million) as a result of the payment of increased income tax and finance costs."

Whilst inevitable and entirely necessary it's this 'news' that has likely caused some selling. When considered alongside the forecast increase to revenues and cash generation in the second half of 2024 and beyond then it's really nothing to worry about. Centamin was significantly undervalued by market experts and institutions for months hence the recent takeout offer. It will take time for Pan African to rerate higher unless a major swoops in but we must be at an even greater discount to value given debt on the balance sheet. Easily 50% below where we should be trading in my view.

On dividends they have increased it by 20% compared to last year. The reason for such a low yield at 30p/share is down to the share price moving 110% during the year!

"The board has proposed a final dividend of ZAR489 million for the 2024 financial year (approximately US$26.8 million), equal to ZA 22.00000 cents per share or approximately US1.20946 cents per share (0.95611 pence per share). A dividend of ZA 18.00000 cents per share or approximately US 1.05820 cents per share (or 0.86915 pence per share) was paid for the 2023 financial year."

Investors are likely not buying Pan African exclusively for the dividends, which are heavily taxed unlike Centamin and previous London listed miners like Highland Gold etc. Hochschild or Fresnillo (I forget which) has previously paid less than 2% yield during good years but this won't detract value investors.

The reason I believe for the muted response today is more likely the ongoing CAPEX which is comparatively much higher than the previous year (for obvious reasons). 12 months from now those CAPEX figures will be much lower and the outlook even rosier.

Thanks for correcting me on that point I read it wrong. Total dividends amount to 3p combined. Excluding the special then we are at a less impressive 5% going forward

Market value today £109m (41p/share)

The group had a cash balance of $97.8 million (£75m approx) at the end of June, no debt or financing.

In the past six months they have paid $3.3m as an interim cash dividend (5 April 2024) and $3.3m as a special cash dividend (7 June 2024) following settlement of Grasvally Mine sale. They've just announced a final divided of 3p/share which effectively means this stock is yielding 14% at today's price excluding the special dividend and assuming no dividend cuts around the corner.

Whether poorly executed or not they spent $2.1 million on share buybacks in the 60p range (and subsequently cancelled) in recent months and I would place more faith in the Board than the likes of ST or any news outlet seeking to capitalise on short term swings.

In terms of the PGM basket and margin pressures this was always going to read poorly in comparison to the previous year. Prices look to have bottomed there or thereabouts. Palladium has added $130/oz since making lows of $850/oz a few months ago. Rhodium is up 17% on the year. Platinum is up marginally.

More importantly for the company's future the Thaba JV Project is oncourse for first PGM and chrome production next year in Q3 2025 I believe. This will add another 7koz to group PGM production and exposure to high demand chrome prices with forecast production of 210,000 tons of chromite concentrate.

My current portfolio is heavily gold and silver laden (PAF, CEY, RSG, WPM, EDV, HOC, SRB, MTL, HUM, GPM, THX, AAZ) however it has not always been so. Gold is simply 'the rage' today but as long term holders here know PGM prices can move far quicker when supply appears constrained. I've followed SLP since the 4p days and traded along the way. This is clearly a low point from which the company can and will bounce back. As always the hard part is calculating when the share price will make a significant about turn.

Sylvania still looks exceptional value taking a 12 month outlook, Thaba entering production, capital expenditure by Q3 2025 all committed, PGM basket ticking up with dividends maintained. They can probably afford another $6-7m dividends over the next year even while developing Thaba.

Cash depletion is inevitable and will probably be the primary factor in determining when to redeploy most of my recent gold gains back here. Tharisa also similar in many aspects with a new PGM mine coming online, already exposed to chrome sales but they are using significant loan financing. Currently Sylvania earn interest and can redeploy all of that before tax into capital expenditure - nice position to be in!

Are we all reading the same update!? That was a stonking update, potential for significant returns of capital via dividends in the coming year and 2024 cost guidance even better than forecast!

· Group cash cost of production (including royalties) reduced to $550-600 million (from $570-630 million).

We knew results would be impressive, still during the first six months the group enjoyed 'Record financial results' with revenues of $867 million, a 47% increase (H1 2023: $588 million) and adjusted EBITDAX of $568 million, a 65% increase (H1 2023: $345 million).

Profit after tax of $89 million, a 27% increase (H1 2023: $70 million), of which $116 million is associated with the continuing operations.

Group leverage reduced to 2.5x (FY 2023: 3.1x) as group cash and liquidity jumped to $345 million and $511 million respectively.

Under the title 'Processing' is perhaps the most important tidbit.

~ Throughout H1 the Vares Processing Plant was commissioned and began producing saleable concentrates.

~ Plant operations will continue to process higher grade material and ramp up to commercial production by Q4 2024.

~ Metal recovery rates are improving, and the processing team is working on further enhancement and optimization of the plant.

~ Initial concentrate shipments were exported to offtakers in Q2, with additional sales occurring Post Period and volumes planned to increase in tandem with production ramp-up in H2 2024.

~ Concentrate transportation infrastructure is fully in place with truck, rail and port logistics operating well during ongoing shipments.

Trading statement today reports earnings and revenue increases as expected. Th

Earnings per share (EPS) for the current reporting period expected to be between US 3.98 cents per share and US 4.30 cents per share (2023: 3.19 cents), an increase of between 25% and 35%.

The increase in EPS attributed coincided with higher revenues (+16.8%), with higher gold sales (+4.9%) and an increase in the average gold price sales (+11.3%).

The price of gold is up about 27% in the past year which shows earnings will continue to rise even if the price steadies at current level and production / sales remain flat from here. Of course with Mintails set to add 50koz to annual group production (estimated to rise more than 25% in the next year) from Q4 going forward there should be more of a buzz here!

The market is largely ignorant of Pan African's potential to produce 250koz in 2025 at $2,500

Resolute Mining are in acquisition mode and have $140m earmarked for 'opportunities'. Stranger things have happened. They were a distressed mine operator not so long ago and could well pick up Dugbe on the cheap. Dundee look a good fit too!

Kounrad is well placed to continue producing copper until 2034 and Sasa is expected to be producing to 2039 and beyond.. These are not particularly concerning life of mine expectations.

Well said Noel! Many will arrive later to the party but those who have seen commodity cycles like the one we are in know it's the beginning of good times. What will come first though gold jumping into $3k territory or Serabi above £1? I'd probably err on the side of caution with any Brazilian miner at this time given the toxic political situation and signals of authoritarian, left of centre direction. Peru had troubles a few years ago but for the most part miners have come out unscathed and are recovering nicely. Still I refuse to be parted of my shares until things really go t*ts up!

"With gold prices continuing to rise over the quarter, Q2 2024 revenue has increased by 30% compared to Q2 2023 generating a record net profit of US$27.5 million for the Period, an impressive increase of 91% compared to Q2 2023. Net profit for the first half of the year was US$$39.9 million."

This is going to be a repeated story across all of the small cap producers including Metals Exploration this quarter and in the year ahead!

Best time to buy undervalued gold producers since 2008-09 period!!

Federal Reserve’s Jerome Powell says ‘the time has come’ for US interest rate cuts

$3,000/oz gold! Choose your date, come up and place your bets ;)

Latest expectations are for THREE quarter-point rate cuts this year. Even two cuts would be a strong signal and encourage institutional investors to look again at the mining sector that benefits off the back of a weaker dollar. Precious metal producers in 12 months time will be turning significantly more cash. We are just in very early on the cycle!

The U.S. Federal Reserve will cut interest rates by 25 basis points at each of the remaining three meetings of 2024, one more reduction than predicted last month, according to a slim majority of economists polled by Reuters who said a recession is unlikely.

The change in Fed rate cut calls follows a weaker-than-expected July U.S. jobs report, which encouraged interest rate futures traders to price in as much as 120 basis points of reductions in 2024 earlier this month. That pricing has reduced to roughly 100 now.

https://www.reuters.com/markets/rates-bonds/fed-deliver-three-25-quarter-point-rate-cuts-this-year-recession-unlikely-2024-08-19/#:~:text=Despite%20recent%20easing%2C%20wage%20growth,reductions%20by%20end%2DQ3%202025.

Conviction buy from here in my view, with commodity prices steadily increasing again. Rate cuts just around the corner and to come next year.

Kounrad on track to achieve 2024 full-year guidance and Sasa's mined tonnage is set to be higher in H2 2024 which should mean it achieves the lower end of 2024 guidance. The share price and interest would suggest the market is less than convinced about the guidance and commodity prices have steadied below late Q2 highs. I think the market may be pricing in dividends to remain at the same level this time last year but we will find out in about 3 weeks.

Interim results and dividend announcement due second week of September.

If there's a pullback it will be short lived. I wouldn't be looking to trade part of my holding at the current bid, maybe 35p you can have a chunk

Https://www.fool.co.uk/2024/08/21/my-favourite-ftse-share-is-up-110-but-still-dirt-cheap-with-a-p-e-of-7-7/

Reminder the stock goes ex dividend on 29th August