The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
Are we supposed to reply with our recent successes? I made silly money in MBO this past week. Buying what I can when I'm able to here.
There will be plenty here who will be loading up between now and a supposed 7-8p retracement but good luck playing the waiting game.
Transnet strike makes now the time to buy Kumba and Thungela
Herenya Capital Advisors’s Petri Redelinghuys on the charts for Thungela and Kumba as they both struggle with the Transnet force majeure and following Tasneem Samodien from Old Mutual talks the return to coal and if it’ll last.
https://www.moneyweb.co.za/moneyweb-podcasts/moneyweb-now/transnet-strike-makes-now-the-time-to-buy-kumba-and-thungela/
Both GDP and SHG on the move today. Hold for substantial rerate
The latest results were nothing to worry about in the grand scheme of things. The market will absolutely respond positively if news of one or more of the three approaches is progressing and an offer is made. Just one offer will send the price back up to recent highs ~13p level (more if it's a generous initial bid).
Regardless of whether an official bid comes the company is on track to boost quarterly production from roughly 17-18koz this year to 25-26koz in 2023, 27-28koz in 2024 and 30koz in 2025 from NLGM and Singida only.
The rate of capital expenditure compared to forecasts has been consistent throughout Singida development and there's no reason to expect the company to fall short (of cash) at the final hurdle (literally the preceding quarter!).
The best outcome for genuine holders here in the short term is of course an offer is forth-coming this quarter however I hope this stock is not taken over on the cheap like TSG, HGM and POG have been in recent years.
https://www.shantagold.com/_resources/Singida%20Construction%20Update%20v2%2031_08_22.pdf
Disclosure: Long term holder currently adding
We need to see some financials or ideally this month a comment from the Board concerning current earnings expectations. If this company is currently as profitable as many here expect (myself included) interest will return.
Talk about teasing the market, that last titbit really sent buyers into overdrive lol
Not investment advice. Just a note to self, keep buying! Shares are worth at least 16p, the placing price offered to new investors before dividends began being distributed. All metrics improving or set to improve in the coming years. Production profile just about to enter exciting growth phase. Quite honestly with shares trading so low all offers should be rejected outright and the company pursue an aggressive strategy of buy backs
https://www.mining.com/coal-price-renaissance-how-long-can-it-last/
Excellent set of Interim Results for the 6 months to June which more than warrants a rerating to the 280-300p range.
Not only has the H1 2022 dividend increased 25% to 10p offering what will likely be an annual yield of 9% at the current price but the company's cost base are benefitting from the depreciating North Macedonian Denar. In terms of value proposition on the markets the company look increasingly better value as Sterling also continues to fall and they churn Dollar profits.
Valued at $460 million with cash in the bank of approximately $40 million following the recent repayment of the entire corporate debt facility, the company looks to be trading on a P/E of 3.6 at current metal prices and assuming the USD strength begins to reverse in the coming months (certainly through next year) then commodity prices will once again move higher.
Encouraging set of Interim Results released on Thursday following on from the production update mid
July with FY guidance maintained at 54,000 to 58,000 gold equivalent ounces.
There is some uncertainty surrounding the transition of operations from Gedabek, our sole existing mine to both the Hasan gold vein at Gosha and at Vejnaly during the second half. These were scheduled for the second half originally according to company reports six months back with Zafar planned for 2023 and now the company have stated that will happen in Q4 with Zafar coming online in the next 12 months. Gedabek production is clearly running at or above forecasts as the company seem confident guidance will come in at the higher end despite minor delays bringing Hasan and Vejnaly into the fold.
As expected the company have declared an Interim Dividend of US 4 cents which puts us on course towards an annual 8.0 cents, which thanks to the Pounds woeful performance is yielding almost 10% on an annual basis.
With commodity prices weakening in recent weeks it is more important now that the company make actual progress on achieving their stated short term goal; to increase production - "Our near-term focus continues to be increasing production at our currently active contract areas of Gedabek, Gosha and Vejnaly"
Anglo have stated in even stronger terms their strategy is to "transition into a mid-tier copper-focused producer" to position itself for the upcoming "electrification and decarbonization era"
Of interest concerning the cash position Anglo Asian keeps its significant surplus cash deposits in United States dollars "with a range of banks to both ensure it obtains the best return on these deposits and to minimise counterparty risk". This ensures limited protection against cost price inflation in country and means 25% of the company's market price is covered or approximately 37-38% when also factoring in unsold inventory.
EPA ISSUES DRAFT PERMIT FOR FLORENCE COPPER PROJECT
August 15, 2022, Vancouver, BC - Taseko Mines Limited (TSX: TKO; NYSE American: TGB; LSE: TKO) ("Taseko" or the "Company") is pleased to announce the U.S. Environmental Protection Agency ("EPA") has publicly issued a draft Underground Injection Control ("UIC") permit for its Florence Copper Project. The EPA has stated that the public comment period for the draft federal permit will last 45 days, ending on September 29, with a virtual public hearing to be held on September 15.
Stuart McDonald, Taseko's President and CEO, commented, "The UIC permit is the final key permit required for the construction and operation of the Florence Copper commercial facility. Our project has gone through extensive scrutiny by both the Arizona Department of Environmental Quality and the EPA over the past eight years and we are confident that the rigorous work completed by both these regulatory bodies will result in permitting success in the coming months."
Florence Copper is expected to have the lowest energy and greenhouse gas-intensity ("GHG") of any copper producer in North America, and will reduce the United States' reliance on foreign producers for a metal considered to be critical for the transition to a low-carbon economy.
"As the United States advances toward its goal of net-zero carbon emissions by 2050 - including 100% clean electricity by 2035 and 50% light-duty electrical vehicle sales by 2030 - the country will need to address its reliance on imports of critical metals. Low impact, environmentally sound projects like Florence Copper will help meet the growing U.S. demand for copper," concluded Mr. McDonald.
"Bailouts and price caps are inflationary and therefore counter intuitive...as the demand continues!"
Regarding the current inflationary cycle and causes of it, the general consensus is this has been supply driven (cost-push) rather than pent up demand (linked extract below). If the inflationary effects were primarily due to demand-pull then stimulus and bailouts would exacerbate price rises and make things worse but for reasons outlined below this is not the main cause.
"What we face now is cost-push inflation. Vladimir Putin has incrementally pushed up the cost of gas as part of his hybrid war against the west (and anyone else who threatens his ambitions). Supplies of Russian gas to Europe began to be disrupted as early as last autumn; now, de facto, the Nord Stream 1 gas pipeline has been closed – and Europe faces a challenging winter. Gas prices have soared as a result of a lack of supply; and all kinds of other inputs, from carbon dioxide and fertiliser – on which farmers depend – have followed suit. The inflationary wave that besets the west was ultimately manufactured in the Kremlin.
"The immediate impact of rising energy and food prices is to suck demand out of the economy because people have less disposable income to spend on such things as clothes, meals out and entertainment. Therefore, the risk of cost-push inflation is that the economy tips into a state of stagflation – rising prices with falling output – as happened in the 1970s, further to the oil-price shock of 1973."
Capping energy prices will be anti-inflationary as the long term cost to the tax payer will ease short term pain and potentially limit the severity of the coming recession. Tax cuts as announced by our new PM will also go some way to easing inflationary pressures in the short term. Governments are now acutely aware of the need to improve their energy security (ergo capacity) so that rogue nations cannot hold them to ransom but this will take time. And spending now to invest in energy security makes sense as the real value of debt declines in periods of high inflation.
Outperforming nearly all others in sector this year. Tightly held stock with steady low capital cost growth strategies and better still exposure to PGM tailings (note SLPs share price 2012/13 at 5-6p compared to recent highs of more than £1.20).
With a bit of good fortune we will soon see an uptick in commodity prices as the USD begins to weaken
The US economy is already shrinking, job numbers have been cushioned for the past two years (stimulus) and all that funny money has propped up the US housing market and to an extent the stock market. I have yet to see a correction in the former although it is definitely slowing.
The Fed got it horribly wrong with inflation. Now they are playing catch up I suspect they’ll get it wrong again possibly curbing rises too late in the cycle. How far along the cycle we are is anyone’s guess and it’s interesting reading such differing views on this board and others, let’s just keep conversations civil please.
Like others I’m concerned the price action here could be something company specific rather than general market weakness forcing holders out. There were a couple of large sells but nothing to warrant this drop except possibly the MMs expecting further heavy sales. This could quickly rebound if the company put out a statement in support of further buybacks with immediate effect. They have around 35 to 40,000,000 in cash and stock piles I think and as Tony says the weakening Pound vs Dollar only strengthens the investment case at the current price
Another top up while we are down here. Not much else I'd rather buy right now. Multiples of current share price coming in the next 12 months if met coal prices continue to make steady gains
Gold price movements are less important here than they used to be, Anglo Asian is transitioning to a primary copper play as indicated in recent updates (FY results quotes copied and pasted below). Production of gold has been lower every year since 2018/19 I believe whilst copper production has not fallen nearly as much.
I would put recent share price weakness down to the general market slump and the weak 2022 production profile that continues to turn investors away but there are reasons to be hopeful. The dividend yield is higher than most other small scale producers on UK markets whilst the price of copper has strengthened more than 10% since July's low and would be much higher if not for the flight to dollar safety as already mentioned in JTD's post.
From the FY results the important points to note: "We will transition from all our production being from our existing mines at Gedabek, which are approaching the end of their operational lives, to new mines at Gedabek and elsewhere in Azerbaijan. The Company expects to significantly increase its copper production and produce zinc for the first time in the next two years."
"The amount of future dividends will depend on the Company's future profitability and capital requirements as it transitions to become a significant producer of copper."
Well the timing is ideal for those with controlling interests looking to pay a price well below recent trading levels. Could the company have managed to finance this without a placing? I think we all know they could have, it just may have taken longer.
Would it have been better to open this placing to the wider investment community, bringing fresh liquidity and confidence interests here are more evenly balanced? Absolutely! Unfortunately this placing sends out the wrong message; that the controlling interests will remain tight and unwilling to let the market price this accordingly.
Fears of price manipulation (easy if you control as much as 60%) and the possibility of being taken private without any recourse may be deterring larger fish from taking a bite here.
Placing complete at least so going forwards and assuming met coal prices remain stable or continue to rebound today's price looks appealing. It's just most here will be at least 25% down and have to weigh up whether it's worth doubling down at this price.
Worse than expected despite managements efforts to mitigate operational failures with the copper collars. On a positive note the market had already and certainly now priced in the weak H1 performance and assuming management’s guidance for the second half is accurate, production and margins will once again increase. Florence continues to advance but is largely discounted given its still 12-18 months away
https://www.investegate.co.uk/taseko-mines-limited/prn/half-year-report/20220809070000PAFD5/
https://masterinvestor.co.uk/funds-and-investment-trusts/full-steam-ahead-for-taylor-maritime/