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The price of Copper has just passed $4.20 which is pretty much double where is was at its low last March/April.
That will do nicely!!
a bean today. Having said that I did manage to to do a FOK for 25K which I put on at 8.30am. It took nearly 2 hours to be filled!
Battleja
You are correct on both counts.
Also the CEO'S loan was originally convertible into shares but was amended to remove this feature. It is now a straight forward loan. The interest rate was increased slightly to compensate for the conversion being removed. A good move as it reduces dilution.
Battleja
The drop in equity from 33 to 11% was tied up with the relinquishing of a load of liability that PERE had over the Minto mine. So although their equity interest was reduced their debt position and liabilities improved considerably. Given the way the copper price is going they may have been better keeping the debt and larger equity holding, but hiensite is a great thing. They still have 11% of what looks to be becoming a very profitable investment and Minto are still liable to pay back the loan PERE made to them.
Now before anyone challenges my numbers I know they are a bit rough and ready. However they clearly show the potential massive turnaround here which the market has not picked up on. They assume that income from gold and silver remains at last years levels.
The interim results for Jan -June 2020, were released Last September.
They show a $9m loss on a turnover of $25.5m. We also know from these results that the copper price achieved was $2.32.
I would imagine that the price realised for copper in the second half was 50% higher at about $3.4. Assuming our cost base remains pretty constant, based on the same production quantities, then this 50% price rise should have increased our income by $12.5m. This would give a $3.5m profit for the second half and a $6m loss for the year.
If we then assume a copper price of $4.5 for 2021, very doable in my opinion, we would achieve turnover of $100m and a profit of $32m. Our 11% interest would give us $3.5m share of this . Our current market cap is only $6.5m!
This does not allow for any production increase which we know is the strategy here, nor does it allow for anymore banked reserves from the recent drilling. I think using a copper price of $4.50 is quite conservative given some of the recent forecasts. If it averaged $5.5 then the numbers are $125m turnover and $57m profit!
Yes there are risks as with all mining stocks but with copper in vogue right now and forecast to be for some years to come, this has could see one mighty turnaround very soon.
Not that many shares in issue or free float here which could also benefit any rise.
Just my 2 pennith worth.
battleja you could be right. I will do some numbers over the weekend based on Citigroups new copper price forecast.
I think they will be staggering!
Copper now well through $4 at $4.03 just now. This has huge positive implications for PERE.
I think the MM's know this, they won't let me buy a single share!
Even a FOK for 10,000 didn't get filled.
people are selling down here when copper is having such a good run and is predicted to continue.
I guess people have their reasons.
Copper about to go through $4. Pere's interim results stated that they received $2.25 for their first half production for turnover of $26m. With prices now nearly double that and possible production increases profits should be going through the roof. And yet we are still sitting at a very low price. All aboard.
Copper just gone through €3.90 lb. Minto must be raking it in at these prices.
I noticed Ascendant was up strongly yesterday. Perhaps the next batch of drilling results are due?
Castiron, if it is then the market has absorbed it really well.
That is one hell of a trade 10,750,000!!
We need some sort of update ASAP!
rossannan, I agree the numbers I have set out are rough and ready but we don't have much more to go on.
They assume all things being equal and I agree there are lots of variables which could affect them, up or down.
The trend though is that things must be massively better at Minto with such a dramatic rise in copper prices.
Can I ask if you have a position?
rossannan, you are right there must be a copper price where the mine breaks even and in my opinion this has now been exceeded.
The half year results show a loss of $9m on turnover of $26m. We know from this report that the copper price realised was $2.20 a pound. Assuming that 75% of Mintos production is copper then $19.5m of turnover was copper production.
The price of copper is now $3.65 which is 65% higher. if we multiply the $19.5 by 65% we get $32.2m which is $13m more.
This would imply a turnaround of a $9m loss into a $4m profit. That is without extra production and gold and silver price increases. I would stick my neck out and say that at current prices the mine should be making $10-$15m a year profit.
So our 11% would earn us £1.1m to $1.65m a year and we are valued at less than £4m which is bonkers to me.
I know we have not had a great start here over the past 18 months and that will affect sentiment but I think we are well on our way to seeing a rerate here over the coming weeks and months.
Looks like news is on the way. I would predict within the hour. Bit of a leaky ship this one.
Obviously this has been staged to let someone buy in on the cheap. Ooops, did I just say that out loud?
Copper just hit $3.59. The drilling results could really set a rocket going.
Fingers crossed we get some sniff of them before Christmas.
Copper is now knocking on the door of $3.60. PERE has to respond soon enough.