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BOD's market cap is only £7m or so at the moment. Of course, it's best to buy at the very bottom, but if the drilling does hit paydirt, then buying in after the share price has risen 20%-30% (or even more) would still be the right decision. There is a huge potential upside here - just read the history of the first Marsfontein.
I believe so. Just like SLP, an adjustment is made to reflect the difference between the two amounts.
For me, a bit more. I want a decent intersection of kimberlite. But it's looking hopeful.
https://www.sciencedirect.com/science/article/abs/pii/S0024493715004181#:~:text=Phlogopite%20is%20one%20of%20the%20few%20minerals%20that,an%20invaluable%20petrogenetic%20indicator%20of%20kimberlite%20magma%20evolution.
Hi Jd!
Yes, it's about 4 months (though it seemingly grew a little during the Amplats shutdown).
It's always worth remembering that with almost all miners "trade receivables - trade payables" ends up being a negative number (i.e. money is owed to others). But with Tharisa and SLP "trade receivables - trade payables" is a big positive number (i.e. THS and SLP are (on balance) owed money to come in later).
twitter.com/BotswanaDiamond/status/1384783499593457665
Hi Sotolo!
(Off topic)
I worry about HOC. The candidate who is leading (according to the opinion polls) in the upcoming Peruvian Presidential elections is running on a platform which includes nationalising the country's mines. Of course, it's not that simple - the new President (if elected) would need to get congress to pass laws to do that, etc. But, overall, it's concerning for the future of mining in Peru.
This, by the way, is why I think Eduardo Hochschild sold so many of his shares. He saw this coming.
Centamin, I'm not sure about. I'd be tempted to wait until the results are out and to see how the market takes them.
For myself, I've backed out of a lot of shares this week, as I sense a top is in and a sell-off is coming. But Tharisa I'm holding, through thick and thin.
Hi EagleBlue!
Yes, the share price is torn between FXPO's outstanding business fundamentals and the geopolitical threat to its operations.
For now, the market is blasé about the Russian-Ukrainian phoney war. On balance, I think that this will probably turn out to be only Russian sabre-rattling and bullying, with maybe some skirmishing in the Donbass. So, probably, things will be OK.
But I still think that there is a smallish risk (5%? 10%?) that the Russians go for an all-out invasion of Ukraine. And that keeps me out of this share until this threat is resolved. East or West, peace is best!
Spasibo vam!
Results a little better than I expected - I thought only 20,000 ounces and a bit higher AISC.
But overall, "meh".
At least they have finally appointed a Chief Operating Officer.
Not sure what is going on in Guinea.
Basically, I make this about the "right" price for this company considering the mess it is in. Improvements in the share price will depend on either improvements in operations or an increase in the price of gold.
Hi Sotolo!
You can play with numbers in all kinds of ways. So, yes, you're right that if the rhodium price collapsed all the way back down to zero, Tharisa would lose 50% of its revenues and more than 50% of its profits. But then if nobody needed chrome anymore, Tharisa would lose 25% of its revenues, and more than 25% of its profits. And so on for each metal. And (hooligan question), what makes gold so inherently valuable anyway? At least rhodium is "backed" by a proven industrial need.
And, yes, Tharisa's dividend policy isn't particularly generous in the abstract. Officially, it is "a minimum of 15% of Net Profit After Tax"; in reality, they usually pay out about 17.5%. This means the dividend is covered at a ratio of 6:1 or more, which is very high. BUT, two things need to be added to that statement:
1. Even though Centamin are paying out all of their profits (and more, I think) in dividends, and Tharisa only 17.5%, the actual yields of the two companies will come in similar at 6% to 7% this year. This is due to the huge difference in the market caps of the two companies, despite their generating roughly comparable revenues.
2. Growth capex is a good use of money. $50m spent now on the Vulcan fine chrome plant means approximately 400,000 tons per year of ultra-cheap chrome extra for the foreseeable future. And that means higher profits in future years. We don't have the numbers yet, but if the PGM smelting plant has similar economics, I'll be delighted that Tharisa are putting their money to good use there as well, rather than paying it out in dividends.
Finally, I can suggest only three reasons why Tharisa is currently so undervalued:
1. The share price is being suppressed by the great Fidelity sell-down (which hopefully will be over soon);
2. The market isn't paying attention, and will wake up to Tharisa once the interims are out;
3. The market does indeed believe that rhodium prices are not sustainable, and that they will crash back down to a far lower level (say $5,000/oz) shortly.
Perhaps there is a bit of truth in all three of these reasons.
rbrand!
Obviously you've been reading a lot of hard right wing nonsense / Russian propaganda, and think you understand something about Russia. Take it from me - fluent Russian, 25 years working there at a high level - you clueless.
Almost all Russians know who Navalny is - his videos on official corruption in Russia (which are very funny) are incredibly popular online. The only reason he hasn't taken part in "elections" (Russian "elections" should always have inverted commas around them) is that by a variety of dishonest legal manoeuvres, he has been banned from them.
And, yes, the Russian invasion threat is clearly real. The prepositioning of military assets for an unprovoked attack on Ukraine continues; just two days ago a variety of amphibious assault craft sailed through the Channel on their way to the Black Sea (from the Baltic). And the Russian propaganda machine is spouting increasingly warlike nonsense.
I'm not sure Biden was wise to brand Putin "a killer" and "a man who has no soul" in public. But he was spot on in his judgment. As for Navalny calling the man who poisoned him "a poisoner", that is likely to cost him his life. Whatever else, and I'm not his biggest fan, the man has courage.
Hi Jemg!
Good luck with your investments. But you clearly know very little about mining or about Vast.
The Baita Plai mine plan is a replacement for one that failed utterly. We don't know yet if this will work, or if the mine is simply worthless. Remember it was bought out of bankruptcy for a song, and it doesn't have a proper independent JORC.
Baita Plai is definitely NOT cash positive every month. It may or may not become so in the future. Who knows?
"Additional mines" are the proven worthless Manaila, and a load of exploration prospects which are basically moneyholes.
New financing? Well, Vast need it badly, to pay off the Atlas "death spiral" loan which threatens ruination for current shareholders of this company. But they haven't got it yet, and my guess is that past poor performance and the business reputations of the directors will make it hard to obtain.
Diamond deal? You're having a laugh. Zimbabwe doesn't grant valuable diamond mining licences to penniless outsiders. Isn't that obvious by now?
Oh, and a share consolidation is still to happen, and that almost always is punished by the market.
All I can say about JLP's reporting is compare it to SLP's. SLP are in the same business. They report full financials every 3 months in an open and trustworthy manner. No bull**** at all.
Jubilee's poor reporting is one of the reasons that I am wary of this stock. (Colin Bird as Chairman is another, Zambia country risk is a third).
No, Boom, Hummingbird have paid nothing for Kouroussa - the deal only completes on the grant of the mining licence, which hasn't happened yet. You should know that if you are invested here.
FWIW, your earnings estimate is about as accurate as your information on Kouroussa - that is, not at all.
Terrible news from Guinea. But I'm wondering if this is directly connected to Hummingbird.
There is no mention of the "Kouroussa Gold Mining Company" in HUM's original RNS, which runs thus:
"Hummingbird has agreed to acquire all of the share capital in Cassidy Gold Guinée S.A. ("Cassidy Guinea"), as well as the benefit of any outstanding shareholder loans owed by Cassidy Guinea, subject to the satisfaction of various matters including confirmatory due diligence and the exchange of a definitive sale and purchase agreement ("Sale Agreement"). Cassidy Guinea is being acquired from Cassidy Gold Corp (incorporated in Canada), which is wholly owned by Guinea Gold Limited. Guinea Gold Limited is incorporated in Labuan, and is 77.7% owned by Asian Investment Management Services Limited together with Halfmoon Bay Capital Limited (the "Majority Sellers")."
And why are the rioters claiming that Burkino Faso nationals (Burkinabe) are involved?
Is this anything to do with Hummingbird at all? Is it a different mining project? Or have Hummingbird lost the Kouroussa Project to a rival group? Or what?
In the interests of investor relations, Hummingbird should probably issue a clarification RNS. But, based on past form, they won't.
Hi Thornyriver!
That's how I'm reading this - it's all about the size of any newly discovered kimberlite. Assumptions are dangerous things, but I'm assuming grade and diamond value will be just fine - all available evidence points that way.
Marsfontein was 0.4 hectares and highly profitable. Currently, Botswana Diamonds have discovered a 0.25 hectare pipe (aka the River Pipe), which I take to be big enough to mine profitably but not to be directly compared to Marsfontein. The current drilling is chasing after a second pipe / an extension to the existing pipe. The first sign that they have hit a substantial intersection of kimberlite I'll be doubling up here.
As for downside protection in the event of a "duster", the market cap is still low, BOD still have the already discovered River Pipe, and they still have the Botswana assets, so that's a decent "insurance policy".
Hi Sotolo!
I agree with Total Trader - you can't really isolate the profit margin for any one of the metals that Tharisa mine, you have to take the operation as a whole. And, as a whole, Tharisa's revenues are increasing rapidly (and its profits should follow).
As for a comparison with Centamin, it raises an interesting question. Centamin is a FTSE 250 stock which trades at a high p/e. Tharisa is an AIM stock which trades at a (very) low p/e. But why is one rated so much higher than the other by the market? Both are single mine operators in African jurisdictions (Egypt / South Africa) of roughly similar difficulty. Both have ample resources in the ground and very long life of mines. Both pay dividends and are net debt free. Last year Centamin reported $828m in revenue and $315m in profit, with an EPS of 13.5 cents per share and a p/e of 12.8. We know that the figures for Centamin this year won't be as good. In contrast, Tharisa's revenues, annualised at today's basket prices, are probably around the same as Centamin's last year, and I'd expect their annualised profit to fall in a similar range. Yet, Centamin's market cap is £1.33m and THS's market cap is £395m. That's really quite a difference, and for what exactly? Yes, Centamin has a larger cash pile than Tharisa at c.$300m, but that doesn't begin to justify such a huge difference.
I believe the answer is simply market inefficiency. And that Tharisa will catch up in time.
Hi MIkieSunday!
First, Tjate isn't UG2 ore, so it will have a MUCH lower rhodium content, and accordingly a much lower PGM basket price. Possibly half your figure.
Also, remember JLP own only 64% (I think, from memory) of it.
And it is very deep and not easy to mine, so costs would be high. And it would take years to get it to production, and who knows where PGM prices will be by then? And mining is outside JLP's area of expertise.
All told, if there were a reasonable offer for it, I'd take it and invest the money in other projects with much quicker paybacks.
Hi Pecten!
Thanks for posting - much appreciated!
I was wondering if the agreement with Palaeo Minerals was still in force. Now we know the answer - no. And as the agreement with EDC only covers the Marsfontein licence, that means Thorny River is presumably "free". This I view as a good thing.
All other answers more or less as I expected, but still good to know!
Hi Mad Stork!
Yes, it's farcical. Longest ever Final Sales Process. No PUSU deadline, no named bidder. Oh, and it's Russia, a land where nobody gets scammed, ever...
More red flags than a Communist May Day parade.
It seems that the Takeover Panel are just as useless as the FCA - which is actually impressive, in a bad way.