Member Info for TigerByTheTail

Most companies would KILL for results like these:
· Net revenue increased 62% to $114.1 million (FY2019: $70.5 million);
· Adjusted Group EBITDA increased 130% to $69.6 million (FY2019: $30.2 million);
· Group net profit increased 125% to $41.0 million (FY2019: $18.2 million);
· Basic earnings per share ("EPS") increased 130% to 14.62 US cents per share (FY2019: 6.37 US cents per share);
And if you project forward into next year with 70K guidance, today's basket price, and static costs, then you get excellent growth in profits and cash mountain next year as well.

It's not Q3 2021 for the special dividend, if it comes. It is Q3 FY 2021 - i.e. January, February or March next year.
Yes, the annual dividend should have been higher, and the house broker Liberum should not have guided towards a higher divi as well. But 2.5%+ is not to be sniffed at in times like these.

Hi Ragnar!
I'm buying heavily at this price as well.
I didn't manage to get any at below 56p, though; that was just the market-makers triggering stop lesses, IMO.
I think the BoD has genuinely blooped with the size of the dividend. And they took a $9m NON-CASH impairment on an ancient investment. Otherwise, the results were exactly as I expected.
Guidance next year of 70K is even a little higher than I thought.

I agree with this - the deal as outlined is simply not viable with the share price at 16p. The rights issue will fail without a bigger discount to the share price.
I would guess that the board were expecting the share price to soar up to around 27p after the announcement of Sir Roger's investment, making the rights deal seem attractive. This hasn't happened, and the board need to accept that they got this one completely wrong.
It would be far better for all if they now dropped this deal and resumed negotiations with the PE buyer who was prepared to offer 33p per share.

So, the coming "big reset" will be to use eucalyptus leaves as legal tender, instead of paper money, as they will be backed by gold?
I'm enjoying the idea of koalas as our new central bankers, in control of the money supply.

Hi Sirius!
This year's numbers will be a lot better than that - just work it out from the interims and Q3 and Q4 results!
Anyway, final results will be out Monday or Tuesday...
Hi Velo!
Puzzled by your post. You're not waiting for the final results before making your mind up about the next three months?!?

I agree it's welcome news. But it does make it clear how bad the cronyism was at Solgold.

Actually, that was just an autofill error. I meant the headline of my post to be plain "Mali news", but this site filled in the rest for me from the coup news a couple of weeks back.
Yes, things are now improving on the ground in Mali. The French and the Mali military are working together normally again. The incompetent ex-President and the dangerous Imam Dicko have been forcibly "retired" from front line politics. The Presidential jet is being sold off and the rank and file soldiers are getting paid and receiving new uniforms. And no blood has been shed.
The next big news should be the opening of the Ecowas borders to Mali. This has turned out far better than I at first feared.

It very much looks like everybody is coming to terms with the army coup now:
https://uk.reuters.com/article/uk-mali-politics-france/despite-coup-france-and-allies-push-on-with-new-mali-task-force-idUKKBN25U262?il=0

https://www.kitco.com/news/2020-09-03/UPDATE-2-South-Africa-apos-s-Implats-earnings-up-nearly-400-on-weak-rand-costly-metal.html

Impala Platinum results:
https://www.kitco.com/news/2020-09-03/UPDATE-2-South-Africa-apos-s-Implats-earnings-up-nearly-400-on-weak-rand-costly-metal.html

Some signs of life in chrome market, according to Metal Bulletin. Early days yet, though:
"China chrome ore, alloys find support on strong stainless steel market
China’s imported charge chrome, spot domestic ferro-chrome and UG2 chrome ore markets all recorded gains in the week to Tuesday September 1 on better demand and after receiving support from the continuing bullish stainless steel market, sources said.
Liquidity returned to the imported charge chrome market with demand picking up in China while stainless steel prices maintained their upward momentum, participants told Fastmarkets
Increased buying interest of late has led charge chrome offer prices to rise quickly, sources said.
Fastmarkets ferro-chrome 50% Cr import, cif main Chinese ports rose by $0.02 per Ib contained Cr week on week to $0.71 per Ib contained Cr on September 1.
The falling domestic supply of ferro-chrome in China was the main cause for increased purchasing interest, sources said. China’s monthly ferro-chrome output declined to around 480,000-490,000 tonnes in August, compared with near 520,000 tonnes in July, sources added."

Hi rclg2!
That's a good point. I agree that Cornerstone are trying to have their cake and eat it too in their presentation.
The truth is (IMO) that neither Solgold or Cornerstone can fund and build Alpala. Neither has the experience or skills to do it. And they won't be able to raise the money, either - or, if they can, it will be on the absolutely horrible self-destructive terms. It's in everybody's best interests that a major takes this project over - they have the skills and the knowledge and (crucially) the ability to raise the finance required cheaply against their existing assets and cashflows.
The majors letting Solgold slowly bleed to death before swooping in at the last moment (al la SXX) is the worst case scenario here. Everybody needs to know that there is a risk this could happen. But, I don't think it will turn out this way, simply because the asset is too appealing. For a major, doing nothing leaves open the risk that a rival will grab Alpala before you.
IMO, £1bn or so seems a reasonable takeover price - not too much for the major doing the buying, and not too little for Solgold's shareholders. So I think this is the most likely outcome.

Hi Miagi!
No, I've always thought that it makes sense for BHP or NCM to take out Cornerstone first, before making a move for Solgold.
To own 15% of ENSA directly and to own around 20% of Solgold (their own shares plus the Cornerstone shares) puts them in a very strong starting position for a full Solgold bid.
I just wish I had acted on my original intuition and bought Cornerstone shares whilst they were still cheap!
I still believe Solgold will be taken out quite soon, for a price between roughly 45p and 60p per share. And that's for the best for all parties (including Ecuador), as majors have the expertise and the financial resources to build the mine, and Solgold frankly haven't.

Hi Shipright!
IMO, Solgold's right of first refusal on a Cornerstone sale is pretty meaningless.
Solgold can only "pay" in Solgold shares, which would be a problem for Cornerstone shareholders to sell. If a major bids for Cornerstone in hard cash, or even in its own very liquid easily saleable shares, then it's game over.

Hi Ragnar!
I think the circumstance you can't mitigate against is a general stock market crash and a subsequent rush for liquidity as margins are called and people are forced to delever. This happened in March ("the dash for cash"), and stocks are even more overvalued now than they were then, so it could happen again. Especially given that the US elections are approaching!
This goes for every stock in the market - good or bad - not just THS. We just have to decide the amount of risk we're willing to take.
For myself, that means I'm holding over 50% in cash or equivalents. If the market does drop I'll be looking to pick up some bargains in "the sales".

Serious question for those better informed on Ecuador than I am!
Why do Liberum expect BHP to wait until after the February elections in Ecuador? What could the elections change? What is at stake?

Hi Bangrak!
I think we may all need a mental "reset".
The fact is, objectively, SLP is still VERY cheap. What other well-run, unhedged, debt-free, cash-rich, highly profitable, dividend-paying companies do you know that trade at this kind of valuation?
(That's a serious question. I'd love to find another company with SLP's profile).
Yes, we've had a good few days, but it's still a long haul up to a realistic valuation for SLP, by any metric you choose to employ.

Hi Ragnar!
Thanks for that post; it confirms what I already suspected.
The flip side of illiquidity is of course volatility. Any price movements - up or down - will get magnified in such a tightly held share. I think we already saw that with the dramatic slump in March.
Hopefully, the illiquidity / volatility will work in our favour when the company releases some decent news. Though I fear what might happen here if there is a general stock market crash, which I do think is possible in the nearish term. IMO, it's best to keep some money in cash for buying at the bottom if that happens.

Hi toptiger,
No, I don't reckon JLP are the next SLP. In particular, I have serious issues with JLP's financial reporting and the truthfulness of their RNSs (e.g. those about Kabwe). Other downsides include financial overstretch (and consequently frequent placings), over-exposure to chrome, and the presence of the notorious Colin Bird as Chairman.
Tharisa (THS) seem to me to be an under-appreciated chrome and PGM producing miner. But, that said, companies like SLP are rare and hard to find.