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I have far too many GFM but sucked into buying 7,131 more this morning. Although a couple of weeks before generating serious cash GFM sells c. 900 tonnes of zinc each week. Even $600 above the previous quarter's average price is over $0.5m extra profit each week assuming costs remain constant.
With zinc above $3,700 we'll be making fortunes if it stays at this level for a few months. Could rise further when China starts up manufacturing after the Olympics.
https://www.lme.com/Metals/Non-ferrous/LME-Zinc#Trading+day+summary
I totally agree. Probably slightly less than 20c fully diluted EPS so a p/e of c. 5.8. Ok the mine is closed but work to improve capacity is, hopefully, being undertaken. Run rate upon reopening of over 50% higher than 2021 with easier to extract metals from Zone II once final permission is granted should give H2 2022 EPS of 83% of full year 2021.
Dividends? More than enough cash to get through the closure and put in all desired works. FY results will be released after the mine has restarted so no reason not to declare a dividend although CAPEX will probably be used again.
Biggest positive will be relaxation of quarantine rules in China and AUS allowing "Western staff" to renew usual work on/off arrangements.
I have far too many shares to buy any more but will certainly not be selling in 2022.
Good morning JustOne. I don't think I'm seeing the same in the RNS. There is no mention that Zone II final approval has been given. It's a relief that the shutdown will be the minimum 6 weeks. I'd have preferred some more meat to the RNS. Eg. "We will be able to get all necessary supplies to last until 14th March. We have a plan of works for the 6 week shutdown that will enable xxxxxx."
What is there in the RNS that thinks this will change the dividend policy and share price? I see nothing to that effect.
Very acceptable production. Gross zinc price was below $3,000 for most of Q3 and above $3,200 today. Fingers crossed that there is no production disruption and zinc goes even higher from here. Q1 2022 looks like a write off for production but as it's been so well flagged mine improvements will be actioned. Presuming Zone II final sign off is received Q3 2022 looks like being over 400,000 in production with even higher prices.
Q3 production should be released next week. On the last broadcast Roger said they couldn't get hold of any shares as there aren't any sellers. Surely in the 2 months since then they could have found the odd '000 shares to buy.
I find it very interesting that none of the options have been exercised since January which gives me great comfort that there are no problems on site.
We must be throwing cash off with zinc at this price. Maybe the Board are holding onto the cash to pay a dividend. I wonder why Roger said they couldn't get hold of any shares. 10,000 were bought this afternoon so could be by the Board?
I’m expecting there to have been buy backs today. From the Chairman’s comments on the teleconference I would expect they’ll be buying as many as they can within their rules. I personally would like 5m shares bought before divis start triggering the exercising and sale of many of the 20m options.
Reads well? I found them to be horrible with the exception of cash on the Balance Sheet. A huge increase in unit costs is not what we wanted. 2022 earnings forecasts are almost unchanged but 2021 FY forecast is down 42%. Some of the downside is due to depreciation reflecting the huge investment in the past.
In all honesty I was only really looking for the 30th June cash balance and I am very pleasantly surprised. PRC fees haven’t been paid and don’t look like they will be anytime soon.
With the pRice of zinc sticking around $3,000 cash generation will be even stronger in H2 so let’s hope it is conserved or used wisely.
Hi volcano. The shares held in Treasury before the buy back programme started was already 540,000. 399,799 shares have been bought this year so far. I don't think $1m in purchases has been completed so we are less than 10% through.