The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Thank you @asimpleinvestor for the clarification. I understood that very well. I just wanted to point out that Vast is (probably) mathematically unlikely to get full price for copper metal. So the gross income is under $1.5m. According to the OPEX costs of the mine are now covered.
But that still doesn't mean profitable. The overhead expenses alone are probably around $10m p.a. Then there are interest, depreciation and taxes plus the sustaining costs.
Sorry folks, but did you really understand and calculate the RNS?
Around 172 tons of copper were sold for the first semester. Even with a payability of 100% (which it is not, because the smelter process also costs) that would be almost 1.5 million USD in revenue. The costs are then deducted from this. Nothing is left for the company.
Normally the RNS would be negative. But in the current situation, I judge them neutral to rather positive. Because I assume a (very) good second quarter of 2023. A publication BEFORE the re-domicilation and BEFORE trading on the LSE was suspended would really make no sense.
PS The schedule looks like this:
- Wednesday, July 26, 2023: AGM for fiscal year 2022
- Friday, 7/28/2023: GM to approve the delisting of POLY shares from the LSE.
- Saturday, July 29, 2023: Suspension of trading on the MOEX
- Tuesday, August 1st, 2023: Last trading day on the LSE
- Wednesday, August 2nd, 2023: Suspension of trading on the AIX
- Monday, August 7th, 2023: Entry into force of the re-domicile to Kazakhstan
- followed by resumption of trading on the AIX and the MOEX
- Wednesday, August 9, 2023: Publication of production results for the second quarter of 2023
I would say August 7th, 2023 golden age for Polymetal International. Current price on the AIX $3.23 or £2.50.
On July 27, 2023, Polymetal will publish the production results for the second quarter of 2023. I assume increased profitability.
Only shareholders holding paper certificates will be able to transfer their holdings to the
AIX CSD through Tabys. Upon the transfer, certificates will be converted into paperless
shares.
1. Firstly, you need a unique access code to register in the application. To get the code, please send the following details to redom@polymetalinternational.com with the subject “Tabys access code request”:
• First name
• Last name
• Date of birth
• Mobile number with a country code
• E-mail
2. You will receive an access code soon after the General Meeting (30th of May 2023), and will need to follow this guide and register in the Tabys application using this code (step 5 below).
3. After you complete registration, an account in AIX CSD will be created in your name
https://www.polymetalinternational.com/files/en/Tabys_guide.pdf
But @CWWX it's exactly about shareholders who bought on the MOEX and these shares are with the Russian depositary NSD. Russian resident shareholders will not be able to apply for certificates until Polymetal International no longer has its legal place of business in an "unfriendly" country. After the Re-Dom to Kazakhstan, the blocking of receiving dividends from the NSD will no longer apply.
Read carefully the RNS of September 22, 2022.
https://www.polymetalinternational.com/en/investors-and-media/news/press-releases/22-09-2022-b/?search_type=all
And now the RNS of September 16, 2022 again.
https://www.polymetalinternational.com/en/investors-and-media/news/press-releases/16-06-2023/?search_type=all
urai5
Today Polymetal International announced that the deadline for shareholders from Russia, who had bought the shares on MOEX, will be extended by 3 months until mid-September to exchange the shares for certificates.
POLY assumed 22% of the 473.6m shares. About 104m shares are therefore "blocked" by the National Settlement Depository NSD. 39m shares could be converted. Once the re-domiciliation is completed, the shares will be de-blocked by NSD. This means that then all shareholders resident in Russia who bought on MOEX will be able to convert them.
As is known, shares purchased from a German-speaking custodian bank are blocked by the collective depository Clearstream. We do not receive any certificates and a transfer to another broker is also not possible.
The re-domiciliation is absolutely central/crucial for Polymetal, then with it the Russian mines could be sold. Kazakhstan is not an "unfriendly" state from Russia's point of view. But a primary listing on the AIX in Kazakhstan makes little sense for Polymetal in the longer term. The volume there is much too low for such a large group.
Considering the above, I would prefer the following scenario:
1. Re-domiciliation to AIX, Kazakhstan
2. Sale of the Russian assets
3. Delisting on MOEX
4. Re-re-domiciliation! to the LSE London
5. Secondary listing on the AIX
Upon return to the LSE London, New-POLY-K would still have plus/minus 40% of its business with it. But depending on the success of the sale of the Russian mines and the POX, POLY could have enough capital (possibly also new debt, since the Russian debt is gone) to acquire interesting projects in the Central Asian metropolitan area. Does not have to be "only" gold. Future metals would also be a very good option. For example projects/mines with copper, vanadium, molybdenum.
urai5
Sorry, but once again, it's not the broker's problem. The problem is Clearstream as the depository. And they have blocked Polymetal International since the end of February 2022. This means that all transactions are excluded: Buying/Selling, transferring to another broker, receiving certificates for registration at AIX.
The only solution remains: Redom, then split, relisting POLY-K on the LSE, followed by deblocking.
All shareholders with a custodian bank in German-speaking countries (Germany, Austria, Switzerland, DACH) have this problem. The compliance department of Clearstream is responsible for the blocking. This is a private company and belongs to Deutsche Börse and is mandated for collective custody by the DACH-banks. Although Polymetal International was not sanctioned, these people seem to make an example here. I am in contact with IR of POLY with this issue.
The most likely scenario is the following: POLY redom to AIX Astana. Legal split. POLY-K re-listed (without Russian mines) on the LSE London. Clearstream deblocked. Share price of POLY-K approx. 5 to 6 USD.
urai5
P.S. In German-speaking forums we discuss and inform about it.
Translated with www.DeepL.com/Translator (free version)
There the sensitivity between ruble and dollar is described (slide no. 12):
A 1 RUB/USD movement in domestic currency: Effect on EBITDA $17-21 mln.
https://www.polymetalinternational.com/upload/ib/1/23-03-02/2022_09_Polymetal_financial_results_H1-2022.pdf
Here is the guidance with the 2023 budget: 65 rubles/USD. (Slide 18)
https://www.polymetalinternational.com/upload/ib/1/23-01-25/2023_01_25_Polymetal_CMD.pdf
Current USD/Ruble rate: 1:82. If the course stays at least that way, there will probably be >200m USD more EBITDA.
Plus the higher price of gold. Higher gold price impact on EBITDA: $100/oz = $170m USD. At 2'000 USD/oz and a guidance of 1'800 USD/oz this means at least 300m USD.
Thanks for your feedback @investor6
I wrote a post on Friday about a possible dividend for fiscal 2023:
Potential dividend for FY 2023: 0.60 USD/share, Fri 09:43
POLY's business is seasonal, with the 2nd half generating more revenue than the 1st half. I'm assuming an interim dividend of $0.2. Payable in Q4 2023.
@investor6 - On net debt and EBITDA:
as of December 31, 2022, POLY had a debt of USD 2.4 billion. With a gold price of $1,900/oz AuEq and a ruble rate of 1:78, the hypothetical EBITDA is at least $1.3 billion.
The debt built up in 2022 as working capital had to be increased: stocks of capital goods, higher costs in Russia due to the massively higher ruble exchange rate.
These effects should normalize again in 2023; in particular, the ruble rate is currently falling dramatically; which is very positive for POLY. A ratio of 1.5x between EBITDA and net debt is absolutely possible. This means a net debt of around $2 billion at the end of the year.
No @Investor 6 - It is exactly the other way around! The value of the ruble drops. In 2022, Poly received 65 rubles for 1 USD; Now Poly is getting 77,28 rubles for 1 USD.
In Russia, Poly receives income in USD and pays the costs in ruble.
According to PPT from September 23, 2022, Slide No. 12, a change in the exchange rate ratio from a ruble has an impact on the EBITDA from USD 17 to 21m.
Specifically: Higher dollar course to ruble from 12,28 rubles means (at 19m USD/1 rubles):
> $ 200m higher EBITDA.
I once calculated the potential possible dividend for FY 2023 (hand-knitted, milk booklet):
For this I made the following assumptions:
- Gold price: 1'900$/oz
- Production: 1.7moz AuEq
- Revenue/EBITDA (base) margin: 36% (2022:Dollar/Ruble 68.6)
- Dollar/Ruble: 1:76.2
- EBITDA/Net Earnings Margin 43%.
Here are the numbers and formulas:
2022 (Invoice)
Revenue, US$m, 2,801
Adjusted EBITDA2, US$m 1,017
EBITDA margin 36%.
2023 (Assumption):
Revenue, US$m, 3,230
Adjusted EBITDA, US$m 1,163 (at margin of 36%).
Adjustment due to better dollar/ruble exchange rate:
Annual Report page 108: 12. Currency risk (...) The average exchange rate in 2022 was at 68.6 RUB/$ (...)
Current ruble rate: 76.20. Difference 7.6 rubles. Costs in Russia are in rubles. Revenues logically in USD.
https://www.polymetalinternational.com/upload/ib/1/23-03-02/2022_09_Polymetal_financial_results_H1-2022.pdf
Slide 12:
A 1 RUB/USD movement in domestic currency: Effect on EBITDA $17-21 mln.
Let's take the average of $19m per ruble: potentially $144m higher EBITDA. That would be hypothetical about 1'300m USD EBITDA for 2023.
Reminder dividend policy:
Minimum final dividend of 50% of underlying net income (...) subject to absolute net debt/Adjusted last twelve months EBITDA ceiling of 2.5x.
Hypothetical dividend calculation (assumption ratio debt/EBITDA below 2.5):
Ratio 2022 between (Adjusted EBITDA, US$m 1,017) and (Underlying net earnings, US$m 440) = 43%.
560m$ (43% of 1'300m US$) resp. 50% of it with a dividend of 280m$.
With 474 million shares: 0.60$.
urai5
P.S. We shareholders from the DACH region have not been able to trade POLY shares for over a year - neither buying nor selling.
Translated with www.DeepL.com/Translator (free version)
Sorry @Pecten11 - but with your answer you make it clear that you have not understood the valuation of a mining company. Insitu Value can never approximate market capitalization.
The discounted Net Present Value NPV would be decisive. However, we can only calculate it when we have the CAPEX with the mine plan and, above all, the AISC and the exact reserves - not resources.
The price of Vast Resources has calmed down in the meantime. For days it has been moving slightly above the GBX 0.55 financing of 6.2.2022. "Everything" is now waiting for news from Zimbabwe regarding the 129.4k carats - above all, of course, the value is of interest.
But the real flagship project of Vast is the polymetallic mine in Romania Baita Plai. Even more important than the value of the diamonds should be the achievement of profitability in the middle of the year. Yesterday, Vast Resources released its 12-month drill programme at Baita Plai. The aim is to significantly expand the existing resources.
The target is a JORC-compliant resource as follows: 11.65-12.65Mtn at 0.98% to 1.69%% Cu, 0.23% to 0.57% Pb, 0.17% to 0.62%Zn.
This potential new resource now needs to be put in relation to the market capitalisation. The data is as follows:
- Potential insitu value (each with average grades) calculated for 12Mtn: $1.7bn.
- Current market capitalisation with 2.73 billion shares: 16.8m GBP, respectively $20.3m.
By-products Au and Ag could be added to this: Au_g/t (based on drillholes samples) 0.05-2 and Ag_g/t (based on drillholes samples) 30-90. That could be another few hundred million $ in insitu value.
urai5
Translated with www.DeepL.com/Translator (free version)
According to the website, the planning (now of course outdated, but there is a clue regarding recovery) was based on the following:
- 237'300t ore
- Results in 9580t concentrate
- According to update 4th quarter 2023 the concentrate contains 23% copper.
- Means a net grade of 0.93%/ Cu
In 2023, the nameplate performance of 14'000t of ore per month should be achieved:
- Per year: 168'000t ore
- Net grade 0.93%
- Saleable copper 1526t, resp. currently 9k/t Cu: 13.7m$ revenue p.a.
Plus by-products: Gold and silver (we leave out zinc and possibly molybdenum)
- Gold/silver recovery from concentrate 70%.
- Ratio between Cu and Au/Ag - 60:40
- This means potentially the value for Au/Ag from concentrate is 6.3m$.
(13.7/60%) - 13.7 = 9.1x70%)
Conclusion
It is just to get an idea of what (theoretical) potential Baita Plai has. At $20m p.a. revenue with 14kt ore per month and an EBITDA margin of 50%, Baita Plai should be profitable on the bottom line (at today's metal prices).
urai5
Translated with www.DeepL.com/Translator (free version)
Vast has excellent assets. But these need to be developed. t the 129k carats with around 8 to 10m$ FreeCash, the projects in Romania can now be developed. Based on the wording of the RNS, I assume that the project "Chiadzwa Diamond Fields located in Marange" can be developed again together with the government authorities and the local population.
I am convinced that the case is over - as expected. Look at the terms page 8, 1 FEBRUARY, 2023 10:00, JUDGE CHINAMORA J
UNOPPOSED ROLL
UNOPPOSED MATTERS
https://www.jsc.org.zw/upload/Cause%20List/High%20Court/Harare/2023/HARARE%20WEEKLY%20COURT%20ROLL%2029%20JAN%20-%204%20FEB%202023.pdf
In human judgment, the Ministry of Mines has not raised any objections in the short term.
That's what @Malpenn is like. So let's take a step further along the timeline.
After the court has made its decision, there will be a 1st RNS. Of particular interest is whether there is a deal with the mining authorities and if so, future business, for example at Marange - is discussed. After the diamonds are in Vast Reurces' possession, it's time for the rating - followed by a 2nd RNS.
I'm still hoping for a 3rd RNS where Vast's future business in Zimbabwe is roughly outlined.