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lee, I think they were not sales by impatient holders. For a sale of a £30,000 holding, or two of £15,000 each, you would expect it not to be an emotional decision but based on careful thought. Perhaps it's someone needing cash as I cannot see few, if any, better opportunities in the market currently. If I needed cash I would look for other sources apart from MTL. It looks to me as if this share price is being held down for some reason. Perhaps its the market makers with their own agenda. A while ago someone posted that the share has been massively de-risked by the banks selling their debt to the 2 major shareholders. That's true and I would have expected the share price to have risen to around 2.5p on that alone. Last July the company was re-negotiating its debt with the 2 banks and the share price was 2.5p. The difference now is that MTL is negotiating the payment schedule and interest rate for the debt with it's 2 major shareholders, where we are all on the same wavelength in wanting to maximise prospects for MTL, returns for shareholders and a fair return for the debt holders. You might say the share price should, therefore, be more than 2.5p. Oh, I didn't mention the fact that the gold price was $1385 on 1 July 2019 and is now $1574, some $200 higher and probably worth an extra $13m in profits for 2020. it's very easy to make a case for a share price higher than 2.5p before finalising the terms of borrowings.
I’m sure Q4 results have been there for some time. Also, I believe the later announcements are due to the refinancing issue. I expect the RNS to cover both Q4 and refinancing, otherwise Q4 would have been released by now. No cause to worry as all the legalities need to be In place before refinancing can be announced.
lee, there may be a large buyer and so there should be of this share. I do know that at the prices you have quoted people I know have been buying. I think the large buyer was the one who bought a million or more in single trades. But I see no reason to be fearful about it.
Surely, the two major shareholders have been insiders for the last year or so. They cannot buy whilst an insider. If they were to try and buy the company what would Mr Bowden do? Would he stay or go? He seems to be a very high profile mining expert with a track record second to none. I think he is a person who does not want to hide under the bush of a private company. I think at least half the value of this company is in him. Major shareholders brought him and and will not want to lose him. So I think we can forget the threat of a takeover.
I am looking forward to enjoying the ride for some time yet.
Look at th e spread towards the close. Perhaps the supply has been turned off. Today’s trading has all the hallmarks of an RNS being finalised in the City. Or the penny had dropped after Fridays news - but that does not explain the price holding fairly tight. We will see tomorrow. Either way the price should.continue rising.
Differentlevel, totally agree. It looks as if the share price is being held back deliberately. With all these buys there must be a supply of shares from somewhere. The narrow spread is also unusual for such a small market cap share. To me this suggests that someone is supplyiny the shares to MM's at a set price. But why?
By the way, saw in the Telegraph today that Argentine bondholders are expecting to take a 20% to 30% haircut on the debt. I wonder how much of a haircut the two banks took when selling their debt to our two major shareholders.
asilad, I did think about the debt but concluded that a low PE of 5 reflects that. If the mine has a current life of 7/8 years , 2 years profit would more or less replay the debt.
Let's wait until the refinancing is finished to see the actual level of debt. Then a valuation of 7p per share might turn out to be conservative.
Then we also need to wait for results of drilling on the remaining acreage to see what the mine life actually is. We may find a PE of 5 is too low!
Can't understand this. If I had any more cash I would be going even more overweight by buying more shares. This is a no brainer.
I'm looking at 90,000 oz gold production in 2020, a cash cost max $875, an average gold price of $1500 for a net cash flow for the company of $45m/$50m before interest and tax. The current market cap is £32m or $41m
This company is valued at less than current year projected profits! It reasonable to put the company post tax profits on a PE of 5, which is £150m or around 7p per share.
Spencer, I totally agree. The thing is it's worth trying to buy shares at the lowest possible price in order to hold and get the best returns. Also, timing is important so as not to have too much dead money in a portfolio, money that is unlikely to earn returns until a later date. Rightly or wrongly I have taken the view that 2021 will give opportunities to buy PLX prior to FDA approval in Q3 2021. I may well buy before that date if the market offers me a price I cannot refuse. My other consideration was that market/trade/currency risks could well derail a buy and hold approach.
lee, the interest per oz of gold sold is interesting.
In the last RNS Darren Bowden said "These negotiations can be concluded swiftly, such that the Company's financial position becomes sustainable; allowing management to focus its efforts on improving operational performance at Runruno and to consider growth options for the Company."
To me this says three things. 2020 gold production will be nearing nameplate production of 100,000oz pa. Total debt level will be lower than $125m currently.
He has another project in mind to grow the company's gold production and share price.
Am I reading something that is not there? As none of this is in the share price, imo.
Sold out yesterday as planned but I would have been better off selling ahead of the news. Switched to add at MTL.
I am a long term fan of Polarean but the company does need to raise more funds as its cash is probably around $2m to $3m now. There was always the risk that the company would seek to raise cash on the back of an expected higher share price following the trials result.
In any case, if cash is sufficient for the time being, the FDA submission is due in Q3 2020 and the FDA decision is due in Q3 2021. Plenty of time here.
lee, we may never know the terms that the two major shareholders have paid to buy the banks debt.
What we will certainly know are the terms of the refinancing package for the company, i.e. the total debt that the two major shareholders have refinanced. After deducting the mezzanine debt ($56.5m) from the total debt ($125m) refinanced, we will know how much of the $68.5m bank debt is now being carried by the company.
If the two major shareholders have bought the debt below face value, then it would be quite normal and acceptable for them to gain some benefit and not to pass the entire benefit across to the company. Alternatively, they might wish to pass the purchased debt straight across to the company and seek their reward through some other means. Either would be completely acceptable to me as a shareholder.
DJ, totally agree re main shareholders. I think Darren Brown is a man of integrity and would only want to be associated with the best. He has performed outstandingly for them . They will want to keep him on side. I have little doubt about producing gold profitably. I think we may see the ASIC coming down to below $900 in 2020 and the cash cost below $800. I can't remember the original plan for costs but I seem to think they were around $700 and $600.
Three major milestones due in the next two weeks:
- Completion of the debt purchase by Candy/Edwards
- News of the refinancing of the company's debt
- Q4 2019 results
And these are for a company in just the right sector. With a global stockmarket correction overdue, major trade/currency problems and a dangerous coronavirus, sitting in a gold producer is not a bad place to be.
I am reading a lot of optimism on this bb. Yet no one is talking about the risks and why the future may not be quite as good as the many here expect.
We all know what the upside in gold production is and where the gold price stands. But why is the share price at 1.5p or so? Let’s not forget the refinancing package has yet to be concluded between the company and the two major shareholders. They did not buy the bank debt out of the kindness of their hearts. If the banks took a haircut, and they most likely did, then that might be good for the company. But our two major shareholders did this also for themselves as well. What that price is for the company we do not yet know.
I think there will be a price for shareholders but what and how I cannot guess. Also, I don’t think the price will be too costly. At least I hope not.
This may explain why the share price is 1.5p. Once the banks sign the sale of their debt and the refinancing is announced the de-risking will have moved on significantly, then we will see a truer share price and can speculate at what the future holds.