Today's is a slog but its something that needed to be considered...in terms of thought processes and risks.
ZinCox should be doing well with the price of Zinc etc...but
this company's share price says a little more of story. The last fundraising
you're thinking was "yonks" ago...A quick glance at the records shows
a contradictory story: 12th November 2013 Proposed fundraising through the
Subscription by the International Finance Corporation, Placing and Open Offer.
An oversight? Perhaps miscalculated the financial needs when doing a placing
only 4-5 months previously? The Directors have experience of this? Oh well time
will tell, after all they've entered into another agreement for similar
'recycling plant' in Russia.
Obviously there needs to be a share incentive plan here and
its always surprising to look at the wording of the incentive plan. Its no
coincidence that the incentive plans are significantly ahead of the current
share price. It looks a lot better does it not if when selling "another
placing" that one can say..."look we're so confidence of the
company's future our options are nearly double the current share price."
Nor was the share price movement and subsequent decline a coincidence in
light of the news being announced. Would it be a coincidence that financing was
"maybe" discussed near the end of March and the subsequent decline by
50% was evidenced?
One hopes ZinCox will be producing sufficient and in profit before their
Korean Recycling Plant rent kicks in or will there 'be a need for an extension
of the rent free period?' The price shall appreciate in value but not for long if
another equity raising is required maybe in November? So will perhaps present
some trading opportunities in the mean time...Perhaps someone can correct me on whether its the C or O that is capitalised?
Caledonia Mining Crp Q1 2014 Production Update which
was 10,607 ounces of gold were produced during Q1 2014 and
was lower than Q4's 2013 at 11,429 production. The company states it
will be paying "closer attention" to grade control in future (so nice
of them)...I will be very surprised if they hit the targeted gold production
for the full year but this should not impact on the dividend coverage with an
announcement due 30th April an approximate yield of 8% based on 6 Canadian
cents over the year.
Now as Sierra Rutile announces Q1 2014 Operational Update
one assumes the positive will start to read across to Kenmare? Yes, previous
discussion on Kenmare (KMR) (Ken's Mare) showed itdoes not have a
positive track record but Sierra Rutile’s results may read across as a positive
for Kenmare. If SRX’s sales, which were higher than production (a positive for
once), then perhaps Kenmare would be likely to benefit as well? Remember Rutile
is the premium end of the pigments and ilmenite the
lower quality cousin. There’s two possibilities here, one being that Rutile
(Premium Ore) is replacing its lower quality cousin (contra play) or both
offerings are set for an improvement on demand (dual play).
Remember, ilmenite can have the titanium oxide upgraded to
make a synthetic rutile however the quality is often inferior. One would be
wise to keep an eye on Iluka Resources (ASX: ILU), Mineral Deposits (ASX: MDL)
(only
started producing/mining at Grande Côte two weeks ago), Base Resources (ASX
& AIM listed) (Kwale
Operations &
Quarterly Activities Report – March 2014 ) and World Titanium (ASX: WTR) (Development Stage Project on the
ASX. Remember it was only this time last year that Iluka (ASX) and Tronox (NYSE)
became bullish in terms of enquiries and reported an improvement but not much
of that mirrored bottom line. It would be prudent to wait for evidence of a
wider industry improvement when Tronox release their Q1 2014
results, expected in June 2014 which may or may not bode well for Kenmare. Sierra
Rutile will certainly benefit in the short—term from the news.
Finally, Armadale
Capital Plc's Strong Financial Returns Demonstrated from Mpokoto Scoping Study.
If you like a rollercoaster of depreciating returns, I’ve followed this for the
predictable outcome I envisaged in 2009 when it was formerly known as Watermark
Global and would clean up Acid Mine Drainage in South Africa…alas has a
shareholder ever made monies here?
Crimea impacting on Gas Prices, or is it the Ukraine? Russia really is the law unto themselves with an abundance of Natural Resources, I do not see what the issue was in terms of Crimea "voting by a significant majority" to go back to Mother Russia? Or is the Scottish Majority vote whichever way it goes (I assume independence) going to be declared illegal based on the majority voting? Wonders will never cease.
For the Grand National followers you'll be pleased to ride any of the horses I followed on a Beach Near you for a 5 minute ride!
All the best, Fraser
Fraser- nice spread of coverage again - not too much unexpected news, including H&T having to come out and say they may bid for some of the ABM assets- I didn't hold either but I would be stunned if H&T didn't run the numbers on some of the ABM stores- what a scoop for the journos involved... and next news from them could be that bears do poo in the woods :-))
ReplyDeleteRe ZOX- yes- they have form in the fund raising area and Im not convinced from the latest update that they have control over this highly corrosive but potential promising process - they have only reached a fifth of their initial prod rate of 15ktpm at best so far so the jury is definitely out on them- perhaps a recalc of the the target prod rate downwards would have been prudent and then it would have given them some push to exceed targets- just a thought. They cant produce for 12 months a year with the regular repairs they need to carry out, and this needs to be projections and cost assumptions. You are right- they are ZincOx, not ZinCox- perhaps the lack of zinc production has forced them to drop the c for now :-))
Re KMR- yes- differing statements being made from producers in their field- some are sniffing the bottom of the mkt for prices and are positive re the coming year. KMR have a big planned prod increase for this year and need positive mkts to get that stuff sold without dropping margins too low. Plus the debt payments have been moved back but they will need good cashflow to meet their requirements there. The price looks about right for me at present.
Sorry your horses didn't come in for you in the Grand National- perhaps a Findus Lasagna at lunch will enable you to get your revenge on the nags and create more demand for the respective owners.
Cheers. The Leggie
Fraser are you still short on Cineworld L.CINE? I observed your view post merger and cannot find any further commentary? The support is there now. Views please? tia Jules
ReplyDeleteJules I closed my positions at around 325 (perhaps too early) as I felt there would be support for the stock. The merger was/is good but there was a lot of expectation (froth) in the SP and profit was being taken. Share price should see some recovery but I'd wait for the support to be more prolonged. Atb Fraser
ReplyDeleteHang on, who commented on the H&T acquisitions of ABM? H&T has to be able to consolidate the sector now...surely? http://www.investegate.co.uk/h--38-t-group-plc--hat-/rns/response-to-press-speculation/201404070922291960E/
ReplyDeleteI envisage market volumes increasing for ilmenite and Rutile before any prices rises kick in. There's some slack in the secotr that needs absorbing first as such, my view, despite most being bullish is quantity will increase with modest price rises. After all the sector is on its arse. Tronox are likely to benefit significantly from the Anadarko Settlement via rebates on taxation on the trust payments. So the market may price more into Tronox as the main producer than the junior/not so loved companies.
Its hard keeping my thoughts a head whilst trading my current views. Something for which I am learning but doubt I will never master in full. I deliberately had the entire weekend off to think through the next market runs. Not an intensive process but generally involves a 'modest' amount of alcohol intake!!!!
Atb Fraser
Fraser- Re CMCL- Just went over the figures and the 2014 prod target of 48k of gold does look within their scope, given the qtr to qtr figures from the past for Blanket and the likely grades in the short term. I guess its just the Zimbabwe discount and gold prospects that is holding them in their trading range.
ReplyDeleteYou are prob right re Tronox being the major beneficiary- an easier way to play those prices as its more liquid and certainly more stable over the next few years, in all likelihood.
Cheers. The Leggie
Evening all
ReplyDeleteI find ZincOx very frustrating. I recall reading an interview from Woolett which im sure he said plant maintenance is a 10-14 day thing each time. Im out for now with a hit watching to see if it will go below 10. Going to try find a different zinc play for now whilst i see how it plays out. Starting with griffin- never heard of them but reading is part of the fun!
Just out of curiosity, what's the story with BPC? I havent looked at them in years but seen they're at 2p having been 20p!?? Is it just trash or is there a real story to it?
Have a good night all
Oli