Sierra Rutile Share Discussion Threads

[nonic] 24/9/2013 16:13

Per tonne of product that is

[nonic] 24/9/2013 13:47

CorbineThat's slightly different to their last one which was about 185p I think. I agree.....why?Is it all down to price?

[corbine] 04/9/2013 10:22

new broker note from Goldman Sachs-anyone got a copy? neutral-60p- question is why? :-) thanks corbs:-)

[weildy2] 30/8/2013 08:49

Mr Castro taking advantage of the fall in share price - again !! He certainly has confidence in the future of SRX.

[corbine] 30/8/2013 08:38

Jan Castro adding...

[corbine] 29/8/2013 08:21

hello Brechin- long time no see- agree with you- more so for the spongy price of rutile-suspect its lower than some commentators were alluding to? maybe its also reflective of selling legacy quotes months/qrtrs/6 months ahead of time? gurantees a cash pull and moves stock but srx spent ages getting rid of the legacy stuff from yonks ago? see russia and north america market needs working on.... then same goes for dupont who hasnt fared better and kenmares figures werent great?- see how wider market reacts? any chance the large sells a few days back were a reaction ahead of the news?
still-great future ahead eh?
and whats with the barge write down? suppose id better post the link to the ints?..

imo gldyoR etc corbs musing:-)

[brechin] 29/8/2013 08:13

Disappointed by these numbers. I am a long-term holder and more patience will be required.

[corbine] 28/8/2013 10:49

kenmares figures (6 months) are out- they warble on and on and on and on and on about weak pricing -blah blah.

[corbine] 28/8/2013 08:58

monk-theyve got parts of a 30 year tailing stream-deposits in various areas? i though they were stockpiled and were able to reprocess a further amount as the spirals and other modernised updates were applied recently-some good grade within stockpiles-on one of the presentations and within some rns back along me thinks?-theres also a map on a presentation showing where some of the tailings are situ?

scutable-concur-only 50% underpriced? :-))
ps enjoyed your post

[madmonkflin] 27/8/2013 19:20

$30m would be more appropriate i think - they should have built up the cash by now and had those tailings to get rid of.

[brechin] 27/8/2013 07:31

That's the drawdown facility completed - just timed before the Board decides if it will pay a dividend at the same time as announcing the interims.
IMHO but it all makes sense.
My guess is a dividend of PDS 10m.

[nurdin] 23/8/2013 13:52

Well put..you nearly made me buy more :o)

[scrutable] 21/8/2013 16:20

IMO the cash has been raised because it can be raised. SRX performance easily underpins/underwrites such a loan. It suggests to me that after recosting Capex and saving $18m, the BOD is is already anticipating a positive outcome from the final Gangama feasibility study and is impatient to start this large and profitable dry mining project.

That's good news hopefully to be endorsed next week on release of H1 figures which should be good.

The market may have been justifiably suspicious of SRX until 2 years ago, The dredge was old and worn, but rutile prices were too low for the mine to make a profit or repair the dredge, then the major variables changed. The price of rutile jumped from $800/T to $2-2,500/T and the key shareholders changed. The dredge was modernised, production made several step jumps, and remains in stable expansion, operating cashflow which was negative by $5.5m changed abruptly to +£65,5m and capitalisation is now less than x8 times op cash flow.

The market is bound to develop confidence in SRX and the share price is bound to catch up with peer companies. H1 results will help. The share is already at least 50% underpriced

[brechin] 20/8/2013 15:48

The facility will enable SR to pay a dividend in anticipation of future cash flows. It is part of their financial planning. Surely that is obvious.

Very positive IMO.

[corbine] 20/8/2013 14:30

yeh i appreciate the final part about leveraging cashflow- but if so wont that restrict early special divi, till the situation improves or can mnsignor sisay clarify that special divi is still on cards? as per earlier rns- the reasoning still, after expenditures etc? so if any useage of facility then surely this takes precedent and jumps queue for divi wait?
just a thought ;-)

[nurdin] 20/8/2013 09:53

Yes corbine,I am confused too.Thought they were thinking of returning cash to share holders?

[orchestralis] 20/8/2013 09:35

It will provide Sierra Rutile with greater flexibility in managing its working capital requirements and allow us to better leverage our strong cashflows

[nonic] 19/8/2013 14:11

These came out on 29th August last year....................

Before anyone gets excited:-

So not long to wait now, what sort of hash can you make of those, when they come out, Eddie?


Sierra Rutile Limited 2012 Interim Results
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Alert
TIDMSRX

RNS Number : 9438K

Sierra Rutile Limited

29 August 2012

Sierra Rutile Limited

Unaudited Interim Results for the Six Months Ended 30 June 2012

London, UK, 29 August 2012: Sierra Rutile Limited (AIM: SRX) ("Sierra Rutile" or the "Group") is pleased to announce its unaudited interim results for the six months ended 30 June, 2012 ("the Period").

Highlights

-- 394% increase in sales to US$98.7 million (H1 2011 "the Prior Period": US$20.0 million).
-- Step change in production from the Prior Period:
- 57% increase in rutile production to 42,610 tonnes (Prior Period: 27,149 tonnes); and

- 67% increase in ilmenite production to 10,315 tonnes (Prior Period: 6,164 tonnes).

-- Rutile cash production costs fell 22% from US$788/tonne in the Prior Period to US$617/tonne during the current Period.

-- US$66.9 million EBITDA for the Period from a loss for the Prior Period (US$(3.6) million).
-- 68% EBITDA(2) margin (Prior Period: (18%)).
-- US$56.2 million net profit for the Period compared to a net loss of US$14.6 million for the Prior Period.

-- Non-controlling interest in Sierra Rutile's operating subsidiary eliminated through US$13.0 million payment to the Government of Sierra Leone ("GoSL").

-- Strong balance sheet with cash at 30 June 2012 of US$23.3 million and borrowings of US$30.2 million, representing a net gearing ratio of just 4.4% (net debt/equity).

Commenting on the first half performance, Sierra Rutile Chief Executive Officer, John Sisay said: "These are a strong set of financial results that serve to illustrate the significant improvements we have implemented at Sierra Rutile since 2010. With our continued strong production from existing assets and the introduction of our growth projects, scheduled to deliver significant production increases over the coming years, we are extremely well positioned for the future."

Financial Review

Revenue

Total Group revenue increased 394% to US$98.7 million (Prior Period: US$20.0 million) primarily due to higher sales volumes during the period (48% increase on the Prior Period), coupled with an extremely strong pricing environment (341 % increase in average rutile price from the Prior Period). This impact was slightly offset by Sierra Rutile stockpiling zircon during the Period, whereas in the Prior Period, Sierra Rutile sold 5,900 tonnes of a zircon concentrate.

Cost of Sales

Rutile cash production costs decreased to $617/tonne for the Period, from $788/tonne in the Prior Period as investment in production assets and efficiencies of production increases began to yield results. On an absolute basis, cost of sales were 23% higher at US$32.3 million for the Period from US$26.3 million in the Prior Period due to the 48% greater volume of rutile sold.

Administrative Expenses

Administrative expenses increased to US$8.8 million for the Period from US$4.6 million in the Prior Period principally as a result of US$1.1 million of additional non-cash stock option expenses and a US$1.6 million provision for bonuses (no bonus provision was made in the Prior Period). The remainder of the increased costs was a result of the enlarged scale of the Group's operations.

Financial Expenses

Net finance costs decreased US$2.6 million from US$3.6 million in the Prior Period to US$1.0 million in Period, principally as a result of movements in foreign exchange rates on the euro denominated loan balance.

Financial Position

Net assets increased by 46% to US$155.9million (31 December 2011: US$106.7million). The main movements in the balance sheet were:

-- Capital expenditures of US$23.0 million, added to property, plant and equipment. This was predominantly incurred on the new dry mining project as well as other assets to support the expansion of the business.

-- Inventories (stock piles and stores) increased by 32% to US$27.0 million (31 December 2011: US$20.5 million), due to the increased levels of production.

-- Cash increased to US$23.3 million from US$10.7 million.
-- In addition, the Company made a PAYE prepayment of US$5.3 million to the GoSL in April 2012, of which US$4.4 million was outstanding at the end of the Period.

Movements in Equity

Equity increased due to the US$56.2 million profit for the period, offset by payments to the GoSL to purchase its non-controlling interest in Sierra Rutile's subsidiary Sierra Rutile Holdings Limited ("SRHL"). The non-controlling interest related to historical PAYE taxes that had been satisfied through the issuance of shares in SRHL to the GoSL under the Sierra Rutile Act 2002 (Amended 2004). See note 11 to the financial statements for more details.

Financing

As at 30 June 2012, after all capital expenditures, the non-controlling interest purchase and associated PAYE prepayments, Sierra Rutile had US$23.3 million of cash and US$30.2 million of debt outstanding, predominantly due to the GoSL, representing a net gearing level of just 4.4%.

Related Party

Related party transactions are disclosed in note 14 to the condensed set of financial statements. There has been no material changes in related party transactions described in the last annual report.

Principal Risks and Uncertainties

There are a number of potential risks and uncertainties which could have a material impact on the Group's performance over the remaining six months of the year and could cause actual results to differ materially from expected results. These risks were set out in detail in the Annual Report for the year ended 31 December 2011 and remain appropriate in 2012. Key risks relate to the following:

-- Exploration and development risk
-- Operating risks
-- Estimates of mineral reserves and resources
-- Insurance
-- Competition
-- Volatility of mineral prices
-- Political risk
-- Protection of assets and personnel
-- Government regulation
-- Title to properties
-- Energy cost and supply
-- Rehabilitation
-- Dependence on key personnel, contractors, experts and other advisers
Going Concern

As at 30 June 2012, after all capital expenditures, the non-controlling interest purchase and associated PAYE prepayments, Sierra Rutile had US$23.3 million of cash and US$30.2 million of debt outstanding, due to the GoSL, representing a gearing level of just 4.4%.

The Board has considered the Group's cash flow forecasts for the period to the end of December 2014.The Board is satisfied that the Group's forecasts and projections, taking into account of reasonably possible changes in trading performance show that the Group will be able to operate within the level of its current facilities for the foreseeable future. Accordingly, they continue to adopt the going concern basis in preparing the condensed financial statements.

Forward Looking Information

This financial report contains certain forward looking statements with respect to the financial condition, results, operations and business of the Group. These statements and forecasts involve risk and uncertainty because they relate to events that depend on circumstances in the future. There are a number of factors that could cause actual results or developments to differ from those expressed or implied by these forward looking statements.

[n3tleylucas] 11/8/2013 14:37

No idea mate, I'll have a look.

[madmonkflin] 11/8/2013 13:51

I guess that's why they set a 85p target then, taking account of your russian oligarch :)

[n3tleylucas] 11/8/2013 09:37

This is controlled by a Russian oligarch. The stock should therefor always trade at a discount, hence "The fundamentals of this share seems almost too good to be true".

You must look at, and behind the majority shareholder, before you do anything.

[nonic] 11/8/2013 03:20

Hi Scrutable

The fundamentals of this share seems almost too good to be true and when it seems like that you know what they say.........

Lets hope not.

The projected outputs/costs/profits justify an share price far above where it stands today. I havent been in it for that long but I seem to remember broken promises and failed targets have meant that the stock exchange doesnt trust the company.... yet.

If SRX can achieve these latest targets they have set themselves within the time frame it should multibag.

Goldman Sachs put a target price of something like £1.80 last year before the bottom dropped out of mining stocks......

The wheels seem to be turning in the right direction now

[scrutable] 10/8/2013 18:50

nonic

this is a lovely share - steady price movement free from Bear attacks (touch wood
Low PE relative to others in the sector, whilst arguably the strongest performer amongst them.
(See VSA report comparison with KMR)

* great rutile prices compared with 18 months ago, declining production costs as dry mining increases and soon to supercede dredging.

* around 30% margin PBT-

* Huge ongoing annual increases in production for next 2-3 years at least. Excessive current cash flow - in surplus to declining capex requirements, leading to board consideration of dividend,

* recent 70,000T sales contract implies strong proposition re relative quality compared with other suppliers.

How many opportunities come close to this?