Wti Oil Etc Discussion Threads

[888icb] 25/4/2016 08:09

A good start to the week

[longsight] 25/4/2016 00:41

fx movement is a corrollory of the lo cu price / hi US$. So if cu [commodities generally] goes up, NAD will strengthen typically.

You also need to add in start cash.

Also Orion will imo assist - they have 25% of the equity & if didn't pull the rug before then will unlikely do so now.

imo, there may be scope for further drops in opex irrespective of the slight improvement in NAD [as per previous remarks on strip ratio]

[mcfly79] 24/4/2016 08:21

Hi all,

I’ve got a holding from a while back. I’ve been taking a look at the debt repayment position and would welcome comments.

As at 31 Dec 2015 the company had loans of USD 100m, being 8.6m of Tranche C and D loans and c.91m of Tranche B loan.

The Tranche C loan is repayable on 31 Aug 16 and the Tranche D loan is repayable in Dec 16.

The Tranche B loan repayment terms were renegotiated in December and the loan is repayable in quarterly instalments from 31 May 2016 to 29 Feb 2020 with the first two instalments being half the level of the remaining instalments. This equate to 3m due for the first two instalments and 6m each quarter thereafter. Therefore 12m is payable in 2016 (3 + 3 + 6) and 24m each year for the three years thereafter with a final 6m payment in Feb 2020.

This ties with the 31 Dec 2015 results which shows 20.7m being due within one year (being the 8.6m Tranche C and D loans and 12.1m of the Tranche B loan).

Therefore I make the loan repayments of principal broadly as follows:

2016: 21m
2017: 24m
2018: 24m
2019: 24m
2020: 6m

On top of this there will be interest to pay. Interest on the Tranche B loan is currently 9% per annum. Given the repayment schedule I think interest will be roughly as follows:

2016: 8m
2017: 6m
2018: 4m
2019: 2m

I can’t find details of the interest payments dates but these would normally be paid at the end of each quarter in which the interest accrues.

The company is currently generating a lot of cash based on the figures in the quarterly update but at the current copper price I don’t think the company will be able to meet the total principal and interest payments of c.30m a year for the next few years, plus central costs. A lot of the 2016 payments are towards the end of the year (6m Tranche B payment on 30 Nov and the Tranche D payment in Dec) and this may be when things get tight and need renegotiation.

Hopefully C1 costs can stay where there are or even fall as the stripping ratio falls to the predicted LOM ratio. That said the C1 costs came in so low in the last quarter in part due to the weakening Namibian dollar against USD. I’m always wary of banking on cost saving from fx movements.

[strummerjon] 24/4/2016 01:01

WTI producing and already guaranteed a substantial premium over the C1 costs per ton for the next six months ( a guaranteed amount which is roughly $200 less than the current price of $5110 per ton, which, even at that lower price, should lead to an operational profit for this year of c.$26,000,000 - all for a MC of c.$11.5m! ).
Yes large debt and interest costs, but easily covered, even at these comparatively low cu prices and the loan should be paid off in 5 years leaving another 6 years of mine life ( which should be capable of being extended with minimal drilling ).
I'm struggling with the apparent lack of interest in this share but expect there have been many who just lost faith, having been frustrated for so long waiting for management to get the show up and running, which does appear to be the case now.

[dixi] 23/4/2016 22:45

Take a look at AAU as a close to production suggestion.

[dilip40] 23/4/2016 21:15

o/t

would appreciate any other gold silver copper producers epic codes for further research heavy in wti thanks

[leedskier] 22/4/2016 17:21

There is an article on Bloomberg.Chinese investors have switched from shares and bonds to buying commodities.

[kingivor] 22/4/2016 16:10

Interest will come strummerjon - just a little patience will see Weatherley at circa 2p,

[longsight] 22/4/2016 15:41

copper up strongly at US$5075

[888icb] 22/4/2016 14:47

WTI off again and rising quickly

[ashbox] 22/4/2016 13:40

I think the 'hidden surprises' sprung on us by the previous management have probably made people wary and so a sustained performance is needed to restore the faith. Things are certainly looking up though.

[strummerjon] 22/4/2016 11:15

I remain surprised at the almost complete lack of interest in this share, compared with the likes of say, GKP!
After recent negotiations with its backers Orion, the company is guaranteed a price-per-ton of well in excess of their C1 costs for the next 6 months, which should enable it to comfortably meet both interest and capital repayments over the next 5 years of the loan.
The CU price is gradually creeping up ( currently over $5000 per ton ) from its lows and is forecast to be higher towards the end of the year leading to the potential for substantial profits.
It would appear that the company have finally managed to get its act together, they have done most of the hard work and overcome all those hurdles which beset explorers and those who have hit ' pay dirt ' but need then need further finances and licences to monetize the assets ( c.f. ARS ).
This should be good for a quick rise back up to 3p for the time being , unless there really are some hidden surprises.

[mcfly79] 21/4/2016 08:58

Hi Matt, I hope you're well. Things at WTI are certainly looking better.

Does anyone have an idea of the current total debt level (which I assume will now have peaked) and what the quarterly repayments will be.

Many thanks.

[longsight] 21/4/2016 07:51

interesting analysis from poster on iii:

Thanks Boff. I have spotted something in the latest RNS which seems to augur well for future C1 costs. The stripping ratio for the Dec quarter was about 7.4:1 but for the March quarter this increased to about 9.4 to 1. Despite this large increase in mining cost per ton of ore, overall C1 was substantially reduced. This augurs well because the 15th Dec RNS predicts a 'life of mine' stripping ratio of 6.5:1. If this is achieved, C1 should fall quite a lot further.

[strummerjon] 20/4/2016 17:11

$8.01million Market Cap. seems an amazing bargain.

[mattjos] 19/4/2016 09:30

I'd rather they try to stick to the schedule if they can. That would be a very strong statement.
Craig Thomas is well underwater with the stock he bought when he first joined the company and wont want that to persist.
I do thing we are starting to the see the back of the sub-1p days now.

[longsight] 19/4/2016 08:52

I think the best thing WTI cd do is to agree a rescheduling of the loan over the life of the mine rather than the current 5 years - especially given that Tschudi has now performed at above capacity & at below projected costs

[longsight] 19/4/2016 08:46

possibly a change in sentiment on copper outlook?

[strummerjon] 18/4/2016 11:41

This appears to be seriously undervalued at an MC of just $8.45m when they are due to make an operating profit of c.$26m this year alone and which should increase in the following years depending on the price of copper ( which appears to be at a low ).

Stock levels of copper on the LME have been falling relentlessly ( although it would seem that the Chinese have been keenly accumulating to take advantage of the low price ).

Copper is easily recycled but bearing in mind that electric car ownership is predicted to seriously rise in the next few years, whether through Elon Musk's Teslas or hydrogen fuel cell technology ( a record 60 million new cars were produced last year ) and these vehicles use twice as much copper as ICE ones, and that more and more electric storage systems will be coming on line, and that the world population which uses increasing amounts of electrical gadgets and needs housing ( which uses large amounts of copper ) is unlikely to shrink, then the demand for copper will increase.

It should be noted that many commodity conglomerates, although having sold off substantial parts of their businesses to pay down debt, have kept their copper assets even at very low and sometimes losing margins.

Yes, WTI have debt of c. $109m but the interest payments should be easily manageable and I calculate that at these current copper prices it should easily be paid off within six years and the mine has a minimum life of eleven years.

This was effectively priced to go bust until as recently as Jan 2016 and investors seemed to have given up the ghost from being repeatedly frustrated at the apparent inability of the BOD to manage the outfit and get on with the job.
Well it would appear that the new boss is going just that and the recent news would indicate the shares should be very conservatively valued at no less than 3p for the time being and then substantially build on that should there be no material adverse changes to the current situation.

[jdwag] 18/4/2016 11:28

Agreed. Even if they just maintain the C1 Costs and Production Tonnage with the price fixed at $4,912 the next quarter will provide cash in excess of $6.5m, that is before any other savings in C1 Cash Costs and further production unto to 20k tonnes per year, looks horribly cheap. So I’ve picked up more too this morning.

JD

[dixi] 18/4/2016 11:03

Looks like a steal to me - keep buying Mattjos - it seems to be working ;-)

[mattjos] 18/4/2016 10:45

fall this morning seems way over done so have been taking some more

[mattjos] 14/4/2016 13:20

Annualised circa $24-$25m operating profit on these sort of figures

[longsight] 14/4/2016 12:56

the progressive increase in output from the leach pad / drop in opex bodes well for the rest of the year

[mattjos] 14/4/2016 11:30

Craig is, thus far, proving a very competent CEO. establishing a pattern of over delivery which was long absent under Webster's leadership.
The company has gone from appearing completely knackered to now having significantly more than just a fighting chance.

The length of mine life is a big +ve here & to have got the costs down to this level so early on in the project is impressive.
Could be significantly more upside than just 3p as/when copper enjoy prices nearer $6,000+