ATH Resources Share Discussion Threads

[loafofbread] 22/5/2008 17:13

Another 1% gone to a good home by the look of things.

Lets hope our chart follows UKC sometime soon.

[sharpshare] 21/5/2008 20:42

Looks like our seller is Artemis. Accross all funds they are down from 3,954,675 ATH shares last reported on 19 Feb 2008 to 3,035,675 on 20 May 2008.

In the GBP800m High Income Fund ATH holdings reduced from 2,546,094 to 1,965,080

They seem to have had a policy of substantially reducing equity exposure in the main High Income fund from 27.9% of total assets at end of Oct 2007 to 19% of total assets at end Dec 2007 to 10.9% at end April 2008 (a reduction of 61% of the equity shareholdings). Looks like a change in strategy after dismal 9.5% fall in value of fund for year to 31 March 2008 to stem losses and stop redemptions. Also appear to have net client redemptions in month of March 2008. This used to be a very popular fund and they had huge subscriptions in the prior year. The unit price bid offer spread is a whopping 7%. (At end April 2008 bid 74.56, offer 79.81)Great fees for Artemis and associated brokers. Artemis must be making a fortune out of these fund investors. Need lots of cash to pay for the constant newspaper adds about the hunting, fishing, shooting chap in tweed jacket with shotgun bagging the profit birdie. To be fair this fund had a good record until about a year ago so maybe they "earned" their money?

It appears that the ATH sales could be mainly due to change in asset allocation policy, redemptions and not much to do with ATH itself, (basically an indiscriminate seller) although it is still possible they know something about ATH which others don't.

Great news for those trying to pick up cheap stock, bad luck for those trying to sell out at good price. It is not a bad strategy buying cheap stock from distressed forced sellers.

In last 15 trading days according to ADVFN trade stats there have been about 1,475,000 buys and about 95,000 sells. There appears to have been a constant big seller at 200p. In the absence of this big seller the ATH share price would probably have been higher. At least the price has not been trashed in the rush to get out.

Fund mgt fees are what a fund mgt company cares about. If investment policy needs to change to attract or retain fees then that is what happens.

Anyone else care to do a little digging...


With the latest all time high spot oil price of USD 134 per barrel and the big rise in long term forward oil prices expect coal prices to go even higher and the shares to pop upwards sooner rather than later as the seller's stock is sold out or the fund manager realizes the facts have changed fundamentally since his original sell order assuming he still has any discretion. Better still a rival fund manager could bid for the rest of this line of stock if it is still on sale. Maybe a UK based coal fired power station would like to buy out ATH to lock in cheap secure supplies. A certain rival UK coal miner may also be drooling over this forgotten coaler.

Now if the company were to announce a new contract with sales prices double the historic contract rate...

[loafofbread] 21/5/2008 16:17

Let's hope Artemis put a cork in it, or at least get up to speed on their disclosures!

[loafofbread] 21/5/2008 14:16

Nice buying again.

[spaceparallax] 21/5/2008 08:45

SS,

I think that most here agree with you - as I've said before, it's just the matter of securing reserves to keep the gravy train going.

[sharpshare] 21/5/2008 08:32

At 200p these shares are very cheap.
Just a matter of time until other investors share the same view.

historic costs about GBP25 per ton
spot price now about GBP80 per ton
planned production next year about 2.6m tons
potential gross profit about GBP 143 million (after older price contracts expire)
market cap about GBP 80 million
If dividend cover remains at 1.1, div yield could be 100% on current share price in a few years time.

Forward contracts of 4.4m tons announced in finals (at prices higher than historic prices but much lower than current spot), mined about 800k in H1, about another 300k so far since end of H1 leaving about 3.3m to go which is about another 1.25years worth of planned production.

ATH should be receiving spot now for most domestic and industrial users.

Drax has just issued a favourable update. Basicaly the spot wholesale electricity price has shot up but most of coal price for the remainer of the year is at low contract prices. When they start buying more coal at spot or new contract prices they may get squeezed. Drax burns 9.8million tons of coal per year to keep our lights on. Most of the UK coal burn is now imported. Spot price in Amsterdam now about USD 156 per ton. Cost to Drax of transport from coast is about USD 18 per ton. Baltic Dry Index now at record prices which is all very good news for local producers of coal. UK Coal doing well.

[loafofbread] 19/5/2008 14:16

Bloody big iceberg.

[sharpshare] 19/5/2008 09:23

It appears that there is an iceberg seller soaking up all the buys in the last few weeks. When buying interest picks up the seller should melt away.

[sharpshare] 19/5/2008 09:17

No momentum traders here yet.

[sharpshare] 17/5/2008 15:08

25.03.08 :+1.5, (191.5) Evolution Securities has initiated coverage on ATH Resources PLC with a 'buy' rating and 350 pence price target.

[sharpshare] 16/5/2008 13:36

New record price for coal at USD 151.50 per ton in Rotterdam.
Which is about GBP 78 per ton and is now more than double ATH sales price last year. New record Baltic Dry Index value which means it is now very very expensive to import coal from far away places like South Africa.
I see big upside potential here.
UK Coal starting to move nicely.

[jonwig] 14/5/2008 14:33

Quite, Matt. I don't know.
Also, I haven't looked at their clean-up business in enough detail yet.

[wassapper] 14/5/2008 14:33

jonwig - ebg overvalued compared the ATH on a pe basis. But we need more reserves.

[matt] 14/5/2008 14:29

Surely buying reserves becomes more expensive too. Are they sat on any resources that could be amended up with expanded drilling?

[jonwig] 14/5/2008 12:57

Sharpshare - I'd be wary of using the PE ratio in a situation where the earnings will stop in 7 or 8 years.
On the basis of current reserve estimates, that's what will happen.

That said, this could well be cheap on a DCF basis; I've just sold part of my EBG holding (Welsh coal miner) and the money may go here.

[sharpshare] 14/5/2008 12:42

ATH Contract price for 2008 around 1.30 GBP per Gj (per pg 19 of latest results presentation)
In the UKC results released on 18 April 2008 they estimate 2008 average realised prices of around 1.75 to 1.80 Gj based on Rotterdam coal price of USD 119 per ton. Price is now USD150. Sterling has weakened.
At current spot coal prices ATH turnover could more than double with most of the increase in turnover being profit.

Page 28 shows "potential" possible unproved reserves of around 21m tons.
Not clear how this figure is calculated.

Page 5 shows planned production of about 2.6million tons in 2008, 2.75m in 2009 and 2.9m in 2010. (subject to planning, taxes, contracts, railways, weather etc)

If production is 2.9m in 2010, spot is USD150, GBPUSD is 1.9425 then turnover could be GBP 224 million. If cost are GBP 25 per ton then gross profit could be GBP 152m. Forward PE could be less than 1.

H1 production already announced around 800,000 tons so interim numbers unlikely to be exciting. The excitement is in the higher spot prices and higher forward curve and increased future production.

Expect electricity prices in UK to go up substantially as most coal is imported that is used to create electricity. The big rise in gas prices will also help to keep the coal price high.

Mkt cap now at 200p is around GBP 80million. Cheap or not?
Nice dividend too.

Expect a rerating of this share price soon.

[loafofbread] 14/5/2008 11:58

Lets hope they do some deals then.

[spaceparallax] 14/5/2008 11:46

The reserves are my only concern.

[wassapper] 14/5/2008 08:52

Results due 10 June

[wassapper] 13/5/2008 11:09

loaf - I think you are right. Reserves is an issue. They can fix that by picking up some more licences, and no-one is restricting them to the UK. Not sure how much they are tied into domestic contracts at lower than world prices. They are proably looking for long term relationships rather than short etrm high sales prices. However, I think if that is the case they are wrong, given the forecasts for coal prices. Coal price is like iron and oil - denial as you say yet latter two continue to rise in price.

[loafofbread] 13/5/2008 09:28

As far as I can see there has been a definite increase in buying interest over the last few weeks. Not matched by any share price increase, so I asume there must be a line of stock on offer.

The recent trading statement was very upbeat so I don't expect any shocks with the results on the 10th. Happy to add at this level.

Looking at the annual report they have high hopes for the regeneration side, with a number of prospects being pursued. about time we heard some more about this. If they get a deal in Australia, which they mention I would expect the share price to react.

Any deal that adds to reserves (4 years is not enough IMHO which may be a reason for the low rating) is going to boost the share price

[notanewmember] 12/5/2008 17:40

Denial phase - that coal prices will fall back and commodities cycle is over. I m not in that camp.

[sharpshare] 12/5/2008 13:41

The price of coal has roughly doubled in the past year yet the share price has hardly moved.
May Rotterdam coal is high at about USD149 per ton.
2.5m tons at USD149 per ton is USD372m
If they can get spot prices of around USD149 per ton and if they have operating costs of around £25 per ton and if they can sell at 2.5m tons pa then the operating profit could be GBP128m pa. Looks cheap to me. What have I missed? Fixed sales contracts at lower prices will slowly fall away so higher spot prices can be achieved. Forward sales were reported around 4.5m tons 6 months ago. The share price is cheap relative to the high coal price. If the coal price remains unchanged this company should make substantial profits when forward sales are cleared.