Caledonia Mining Share Discussion Threads

[gfrae] 07/2/2014 09:55

I'd be very happy that I had 30 pps in my pocket!!!!!

[gwr7] 07/2/2014 08:25

Let's say they hand out all their cash to shareholders then gold drops to $1000/oz as many expect. What would be your plan then?

[gfrae] 06/2/2014 15:06

£15m of cash held outside Zimbabwe yielding mext to nothing,could presumably be handed back to shareholders ie approx 30p per share.
The profit would presumably be almost the same,they could therefore continue to pay the same dividend,resulting in dividend payouts of about 25%!
Why dont they hand cash back to shareholders or use it to buy thier own shares!

[gwr7] 06/2/2014 12:33

I'm slanting it more towards diversification. I think they need to go to whoever keeps screwing them over in Zimbabwe and say look, we've now got asset x in country y. That's where our investment focus will be going forward and you need to start playing ball if you want us to continue working here to the benefit of your indigenous hangers on who have 51% of our assets.
As for "the all in costs at $1200 gold mean they make little to no profit", my point is I would back CMCL management to drive down costs and increase profitability in that hypothetical scenario.

[drdre] 06/2/2014 09:42

I don't disagree but unless you want to use debt or dilution to finance an acquisition, which may mean the cessation of the dividend, the cashpile is nowhere near large enough to pick up a producing asset that would actually enhance value here IMHO.

How cheap do you think a producing asset can be picked up for? There may be numerous projects that could be picked up for $25m .

And if it is cheap, there will be a reason - either debt to service or as in the case of many, the all in costs at $1200 gold mean they make little to no profit.

There could be some mothballed / care and maintenance projects which have the infrastructure in place that would necessitate minimal capex to restart and they may be logical targets. However, in my experience, such projects do not always start up smoothly - I used to hold Kinbauri gold who picked up the Carles project which had been put on C&M but the owners. Orvana took out Kinbauri to acquire Carles but the anticipated costs to restart were higher than anticipated in the studies.

Sorry for the long posts but I often see acquisition as the holy grail for miners when in reality they usually present more head aches in the short and medium term.

[gwr7] 05/2/2014 22:07

There must be beaten down small producers in other countries where CMCL could leverage their skills. They have proved they can run a mine at low cost under adversity and I would support them in a turnaround scenario. That's what I was thinking of, not a high risk/high cost punt on a developer or explorer. Just a thought as the current single mine in a single dubious country isn't cutting it. As you say, on paper the company has plenty going for it though it seems little appetite from the directors for their shares, presumably due to the ZG taking an ever increasing slice of the cake.

[drdre] 05/2/2014 20:51

I've been in and out of CMCL before. I don't think I've ever seen a fundamental valuation based on cash generation, cash in hand and the dividend as you have here.

They have over £15m in cash (Caledonia is debt-free and at September 30, 2013 had gross cash of over $25m outside Zimbabwe) so the business is valued at just £4m.

The dividend of 6c (3.3p) annually currently equates to a yield of around 9%!

All in cost is under $1000/oz, meaning $200 per ounce profit, or $98 to the shareholders. At 48k ounces, that is $4.7m in profit annually.

I agree that the undervaluation must be solely due to the Zimbabwe factor.

I keep looking over my notes on this and say to myself that it must re-rate someday. Even if not, the dividend yield makes it very tempting.

I could not find the current mine life for Blanket. I know the current resource is being expanded underground but that could also be a factor in the undervaluation.

I still watch and do not hold here. Diversification may be the key but even though there are a number of beaten down companies worldwide possessing fantastic projects, you need the cash in the bank to cover Capex these days. I would not see the point in wasting the cash pile to acquire a resource that needs 10s or 100s of millions to develop. There are already too many producers who have been hammered who also have debt to service.

Like you can see, I have no real clue here. Although I am tempted to pick up a bunch of these in my SIPP for the dividend. GL all.

[gwr7] 05/2/2014 19:40

I'd like to see evidence that they can fight their corner in Zimbabwe before I invest. Does MWA comply with indigenisation? No. Has MWA announced gold marketing arrangements on worse terms? No. The CMCL directors are looking like a soft touch and I suspect the movable feast which is currently moving only in the direction of the Zimbabwean government is what is putting folk off. Personally I think they could do with some diversification as well as growing a pair.

[joan of arc] 04/2/2014 10:23

MWE. But I wouldn't particularly recommend it as they are not overinclined to either invest it or return it the rightful owners.

[stemis] 04/2/2014 09:02

Which stock is that?

[joan of arc] 03/2/2014 16:37

gfrae, spot on. That's why I bought. However it's emerging markets, a gold miner and the markets are also worried about tapering. Add in it's Mugabe territory and you can't give the stock away. One day the market will come to its senses.

I hold another stock where the net cash is worth 2ce the share price Ridiculous isn't it.

[gfrae] 03/2/2014 12:42

Is'nt this a bit too too cheap?. Kalaa Mpinga of Mwana says Zimbabwean gov't one of the easiest to deal with in Africa,and they have not had any problems with them.
If you take into account the $20m held in cash outside Zimbabwe,stock appears to be valued at about 1x earnings.

[lazygun] 31/1/2014 10:59

interesting that it's dropped on almost no volume. full year divy yield must be close to 8% now on current price

[338] 30/1/2014 08:22

Full payment has been received... less concern for now

[joan of arc] 28/1/2014 09:40

I am glad that no one is fazed by the latest RNS. To me it sounds like the first step in government interference again. Today 1.5 % rip off, tomorrow 3%.......

[gfrae] 14/1/2014 14:19

A little bit left behind?

[gwr7] 17/12/2013 08:47

RNS correction as expected.

[gwr7] 12/12/2013 11:45

I think it's more likely an error rather than an accounting exercise Joan.

[winston66] 12/12/2013 09:09

Mr MacGregor
12 Dec'13 - 08:59 - 3574 of 3574 0 0

I nip over the lawn when I'm coming to shag your lass ; )

[joan of arc] 11/12/2013 11:54

They are paying off their loan by in effect not physically receiving the dividend, it's just an accounting exercise. He also said that the $5.9m would drop to $3m next year.

[gwr7] 11/12/2013 09:49

Hello, just watched the video and I don't think the question on the $5.9m indigenous dividend is answered at all.

Mark's a very clear presenter and about 7 minutes in he says that the indigenous investors are sacrificing 80% of their dividend entitlements to pay back the $30m loan.

The $5.9m dividend is clearly far too high on that basis as their actual entitlement for that nine months would have been five times that or $29.5m!!!

[joan of arc] 10/12/2013 21:19

GWR7, watch the video in post 159 for your answers.

[gwr7] 10/12/2013 20:06

Looking at the cash flow statement for the 9 months to 30th September 2013, can anyone explain why a $5.9m dividend was paid to indigenous Africans? I didn't think they were supposed to get any cash until they'd paid for the 51% of the company that was handed over to them. This is ringing the old indigenisation/Zimbabwe alarm bells for me.

The fact that their dividend for 9 months is nearly twice what shareholders can expect over 12 months is also of concern. Any views?

[steffyloveshares] 09/12/2013 14:20

VIDEO INTERVIEW

Caledonia Mining increasing gold production and dividends

Mark Learmonth, Caledonia Mining (LON:CMCL TSX:CMCL), tells Proactiveinvestors says that the company continues to increase production and hopes to be able to continue to cut production costs. Mark also says that, with six-times cover, the dividend is very stable and makes for an excellent opportunity for investors.