Caledonia Mining Share Discussion Threads

[joan of arc] 31/8/2018 10:11

Does anyone have an idea what is causing this price collapse?

[joan of arc] 24/8/2018 13:35

In that case it looks like a very very good deal.

[thechurch333] 24/8/2018 10:58

Looks a very good deal.

Remember Caledonia had written off the loan on their balance sheet.

Shares have fallen on minimal volume.

[joan of arc] 24/8/2018 10:44

To which the market shows no reaction!

[stemis] 24/8/2018 10:23

Caledonia acquire another 15% of Blanket Mine for $16.667m. Values mine at $111m (current market cap, including cash, is now $80m). Looks like a sensible move. Gives CMCL majority control of mine and most of consideration is cancellation of loan that was created when shares originally 'sold'.

[thecoyone] 20/8/2018 14:23

Might get back in here shortly.

[joan of arc] 20/8/2018 11:24

MM games or novices panicking? This will be back over 600p soon enough.

[stemis] 19/8/2018 20:44

The investment in new mine shaft has been known about for years and is fundamental to a step change in profitability here. It would be short terminism of the worst kind to use the cash for a few dividends.

[thecoyone] 19/8/2018 17:35

The new mine shaft is draining cash that could be used for both exploration and dividend increases.

They decided to deepen the shaft more than was initially implied, whilst this will eventually benefit future earnings it is eating into cash, the drop in the gold price does not help.

Then add into the mix the poor safety record at Blanket, is it 3 deaths now, I think so.

The political situation in Zimbabwe is muddled to say the least, not so positive as initially expected.

There is also a new kid on the block on AIM, a maiden dividend payer, namely Anglo Asian Mining (AAZ) that is quite literally throwing off cash. The prospective yield is closing in on 5%, earnings growth looks better over the next 24 months than CMCL.

I wonder if some investors are switching, I have.

[joan of arc] 19/8/2018 16:59

I saw the summary in Money Week. You are right SteMIS. Typical half baked analysis from IC.

[stemis] 19/8/2018 14:43

Sell recommendation in IC. Poor analysis but it'll have some impact at the edge.

[joan of arc] 17/8/2018 15:21

Price whacked again! Ouch.

[stemis] 13/8/2018 10:21

A few director buys there...

[stemis] 09/8/2018 16:26

It's often hard to know what drives the share price in the short term. Cashflow was weak but that was due to working capital movements which hopefully should reverse. Production was known since July and the company reiterated its full year and 2021 forecasts.

[a2584728] 09/8/2018 14:30

Price whacked. Am I missing something

[3800] 20/7/2018 14:16

thanks for the clarification thechurch333

[thechurch333] 19/7/2018 22:33

3800 - Caledonia have confirmed a rights issue will NOT be happening. The proposed rights issue in question was in any case to be done by the Blanket gold mine and NOT by Caledonia. It was basically a way of Caledonia regaining over 50% control, but now the indigenisation rules have been relaxed Caledonia is trying to buy out some of the other shareholders in the Blanket mine instead and gain >50% control that way. I suspect we will be hearing more news on this in the near future.
Hope this helps.

[3800] 19/7/2018 15:16

I have just got round to reading the brokers note posted by SteMis. This bit

With the Zimbabwean government relaxing indigenisation requirements for gold miners, the Blanket gold mine is to undertake a US$4m rights issue underwritten by CMCL’s Zimbabwean subsidiary. Since this time we have seen CMCL announce that Blanket will receive an increased Export Credit Incentive (10% cf 3.5% previously). As a result we consider the rights issue may not be required. However, if this rights issue takes place it would likely leave CMCL again owning a controlling c 51% share of the Blanket mine.

Doe's that mean the we may be seeing a possible rights issue or have I misunderstood it?
3800

[joan of arc] 12/7/2018 09:50

CMCL are getting careless

[thechurch333] 21/6/2018 15:22

Stemis - 100% agree - again!

[stemis] 21/6/2018 15:17

It may seem optimistic but I'll just repeat the post I made last month:-
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SteMiS 1 May '18 - 13:46 - 423 of 435 Edit

http://www.edisoninvestmentresearch.com/research/report/caledonia-mining738695/full

DCF valuation = 911p.

Interesting that their cashflow projections show that by 2021 they will have net cash of $85.3m and an ebitda of $76.6m. Current market cap is $99.7m. If they hit these numbers can't see the share price in a couple of year as anything other than at least 3 or 4 times the current level.
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Market cap is now $93.3m. Current dividend of 6.875c per quarter costs a paltry $2.9m.

[thechurch333] 21/6/2018 10:54

New presentation on the company's website given to the Natural Resources Forum yesterday. Well worth reading. Talking about options for deploying cash-flow. Openly talking of a six-fold increase in the dividend by 2021 if no better opportunities come along.

[thechurch333] 20/6/2018 14:03

SteMis -agree 100%

[stemis] 20/6/2018 13:56

What is specifically attractive about CMCL is that they are in a great place to take advantage of the improving political situation in Zimbabwe. They have on the ground knowledge and capability, a cash cow there and, I imagine, government contacts. Zimbabwe need development of their mining to bring tax revenue and foreign currency. I'd rather CMCL did that than diversify into other countries. If I want diversification into other countries I can do it myself.

[fredfishcake] 20/6/2018 13:28

I agree, this lot are probably a better bet that their predecessors, and CMCL did well under their predecessors anyway. I'm a long way from saying that this is a bad investment, just that Zimbabwe is on the riskier end of the spectrum. If CMCL had the opportunity to diversify into other countries, it would reduce the overall risk.