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25/1/2021
08:41 | rivaldo: News from CAPD client Altus Strategies this morning that they've been awarded "a number of gold exploration licences" in Egypt.
Since CAPD (1) already have substantial work from Altus, and (2) have their major client (CEY) already located in Egypt, there must be a strong likelihood of this new work coming CAPD's way:
Https://www.investegate.co.uk/altus-strategies-plc--als-/rns/award-of-gold-exploration-licences-in-egypt/202101250700076829M/
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21/1/2021
10:29 | rivaldo: FYI I came across this summary of CAPD on Reddit from last week from a holder, which seemed to trigger a bit of interest judging from the comments:
Https://www.reddit.com/r/UKInvesting/comments/kxvxkm/seriously_undervalued_capd/
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18/1/2021
18:25 | yasx: Rivaldo,
One can't place the blame on the brokers - if the Co. wanted to flush out the recent seller by adopting the various strategies that have been outlined on here, they could have. Whatever instructions they provided to their broker at the time of orchestrating the placing, well, they ought to have gone about it in a far more productive way.
As regards the other investments, yes it is true to point out they are a significant contributor to NTAV, however, in fairness, I doubt anyone is investing in CAPD due to considering it a sort of investment fund or vehicle. It would be better if they sold or reduced a few of these to put the cash to buying back the shares and getting rid of the seller(s).
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14/1/2021
09:32 | rivaldo: Tamesis Partners have now increased their target price significantly to 127p.
They conclude that CAPD are "bewilderingly undervalued".
They see a massive 15.7c EPS for next year, i.e 11.6p EPS when the new Centamin contract kicks in.
They have 12c EPS for last year, i.e 8.9p EPS, including $10m of investment gains from CAPD's equity portfolio. Without those gains they have 6.7c core EPS, i.e 5p EPS at $1.35.
For this year (2021) they have 10.2c core EPS on both metrics, i.e 7.6p EPS. That's a P/E of only 8.2.
Https://www.tamesispartners.com/research-portal#/portal/tamesis-partners/research/f2e7168c-a7ce-4949-b373-e25c6c30d8e4
"Leaving the company bewilderingly undervalued
Capital Ltd now has numerous sources of income ranging from their traditional drilling contracts through the burgeoning MSALabs business through to the new mining services operations. Theinvestment side of their business also recorded its best year ever in 2020. They are now spread across Africa having successfully entered West Africa c.2 yrs ago.
As per this morning’s announcement trading conditions are “extremely positive”. So we don’t understand why the market is according such low valuation metrics to the business. The shares are trading on EV/EBITDA of just 2.6x and 2.0x for 2021 and 2022 respectively –equivalent to a discount of 45% and 54% to its peer group (none of whom are delivering the same scale of growth) likewise PER multiples of 8.2x and 5.4x. In addition,we estimate the company should pay a dividend of 2.4cps in 2021 and 2022, equivalent to a yield of 2.9% (with clear upside to our 2022 forecast).
As a consequence of the above we are raising our 12-month Target Price to 127p.This target price is calculated by applying a 5x multiple to our 2022E EBITDA of US$66.2m, and we believe the market will start to price this in by June this year."
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30/12/2020
23:01 | rivaldo: Excellent summary ds2, thanks. And worth pointing out that Tamesis Parners had CAPD on a P/E of just 5.4 for 2021 at 65.3p prior to the new Centamin contract - so even assuming no immediate benefit from that contract, and the placing dilution, CAPD would still be on a rather low multiple considering its excellent prospects and asset backing (including a cash-rich Balance Sheet and the investment portfolio).
I also note that Hastings has today written a very good new summary of CAPD on his web site which which should help spread the message further:
Https://martinflitton1.wixsite.com/privatepunter/post/digging-for-returns-with-capd-30-12-20
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30/12/2020
16:19 | rivaldo: Er....I posted this only recently from the news wires re Berenberg - note that they've raised CAPD's earnings substantially as a result of this "transformational" deal, and have a Buy and a 103p target:
"Berenberg have today reiterated their Buy and 103p target for CAPD per this from the news wires, and have raised forecasts as follows:
"Berenberg reinstated coverage of drilling services firm Capital, believing its recent contract for Sukari gold mine to be "transformational".
The bank kept its Buy rating and 103 pence price target. Capital shares were down 0.8% at 59.01p in London on Wednesday, down 10% in the year-to-date.
At the start of December, FTSE 250-listed gold miner Centamin said it had awarded an contract for waste stripping in the open pit at the Sukari gold mine in Egypt to Capital.
Mauritius-based Capital said the new open pit waste mining services contract, together with the extension and expansion of an existing drilling contract at Sukari, will bring USD235 million to USD260 million in incremental revenue over the four years starting January 1.
Berenberg said the contract offers the firm its first step into a USD1 billion-per-year contract mining business in Africa, not only providing a material revenue boost but also a springboard for growth with new contract wins.
The contract mining business diversifies revenue from drilling to other mine services and offers scope for a multiple re-rate in line with full-service contractor peers, the German bank believes.
After raising USD40 million, Berenberg thinks Capital has more than enough financial firepower to fund its Sukari commitments, and this should offer flexibility to tender for new contracts. This would add further top-line, earnings and free cash flow growth.
The broker lifted its sales estimate for 2021 to USD189 million from USD149 million previously, and for 2022 lifted its forecast to GBP226 million from USD149 million. Berenberg's earnings before interest and tax forecast for 2021 was bumped up to GBP29 million from GBP25 million, and for 2022 to GBP36 million from GBP25 million.
"We think 2021 will be a transformational year for Capital and believe there is meaningful share price upside; we remain Buy-rated," said Berenberg."
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23/12/2020
08:49 | rivaldo: Good news this morning from CAPD's client HUM, where the company has (1) extended its drilling campaign at Yanfolila, and (2) is "finalising our 2021 exploration and drilling strategy not only for Yanfolila but at our new Guinea gold project, Kouroussa".
Both of these projects utilise CAPD:
Https://www.investegate.co.uk/hummingbird-res---hum-/rns/yanfolila-exploration-and-drilling-update/202012230800026517J/
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03/12/2020
07:10 | shanklin: No surprise that institutions being given free money were keen on the placing. Given CB's malign influence on the SP, the placing price is farcical.
You would have thought CAPD could have made this available to private investors.
Despite all this mismanagement of the share price by CAPD, through not buying out CB when they had the cash to do so, the share price should move up from here.... ...once all the chancers who took part in the placing have sold out for a quick buck.
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29/7/2020
21:56 | rivaldo: You've misjudged my rubbish techie skills deanowls :o))
Nice mention for CAPD in today's monthly SIF portfolio review on Stockopedia (what does SIF stand for?) - CAPD are a core holding:
Https://www.stockopedia.com/content/sif-july-review-gold-price-provides-a-welcome-boost-capd-hat-bhp-645003/
"Capital (LON:CAPD)
(Original coverage: 02-Jul-2019)
This is the AIM-listed gold mining services contractor formerly known as Capital Drilling. It’s been in the portfolio for a full year now, and has been covered in several previous monthly reviews (April, May amp; June).
As I’ve discussed already, I’m having to fight against my instinctive desire to take a profit here. The shares are now at the highest level seen since 2011:
Luckily my rules are on hand to guide me. Capital continues to look affordable, with decent growth prospects.
P/E ratio (f) : 8.9
PEG ratio (f): 0.6
EPS growth (f) : 16.4%
Dividend yield (f) : 2.72%
Quality metrics are impressive, too:
Return on Capital : 18.4%
Return on Equity : 12.7%
Operating Margin : 14.49%
The shares still pass all of my screening rules, except for the lumpy spread, which I don’t see as a reason to sell:
So far, this position has delivered a total return of more than 55% including dividends. I’ll continue to hold the shares for another month."
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21/5/2020
08:15 | rivaldo: Latest forecasts are:
- year to 31/12/20 : 9c EPS, $28.9m EBITDA, $16.6m PBT
That's around 7.3p EPS this year, giving a P/E at 60p of only 8.2.
Tamesis Partners "value Capital Drilling at 99p/share, and maintain our target price of 100p. This represents 5x forecast 2020 EV/EBITDA of US$28.9 million"
Quite apart from excellent trading prospects as per the recent Q1 trading update:
Https://www.investegate.co.uk/capital-drilling-ltd--capd-/rns/q1-trading-and-covid-19-update/202004160700048535J/
CAPD also has substantial tangible asset backing against its £79m m/cap at 60p of (as at 31st December 2019):
- $4.4m net cash
- $12.5m of investments, split roughly evenly between publicly quoted and private companies
- $52.9m of property, plant and equipment, mostly drilling rigs
CAPD provide services almost wholly to gold producers, with very little exposure to more cyclical gold exploration. It's been unaffected by COVID-19, with all of its gold producing clients operating normally.
The gold price is as I write at multi-year highs at around $1,740 and is forecast by most to stay at high levels for some time to come.
CAPD's non-drilling services are also growing fast, including a first mining services contract for Allied Gold recently commenced covering exploration, grade control and blast hole drilling, mining equipment hire and service, and management services. CAPD also provide mineral analytical services as well as maintenance services. Non-drilling revenues were 12% of total revenues in Q1 2020, up from just 4% in Q1 2019.
Since 31st December 2019, CAPD's investment in Predictive Discovery on the ASX has rocketed. CAPD invested $350,000 at 0.009 AUD. They own 90m shares in total, or 14.69% of PDI. At the current 0.074 AUD quote this is now worth $6.7m AUD, or around £3.6m.
CAPD's investments of which I'm aware include:
- Predictive Discovery (PDI:ASX) - 90m shares worth £3.6m @ 0.074 AUD
- Cora Gold (CORA: London) - 8.7m shares worth £610k @ 7p
- Golden Rim Resources (GMR:ASX) - 76.9m shares worth £260k @ 0.006 AUD
- Arrow Minerals (AMD:ASX) - £450k (110m shares) +options invested at 0.01 AUD, now trading at @ 0.006 AUD
- Firefinch Ltd (FFX:ASX) - 9.5m shares, cost A$900k plus 5.625m options @ 0.015 AUD, now trading at 0.009 AUD (formerly Mali Lithium)
- Tanga Resources (TRL:ASX) - 13.3m shares, invested at 0.03 AUD, now trading at 0.019 AUD
- Algold Resources (ALG:TSX) - 3,874,692 shares (14.25%), now trading at 0.13 CAD
- Awale Resources (ARIC:TSX) - 8,333,334 shares (12.18%) invested at 0.09 CAD, now 0.1 CAD
- Desert Gold (DAU:TSX) - 6,200,000 shares (5.7%), trading at 0.17 CAD, worth £620k
- Marvel Gold (MVL:ASX) - 22,793,083 shares, trading at 0.052 AUD, worth AUD$1.2m (formerly Graphex Mining)
Current customers include AngloGold Ashanti, Acacia Mining, Algold, Barrick Gold, Centamin, Khoemacau, Kinross, Rakita Exploration, Resolute and Tanga Resources.
Https://www.capdrill.com/about-us/at-a-glance
"At Capital, we provide full service drilling solutions to customers within the global minerals industry, focussing on the African markets.
Our drilling services include: blast hole, delineation, directional, exploration, grade control and underground drilling.
Our range of ancillary services includes: directional software; shot loading and firing; surveying and geophysical logging; mineral analytic services; and on-site safety monitoring systems."
"Capital Drilling is one of the largest diversified drilling companies globally. Our extensive fleet enables us to provide drilling services across all phases of the mining cycle, from greenfields exploration to mine-sites, in both surface and underground mining operations. "
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PLUS1
