Capital Share Discussion Threads

[shanklin] 19/8/2021 07:41

Have submitted the following question to the 9 a.m. sharecast.

"What buy and sell criteria do you apply to the composition of your share portfolio?

Obviously some companies you have previously held (and may still hold) shares in, have had excellent drilling results, and significant share price moves, in recent months but shareholders currently have no idea whether you have manintained, reduced or divested these holdings."

[shanklin] 19/8/2021 07:34

Notes 14 and 15 are worth a read re CAPD's share portfolio. Worth over £22m at 30-Jun.

Some wiser than me may be able to discern something about the composition of CAPD's current investments.

[rivaldo] 19/8/2021 07:29

Absolutely terrific results - if you double H1's basic 6.7c EPS, as seems likely at minimum, then that's around 13.4c EPS for the year for the core business alone, i.e around 9p EPS.

Then you add in the investment gains on top.....plus the huge tangible asset back-up value from rigs, share portfolio etc.

Terrific rig utilisation rates - the best since 2012.

Plus "incremental revenues of $235 - $260 million over the next four years" from Sukari.

Plus an H1 divi up 33% to 1.2c.....

There's too much to list, but this share price is just crazy cheap, n'est-ce pas?

[lord gnome] 19/8/2021 07:21

That reads well, doesn't it? Just checked on Stockopedia and the market was forecasting eps of just 10.1 cents for the whole year. We have almost achieved that in the first half with investment gains. Could we pencil in 20 cents for 2021?

[smithie6] 18/8/2021 15:57

ooh

that seems to have moved the price up a little bit !

[smithie6] 18/8/2021 15:00

is it tomorrow for results ?

[rivaldo] 18/8/2021 07:19

Further successful drilling for CORA announced this morning - and more activity for CAPD's rigs:

EDIT - thx Adam, the thread header post has been updated for the new Aya Gold shareholding.



"Update on drill programme progress

● 328 holes drilled totalling over 36,648m from start of the campaign to 12 August 2021

● The Capital Drilling deep RC rig has been moved, following completion of the P2 deeper holes at Selin, to target follow-up on the high-grade intercepts reported at Zones A, B1 and C, and as part of the completion of the P2 resource consolidation process.

● The GEODRILL KL600 RC rig will complete the southward progression of the Selin P2 shallow resource consolidation drilling.

● The Capital DD rig is moving south to complete geotech-metallurgical programmes at Zones A, B and C prospects."

[adamb1978] 17/8/2021 12:12

Hi Danger

Yep, the 'business development' point of view was what I initially said above on the stakes and more valuable than the stakes per se. Adding a few million $ to the bottom-line from those relationships, which even if you just put a PE of 10x on it, adds far more upside than the possible increases in the value of the stake in those companies.

Adam

[dangersimpson2] 17/8/2021 11:59

The equity stakes have been a great success from a business development POV. In 2021, CAPD have had active drilling campaigns with 9 of the 11 companies that we know they have equity stakes in, and they didn't drill for Golden Rim due to a lack of rig availability and Tanga are soil sampling at the moment rather than drilling.

The listed stakes are worth just over $30m, despite some selling down of some of the stakes, (although some cash has been put back into PDI.)

The unlisted, which is mainly Allied Gold, was valued at $10.9m but may well have increased in value. Allied are looking to list in London later this year so we may well get a market value for that going forward. They are looking to raise at least $500m to fund their expansion plans which suggest that CAPD's 2% (IIRC) cannot be worth less than $10m and is probably closer to $20m (assuming the raise & listing goes ahead as planned).

CAPD isn't an investment company and shouldn't be valued as such, but also $50m isn't immaterial to a $210m market cap company.

[adamb1978] 17/8/2021 08:27

By the way, for whoever maintains the header: I think the Aya Gold holding could be updated to CAPD owning around 41k Aya shares.

From the press release:
"The final exchange ratio is 0.010601 of an Aya common share for each Algold share. Algold shareholders will receive the resulting Aya shares without action on their part."

So the 3.87m Algold shares were exchanged for around 41k Aya shares.

hxxps://www.newswire.ca/news-releases/aya-gold-amp-silver-announces-closing-of-the-algold-transaction-increases-eleonore-m-amp-i-resource-by-127-launches-tijirit-feasibility-study-811400413.html

Adam

[adamb1978] 17/8/2021 08:21

Hi otemple

I have the stakes at £21.8m in my spreadsheet based on latest share prices so 14% of market cap. Unless there is a view that these are drastically undervalued by the share prices of the individual companies, personally I see them as an add-on the value the business rather than fundamental driver but we all see things differently!

Adam

[otemple3] 16/8/2021 22:27

Adam, the investments are worth c.20% of the market cap so a 50% increase would be fairly significant in my eyes. I do agree there is a strategic element to this but the stakes are very significant to the value on offer here and showing a plan or strategy towards these may help that value to be realised. Will be very interested in what they say this week as values both during and particularly post H1 have increased quite significantly.

[adamb1978] 16/8/2021 21:38

To me the value of the holdings is somewhat marginal to the investment case given that even if the value of those holdings goes up by say 50%, its only worth a few pence per share on the CAPD share price, and you can also debate whether or not the market actually recognises the value of those investments (which also partly goes to Shanklin's point about them not being well disclosed).

However the value in my view about the investments is more linked to whether those relationships helps CAPD win business which drives its P&L, and I think its harder to get a grasp on that. Perhaps you can with some forensic work over time, but I think they could be clearer on the link between the holdings and business-as-usual.

All that said, I still think CAPD are good value. If I look forwards 2-3 years, my base case for the share price is 115-120p to which you can add another 10%-15% for the investments and another say 10p in dividends over 3 years (all in round numbers). I dont think this will go up 10x or even 3x, but as a solid investment which should deliver a double-digit return at low risk, I think its a good bet,

Adam

[shanklin] 16/8/2021 13:38

It would be interesting, and appropriate, for us to be given more detail of the value of CAPD's holding in quoted securities.... ...and indeed as to what those holdings currently are, so long as that does not prejudice CAPD's ability to win follow on work.

[dangersimpson2] 16/8/2021 12:47

It is unknown since CAPD went below the notifiable threshold so are not required to make any disclosure if they had sold.

[deanowls] 16/8/2021 12:45

Do we still have shares in Cora? They are motoring also.

[dangersimpson2] 16/8/2021 10:04

I'm pretty sure it is. Taberkole is led by Marvel Gold and CAPD are the largest equity holders in Marvel. Although Marvel have been doing a combination of AC, RC & DD drilling, so CAPD may not have had all types of rigs available for them given the tight market.

[shanklin] 16/8/2021 07:21

Presumably this is CAPD?

[smithie6] 13/8/2021 13:25

the graph is ok

60p to 80p in 2021

not bad

[fozzie] 13/8/2021 10:41

I'm guessing people selling out of boredom, lack of upwards movement. Certainly a tough hold here. All these positives and the share price just not reflecting them.

[kaizenkid] 12/8/2021 20:00

Good numbers from Geodrill confirming positive industry trends “We closed the first half of 2021 with outstanding momentum underscored by strong financial and operating performance. Year to date, we grew revenue 58%, net income 183% and EBITDA 101%,” said Greg Borsk, Chief Financial Officer at Geodrill. “Strong market fundamentals and robust demand for our services provides the foundation for solid revenue performance for the remainder of 2021

[rivaldo] 12/8/2021 07:19

Yet another client announcing good exploration results and more drilling this morning - Altus Strategies include a nice plug for CAPD in their RNS:



"Diba Project: Drilling Programme

The planned drilling programme at Diba includes up to 7,500m of Air Core ("AC") and 12,500m of RC drilling. To date, 2,989m of AC and 1,803m of RC drilling have been completed. The programme is due to recommence after the current rainy season, which ends in September. Capital Drilling Limited has been contracted to undertake the balance of the drilling programme. The programme comprises 7,000m (46 RC holes) in and around the Diba Deposit, testing potential down-dip and on-strike extensions, as well as infilling areas to increase the resource confidence. Approximately 5,500m (36 RC holes) is planned, to define and extend mineralisation at the Diba NW prospect. The drilling programme will also test the potential to link the mineralised zone at Diba NW to the current Diba Deposit. In addition, a number of priority prospects, located within 3km of the Diba Deposit, will be tested by AC drilling."

[dangersimpson2] 11/8/2021 14:49

The company has already announced that results are the 19th August this year in the recent trading statement.

In other news, Shanta announced drilling results this week:

These aren't from CAPD rigs but they say:

Two drill rigs are currently active at the Isulu and Bushiangala deposits in West Kenya, with a third rig mobilised and now expected in August.

CAPD mention SHG as a contract win in the last trading statement, so this will be the CAPD rig arriving.

They also say:

Shanta is on track to complete approximately 35-40% of total planned drilling at West Kenya by the end of 2021...

Phase 2 of the ongoing diamond drilling campaign...amounts to 75,000 m of planned drilling and is due to be completed in Q4 2022.

So that looks like at least 18months work for the CAPD rig.

[smartmoney100] 11/8/2021 14:46

Half year results are next week mr doughnut. Thurs 19th