Capital Share Discussion Threads

[rivaldo] 24/11/2022 08:26

Yep, great to see a non-exec buying $50,000 of CAPD shares relatively close to the year end. Which hopefully bodes well.

Announcing first thing today would have been preferable impact-wise as most wouldn't have even registered it coming so late last night.

[gleach23] 23/11/2022 18:36

Nice way to end the day - RNS of a 43.5k director share purchase announced at 18.15

[kaizenkid] 15/11/2022 08:53

ALS reported yesterday - the commodity testing division looks like its going very well. Helpful for MSA Labs. Nice little recent interview with CAPD CEO discussing what MSA is achieving in Canada here: hxxps://www.linkedin.com/posts/msalabs_interview-with-peter-stokes-ceo-capital-activity-6997771310009389056-TR4A?utm_source=share&utm_medium=member_desktop

"The commodity margin expanded due to price improvement and sample volume growth. The Geochemistry business had a solid sample volume growth, price improvement and a consistent mix of 60% majors and 40% juniors and there is positive medium- to long-term outlook"
"The division had a total revenue of $503 million with a strong organic revenue growth of 27%, underlying EBIT of $156 million and a margin of 31%, up 111 basis points versus prior corresponding period."
"The commodities division, particularly Geochemistry and Metallurgy are continuing to benefit from the strong demand for commodities and energy metals. Sample volume growth slowed towards the end of the period and this trend is expected to continue through the second half. However, growth is structurally supported over the medium to long term by an increasing demand from a broad range of metals, including metals that support decarbonization, electrification, transmission and storage of energy."
"Yes. So thank you. I mean we're still seeing our ability to push price in this environment and that continues. So we are still -- there is still high demand for capacity within our business. And up until last week, we were still pushing price and we don't see that easing up through the second half provided, there's still demand. And again, my personal view is that we should be able to push price through the end of this fiscal year."

[tole] 14/11/2022 18:42

https://www.fool.co.uk/2022/11/13/a-dirt-cheap-penny-stock-with-a-dividend-that-id-buy-today/

[kaizenkid] 11/11/2022 13:24

Good numbers from Geodrill: “Geodrill experienced growth in each and every financial metric for what is our best third quarter ever; record revenue, EBITDA, and net income on the back of continued strong demand in all
geographical locations for our drilling services,” said Greg Borsk, Chief Financial Officer of

Geodrill. “With this continued momentum in the third quarter, we remain on track for an
unmatched year in terms of Geodrill’s financial historical performance.”
“Our strategic decision to diversify geographically has been critical to Geodrill’s growth
trajectory. New long-term contracts with major exploration partners not only provides future
revenue streams but has also extended and solidified our reputation as a leading drilling service
provider beyond the borders of West Africa,” said Dave Harper, Chief Executive Officer of
Geodrill. “Now, Geodrill is better positioned than it has ever been, both financially and
operationally. At the same time, the demand for commodities continues unabated. This set of
circumstances, against a backdrop of global uncertainty that has roiled markets, creates a unique
investment opportunity. With an established business and impressive financial performance, we
believe Geodrilll is strategically positioned to create higher returns for investors than other
industry players”.

[rivaldo] 10/11/2022 09:04

Good news - Resolute Mining raising up to A$200m "to pursue a new open pit operation at Syama North" etc (where CAPD are the contractor):



"The Syama North expansion plans include drilling and test work to convert Resources to Reserves and completion of the Pre-Feasibility Study in Q1 2023 ahead of the commencement of a Definitive Feasibility Study in Q2 2023. Development of the Syama North resource is expected to provide ore feed for a low capex expansion of the Sulphide circuit to achieve economies of scale and reduce AISC per ounce."

Bad news from a week ago - "Firefinch can no longer continue to fund Morila SA to operate the Morila Gold Mine", so Morila's future must be somewhat in doubt at the least:

H

[rivaldo] 09/11/2022 11:43

The current list of major shareholders contains a number of major institutional holders these days - this lot (including Jamie etc) add up to almost 65% of the shares in issue:

Jamie Phillip Boyton 23,351,598 12.2%
Aberforth Partners LLP 21,381,827 11.2%
Allianz Global Investors GmbH (UK) 13,357,389 7.00%
Brian Rudd 12,500,158 6.55%
River & Mercantile Asset Management LLP 9,658,448 5.06%
Ruffer LLP 9,462,237 4.96%
Lombard Odier Asset Management (Europe) Ltd. 9,115,621 4.78%
Aegis Financial Corp. 8,685,227 4.55%
Chelverton Asset Management Ltd. 6,456,000 3.38%
FIL Investment Advisors (UK) Ltd. 9,821,714 5.15%

[rivaldo] 09/11/2022 07:11

Holdings RNS - looks like Fidelity International have been buying and are now major shareholders, with 5.15%, or 9.82m shares:

[rivaldo] 08/11/2022 07:17

FYI, whilst I was on hols Small Caps Life (Mark Simpson et al) sent out useful as ever commentary on the Q3 results. I like the comment that "their own shares remain a better capital investment than almost all the other possible capital investments they could make at this time"!

"Compared to Q2, the number of utilised rigs is down, but the average revenue per rig is up. The reasons given were as expected for this time of year:

"Fleet Utilisation of 77% in Q3 2022 was up 1.3% on Q3 2021 and down 9.4% on Q2 2022, due to typical seasonal weakness, particularly the wet season in West Africa, and also increased asset mobilisation as the group begun repositioning the contract portfolio as outlined at our H1 22 results. Repositioning of rigs is continuing in Q4 2022 along with some refurbishments on the newly acquired rigs at Fekola";

The overall effect is a small beat on drilling revenue and either a small beat on mining or MSALABS (they don’t break this out) versus Mark’s Q3 expectations. A similar story from Broker Tamesis, who say:

"Revenue remains high and on track to meet guidance. The company achieved Q3 revenues of US$73.1 million which is just above the previous quarter which is impressive given the usual seasonal weakness (wet season in West Africa). The company continues to edge up growth in non-drilling revenue contribution (29% of total vs 26% in Q3 2021) driven by strong quarter for mining services and continued growth of the MSALABS business. The average ARPOR of $182,000 was flat YoY but up 6.4% QoQ which is a positive surprise to our modelling. We expect this high ARPOR to come off slightly (we model $175,000 going forward) compensated by the increased fleet size. After this strong quarter the company remains on track to meet its US$280-290 million revenue guidance for 2022."

Given the closing size of the rig fleet, a Q4 performance of 80% utilisation and $175k ARPOR would give the upper end of that revenue range.

There is a couple of new contract announcements:

§ A multi-rig exploration drilling contract (including reverse circulation, diamond and air core drilling) with Perseus Mining at its Block 14 Gold Project in Sudan; and

§ A reverse circulation drilling contract with Evolution Energy Minerals at its Chilalo graphite project in Tanzania.

These, together with the B2Gold contract already announced and the continued growth of MSALABS, mean that 2023 should see further profitable growth.

Perhaps the biggest disappointment is the lack of any new share buyback announcement. With a forward EV/EBITDA of less than two versus peers who trade on approximately 4x, their own shares remain a better capital investment than almost all the other possible capital investments they could make at this time. Earlier in the year, they were buying back shares at 97p. Since then, brokers’ EPS forecasts have risen by around 40% in sterling terms, yet the share price is some 15% lower. Surely this makes a further buyback a no-brainer?"

[rivaldo] 07/11/2022 07:20

Encouraging drilling results announced this morning from CAPD's relatively new exploration contract with Shanta Gold. Drilling is being expanded - plus they use MSALabs to do their sample analysis:

[rivaldo] 02/11/2022 10:06

Been away on family hols for nigh on three weeks, so happy to read the excellent Q3 results here.

CAPD merely need $72.6m revenues in this Q4 to meet expectations - that's less than they achieved in the much seasonally weaker Q3 just gone. So the likelihood is that the year end numbers should look pretty good compared to Tamesis's forecasts.

The core business EBIT (before investment portfolio gains/losses) is forecast to be up to $55.8m from $51.9m - this against a £163m m/cap, with $87.4m cash inflows from operations.

There are obvious risks as have been stated, but the share price is still very, very undervalued imho.

[mtioc] 26/10/2022 11:02

Does anyone know maintenance/growth capex split? New to thread and apologies if discussed earlier.

[tole] 19/10/2022 18:22

https://masterinvestor.co.uk/equities/small-cap-round-up-internet-broking-sites-and-drilling/Capital Limited (LON:CAPD) – good upside still left in the priceThe mining services group yesterday declared its Q3 Trading Update to end September. It showed that the group is well on track to meet market expectations for the full year.Analysts at Tamesis Partners are now looking for the year to report $283.8m revenues ($226.8m), with pre-tax profits halving to $40.7m ($82.0m) and earnings of 15.1c (36.8c) per share.For the coming year they go for $317.8m sales and recovering profits of $53.4m, worth 21.2c per share in earnings.Despite there always being a seller around the market when good news is published, I would actually consider that the shares, at the current 82.7p,have some good upside still left for pursuing.

[chillpill] 18/10/2022 07:40

As we have come to expect all looks good.

[rivaldo] 13/10/2022 07:45

Looks like Friday or Monday then :o))

EDITED - prior version was rubbish!

2ND EDIT - a post elsewhere states it'll be Tuesday.

[rivaldo] 12/10/2022 15:23

CAPD tweeted this yesterday re rather encouraging September industry drilling data. Hopefully bodes well for the Q3 update which may land tomorrow:

[phillis] 10/10/2022 10:42

A J Bell finally credited divis this am

[rivaldo] 04/10/2022 12:35

The Q3 trading update has been on 13th October for each of the last two years, so not long to go.

Q3 is generally seasonally slower, but given this from the interims less than two months ago the year on year comparison should be pretty decent:

"the tender pipeline remains buoyant across drilling, mining and laboratories and as a result of this strong demand, we are raising our revenue guidance for 2022 to $280-290 million".

[hpcg] 03/10/2022 16:19

With the price of gold in dollars recovering this will go up. It's really stupid, given that gold is close to all time highs in most currencies. Of course if gold goes up faster than the dollar goes down then we are cooking. As important an easing of the dollar will improve sentiment and sentiment is the most important driver for risk assets. If the Fed shows any signs of slowing rate hikes, especially if it looks like real rates will remain negative, then there could be an abrupt reappraisal of prices in precious metal related equities.

[yasx] 03/10/2022 12:58

"I reckon listed and unlisted are worth about $44m at the moment, and I take a 10% discount to reflect illiquidity, giving a $40m valuation."

There is not a chance they could dispose of these investments at that price - a 10pc reduction is grossly optimistic.

The sentiment towards smallcap mining tiddlers has changed markedly - most of these will continue to fall and dramatically so. Since CAPD have no intention of selling them, the valuation is pretty meaningless other than to point out that a 50pc reduction is probably generous right now.

As for this trading at a higher premium relative to peers, I do not think that is justified given the geopolitical risk - CAPD operate in a (relatively) risky part of the world.

[chillpill] 02/10/2022 20:02

I agree it’s a good place to be at the moment.

[rivaldo] 30/9/2022 13:51

Mark Simpson (ds2) has just sent out the latest Small Caps Live weekly market round-up. Hope he doesn't mind me linking to his updated valuation of CAPD as follows:



"Capital Limited (CAPD.L)

We don’t normally comment on stocks without specific major news. However, with Capital there has been a number of small changes that have potentially added up to a big change in valuation. These are a new contract with B2Gold, a placing at Firefinch, but perhaps most importantly, a weakness in the pound. This still provides a tail wind even though the current spot rate has bounced strongly back to 1.12 on Friday.

On discord, Mark has tried to make sense of this with an updated valuation model. As usual, he calculates a mid-case valuation but also presents a low and high case for those who are particularly pessimistic or optimistic on how Capital should be valued versus its listed peers:

First up is the investment portfolio. Lots of moving parts, but I have updated holdings where we know about them and also marked Firefinch to the AUD6c placing price vs 20c suspension price. I reckon listed and unlisted are worth about $44m at the moment, and I take a 10% discount to reflect illiquidity, giving a $40m valuation.

MSALABS I value on a revenue multiple. The growth rate will be slowing from the 100% pa historical rate, plus market valuations have come in for growth stocks. So I reduce my revenue multiple to 4x. However, the TTM revenue is now around $21m making a $64m valuation for CAPD's c77% stake.

For Capital Mining & Capital Drilling, I used EBITDA multiples of 3.7 & 4.1, respectively, which is the competitor mean from the 22H1 results presentation. Splitting the admin costs pro-rata between the businesses and ignoring MSALABS (which is conservative since at least some of the admin costs will be due to this growing business), I get around $16m EBITDA for mining & $70m for drilling based on my estimates.

This gives a $59m valuation for mining and $288m for drilling.

Year-end debt will be higher due to purchasing the 10 rigs from Perenti. I am estimating this at $42m net debt since the guidance was for this to come down a bit from the $36m at H1, prior to this deal.

All of these are in USD, and with the current GBP weakness, this mid-case valuation works out to be about £1.93/share for a 128% upside to fair value.

My downside valuation, implying that the various parts should trade at a discount to industry averages, gives a fair value of £1.24/share for a 46% upside.

If you believe that the business should trade at a premium to peers, (an argument that I have some sympathy for, given their pursuit of long-term contracts rather than high spot rates), then I get an upside valuation of £2.76/share for a 226% upside.

I've always thought that Capital was a good place to be invested because of the quality of management and where we are in the cycle, but that the returns would be good but not stellar. They would just be a lot more certain than other places to put your money, and this justified a reasonable holding. Of course, returns in a spreadsheet are not the same as an actual share price, and the areas of operation make the company higher on the risk spectrum than average. However, I am increasingly seeing that this could be a multi-bagger with a fair wind, not just a solid but unexceptional return."

[soundbuy] 29/9/2022 14:40

somebody lightening....1,300,000 @86p

[kaizenkid] 29/9/2022 08:58

More gold found at CAPD largest holding PDI: hxxps://www.investi.com.au/api/announcements/pdi/56c30186-591.pdf