Capital Share Discussion Threads

[hpcg] 01/8/2023 10:27

I bought more today too. I was waiting for the pips to squeak. When someone is selling without a care for the price they get the worst thing one can do is get in their way. Also a decent down wash out candle (possibly) was a trigger to get involved. I don't expect any thing more than a consolidation during August and the price could certainly go lower yet, but this is also a sensible level for support.

[mammyoko] 01/8/2023 09:07

Annual gold production in Niger behind Philippines

hxxps://www.gold.org/goldhub/data/gold-production-by-country

[chillpill] 01/8/2023 08:54

Been a shareholder here for 3 years. Decided to average up this morning as seems an irrational price movement…..unless there is something we haven’t been told!

[mammyoko] 01/8/2023 08:32

No current or previous operations in Niger

hxxps://www.capdrill.com/about-us/at-a-glance

[johnrxx99] 01/8/2023 07:13

Make that 75p

[adamb1978] 31/7/2023 10:17

Fair point with the Niger news Ben, and there being contagion from that

[benjonesinvestments] 31/7/2023 09:53

I don't see any fundamental news - only thought is concerns about more widespread unrest across Africa. However, this is always temporary and I don't see it as a long term concern.

Agree on share buybacks although Capital are likely going to need around $25m capex for the new mining contract. I'd prefer debt levels where they are, so share buyback might need to wait a year or two.

Upside from investment portfolio may help fund a buyback but I wouldn't choose to rely on that, I see it more as a cherry on the cake.

No doubt they're undervalued and I still see £2 as a fairer share price (even without performance from their investment portfolio)

[adamb1978] 31/7/2023 09:34

Hard to see tht there's any unknown news about to come out given how recent their trading statement was. A share buyback at these levels is a no-brainer, and I think they should be stretching to finance it however they can

[johnrxx99] 31/7/2023 09:26

Could be a buy at 80p, depending on any news.

[stevenlondon3] 31/7/2023 09:18

Pity they can't sell their investment holdings and use the cash for share buy backs.

[adamb1978] 31/7/2023 08:59

Now down to 83p?? Is there no floor?

[hpcg] 27/7/2023 11:20

Whomoever is selling now simply doesn't care about the Allied receipts. Interesting that they've chosen the very worst part of the year to do so. I have no idea if Odey had any money here; funds were invested in Shanta Gold.

IMO north or $10m or below $5m would count as surprises on the Allied holding.

[rivaldo] 27/7/2023 10:56

Martin, this article suggests a pre-money valuation for Allied Gold of $1.2 billion:



CAPD's investment was valued at $7.7m at the last year end and is 1.55% of Allied. With a $1.2 billion pre-money valuation that would imply a value of $18.6m.

Of course we'll know for sure whether this IPO valuation has been maintained in the next couple of weeks.

[adamb1978] 27/7/2023 10:53

From my perspective Martin, the main benefit of the IPO is liquidity and as you say, we'll know more about valuation once the IPO is done.

[shanklin] 27/7/2023 10:44

Possibly a stupid question and even $7.7m Allied Gold valuation is not to be sneezed at, but what is the basis on which this might be valued at far more than this please?

Obviously we will know more as and when the IPO completes.

Cheers, Martin

[hpcg] 27/7/2023 10:33

Johnrxx - Everything known should be priced in, and this is approximately known. Now I'm not a big fan of efficient market theory for small caps as sentiment is a much more significant driver of price and a single stock can trade with a wide range of price based multiples. In this case though I think it is in the price, bar upside or down surprises on the amount. I think sceptical investors want to see the cash in hand. It does convert a long term asset into a short term asset come what may.

[rivaldo] 27/7/2023 10:04

Cheers Adam - I'll amend the thread header post to 1.55%. But that link does say Allied Gold makes up "the majority of the unlisted ($8.3m) portion", so I suspect the $7.7m from the Annual Report is the correct latest valuation of the stake.

One could argue that given the ridiculously low P/E CAPD trades on, let alone the very high TNAV or the value of the long-term recurring revenue contracts, that the entire investment portfolio is not priced in, never mind the upcoming uplift in the value of the Allied Gold stake!

EDIT - great minds think alike Adam :o))

[adamb1978] 27/7/2023 10:04

I dont think anything is priced in looking at the share price!!

More seriously, I certainly dont think anything relating to the investment portfolio is priced in. Historically movements in the portfolio dont seem to have impacted the share price (though obviously not possible to tell) though its something like 16p per share.

Hence why I'd like to see them gradually monetising the portfolio, which in theory should be consistent with them increasingly working with larger clients who wouldnt need them to take a stake in their business.

Also another reason why I dont like their recent 'Capital Investments' segment. The market doesnt give them credit for it so it feels to me like a vanity project

[johnrxx99] 27/7/2023 09:37

Do you think that is priced in?

[adamb1978] 27/7/2023 09:33

Hi Rivaldo

Here you go:

hxxps://www.capdrill.com/media/investors/Announcements/CAPD-Allied-ownership-RNS-v2_Website.pdf

[rivaldo] 27/7/2023 08:46

Hi Adam, no indications yet AFAICS of the pre/post-money m/cap.

I had CAPD's valuation of the Allied Gold stake at $7.7m per the last Annual Report (p.101) and thought the holding was nearer 2% of Allied - do you have sources for your $8.3m and 1.55%? TIA.

[adamb1978] 27/7/2023 08:15

Thanks Rivaldo. Do you know what the pre/post-money market cap is expected to be?

Their shareholding was 1.55% so can use that and the $8.3m carrying value of the stake on CAPD's books to calculate the change if anyone has the patience!

[rivaldo] 27/7/2023 07:44

Good news - looks like the Allied Gold IPO is going ahead on or around August 17th (cheers Martin):



They've raised the minimum $250m, and are looking for more to take them nearer the $300m originally mooted.

Difficult to tell what CAPD's upside is without knowing exactly how many Allied shares they own, unless this paragraph helps someone to work it out:

"In connection with the Going Public Event, the Common Shares will be consolidated on a 1:2.2585 basis prior to the issuance of the Resulting Issuer Shares, which are expected to trade in Canadian Dollars reflecting an effective price of approximately C$5.92 per Resulting Issuer Share."

[benjonesinvestments] 25/7/2023 18:43

Hi Adam,

I appreciate you were looking at EBITDA margins to strip out the impact from higher depreciation figures but didn't have those in front of me, so thought op margins were next best I had! I have gross margins of 47% for 2021, 46% for 22 and 45% for both 23 and 24 which strips out D. Weaker services margins offset to some degree by better ARPOR growth which has been good aside from Meyas Sand issue.

Must admit, not straightforward to anticipate ARPOR growth!

I'll also need to look at mining contract - might be one that needs an email to IR :)