Capital Share Discussion Threads

[qs99] 26/3/2024 07:44

Good morning Riv and thanks for the posts as ever.

With Sukari winding down, do year 2 and 3 forecasts suffer a dip because of this please, I'm not sure i've seen or can access those forecasts anywhere? Apologies for the ignorance and have a good day

Cheers
QS99

[rivaldo] 26/3/2024 07:37

Wow - Awale actually ended the session up 100% to $0.8! So CAPD's investment is now worth the best part of £4m....

This was on stunning drilling news (also good for CAPD as the operator) - the CEO's commentary is worth a read!



"This drill hole is absolutely spectacular. I have been looking at gold projects for the last 20 years and have never seen anything like this. Odienné has produced very high-grade mineralization since we started drilling, though we always felt that some special things would come as we continued our work. The harder we press at Odienné, the more it gives back, and we've only just scratched the surface."

[theapiarist] 25/3/2024 20:59

Yup, that's some rise - 344% in 10 days!

Now £3.9 million (2.4% of market cap)

Have you got any more up your sleeve, Rivaldo?

[otemple3] 25/3/2024 16:53

Awale flying today, up another 88% on my watchlistWish we had a larger holding / CAPD share price could have a day like that.....

[rivaldo] 22/3/2024 07:31

Thx chaps. So....Awale were up another 8% to CAS0.39 last night on yet more successful drilling news. CAPD's holding is now worth £1.9m:



Awale also "now plans to pursue further drilling to explore the shear zone-hosted target's potential", which is more good news for CAPD as the drilling contractor.

And WIA Gold were up 8% to new highs of A$0.82 - this holding is worth a further £7.75m.

Awale and WIA are now worth almost £10m between them.

Plus Allied Gold rose 5% to $3.35.

[theapiarist] 21/3/2024 10:08

Keep posting!

PS

The eponymous game looks quite interesting as well.

[death by donut] 21/3/2024 10:06

Feel free to carry on Riv , much appreciated by me as i sit here on site at T break .DbD :-)

[rivaldo] 21/3/2024 08:39

I promise this won't be a daily thing...but Awale rose a further 20% overnight to CAD0.36, so CAPD are up another £250k and this investment is now worth £1.75m.

[rivaldo] 20/3/2024 10:57

Awale's shares climbed another 17% last night to CAD$0.30, so that holding's now worth almost £1.5m.

Couldn't agree more robsy2 - yet it's on a P/E of 6.2 on conservative forecasts, with around a 3.5% divi and a fast growth business in MSALabs on top of its other divisions which are growing nicely and diversifying into more risk-friendly geographies.

A few random points I picked up from the presentation:

- 2024 is expected to be a "fantastic year"
- they expect to be realising some gains from the investment portfolio "this year"
- some of these may be returned to shareholders
- the Sukari mining fleet could either be redeployed or sold, and again it was noted this could involve a return of funds to shareholders
- Kaizenkid elsewhere has noted that the PDI and Sukari proceeds could total $60m
- ARPOR should improve with the move to the USA
- guidance for MSALabs this year is $50m-$60m revenues, up another 40% at the midpoint
- CAPD are fully provided against any Morila debtors
- forecast growth is almost entirely from existing contracts
- all receivables from 31-60 days old have been received

[robsy2] 20/3/2024 10:02

I'm pretty new to this one . Just been to the results presentation and things seem to be running well. Decent team , incredible track record, good 5x covered dividend and plenty of irons in the fire.

[rivaldo] 19/3/2024 07:29

CAPD's holding in Awale Resources looks like becoming another decent-sized holding.

Awale's shares rocketed 42% last night to CAD$0.255 on excellent drilling news.

CAPD hold 8.33m shares per my records, so this is now worth £1.25m.

CAPD are also the drilling contractor at Odienne, so there should be lots more work in the future:



""We are delighted with these assays from the follow-up program at the BBM target. The mineralization is robust and we have now confirmed plunging high grade mineralization over 500m of strike, which remains open in all directions. The consistently high-grade gold mineralization encountered in multiple drill holes underscores the prospectivity of our exploration area and highlights the substantial value it holds for our Company and stakeholders."

[rivaldo] 18/3/2024 09:40

Tamesis have released their post-results update.

They retain their 160p target price, and note that EBITDA, PAT and net debt were all better than expectations.

They forecast 18.7c EPS this year, i.e 14.7p EPS, with "at least" a 3.04p dividend.

Brief extracts - note that they were "taken aback" by the initial share price reaction!

"And there is more to come: management are guiding to a revenue range of $355 - 375m for FY24. If delivered, and we normally get upgrades throughout the year, it will equate to a 17% CAGR since 2021 and we see no reason for this growth not to continue into 2025. As part of the guidance, the company have specifically guided to revenue from the MSALABS business at $50 – 60m, and reiterated their guidance of 21 Chrysos units to be rolled out by 2025 which we estimate will deliver $80m in sales. Capex is guided to $70 – 80m, covering sustaining capex for ongoing fleet as well as their planned expansions in the US and MSALABS.

We show our forecasts below and in the appendix. At the mid point of guidance revenue grows another 15%. We believe EBITDA will reach $98.7m assuming the margin remains at 28%. Cash from operations reaches $104.9m and net debt goes to $76.1m. This will allow management to pay out at least 3.04pps in dividends – currently yielding 3.4%.

Investment Case

The investment case is still centred on diversified and therefore low risk growth. This in turn has been accelerated by the breakthrough technology that is Chrysos which carries very low capital requirements. The engine room drilling business is benefitting from the increasingly large and high quality client base for whom Capital works and finally the mining service operations have the ability to deliver step changes to the P&L. The growth is accompanied by a dividend and an investment business with assets currently worth $47.2m. We believe the company should start to set investment parameters and structure to its investing. This, along with the release of the margins in the MSALABs operation, may encourage the market to apply a SOTP analysis to the valuation which, using our methodology, comes to 157pps."

[rivaldo] 15/3/2024 11:15

Good to see CAPD also doing an Investor Meet presentation on 20th March at 9.00 am FYI.

[gb904150] 15/3/2024 10:41

People don't like the gold portfolio because it's not really valued in the CAPD share price.

But part of the reason is because we've been in a miners bear market for several years, especially gold miners. Look at the GDXJ chart!

Right now PM's are breaking out and people are taking an interest in gold miners again.

At some point the value in that gold portfolio will be realised - first via higher valuations and eventually via exits on those positions.

That should lead to some special divis or buybacks because they absolutely can't justify ploughing more money into capex than they already are.

I think CAPD will just get taken private within the next year anyway...but I hope we get to realise some of the portfolio investments and return value to SH's first.

The good insider ownership - Jamie Boyton 10% / Brian Rudd 6% should help ensure it only gets sold if a decent offer is made.

In the meantime.....small divis mean you're paid to wait.

[phillis] 15/3/2024 10:03

Rivaldo
Yes follow on investments
See presentation

[hpcg] 15/3/2024 09:38

One of the interesting nuggets on yesterday's call was the lead time for rigs of 6-12 months. This should keep a lid on over-enthusiastic expansion by drill operators even if operating prices enabled that. I must admit to being at an informational disadvantage to at least some in the market as I did not know rig rates had softened during the year. It was good to hear they are heading back up again.

[hpcg] 15/3/2024 09:33

AdamB - I actually disagree on the portfolio - share price movement. I think it correlates reasonably well. I'm kicking myself for not selling at least some in Jan 23 when I had calculated the portfolio value pretty well and though to myself that it would disappoint the market. So it isn't a huge surprise to me that the share price and buying activity has strengthened as portfolio has bottomed and recovered.

[rivaldo] 15/3/2024 07:26

Indeed, and as well as PDI I'm sure CAPD increased their investment in WIA Gold during last year (I don't have the details to hand immediately).

As it happens, WIA Gold's share price was up another 10% overnight to 0.075 and to more new highs. So the value of CAPD's investment in WIA has almost doubled since the year end and is now worth over £7m.

[otemple3] 15/3/2024 00:06

Adam, PDI had a rights issue in June which we took part in. Don't know the value invested, but would assume that was all or certainly the majority of the money invested. Placing was at 0.15 AUD and current price is 0.235 AUDI suspect, when PDI is eventually sold, that investment will be rewarded handsomely

[adamb1978] 14/3/2024 22:41

To me the market factors in zero value from the portfolio - when its goes up in a given period there doesnt seem to be any market reaction, when it goes down in value the share price goes down.

I'd love to know what they've frittered $9m away on in 2023 which, counting interest costs, has probably cost them nearer to $10m now.

Share price here would be considerably higher with more conventional governance structures and better, well-communicated capital allocation decisions IMO. There's considerable upside here if management could sort their act out, but there doesnt ever seem to be suggestions that that will happen

[death by donut] 14/3/2024 16:58

Clearly need a name change , i was thinking C AI PDDbD :-) Long

[theapiarist] 14/3/2024 16:06

What will happen "Unless they monetize their investments", QS99?

Not being cheeky, just curious.

[qs99] 14/3/2024 15:37

Still doesn't answer the big question about FCF this year? Unless they monetize their investments, but they stated they were "key" to keeping relationships with clients in their RNS, so how can they sell them? DYOR

[rivaldo] 14/3/2024 13:43

Cheers TheApiarist, glad someone else is paying attention to the investment portfolio! I suspect we may also see a continued revival in Allied Gold's stock price given the surge in the gold price.

Re deanowl's question, apparently Sukari's equipment can both be redeployed to another project or sold.

[deanowls] 14/3/2024 13:21

Anything mentioned on what happens to the fleet at sukari when the contract ends? Do CEY buy the fleet off us?