Capital Share Discussion Threads

[klosters65] 01/9/2019 10:23

There appears to be plenty of potential on the upside for the shares. What I do not understand, is why there is so little trading.

[deanowls] 01/9/2019 08:33

It’ll be interesting should they then lol to monitize the shares, haven’t seen much talk from them about how these deals work?

[klosters65] 31/8/2019 13:36

Participating in raising funds is an effective way of winning the drilling contract. Besides Cora, do you know which other companies, it has adopted this approach?

[rivaldo] 30/8/2019 09:32

CAPD are getting busy again with another investment which will secure more drilling contracts and hopefully be just as successful as their other recent investments!



"Tanga Resources has received commitments to raise $1.8 million, with London-listed Capital Drilling to become a cornerstone shareholder with about 14%.

The funds raised at 0.3c per share will be used to advance the Hagenhof copper project in Namibia."

[rivaldo] 28/8/2019 09:18

Nice mention in MWM's small cap round-up:



"Capital Drilling (LON:CAPD)

This drilling company, focussed upon the African markets, showed another strong performance in the first half of the current year.

It reported an improved fleet utilisation at 52% against 46% previously, on an average number of drill rigs at 91, down just three rigs from previous results.

The company is still spending on its capex, up from $5.4m to $6.4m, and that is against a much greater cash generation in the first half at $10.5m, up from $7.2m.

Revenue was steady at $54.8m ($54.5m); however, the net profit after tax was almost doubled at $5.1m against $2.8m.

Earnings improved 87% to 3.7c per share, with the interim dividend up to 1.5c per share.

That was a very decent set of results, especially considering the increased spending as it wins new contracts to come into action in this second half, in Burkino Faso, Mali and Cote d’Ivoire.

This really is a cracking little company with masses of upside potential and tightly controlled financially.

Its shares are trading at around the 58p level, well up on my late July 48p feature price. I strongly maintain my 76p target price."

[mfhmfh] 23/8/2019 11:25

I think CAPD is under promising and will over deliver...

[rivaldo] 23/8/2019 10:58

Cheers astonedt. Good to hear that typically H2 is stronger than H1, so CAPD really are on track to at minimum meet and potentially strongly beat expectations.

And another new interview with the CEO here!



Finally, this news was out yesterday re Altus Strategies PLC in Mali re the signing of a Joint Venture Term Sheet on Lakanfla & Tabakorole gold projects - CAPD have been appointed to drill Stages 1 and 2.

Altus weren't mentioned in yesterday's RNS, so hopefully this is another additional contract win:

[rivaldo] 23/8/2019 06:56

Good to see CAPD featured in the Times' market report today - from memory Peel Hunt have a 75p target compared to Tamesis Partners' 91p valuation:



"With seven new west African contracts under way or due to start before the end of the year, the miner Capital Drilling’s decision to move rigs to the area is being vindicated, analysts at Peel Hunt said.

They advised dealers to buy the stock, adding that the company was helped by the strong gold price, which has been boosted by macroeconomic uncertainty as it is considered a safe haven for investors. The shares added 1½p, or 2.7 per cent, to 57p."

[mfhmfh] 22/8/2019 11:25

I'm looking for CAPD to beat the full year EPS guidance of 7c as already on 3.7c for H1 and work for the company seems to be accelerating for H2. IMHO.

[rivaldo] 22/8/2019 09:06

Tamesis Partners have issued a new note - they have a 91p valuation.

They see 7c EPS this year, rising to 8c EPS next year, with a 3.2% dividend yield.

With 3.7c EPS in H1 alone, it would seem that this year's forecast has a very good chance of being beaten.

They conclude:

"Price target maintained at 91p/share

Even with strong recent share price performance, Capital Drilling continues to look
undervalued. The company is underwritten by core long-term contracts, a balance sheet that has never looked better, a proven record of growing the dividend, and continued opportunities to grow the contract base with new wins in West Africa.

We forecast full year 2019 free cash flow of US$8.7 million (pre-investments) which implies a 9.6% FCF yield at the current share price.

We estimate that Capital Drilling is trading on 3.0x 2019E EV/EBITDA and 9.1x 2019E P/E multiples.

We value Capital Drilling at 91p/share, representing 5x forecast 2019 EV/EBITDA of
US$26.8 million and a 1.6x multiple on the current share price."

[dogwalker] 22/8/2019 08:47

Pity about Tanzania & the tax claim there.

[catsick] 22/8/2019 07:53

All looks very good to me, business throwing off lots of cash, lots of new long term contracts and a bullish outlook with gold prices meaning long delayed exploration drilling will go into overdrive... drill for equity another nice string to the bow now too

[rivaldo] 22/8/2019 07:31

Very good H1 results out this morning. Revenue and EBITDA are slightly up, but net profit and EPS are up hugely as the reduction in depreciation kicks in and the tsunami of cash flows which CAPD are receiving truly show themselves.

EPS of 3.7c for H1 is up from just 2c, cash from operations is up to $10.5m from $7.2m and net cash is up to $8.5m.

The outlook for H2 and beyond looks great given all the new contracts, and the rising gold price. And there's mention of the new investment programme which I've been featuring (CORA has risen very nicely indeed).

The interim divi is up to 0.7c, and CAPD looks in fine fettle:

[klosters65] 15/8/2019 23:24

Anyone have an explanation for the sale / transfer of 900,000 shares at 55.50p today ? I am hoping / expecting some buying before 22nd, when I think half year trading results are to be reported. Why is there virtually no trading in this share ?

[rivaldo] 07/8/2019 08:39

Good news from CORA this morning, and their share price is up to around 6.1p now.

CAPD's 8.7m shares originally bought at 3.85p is now worth over £0.5m.

With the gold price having surged recently, you have to commend CAPD for the timing of their investments in a number of gold companies in the spring/early summer.

[rivaldo] 02/8/2019 07:36

I note that CEY's interims the other day were very encouraging.

And Compass Gold had encouraging drilling results this week using CAPD's rigs in Mali - more drilling planned for later this year:

[mfhmfh] 31/7/2019 08:55

Gold price should stay strong with US interest rate cuts.

[rivaldo] 31/7/2019 08:24

Breaking upwards now, with the gold price rising above $1430.

[mfhmfh] 29/7/2019 11:54

IC article says business should pick up now that the West African wet season is over. Let's see what the 22nd August half year results bring.

[rivaldo] 29/7/2019 11:48

CAPD have also been tipped by Master Investor:



"Capital Drilling – this could really be a ‘rigged’ market winner
By Mark Watson-Mitchell 23 July 2019

Capital Drilling supplies special drilling services to mining companies and mineral explorers operating mainly in African countries. Mark Watson-Mitchell takes a closer look.

Mark Twain was right!

He said, “During the gold rush it is a good time to be in the pick and shovel business”.

As an investment strategy, this approach has paid handsomely for many a successful investor – it is a way to invest in an industry without having to endure the risks of the market for the final product.

That is exactly why I like Capital Drilling (LON:CAPD): because it supplies special drilling services to mining companies and mineral explorers operating mainly in African countries.

It provides complete drilling solutions to its global clients, ranging from grade control, underground drilling, blast hole, exploration, delineation and directional – as well as such ancillary services as shot loading and firing, mineral analytic services, on-site safety monitoring systems, directional software and surveying and geophysical logging.

Importantly though, it owns and operates some 92 drilling rigs. Those rigs are amongst the newest in the whole global rig sector – taking in 41 diamond core rigs, 27 blast hole rigs, 13 reverse circulation/grade control rigs, 7 underground rigs and 4 air core rigs.

From its base in Mauritius, the company, whose first rig was used in 2005 in Tanzania, has subsequently built up its experience base from operating in so many different environments, such as Eastern Europe, Latin America, Asia and Africa.

The geography of where its rigs are in use stretches across the globe from its Mauritius base to Armenia, Chile, Botswana, Zambia, Burkino Faso, Tanzania, Nigeria, Cote d’Ivoire, Mali, Mauritania, and Egypt.

Capital Drilling has developed long-term relationships with some of the world’s largest mining companies. Its major clients include Acacia, Algold Resources, Anglo Ashanti, Antofagasta Minerals, Ascom Precious Metals, Aton Resources, Barrick, BHP Billiton, Centamin, Dundee Precious Metals, First Quantum Minerals, Glencore, Golden Rim Resources, Hummingbird Resources, IMX Resources, Khoemacau Copper Mining, Kinross, Liontown, Magnis Resources, MMG, OreCorp, Resolute Mining, Rex, Rio Tinto, Sama Resources, Strandline Resources, Tanga Resources, and finally, Tiger Resources.

Now that is quite a list to admire – so perhaps Capital Drilling really is more about its overall services offer than just owning the ‘picks and shovels’.

With the price of gold now on the rise again, and with exploration activity picking up, the number of quality tenders that the company has been offered to bid for has been on the increase. The company has recently been awarded a new exploration contract in Burkino Faso.

Some 35% of its rigs are currently in West Africa, with more being planned to switch there in due course. It is that area that now accounts for 45% of all the African continent’s gold exploration expenditure.

There are 136.3m shares in issue, valuing the company at £66m. The largest holder is Jamie Boyton, the 46 year-old executive chairman, with 15.5% of the equity, whilst the company’s chief operating officer, David Payne, owns 2.35%.

Of the institutional holders Ruffer owns 7.30%, Sustainable Capital 5.63%, Aberforth Partners 5.57%, BlackRock Investment Management 4.51%, Allianz Global Investors 4.19%, FIL Investment Advisers 2.52%, River & Mercantile Asset Management 0.92% and Webb Capital Asset Management 0.09%.

For the year to end-December 2018 the company’s international revenue was $116m, from which it generated pre-tax profits of $12.6m, earnings of 6 cents and a dividend of 3 cents a share.

The current year could show sales much the same but with pre-tax profits improving to $15m and earnings lifting to 7 cents and a maintained dividend.

However, brokers are looking for revenue next year of $122m, with profits of $17.4m and 8 cents in earnings. For the 2021 year some $128m is estimated, 9 cents of earnings and 4 cents of dividend per share.

The group’s first-half results are due to be announced on Thursday 22ndAugust. The company’s shares, now at 48p, look to me as though they are heading higher during the rest of this year.

Brokers Peel Hunt rate the shares as a ‘buy’ with a target price of 76p – which certainly looks good enough for me."

[rivaldo] 29/7/2019 11:19

Great to see the tip in the IC after the solid trading update. The optimism for the rest of 2019 bodes very well.

Looks like new highs coming soon. And CAPD's investment in CORA is already up by around £130,000.

[mfhmfh] 26/7/2019 18:24

nice finish

[dangersimpson2] 26/7/2019 13:23

We always seem to get these strange price swings around results & trading updates.

People notice that this is cheap - EV/EBITDA of 2 and at a significant discount to its peers, safe balance sheet, discretionary CAPEX, diversified clients and geography, so people buy.

Results or trading updates and everything in-line but sounds a bit dull so people sell thinking they can get more excitement elsewhere.

Inbetween results, 'hey, this looks ridiculously cheap, buy some'

rinse, repeat!