Central Asia Metals Share Discussion Threads

[topazfrenzy] 22/9/2017 14:51

Copper is sinking with China, unfortunately copper has been ramped to death and the clever money exited a few weeks ago and here you've been sucked in and locked in.

[mr.oz] 22/9/2017 14:33

Well.. If it was, then perhaps CAML should diversify?
Oh wait...

[arf dysg] 22/9/2017 14:24

topazfrenzy, if you have such a pessimistic view, presumably you've taken out a massive short on CAML and the copper price.

Why would copper be heading to the bin? Surely you meant it's going utterly down the toilet? Say it, say it! You know you want to.

[zho] 22/9/2017 14:22

Conclusion: CAML’s purchase of Lynx provides it with an established, long life, lead/zinc/silver mine at a price of 10x historic earnings and close to an assessed NPV10% valuation estimate. Indications that there may be scope to improve mining practices through the implementation of a safer, less dilutive mining method may provide scope for an incoming management to introduce operational improvements and efficiencies.

[topazfrenzy] 22/9/2017 14:20

This could open 40% down when/if it comes back with copper heading to the bin

[gary1966] 22/9/2017 13:52

I can't find any figures for Lynx Resources Ltd online but if the production levels are maintained and at current prices and a constant EBITDA margin, which actually I would expect to improve with the rise in prices, then EBITDA will come out at around $90m.

Personally happy with the diversification both in terms of resource and location. Looking at the Lynx website it looks as though they have good relationships with the powers that be and the area has been mined for a long time. Potential to expand the resource as well. Interesting that the Lynx website says that they are in the lowest cash cost quartile yet CAML say that they are at the lower end of the second quartile.

See no reason why the placing should be at a big discount, if at all but guess we will know by the end of the day.

GLA

[arf dysg] 22/9/2017 13:35

I like this part of the announcement about the proposed acquisition:

"The Transaction is expected to be both earnings and cash flow per share accretive in the first full year, underpinning CAML's dividend profile"

Three things close to an investor's heart: earnings, cash flow per share and dividend.

[danieldruff2] 22/9/2017 12:22

Someone on iii saying the book has closed and an RNS due later today...

[danieldruff2] 22/9/2017 12:07

They will move into the top 15 of London listed miners and give rare exposure to zinc & lead

[lord gnome] 22/9/2017 11:50

A lot to take in and digest this morning. Interim results look good and I like the divi increase. At first glance, the deal to buy Lynx looks good and I like the fact that Orion seem to be sticking around. The finance package looks ok even if the interest on the debt element is top end. Not surprised to see Rakishev heading for the exit.
Not sure what the market will make of it. The accelerated book build will be done very quickly and we might even get news before close of play today. I doubt that they would put a deal like this together and not have takers already lined up for the equity placing. The price paid will tell us how things will go on Monday morning. Might also get some weekend press coverage.

[jimmywilson612] 22/9/2017 11:22

Graham - where did you get that profit figure from?

In part 7 of the documents released today, it stated profit is $34M (£25M) I think?

[jimmywilson612] 22/9/2017 11:18

See the dividend policy is moving away from paying out 20% of free cash to shareholders to 30% - 50% after the move.

[ntv] 22/9/2017 10:27

never any insider trading it is just rumours !!

[gheebee] 22/9/2017 10:19

Makes you wonder why we bother with the SFO, the NCA, the City of London Police or the FCA. Oh and hosting and paying for the IACCC for the next four years really is a waste of time and tax payers money.

[ntv] 22/9/2017 09:53

or the US !!

[ntv] 22/9/2017 09:52

and of course there is NO CORRUPTION in the uk lol
i forgot it has legalised for years

[gheebee] 22/9/2017 09:12

1 wasn't an option. Had they tried it there would have been government interference via the licence almost immediately. 4 is indeed the only real option and for that to work they'll need a Macedonian "Kenges". I'm sure they have one already lined up. although they'll never find one with such splendid royal connections as Mr Rakeshev has.

[danieldruff2] 22/9/2017 08:50

You could write that about the majority of the world's mining operations.

CAML had 4 choices:

1) Run down Kounrad and close shop in 2032 (with Kenges selling out in the meantime)
2) Pursue opportunities smaller than themselves (ie Copper Bay etc, we've seen how tricky that is)
3) Drill away and hope a viable project results and is off the ground by 2032 (industry odds, circa 5%)
4) Do a deal like this one

None are risk free but I dislike 2 and 3, as the odds of success were low

[gheebee] 22/9/2017 08:40

It's a forced process that's going on here. Price and value are out of the window. CAML had two legs - Chile and Kazakhstan. The Chile leg has been shown to be a moderate, at best, prospect and Kazakh ops depended on influence which has now gone out of the window. I expect this will be reflected in the price. We had the upside but now....

"Corruption

In Kazakhstan and Macedonia, the bribery of officials remains at a high level relative to more economically developed markets. The Group's business, results of operations and financial condition could be adversely affected by corruption or by claims, even if groundless, implicating the Group in illegal activities. Social instability caused by corruption could increase support for renewed centralised authority, nationalism or violence and thus materially adversely affect the Group's ability to conduct its business effectively, including as a result of restrictions on foreign involvement in the economy of the countries in which the Group operates. Any of these could restrict the Group's operations and lead to a loss of revenue, which could have a materially adverse effect on the Group's business, result of operations and financial condition."

[waterloo01] 22/9/2017 08:38

And a lot of new/replacement infrastructure needed including new tailings dam. Some risk for a debt free company as it stands and they take on any historic risk. Guess the price of the book build will tell a story as to the risk being taken on.

[grahamhacker] 22/9/2017 08:31

Financials (Bermuda registered co.) - 31/12/16 profit ($26m/£20m) so we are paying 16 x profit (3.5 x net assets) - seems expensive, but no idea on the prospects except they say "life" at least until 2032

[gheebee] 22/9/2017 08:19

Kenges Rakishev looks to want out. Chile is a dead duck and he is no longer in favour in Kazakhstan. No wonder they are changing direction.

[ntv] 22/9/2017 08:15

could PI's screwed again in bookbuild placing
look just what happened with PCA
price will be announced at some point today
i will work on profits forecast over the weekend

[cgequityinvest] 22/9/2017 08:09

We need to see the detail and what analysts are forecasting in terms of eps and cash flow generation to be able to judge.

Company is gearing up via bank debt as well as raising equity.

No opportunity for PI's to participate in the new equity raising which is disappointing but maybe not surprising, i.e. we will get diluted by circa 40%.