Central Asia Metals Share Discussion Threads

[mount teide] 25/9/2017 15:14

GN - XLM(i hold), had headline bid/offer pricing 135p v 138p about 10 mins ago.

What L2 'visibility' showed was that 5 MM's were on the bid at 135p while just one was left on the offer after a number had moved up, and that just one MM was on 139p with the rest 140p or above.

Now that suggested to me that if i wanted to buy now would probably be a good time because modest buying pressure could see the final MM knocked off the top of the offer and the offer price lifted. Conversely, if i were looking to sell, it might be wise to hold on because the bid price would probably lift if the 138p offer price is taken out.

That is exactly what happened shortly afterwards, with the final MM on 138p getting taken out, one MM moving up to 136p on the bid and one MM at 139p on the offer. As i type L2 is now 138p bid v 140p offer.

Buying a decent chunk at 138p, would have already made up the spread, and if i were a seller holding off would have got me 3p more per share than 10 minutes ago.

If i were selling 10,000 XLM shares today, holding off would have generated additional profit equivalent to more than a years L2 fees!

[gn100] 25/9/2017 15:03

Thanks Mount Teide. I have been vacillating over taking an L2 sub for some months now. I think it probably cost me a few hundred this AM not having it. Guess I will just have to pay up - as you say it should save me a sub value at least over the year.

[waterloo01] 25/9/2017 14:41

Nicely described although even L2 doesn't let you see the icebergs!

[mount teide] 25/9/2017 14:36

GN - this morning L2 data combined with a few dummy sells/buys gave a good feel as to the most likely early direction of share price travel.

I like L2 because it lets you see what is going on below the current top bid and offer prices(ie; where the other MM's and rest of the market is positioned) - my portfolio transactions per month are extremely low compared to a day trader but, for me L2 still probably covers its cost many times over during the course of a year.

For the small and mid cap equities i mostly invest in, to me L2 is like having a radar on the bridge of a ship in restricted visibility - lets me see what is currently going on beyond the visible horizon. Useful too for spotting U-Boats (iceberg trades).

[catsick] 25/9/2017 13:53

I bought a few this am close to the placing price, I think this should work out to be a good deal and as an rto gets a listing for the lynx assets and creates a much larger new company, just this is going to hopefully create a much larger company with a market cap that will justify a main market listing and inclusion into some of the smaller indices and thus a better rating, I have not really fully digested the implications of the deal but being offered a quick chance to buy the shares at a 10 percent discount I thought it better to buy first and di the homework later ...

[gn100] 25/9/2017 13:41

Mount Tiede - when you had your L2 feed up this morning for CAML were you able to see the downward pressure on the share price fairly quickly? I ask because I am considering subscribing to L2 and would hope that would have been a help this morning.

[ashehzi] 25/9/2017 12:30

Those who bought at 230p did a good job.

[carcosa] 25/9/2017 11:02

If anyone has not read it the admission document and presentation material are available on the company website. Well worth a read. Ref: hxxps://www.centralasiametals.com/investors/proposed-acquisition/

After a couple of hours reading it I get the impression that

A) This is a really good deal except;
B) The risk profile has increased tremendously and any one of a number of real possibilities could bring substantial damage to the company

There is no immediate reason to sell in the very near term as those risks will take time to materialise.

[pimsim] 25/9/2017 10:33

For those holding CAML for the divi, it worth reviewing the new divi policy – i.e. 30-50% of free cash flow (defined as operating net cash flow – capex). What sort of operating profits do they need going forward to match last years divi of 15.5p?

A very basic (and admittedly simplistic) analysis:

Following the placing I think there are now 161m shares in issue. If I understand the purchase terms, they still need to issue a further $50m in shares to Lynx so lets assume these are issued at around 230p with FX rate around 135p so about 16m further shares making an overall total of around 176m shares.

Working backwards, to sustain a divi of 15.5p * 1.35 GBP/USD * 176m = approx annual payout of $37m. If we are generous and assume they pay out 50% of free cash flow that means they need to be making $74m. Capex in the next few years is unclear but lets assume a conservative $10m/yr. So, operating net cash flow will need to be a minimum $84m/yr just to maintain current divi.

Now lets turn to reported operating profit (not the same as op c/f but good enough for this exercise) CAML operating profit for 2016 was $33m, SASA operating profit for 2015 looks to be $38.5m so starting point for a combined business is around $71.5m. Subtract taxes and operating cash flow would have been around $58-$64m before adjustments for depreciation. Going forward, they will definitely benefit from recent higher commodity prices and who knows, there may be some future operational cost savings but, short term, there will also be a hit from acquisition costs.

It is not impossible that the current dividend will be sustained but IMO, looks doubtful and would certainly require sustained higher commodity prices and limited capex over the next few years.

[napoleon 14th] 25/9/2017 10:21

I have plenty of these & so won't add. 230p is no surprise, in fact the norm is for a placing/fundraising price to be the first opening price.
However, who is going to turn this deal down?
CAML's problem is we have a very finite asset, ergo the cheap share price This deal will:
Get us into other minerals than Cu, into zinc & lead, and into a longer term project,
Reduce the dependence on Kazakstan (one of the southern states in the old USSR, like Georgia, Crimea & Ukraine if you get my Putin).
IMO it's a done deal, and a good one, & I would vote for it.

[pugugly] 25/9/2017 09:41

230 placing - If follows often followed route might well drop some 10% + if metal weakness continues PLUS uncertainty factor of problems yet to be unconvered with new purchase. (imo) - Very much on the side.

[edjge2] 25/9/2017 09:37

samb I would be too but it is finding something to sell and metals not too happy at present, gold likely to dip sub 1250 too before the inevitable bounce.

[samdb] 25/9/2017 08:51

I'm buying here at 230.

[grahamhacker] 25/9/2017 08:49

IG Index shows 9.5% down

[oohrogerpalmer] 25/9/2017 08:40

Hopefully it's just the market reacting to the thing they hate most - uncertainty!!
Probably needs time for people to digest what the future holds.

[lord gnome] 25/9/2017 08:29

The market has given its verdict. All those complaining about not being able to buy at 230 can now buy even cheaper and get the divi as well. Will they be buying now? Somehow I doubt it. Pah!

[samdb] 25/9/2017 08:06

A few nervous people will sell early then it's likely to stay reasonably flat from here while people try to work out the value of this acquisition going forward.

[mount teide] 25/9/2017 07:56

L2 - First two MM's have shown their hand - 241p bid v 250p 0ffer

[masurenguy] 25/9/2017 07:47

It will be fascinating to see where this goes today. Markets looking likely to open flat/marginally down this morning.

[samdb] 25/9/2017 07:47

Should be a floor at 236.5, placing price plus the dividend. 240 opening seems reasonable.

[gersemi] 25/9/2017 07:37

Shackles removed

[capercaillie] 24/9/2017 20:24

Caml Kounrad site has resources "beyond 2030" Lynx has resources until "at least" 2032, so may not have too disimilar lifespans.

[spittingbarrel] 24/9/2017 19:49

My guess would be around 240 but we shall soon see.

[waterloo01] 24/9/2017 17:52

On the downside should't go below placing price but would have liked to see some weekend press to drive interest.

[oohrogerpalmer] 24/9/2017 17:21

So any guesses what price we open at tomorrow???