Central Asia Metals Share Discussion Threads

[speccy1] 21/7/2018 12:36

I've been invested here for a few years now, and I rate this as the best run company I've had in my portfolio.

I've seen this price action before, when it rose from my initial entry point of 145p up to just over 180p, and I carried on buying at 151p, 170p and 182p. It then drifted down to 140p and I was making a loss and couldn't understand why - there was loads of cash and the dividends were great.

It didn't dwell very long at 140p before the long and relentless climb to 249p when it had another blip for about six months.

This share seems to do that - but then it goes on another relentless climb - last time from 207p to 337p.

I didn't have a massive investment - altogether about £4,500 cost, and in just under 3 years that has yielded £853 dividends, so I'm very happy with this company. I top-sliced a few when the value went over 10% of my portfolio cost, but now it's dropped to 5.6%.

If I had spare cash now I would be loading up at these prices, as I'd love to get this back up to 10% of my portfolio.

Obviously don't take my word for it, and DYOR etc, but my experience here has been a good one and I think this is an excellent entry point given the revenues due from the new lead/zinc operation and the track record CAML has for looking after its shareholders.

[bogdan branislov] 21/7/2018 07:20

Lauders. I think that the dividend cover figure that you have quoted is based on last years earnings. That is the additional shares issued for the reverse takeover are factored in, but only a couple of months of the post acquisition additional revenues and profits. This obviously distorts the apparent dividend cover downwards. The post acquisition earnings for the current year will result in a much higher dividend cover. Any other views on this? Bogdan

[lauders] 21/7/2018 01:23

I am now waiting for some funds to be credited to my account and have been following CAML for a while. If it can stay at these levels or go a little lower in the short term it will be a perfect entry point for me. We shall see whether I can enter at a good price. With a good yield and dividend cover of around 1.76 and a history of paying and increasing its dividends I hope I will be a fellow shareholder in the very near future. Anyone see any reason why the dividend is not safe or maintainable please? My main reason for buying will be income but expect growth to come over several years too.

[mount teide] 21/7/2018 00:55

Kael - the Sept/October 2017 placing to purchase SASA was at 230p - the management did't put out a statement to explain why the share price shortly after completion rose in tandem with a rising copper price to circa 330p, so why would they put out a statement if the share price returns back to the placing price with a falling copper price?

The only thing that has change since last October is that the price of copper has risen from circa 275p to 330p and back to circa 275p today - little else has changed.

Kaz Minerals has experienced a near identical percentage rise and fall with the copper price over the same period.

The average price of copper, lead and zinc during 2018 to date suggests that even if the current H2 average pricing were to be maintained until year end - CAML would still generate a 2018 result ahead of the Quoted Data EBITDA estimate of $138m and the circa 18p dividend estimate.

If equity prices could be relied upon to always be “right”, then market bubbles and stock market collapses would never occur. But they do, indicating that market prices are not always right.

The share price rise and fall over the last 9 months has not been characterised by high transaction volumes on the way up or down and there has not been a single notifiable change in holdings reported by the Institutional Investors since re-admission last November.

Shell's share price bottomed at circa £14 with the price of oil in early 2016 - it then had a dividend yield of circa 8% and PER of 6.5. The near doubling of the oil price since has seen Shell's share price nearly double and the PER rise to circa 15 with a 5.5%+ yield. Other than that little else has changed with the business during the last two years.



AIMHO/DYOR

[kael] 20/7/2018 23:27

It's bs. Whilst I understand the current climate. Doing nothing just reeks of fear. The management should make a statement. Unless of course there is more than meets the eye here. The yield means nothing when the share price has fallen over 25 % from recent highs. Obvs the directors don't see value here, where are their purchases. It's cl at there are ulterior things going on, what they are time will tell us.

[mount teide] 20/7/2018 20:25

2018 Copper, Lead and Zinc Average Prices

Copper

$2.81 - Quoted Data CAML 2018 Model
$2.86 - H2/2018 Average (+1.7% to QD Model)
$3.11 - 2018 Average year to date (+10.6%)

Production is on target to achieve 13,750t - 14,000t against Quoted Data model forecast of 13,150t

LME Copper Stocks are 58% down from the 5 year peak and are back close to the 5 year low.


Lead

$1.02 - H2/2018 Average (-1.9% to QD Model)
$1.04 - QD CAML 2018 Model
$1.11 - 2018 Average year to date (+6.7%)

Production was 2% above 2017 Actual/QD Model in H1/2018

LME Lead stocks are 47% down from the 5 year peak and close to the 5 year low.


Zinc

$1.23 - H2/2018 Average (-16.3% below QD Model)
$1.47 - 2018 Average year to date (-1.3%)
$1.49 - QD CAML 2018 Model

Production was 2% below 2017 Actual/QD Model in H1/2018

LME stocks are 75% down from the 5 year high and close to the 5 year low.



If 2018 year to date average pricing is maintained through to year end 2018, Quoted Data's model would generate circa $12.16m of additional revenue/profit - broken down as:

Copp +$8.69m - model assumes $2.81/lb - 2018 average ytd price $3.11/lb
Lead +$4.47m - model assumes $1.04/lb - 2018 average ytd price $1.11/lb
Zinc -$1.00m - model assumes $1.49/lb - 2018 average ytd price $1.47/lb

In addition the QD model conservatively assumes 13,150 tonnes of Copper production in 2018. CAML management has forecast 13,000t to 14,000t for 2018. A 13,500t mid range performance would generate an additional $2.4m of EBITDA, while a top end 14,000t performance would see an additional $5.9m.

Consequently, at 2018 average metal pricing to date, QD's model with a 13,500t performance from Kounrad in 2018, would generate EBITDA of $153.5m, while a similar Kounrad performance to 2017 of circa 14,000 tonnes would result in EBITDA of $157.0m(up 139% compared to 2017 actual)

EBITDA of circa $157.0m would put EPS up from QD's 2018 forecast of 51.8c(37.5p) to circa 57.2c(43.75p) giving a forward PER of 5.26.


AIMHO/DYOR

[coxsmn] 20/7/2018 18:14

Copper up 2.1%, caml down 1.7%!

[davr0s] 20/7/2018 17:21

Yeah what's it loss in recent months - 30%. That's an awful lot of years divis to break even now

[andyj] 20/7/2018 17:13

Still yielding less than Vodafone and both have rapidly falling share prices which makes the yield redundant.

[melody9999] 20/7/2018 08:27

At 238p with a 16.5p dividend, this is around 7% yield! Must be one of the safest 7% I know.

[coxsmn] 19/7/2018 22:40

Longer term view,https://www.bloomberg.com/news/articles/2018-07-18/prepare-for-copper-on-steroids-as-trump-slump-belies-shortage

[coxsmn] 19/7/2018 21:54

M, agree the share price is a nonsense at the moment but happens sometimes.

[shieldbug] 19/7/2018 16:42

Thanks Arf

New here after running from iii.

[zebbo] 19/7/2018 16:21

Done 234.5

[zebbo] 19/7/2018 16:20

Im just about to grab more......fillyerboots

[morph7] 19/7/2018 16:15

It's just noise guys relax. Some metals sell off so all related companies are marked down.Being in the lowest quartile of costs for producers this is what I call 'a BIG bargain'.I grabbed Northern 12k shares today. Thankyou very much, cheers easy.

[kael] 19/7/2018 16:10

Right now id prefer buybacks to support the price than dividends.

[arf dysg] 19/7/2018 15:39

shieldbug, if you use hTTp (two capitals in the middle) you can put in the complete web address and it becomes a clickable link.

[shieldbug] 19/7/2018 11:24

Just found this useful if slightly out of date document on line hxxp://martenandco.com/wp-content/uploads/2017/04/170425-CAML-Annual-Overview-MC.pdf

[mount teide] 19/7/2018 11:05

Extrader:

circa 15 years - Kounrad / Copper

circa 20+ years - SASA / Lead & Zinc

[mount teide] 19/7/2018 11:03

A statistic the Chinese as the worlds largest consumers and buyers of copper like to keep quiet: In the present decade Chinese copper consumption growth has averaged 131% a year higher than during the decade before known as the Chinese driven commodity 'super-boom'.

In just the last 4 years the tonnage increase in Chinese copper consumption was equal to the tonnage increase for the entire 2000-2009 commodity 'super-boom' decade and nearly double that of 1990-1999.


Global Copper Consumption Growth:

From 10.8m tonnes in 1990 to circa 24.0m tonnes in 2017

+3.4m tonnes / 1990 - 1999 (average growth of 0.34m tonnes per year)

+3.8m tonnes / 2000 - 2009 (0.38m tonnes per year)

+6.0m tonnes / 2010 - 2007 (0.60m tonnes per year)


Chinese Consumption Growth:

+1.6m tonnes / 1990 - 1999 (average growth of 0.16m tonnes per year)

+3.2m tonnes / 2000 - 2009 (0.32m tonnes per year)

+5.8m tonnes / 2010 - 2017 (0.74m tonnes per year)


Source: Energy and Capital

[extrader] 19/7/2018 08:53

Hi all,

In the long run, we're all dead ;-> !

What is CAML's likely mine life, if known/forecast ?

ATB

[mount teide] 18/7/2018 23:49

Well, well - good to see the Wall Street Investment banks finally waking up to the impact that 5 years of chronic under-investmentment is going to have on production growth during the next decade, particularly when combined with falling head grades at existing mines .

'Prepare for a decade of Dr. Copper on steroids' - Citigroup

The bank sees average annual prices at $8,000 a metric ton in 2022, passing $9,000 a ton by 2028 under its baseline scenario.



Copper Prices Are About to Go on Steroids, Citi Says - Bloomberg today




'Recent rout opens up long-term buying opportunity, bank says - Prices may top $9,000 tonne next decade as supply growth slows.

Copper’s slump amid a deepening global trade conflict offers a long-term buying opportunity, according to Citigroup, which shrugged off fears for world growth to boost its long-term forecasts.

“Prepare for a decade of Dr. Copper on steroids,” analysts including Max Layton and Tracy Liao wrote in a July 17 note. The bank sees average annual prices at $8,000 a metric ton in 2022, passing $9,000 a ton by 2028 under its baseline scenario. The metal, often viewed as a barometer of world economic health, closed Tuesday at $6,152 a ton in London.

Hot Metal
Copper poised for multi-year advance on tight supply, Citigroup Inc. says


Copper has spiraled lower in the past six weeks as President Donald Trump upends global trade with disputes involving multiple nations, most critically with No. 2 economy China. But, in the longer term, Citigroup said prices have to rise because the metal is getting much more difficult and more expensive to mine.

“We look beyond the potential trade war to longer-term copper market fundamentals and we find that current prices of $6,200 a ton are nowhere near high enough to enable the market to clear,” the analysts said. “Copper is set to outperform most other commodities under our coverage over the coming decade on a lack of mine supply growth.”

Citigroup’s forecasts from 2023 are based on a new long-term forecast of $7,500 a ton, assuming 2 percent annual inflation, up from an earlier outlook of $7,000 a ton, the bank said. The metal slumped to its lowest in a year earlier this month, after touching its highest since 2014 in June.

The bullish outlook chimes with other analysts and miners who see a supply shortage looming as urbanization and the rise of renewable energy and electric vehicles fuels the world’s need for the metal. Demand can keep growing at an average of 2.7 percent a year through 2030, with new energy sectors and EVs contributing most of the increase, according to Bloomberg Intelligence. The market is entering a long period of deficits starting this year, Citigroup said.


“The overall lull we’re seeing in project development will start to weigh on the market and we’ll start to see supply fall well behind what are relatively conservative demand forecasts,” Daniel Hynes, senior commodity strategist at Australia & New Zealand Banking Group Ltd. said in a Bloomberg TV interview.

“I’m still quite positive on copper in the longer term, but even in the shorter term we’re starting to see some value and concerns around the trade war are overdone.”

Citigroup added a note of caution for the near term in its report, noting that if a full-blown trade war materializes, copper will fall “materially lower before it goes higher again.” Still, that’s not the bank’s base case, and copper should find a floor near current prices as high-cost mines come under pressure in the low $6,000 range, it said.'

[zebbo] 17/7/2018 20:06

Interesting, CAML may be on the small side for the big boys. However good our operating costs are and the quality of our copper deposit