Glencore Dividends - GLEN

Glencore Dividends - GLEN

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Stock Name Stock Symbol Market Stock Type Stock ISIN Stock Description
Glencore Plc GLEN London Ordinary Share JE00B4T3BW64 ORD USD0.01
  Price Change Price Change % Stock Price Last Trade
-2.80 -1.0% 277.10 10:29:28
Open Price Low Price High Price Close Price Previous Close
279.00 276.45 279.65 279.90
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Industry Sector

Glencore GLEN Dividends History

Announcement Date Type Currency Dividend Amount Period Start Period End Ex Date Record Date Payment Date Total Dividend Amount

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sarkasm: Investomania Will the HSBC, Glencore and Centrica share prices make gains after their declines? Could HSBC Holdings plc (LON:HSBA) (HSBA.L), Glencore PLC (LON:GLEN) (GLEN.L) and Centrica PLC (LON:CNA) (CNA.L) post improving share price performances? November 10, 2020 Robert Stephens, The HSBC Holdings plc (LON:HSBA) (HSBA.L), Glencore PLC (LON:GLEN) (GLEN.L) and Centrica PLC (LON:CNA) (CNA.L) share prices have experienced difficult periods this year. Could they produce improving performances in the long run? In my opinion, the HSBC share price has long-term turnaround potential. I think the company is making the right moves in terms of seeking to reduce costs at a time when it is experiencing an exceptional set of trading conditions. Sure, low interest rates and a difficult economic outlook in many of its main markets may weigh on its near-term share price prospects. However, I think that its 37% share price fall since the start of the year suggests that investors have accounted for this to some extent. I also believe that HSBC’s exposure to Asia may be of benefit to it in future. It could experience a higher rate of growth than its UK and European focused sector peers. This may improve its capacity to recover from recent declines in its valuation. I’m also upbeat about the long-term outlook for the Glencore share price. To my mind, the company has delivered a sound operational performance during unexpectedly difficult conditions in 2020. Most of its assets have continued to operate in spite of lockdowns being present in many regions this year. In the short run, investor sentiment could continue to be weak because of a difficult global economic outlook. This may reduce demand for commodity-related companies such as Glencore that are more reliant on the global economic outlook than some of their FTSE 100 peers. However, the company’s decision to postpone dividend payments, the capacity of its marketing division to provide growth in a variety of market settings and its strategy to embrace a low-carbon global economy mean that I’m optimistic about its potential to reverse share price declines experienced in 2020. Volatility may continue to be high, but I feel that it can produce relatively sound returns in the long run from its current price level. The Centrica share price has disappointed for a number of years. To my mind, the company has struggled to deliver on its revised strategy. This may have contributed to weakening investor sentiment that has caused the company to underperform the FTSE 100 by 80% over the past five years. The FTSE 100’s decline this year means that I believe there are a number of stocks that offer good value for money at the moment on a long-term basis. Therefore, for me, the Centrica share price does not have a large amount of appeal just now. I would rather wait for the business to start delivering more resilient operational and financial performance before becoming more bullish about its long-term prospects. Disclosure: the author has no position in any stocks mentioned.
adrian j boris: TOP NEWS: Glencore Swings To First-Half Loss, Withholds Dividend Thu, 6th Aug 2020 09:02 Alliance News (Alliance News) - Glencore PLC on Thursday posted a swing to loss for the first half of 2020 and said it will not pay a dividend but instead focus on reducing its net debt. Shares in the Swiss-based miner were trading 3.2% lower at 189.98 pence each on Thursday morning in London. In Johannesburg, Glencore shares were down 0.2% at ZAR43.41 each. Glencore said that for the six months ended June 30, it swung to a net loss of USD2.60 billion from a USD226 million profit last year, as revenue fell to USD70.96 billion from USD107.43 billion. Adjusted earnings before interest, tax, depreciation and amortisation dropped 13% to USD4.83 billion but was ahead of market expectations of USD4.29 billion. The company booked impairments of GBP3.2 billion as a result of lower commodity prices related to the uncertainty arising from the coronavirus pandemic. Glencore said it will not pay its deferred dividend, saying the economic outlook is too uncertain due to the coronavirus. The dividend was put on hold earlier this year due to the pandemic. It stated that it would instead focus on reducing its net debt to less than USD16 billion by the end of 2020. Net debt as at the end of June was USD19.70 billion. Looking ahead, Chief Executive Ivan Glasenberg said: "The outlook remains uncertain in the short term. Over the longer term, our diversified commodity portfolio, positions us well to play a key role in the next upward economic cycle, benefiting in particular from the commodities required for the transition to a low-carbon economy. We remain focussed on creating sustainable long-term value for all stakeholders." Available liquidity as at the end of June was GBP10.2 billion. By Ife Taiwo;
sarkasm: Tempted by the Glencore share price? Here’s what I think you need to know Rupert Hargreaves | Sunday, 5th July, 2020 | Since the beginning of the year, the Glencore (LSE: GLEN) share price has dropped more than 29%. After this decline, the stock looks cheap compared to its historical pricing. However, like so many other businesses, Glencore has been severely impacted by the coronavirus crisis. The company is facing several other significant headwinds as well. Glencore share price concerns Glencore is the world’s biggest commodities trader. It shifts millions of tonnes of metals, minerals and oil across the globe. This gives the company a relatively defensive nature. The world will always need commodities like oil and copper, and Glencore has the size and contacts required to procure and ship these resources at the lowest possible costs. But the business also operates in some grey legal areas, and the lawsuits are mounting up. The latest is a criminal investigation into the company over its failure to prevent alleged corruption in the Democratic Republic of Congo, where it mines copper and cobalt. The group is also being investigated by the Serious Fraud Office over “suspicions of bribery” in December 2019 These legal actions have had a meaningful negative impact on the Glencore share price. It doesn’t look as if these investigations will be resolved anytime soon either. If it is found guilty in any of these investigations, the company’s ability to do business in certain countries may be restricted. That could have an impact on profitability, which would lead to further selling of the Glencore share price. Global leader Still, even if the company is found guilty, the size of its operations should insulate it from the worst of the fallout. There are few, if any, other companies that have access to their same kind of trading infrastructure as Glencore. As such, now may be a good time for risk-tolerant investors to snap a share of this business at a low price. The company’s earnings might drop substantially this year, but they should recover in 2021, according to analysts. This depends on the global economic recovery. However, policymakers around the world are planning large infrastructure spending plans to get the global economy moving again after the coronavirus crisis. The Glencore share price could benefit significantly from these actions as the demand for its commodities increases. Also, the company has historically returned a significant amount of profits to investors with dividends or share buybacks. This may continue when the crisis is over. Management still owns a large percentage of the group’s outstanding shares. Shareholders should benefit from this in the long run. If you like the look of the Glencore share price but are worried about the company’s legal problems, it may be best to own the stock as part of a well-diversified portfolio. Doing so may enable you to benefit from any upside while minimising downside risk. The Motley Fool
la forge: The Glencore share price is up 51% since the market crash. I think it’s a bargain buy. Matthew Dumigan | Friday, 19th June, 2020 | More on: GLEN View of a gold mine from above Image source: Getty Images. The 2020 stock market crash presented an ideal buying opportunity for investors looking to pick up a bargain or two. In the depths of the sell-off, the FTSE 100 index lost 32% of its value. On top of this, many quality UK shares were trading far below average historic valuations. That still remains the case for numerous companies listed in the index today and one that I think may have been largely overlooked is Glencore (LSE: GLEN). The Glencore share price The commodity trading and mining company saw its share price tumble by 52% in the depths of the market crash. Since then though, the shares have recovered much of their value. That said, it’s worth noting that the company’s valuation is still down by around 26%. Right off the bat, the shares appear to offer a wide safety margin. What’s more, they don’t appear overvalued relative to other miners in the index, with a forward P/E of 13.5. Since flotation on the London Stock Exchange in May 2011, the Glencore share price has had a bumpy ride. To illustrate, those who bought shares on day one would have lost 85% of their initial investment when the company’s valuation hit rock bottom on 15 January 2016. However, if you’d invested around that time, you’d currently be sitting on approximately 130% gains. Stable position In late April, Glencore released its first-quarter 2020 production update. The company reassuringly announced that most of its operations had not seen any material impact from the pandemic. However, government restrictions in Canada, South Africa, Colombia and Peru have caused some disruption. In the report, Glencore also highlighted the opportunities that have arisen for its marketing business as a result of the volatile and complex commodity trading environment. Success here has enabled the company to generate annualised earnings in line with its long-term guidance range. Positive future outlook Things look good moving forward too. At the beginning of the week, news surfaced of a deal struck between Tesla and Glencore for batteries. The agreement stipulates that the electric car manufacturing company will buy cobalt from the FTSE 100 miner for use in its new car plants. With Glencore being the largest industrial supplier of cobalt in the world, I think the long-term partnership could prove a catalyst for further growth in the company. Moreover, as the global economy recovers, I expect activity in the resources sector to swiftly return to pre-pandemic levels. If so, investor sentiment towards mining stocks is likely to improve, causing share prices to rise. In fact, analysts at Deutsche Bank have already hiked their price targets for numerous miners on the back of strong demand in China. Overall, given the company’s strong liquidity position and resilient business model, I think Glencore is more than capable of navigating the current challenges facing the sector. As such, now could be an ideal time to buy the shares at a reduced valuation and hold them for the long term. Motley Fool UK
gibbs1: Glencore’s expansion of Hunter Valley coal mine approved MINING.COM Staff Writer | March 5, 2020 | 6:10 am Energy Australia Coal Glencore's expansion of Hunter Valley coal mine approved Mt Owen/Glendell Operations in Australia. (Image courtesy of Glencore). The New South Wales’ Independent Planning Commission approved for an additional 2 million tonnes of coal to be extracted from Glencore’s (LON: GLEN) mine in the Hunter Valley. This, after the Commission greenlighted -with conditions- a modification to the site’s existing development consent. In detail, Glencore’s subsidiary, Mt Owen Pty Ltd, sought approval to extend the Barrett Pit at the Glendell coal mine, located 20 kilometres northwest of Singleton and which is part of the Mt Owen/Glendell operations together with the Mt Owen and Ravensworth East mines. The Mt Owen Complex consists of the Mt Owen mine, Mt Owen CHPP, Ravensworth East and Glendell open-cut mines The proposed modification aims to recover an additional 1.97 million tonnes of run-of-mine coal, which will result in a net increase in disturbance area of 4.3 hectares and a net 0.4-hectare reduction in clearing of native vegetation. Despite this and the fact that the project received 25 public objections, the Commission determined that it is in the public interest and that its benefits outweigh the costs. But some community members at Singleton said in a public meeting that they are worried about air quality; greenhouse gas emissions; Aboriginal heritage; rehabilitation, mine closure and water impacts. “In relation to GHG emissions, the Commission noted Glencore’s commitment to an annual thermal coal production cap for its global operations and that coal produced under this Application will be included in that cap… (and) that Glencore has announced a target of reducing Glencore’s greenhouse gas emissions intensity by 5% by 2020 compared to a 2016 baseline,” the government agency said in a media statement. According to the Commission, the extension of the Barrett Pit and extraction of an additional 1.97 Mt of ROM coal over an 8 month period will result in a minor increase in GHG emissions which are accounted within the reduction strategy Glencore has in place. The Mt Owen Complex is located within the Hunter Coalfields at Hebden in the Upper Hunter Valley of New South Wales, approximately 25 kilometres northwest of Singleton and 26 kilometres southeast of Muswellbrook.
waldron: Glencore to shake up its top tier with younger leaders ‘Senior changes coming’ at commodities trader, says chief Glasenberg 22 minutes ago Only a handful of executives from the time of Glencore’s 2011 flotation are still at the company. Only a handful of executives from the time of Glencore’s 2011 flotation are still at the company. AddThis Sharing Buttons Share to Facebook Share to Twitter Share to Email App Share to LinkedIn Glencore boss Ivan Glasenberg has said several more leadership changes are on the way as the miner and commodities trader makes the transition towards a new, younger generation of leaders in 2020. Speaking after the publication of annual results, which beat market expectations, Mr Glasenberg said the company was working on bringing through a fourth generation of leaders. “There will be a few senior changes coming,” Mr Glasenberg said, without giving further details. “As I have said, once the new generation is in place and ready to move on, it will also be time for me to move on.” In the almost half century that Glencore has traded commodities, the company has had just three chief executives, including its founder Marc Rich. Pressure Today, only a handful of executives from the time of Glencore’s 2011 flotation are still at the company. These include Mr Glasenberg, head of coal trading Tor Peterson, and Daniel Mate, who leads its zinc business. Bribery investigations by the UK’s Serious Fraud Office and the US Department of Justice have increased the pressure for more change at the top of the company, according to analysts and investors. They say the leading contenders to succeed Mr Glasenberg are: Gary Nagle, head of coal assets; Kenny Ives, who runs the nickel operations; and new copper boss Nico Paraskevas. Mr Nagle, a fast-talking South African, is the most similar to Mr Glasenberg - who once said his ideal replacement would be about 45 and look much like himself. Mr Glasenberg was speaking after Glencore announced a drop in annual profits. 2019 was a tough year for the company as it missed production guidance for its key commodities and faced a string of issues at its Africa copper business, which it is now starting to tackle. In addition, commodity prices fell because of uncertainty created by the US-China trade war. All that weighed on its share price, which dropped more than 20 per cent, underperforming the wider market and its peers. Learn more Glencore said adjusted earnings before interest, tax, depreciation and amortisation – the measure most closely followed by analysts – fell 26 per cent to $11.6 billion in the year to December on lower prices for its key commodities including copper, thermal coal and zinc. However, the result was ahead of market forecasts by about $400 million (€369 million). Revenue was $215 billion, down from $220 billion, while net debt increased to $17.6 billion, from $14.7 billion a year earlier, as Glencore was forced to add leading commitments to its balance sheet under new accounting rules. “Given we see a credible turnround in Africa. . .we don’t have too much concern over the balance sheet position today despite being slightly over the top end of the company’s desired level,” said Conor Rowley, analyst at Credit Suisse. After taking a string of impairment charges on assets, including copper mines in the Democratic Republic of Congo and Zambia and Colombian coal businesses, Glencore recorded a loss for the year of just over $400 million. Assets Glencore said its Colombian coal assets had been hit by an oversupply of liquefied natural gas (LNG) and the knock-on effect of weaker European demand. Its African copper mine Mutanda, which has been mothballed, suffered from low cobalt prices. The company declared a dividend of 20 cents a share, which will be paid in two equal instalments, but did not announce another share buyback programme. That would be on hold until net debt is around $14 billion to $15 billion, or about one times ebitda, Mr Glasenberg said. “We would like to do buybacks at some stage [in 2020] and if the free cash flow allows us to do it, we will do,” he said. Mr Glasenberg said Glencore was closely monitoring the coronavirus outbreak but it was too early to tell what impact it would have on growth in China and therefore commodities. Nonetheless, he said Glencore’s muscular trading arm, which is an important source of cash for the company, had enjoyed a good start to the year. “It is a bit too early in mid-February to start predicting exactly where [profits from the trading business] are going to be . . .but the year has started off fairly well,” he said. In a separate announcement, Glencore projected a 30 per cent reduction in its absolute Scope 3 emissions – which include those produced by its customers–- over the next 15 years. Mr Glasenberg said he expected the “depletionR21; of the company’s coal resource base in Colombia, and to a lesser extent, South Africa and Australia, to contribute to this reduction. “By 2035 we will not have any production in Colombia. [The] Cerrejón and Prodeco [mines] will not be running at that time.” Although Glencore has a large coal business, it already has lower Scope 3 emissions than many of its rivals such as BHP and Rio Tinto, which supply raw materials to China’s huge steelmaking industry. – Copyright The Financial Times Limited 2020
waldron: Investomania Home Investing Articles FTSE 100 (INDEXFTSE: UKX) FTSE 250 (INDEXFTSE: MCX) Do these FTSE 100 stocks have growth potential? Imperial Brands, Glencore and BAE Could these FTSE 100 (INDEXFTSE:UKX) shares produce rising earnings? Imperial Brands PLC (LON:IMB) (IMB.L), Glencore PLC (LON:GLEN) (GLEN.L) and BAE Systems plc (LON:BA) (BA.L) February 5, 2020 Robert Stephens, CFA BAE (LON: BA) (BA.L) (BA.LON), FTSE 100 (INDEXFTSE: UKX), Glencore (LON: GLEN) (GLEN.L) (GLEN.LON), Imperial Brands (LON: IMB) (IMB.L) (IMB.LON) BAE Systems plc BAE Systems plc The investment prospects for FTSE 100 (INDEXFTSE:UKX) stocks Imperial Brands PLC (LON:IMB) (IMB.L), Glencore PLC (LON:GLEN) (GLEN.L) and BAE Systems plc (LON:BA) (BA.L) have been challenging over the past couple of years. BAE, for instance, has faced uncertainty regarding its ability to service demand from Saudi Arabia. This could continue to be a threat to my mind, although the company is seeking to diversify its revenue streams and Saudi Arabia sales currently account for 14% of its total revenue. I think that rising global defence spending could catalyse BAE’s financial prospects. It is expanding its Australian business, could benefit from rising NATO spending and still offers a dividend yield of almost 4%. Imperial Brands has been hurt by falling demand for cigarettes in the past few years. It also reported this week that the growth in sales for its next-generation products have been lower than its previous guidance, which caused its share price to fall by around 10%. Its change in CEO may also create some uncertainty for the business in the short run. I feel that cigarettes still offer profit growth potential due to pricing power. Their solid cash flow could provide Imperial Brands with the capital it needs to develop its market position in an ever-changing reduced-risk products segment. Sure, regulatory risks are a concern for the business, but they have been omnipresent in the tobacco sector since I started following it 15 years ago. I feel that those risks may now be factored into Imperial Brands’ share price, although I’m expecting further volatility from the stock in the short run. Glencore may suffer from concerns about the global economy in my view, while regulatory risks could continue to concern investors. Still, I feel that its shift towards cleaner products could enhance its sustainability and long-term profit growth. It has a diverse asset base, and I feel that the overall mining sector could be undervalued at the moment. Sure, Glencore has experienced volatile trading conditions of late – and they may continue. But its prospective P/E ratio of 10.5 could indicate good value for money to my mind. About Robert Stephens, CFA 6256 Articles Robert Stephens is an Equity Analyst who runs his own research company. He is a CFA Charterholder and a passionate private investor who has been buying and selling shares for many years. He currently writes for The Telegraph's Questor column, What Investment, Master Investor, Investomania and Gurufocus. To contact Robert, please email or connect via Twitter
sarkasm: Look past the negativity – there’s one very good reason why I like Glencore shares at the moment Michael Baxter | Thursday, 30th January, 2020 | More on: GLEN Diggers and trucks in a coal mine Image source: Getty Images. Glencore (LSE: GLEN) shares have fallen by 28% since last April. There are good reasons for the fall. At the top of the list is the news that broke at the end of last year of an investigation by the Serious Fraud Office into allegations of bribery at the company. In addition, there have been nagging doubts about debts at the company for some time, although it has reduced them significantly over the last year. Its debt ratio is now 48%, which is not horrendous. Another fear relates to the fall in annual profits in 2018, down by around a third from the year before. In the latest half-year period, profits fell precipitously from £2.8bn to £226m. On the other hand, Glencore is a big dividend payer and offers diversification across the mining sector. Cobalt and lithium ion batteries Let me now turn to the reason I like Glencore. It’s very simple: cobalt. Glencore is the biggest miner of cobalt in the world. That is significant because cobalt is a key component in lithium ion batteries. The economics of electric cars is becoming more compelling. The cost of lithium ion batteries, the big cost component in electric cars, fell from almost $1.200 a kilowatt hour in 2010 to less than $200 in 2018. As the lifetime cost of lithium ion batteries falls and the longevity of the batteries increases, their carbon foot print reduces. More to the point, we are very close to a tipping point when the life-time cost of an electric car including running costs, is less than the lifetime cost of an internal combustion engine car. Once that tipping point is crossed, lithium ion batteries will continue to get cheaper and I believe that demand for electric cars will explode. With that rapid increase in demand for electric cars, demand for cobalt will grow proportionately. Glencore will be a big winner from this. With the current Glencore share price at its lowest level since the autumn of 2006, I think its position in the cobalt market makes this company’s share price attractive. In my opinion, the bad news about the company is priced in, but the good news is not. A concern, not a deterrent I do have one nagging concern about Glencore’s longer-term prospects. Elon Musk, the boss of Tesla, which is leading the electric car revolution, has said he wants to eliminate cobalt from Tesla lithium ion batteries. At the moment, this is just an aspiration. In any case, the rush of other car companies into the electric car market, who are not so keen to remove cobalt from batteries, means that for the next two or three years demand for the metal will grow very fast. Look further ahead to the midpoint of this decade, however, and cobalt demand may have peaked and be in decline. Glencore has got several years to prepare and I believe that whatever the future components of energy storage technology may be, mining will be crucial. A top income share with a juicy 5% forecast dividend yield Income-seeking investors like you won’t want to miss out on this timely opportunity… Here’s your chance to discover exactly what has got our Motley Fool UK analyst all fired up about this out-of-favour business that’s throwing off gobs of cash! But here’s the really exciting part… Our analyst is predicting there’s potential for this company’s market value to soar by at least 50% over the next few years... He even anticipates that the dividend could grow nicely too — as this much-loved household brand continues to rapidly expand its online business — and reinvent itself for the digital age. With shares still changing hands at what he believes is an undemanding valuation, now could be the ideal time for patient, income-seeking investors to start building a long-term holding. Click here to claim your copy of this special report now — and we’ll tell you the name of this Top Income Share… free of charge! Michael Baxter has no position in any of the shares mentioned. The Motley Fool UK has no position in any of the shares mentioned. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.
sarkasm: the motely fool The Glencore share price has fallen 20% in six months – here’s what I’d do now Conor Coyle | Friday, 6th September, 2019 | More on: GLEN Silhouette of digger Image source: Getty Images. Shares in mining giant Glencore (LSE:GLEN) have taken a beating over the last six months or so, with the company’s share price currently sitting at 235p, a fall of just under 20%. A recent surge has prompted some investors to consider whether now is the right time to buy into a recovery of the FTSE 100 stock. Glencore has suffered from falling profits in recent times, no less than in its most quarterly earnings report where its adjusted earnings before interest, tax, depreciation and amortisation fell 32% to $5.6bn. Full-year results in 2018 fell short of expectations and that trend appears to be continuing this year, with lower commodity prices for its main production materials weighing on performance. So what are the prospects for the Glencore share price for the remainder of 2019 and beyond? Operational issues Fears over a global recession and an ongoing trade conflict between the US and China, leading to a fall in cobalt prices led to declining profits for Glencore in the last quarter, but the company also referred to unresolved operational issues as making up $2bn of the $8bn decline in operating earnings. While cobalt prices have recovered somewhat since Glencore announced it was closing its Mutanda mine in DR Congo, it’s the so-called operational issues which lead me to be sceptical about the prospect of a recovery. New laws in the African country made it increasingly difficult for one of Glencore’s biggest mines to be profitable. DRC is the world’s largest producer of cobalt but the introduction of a raft of smaller competitors has driven prices and profitability down. Value play Looking at Glencore’s dividend yield of 6.5% alongside a current P/E ratio of more than 9, there is certainly an argument to say that the stock represents a great value investment now at 235p. Considering other miners such as Rio Tinto and Anglo American offer yields of 5.5% and 4.2% respectively at current prices, as an income investment that argument is potentially stronger. However, Glencore is currently the subject of a number of ongoing investigations into alleged corruption in the countries where it has mines, which is harming its reputation and making it more and more difficult to do business there. The firm’s half-year results also included a write-down of around $350m due to the falling value of unsold inventory, which doesn’t fill me with confidence that it is prepared for potentially wide swings in commodity prices. While the very nature of the mining industry in which Glencore operates is quite cyclical, much of the pressure affecting the prices of cobalt and other commodities relates to ongoing geopolitical uncertainty. With US President Donald Trump continuing to slap extra trade tariffs on China and a variety of other issues weighing on the wider global economy, I don’t see that uncertainty coming to an end any time soon. That’s why I’d hold off on buying Glencore shares at this stage, at least until the prospect of steady long-term rises in commodity prices become a reality.
la forge: Https:// First Cobalt Corp. and Glencore Sign MOU on Cobalt Refinery Date 5/24/2019 10:53:02 PM Tweet on Twitter (MENAFN - Investor Ideas) First Cobalt Corp. and Glencore Sign MOU on Cobalt Refinery Source:Streetwise Reports May 24, 2019 ( Newswire) If the agreement to get the North American cobalt refinery up and running is finalized, sector expert Peter Epstein believes it could be transformative for the Canadian company and its investors. This is big, really big. I can't say it's a surprise that Glencore AG might want to partner withFirst Cobalt Corp. (FCC:TSX.V; FTSSF:OTCQX; FCC:ASX) , but it would be by far the best possible outcome for management's strategic review of its 100%-owned refinery in Ontario. Shareholders and prospective investors were understandably growing nervous about First Cobalt's ability to deliver the restart funding with little or no additional equity issuance. Not because of management, because the battery metals sector is a complete disaster. Everyone knows that the cobalt price is down a lot, did you know that vanadium is down 73.5% in six months? This news alone, if this agreement is consummated, it could mark a turning point for select cobalt juniors. [Seefull press release .] Glencore adds tremendous credibility to First Cobalt's refinery In addition to the potential for significant revenue (CA$100 million+ at US$20/pound cobalt) and good, very good or great EBITDA (earnings before interest, taxes, depreciation and amortization) margins (depending on the cobalt price), this would open a lotof doors for the company. It would instantly become the premier pure-play, North American cobalt junior, not that there are many left to choose from. First Cobalt could solidify its leading position by acquiring other companies end assets. Might eCobalt Solutions Inc. (ECS:TSX; ECSIF:OTCQX; ECO:FSE) be first on the list !?! eCobalt might now prefer the embrace of First Cobalt over a takeover by Australian-listed Jervois Mining Ltd. (JVR:ASX). I have no insight on this, I'm just reflecting on the recent acquisition of ECS shares. At the risk of getting ahead of myself, this is a memorandum of understanding (MOU), not a signed, sealed and delivered deal. I continue with the benefits of an agreement between First Cobalt and Glencore. Glencore adds increased credibility to First Cobalt, the management team and the refinery. It would be a supreme vote of confidence. Outside of North America, First Cobalt might not be a very well-known name. That would change overnight—in fact it might be changing as I write this sentence. . .First Cobalt would attract additional world-class executives. The company could pay a dividend! My quick math suggests that a 5% dividend yield would be possible from 50% of the cash flow on 2,000–2,500 tonnes of production at US$20/pound cobalt. Glencore would greatly derisk refinery restart and attract attention to First Cobalt It's amazing what Glencore would bring to the table that no one else possibly could. It appears from the press release that Glencore might provide a loan for up to US$30 million, all of the capital needed to restart the refinery. In addition, Glencore would provide technical assistance in bringing the refinery back into production. For instance, they would "collaborate on final flow sheet design." Glencore would source up to 100% of the feedstock. The refinery is a hydro-metallurgical cobalt facility in the Canadian Cobalt Camp of Ontario. It has the potential to produce either a cobalt sulfate for lithium-ion batteries, or cobalt metal for the North American aerospace industry and other industrial and military applications. Taking this news a step further, if the restart were to be a success, guess who would be there to help (if feasible) ramp up operations from 2,000–2,500 to perhaps 4,000–5,000 tonnes per year? Glencore is to cobalt what Albemarle Corp. (ALB:NYSE) and SQM (SQM:NYSE) are to lithium. Yes, closing on this agreement would be really, really good for shareholders. Assuming that Glencore is on board, the refinery would likely be up and running sooner than otherwise would be the case. And, once the world realizes that a cobalt refinery is coming online in Canada in 2021, and that produced cobalt would to be ethically sourced from mine to finished product, end users would be very interested in speaking with First Cobalt. First on the list of visitors to see CEO Trent Mell would likely be execs from the automakers. The company has already signed non-disclosure agreements (NDAs) with a number of them. Next to visit? Lithium-ion battery makers. Both automakers and battery companies need ethically sourced cobalt for genuine moral considerations, for public relations and for security of supply. As per the press release, "With no cobalt sulfate production in North America today, the First Cobalt Refinery has the potential to become the first such producer for the American electric vehicle market. The Company has signed confidentiality agreements with several automotive companies interested in securing cobalt for the North American market." I have to remind myself that this is a MOU, not a done deal, but I think the chances of it getting done are pretty high. First Cobalt and Glencore have likely been talking about the refinery for months now, if not longer. And, although I've outlined the many benefits for First Cobalt shareholders, Glencore benefits as well. Over time, if the refinery could produce 5,000 tonnes of cobalt products, and Glencore controls that offtake, that's a meaningful amount, probably >10% of the battery-grade cobalt processed, refined and sold outside of Africa and China. Speaking of China, recent news shows that geopolitical risks are alive and well, with China hinting at restricting the free trade of rare earth metals from China to the U.S. It doesn't matter who's to blame or how the U.S. and China got here, all that matters are the potential consequences. Today it's rare earth metals; will China threaten to stop exporting lithium and cobalt next? I doubt that China would sell to Canada or Mexico if there was an embargo against the U.S. for rare earth metals, lithium, cobalt, vanadium, graphite, etc. But now I've veered off course. This isn't about China. . .the news today is about Glencore signing a MOU with First Cobalt Corp. to help design, reengineer, refurbish and commission the company's cobalt refinery in Ontario, Canada. Glencore could deliver up 100% of the feedstock needed to produce 2,000–2,500 tonnes of finished cobalt. And, Glencore is considering paying the entire US$30 million cost (in the form of a loan to First Cobalt Corp.) to get it up and running again. This is the biggest news of the year for the company. This is important news for the cobalt sector. Let's see if this marks a change in sentiment for cobalt juniors. Peter Epsteinis the founder of Epstein Research. His background is in company and financial analysis. He holds an MBA degree in financial analysis from New York University's Stern School of Business.
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