Kenmare Resources Share Discussion Threads

[ih_658216] 23/7/2019 16:55

Normally I would agree with you. In this case though, I think we are simply now priced at the level the company traded for 2-3 years. It was the short term dip down to 180p that was the anomaly, on previous little volume and being filled by a known seller of a large position. Bar a market correction, I think we should see strength ahead as well as the prospect of confirmatory dividends (admittedly small in quantum).

[datahead] 23/7/2019 12:56

Yep time will tell i am a seller right now - sold today and yesterday took some short term gains - going straight up isnt sustainable and realistic

[ih_658216] 23/7/2019 09:21

2 days doesn’t make a summer. But 50p increase is better than a further reverse. Interesting that it all kicked off so early in July - time will hopefully tell the story behind.

[petomi] 23/7/2019 08:59

Surprised no comments on recent strength here. They seemed unloved for a long time despite much more reliable operating performance. Of course a long way to go for us longer term holders

GLA

[murraybasin] 16/7/2019 21:15

It's measured. Still, with the FANGS and T looking dangerous, someone needs to look at where all of this comes from. There's $5.2b+ EBITDA sitting at Moma for whomever wants it. That's based on p+p reserves, not resources. Taking on the latter, another $17.1b. We're only looking for between EBITDA of $100m and $150m a year to make this rock (sic!); starting to look way more plausible given $93m 2018 and $107m forecast (Davy) 2019. ECoS now starting to settle in.

The PFS question for all players will be, can you meet KMR's target unit cost of ~$125 tonne (Base ~536 tonne?). That is going to be bloody difficult for all new entrants especially if they have no co-product credits. Now you know why we are ploughing capital into copper-fastening the current operation.

The management team are being very coy about this given their previous bumpy history. The underlying signals are looking alright. They've discussed the production and cost objectives of the plan, not the revenue or ramifications for other industry participants.

Getting harder for minor operations to compete when KMR can up volume at very marginal cost. All starting to play out. KMR will probably put Strandline, Image, MZI, and Melior under serious strain, BlueJay too. MRC to a lesser degree but it has its own distinct set of issues. Base has local objections on Toliora but the current Kenyan operation is sound enough. Probably hasn't been helped by RTFeT being previously disingenuous in Madagascar.

Lot's to ponder, including increasing prices, increasing volumes and increasing unit margins.

[donkey40] 15/7/2019 18:55

Means volume is going through the market which is all good.

[murraybasin] 15/7/2019 18:23

Machine doing the buying. Small, bigger, big. Small, bigger, big.

[donkey40] 15/7/2019 11:21

190p and Brokers now saying outperform.

I wonder how EIB are getting on ...

[donkey40] 23/6/2019 22:49

Is this a dot dot dash moment. Sending out an SOS. Message in a bottle, yeah

[murraybasin] 12/6/2019 09:28

Current Chinese spot for similar grades is above KMRs average for 2018. They've also indicated they agreed higher contract prices for 2019. The only time you'll get true insight into financial performance is in the HY and FY financials. Q1 report from KMR reports tightening supply conditions. Position is supported by other reports, Iluka Resources for example.

[donkey40] 11/6/2019 22:36

Wendy - well past your bedtime. Stop wasting our time please.

Apologies SteMis - we have allowed ourselves to be dragged into a meaningless exchange with children about their pocket money.

[stemis] 11/6/2019 21:36

On that basis no stock could be cheap because if it WAS cheap then buyers would be buying it and the price would be higher.

On current basis KMR is valued at about 2.6 x ebitda. If they deliver on their expansion then the current price will put it at about 2.1 x ebitda.

Main risk seems to me to be price of product. If it falls then it hits profit but also cashflow and funding of expansion. 2018 benefited from increased prices. What are they now?

Plus, what's all this about TLOU?

[wheniamfree] 11/6/2019 21:06

I thought you said 1200p Donkey - you’ve dropped to 750p in less than 2 weeks but, as you said, you’ve been calling it wrong for 3 years.

If the price was so low and everyone wanted a piece there would be buyers soaking up the sells - there isn’t. That tells me nobody buys the story because of the above points - a company treading water whilst it blows all cash flow on upgrades ready in time to miss the peak of the commodity cycle.

Operating in a region rife with terrorism with historic issues of operations based on operational failure and acts of god. Run by the same team that led to its ultimate wipeout before consolidation and refinance wiping out 99.8% of shareholder value.

What’s not to like?

[murraybasin] 11/6/2019 20:20

2022 operating margin probably north of $150m. Price an acquisition on that basis, after all of the development capital programme has been done.

[donkey40] 11/6/2019 17:02

SteMis - because one particular large II is presently exiting. And the market knows this, and the shares will not advance until this clears the market.

Yes the story here is stale to certain people. There are those who are bitter and twisted about past performance; fair enough nobody likes to lose money. But money management is about future performance so get over it and decide if you are in or out.

The current price weakness is nothing more than a function of someone large exiting and is taking time to absorb. There does not appear to be any Mine performance issues or product side issues driving the current price weakness.

Despite what other knuckleheads would try to have you think.

[stemis] 11/6/2019 15:43

Why are non of the majors sniffing around this? It's only valued at 30% of tNAV. They only have to talk to pretty much two shareholders.

[wheniamfree] 11/6/2019 14:32

Of course danger, however KMR is a well known business and already has a raft of II backing some of which are stale to say the least.

As buck continually points out, liquidity is an issue so the lobster pot could get an airing via Peel to shift stock around.

It could also be sounding the market for capital which, is usually the case - nice little bonus for their troubles also.

Some big development plans all of which are to be funded from projected cash flows, once achieved production should/would increase but what will be the sale price of product at such time? They have missed the peak of the cycle.

Already starting off with additional costings of WCP B of circa $5m isn’t really setting the world alight.

There is nothing to get excited about for over 18 months and this of course is assuming all goes to plan, on budget and with no hiccups.

[dangersimpson2] 11/6/2019 13:47

Probably the usual reasons: they think the broker will help raise awareness of the company through research or presentations, will help manage any overhangs where large shareholders want to sell, source large blocks of shares for large buyers, advise on any corporate deals or structure.

Helping to raise equity may be one of the functions of a corporate broker but by no means the only one. Inferring an equity raise from a broker appointment is a bit like inferring that they are in takeover talks because they didn't immediately reply to an email!

[donkey40] 11/6/2019 13:38

You tell us all please Wendy ....

[wheniamfree] 11/6/2019 12:49

Why the appointment of broker, additional costs for what else?