Pembridge Resources Share Discussion Threads

[tim000] 26/6/2020 13:52

I’m not clinging to it, it’s just one factor. I agree with you that sunk capital has no bearing on market pricing. But in a tight market it has a bearing on output, and hence profits. But there’s no point arguing these things, we agree the situation is opaque but take a different judgement on the risk/reward of investment.

[mdchand] 26/6/2020 13:43

rossannan - I thought PERE retained a 33% interest in Minto's cash flow. I admit recent fund raisings have perhaps obscured any dilution here, but I can't find any official statements that confirm your 11% figure. Could you point me in the right direction here?

[tim000] 26/6/2020 13:33

Yes, we agree we’re short of data. No doubt that is contributing to the share price weakness. I don’t agree with you that sunk capex is irrelevant. It indicates that the mine is a substantial operation and will most likely have scope to increase throughput and profitability going forward. That affects its prospective market value. Put another way, a prospective acquirer would probably need to spend a very large sum to replicate Minto’s output from a greenfield site. And as you know, copper is believed to be in growing deficit of supply, putting upward pressure on its price. Anyway, time will tell.

[tim000] 26/6/2020 12:29

RNSs state that Minto revenues are about $2000 per tonne of concentrate and output is currently ca. 30k tonnes pa (ie revenues of $60 mn), and increasing. PERE currently has an EV of about £3 mn. If that is fair value, it implies Minto has a fair value of ca. £27 mn. As I've mentioned, Minto has sunk capex of $350 mn and is producing revenues of at least $60 mn pa (it should be more now with the renegotiated gold and silver credits). Yes, we don't have a P/L account for the mine. But on this evidence, I think Minto (and PERE) are worth more than indicated by PERE's share price. That's my judgement, we'll see over time if I'm correct.

[tim000] 26/6/2020 10:56

The Offtake Agreement seems to be that 90% of calculated proceeds from the copper concentrate are paid to Minto upfront, with a balancing payment determined from market prices in the month three months after delivery of the concentrate to Japan. Minto has currently delivered one shipment for all of its production up to end-March, which must have arrived in Japan in May. So the balancing payment presumably will be made in September, based on August copper prices. That means Minto suffered no permanent loss of revenue from the dip in copper prices in Q1, and will benefit from the apparent upward trend in prices now. Production in Chile and Peru seems to be falling as refineries are closed down due to covid. Analysts are expecting copper prices to rise further in Q3. I make no predictions for the share price in the short term, but it still looks far too low to me! Long-term hold.

[soulsauce] 25/6/2020 19:40

Hi bazz I am not sure. Depends on whether there is any news in the offing.
If it is just punters jumping on the next low cap miner to ramp then it might snuff itself out soon.
If there is some decent news then may be test 8 to 10p.

[bazzerhino] 25/6/2020 19:33

Soul mine were renamed to pere yonks ago so I can't do anything with them.
Where do you see the share price getting to?

[bazzerhino] 25/6/2020 16:18

Waiting for 35p so I can get the hell out. Been in since CAF days

[tim000] 25/6/2020 16:01

rossannan, yes, I agree it's not a perfect indicator. On average though, do you think copper miners make a positive or negative return on capital?! Answer: it's positive!

[dave4545] 25/6/2020 15:58

I remember when they all piled into this at 15-20p

That chart is great, it just looks nailed on to get to 6-8p then 8-10p but each to their own how you trade it.

Seen quite a few miners have similar charts, flatlining then taking off

[tim000] 25/6/2020 15:55

Market cap is still tiny, investors get a lot of leverage buying heavily undervalued microcaps. Hard to say what fair value is without more operations data, but one indicator is as follows. The company has stated that the Minto mine has attracted total capex of over $350 mn to date. 11% of that is over 40p per share. And the mine's investors expect to recover more than costs!

[bigboots] 25/6/2020 15:45

Hope you all followed me... still a big buyer out there at 150,000 clips

Going to 8p

[tidy 2] 25/6/2020 14:13

7p next target hTTps://twitter.com/share_talk/status/1276134746528104448?s=21

[bigboots] 25/6/2020 12:03

100% watch it - short term move