Petropavlovsk Share Discussion Threads

[brian1944] 03/2/2019 16:23

hi all in sats ft paper ernings 2019 177 mill 2020 220 mill

[officehead] 03/2/2019 14:51

Route 1- yes IRC shareprice has rapidly come off its base, since PH purchased his slug of shares. This has been followed up with confirmation of refinancing and a boost in the iron-ore price following the tragedy in Brazil. It can only be good for POG but in reality the doubling in share price equates to around £13m for POG. Kenges Rakishev's stated acquisition of IRC shares from POG strikes me as a confidence boost to re-assure investors that POGs current financial commitment to IRC is sound.
I think that compared to POG the risks attached to IRC are similar, but on steroids!! However the rewards of investing at these levels will be exceptional should they be able to deliver a sustainable profitable business.

[route1] 03/2/2019 12:35

Corporate curve balls? Let's hope that they are solid Gold ones!!!Joking apart; something to add to my last post is that our major shareholder, Kenges Rakishev maybe thinking of acquiring a holding in IRC,following its current Chairman Peter Hambro,who bought more than 15 million shares last year, and has atthe current price,doubled his investment.

[officehead] 03/2/2019 09:39

All those recent investors in POG, congratulations on your investment timing, I think this could be a very good year for you. For the long suffering shareholders like myself, the stars seem to be coming into alignment - at last. POX and the associated increase in Reserves, IRC refinancing, and bullish views on the Gold Price, will all deliver a more positive sentiment and raising expectations at the same time! All fuel to the share price. This now has to be born out by some real improvements in the financial figures going forward. Not expecting anything special in the EOY results for 2018, but need to see real change, such that there is real confidence that the current debt profile can be absorbed and real shareholder value is returned. The market cap is still only £270m, a share price of 15p would equate to mkt cap of £500m - still a small % of its peak valuation in the early part of the decade. Now with the POX seeming running successfully, and if they can get u/g mining delivering at Pioneer, then a share price of 15p in the next 12 months is in reach. However I think there is still likely to be corporate curve balls to come this year! With the possibilities that brings with it! .IMHO.

[davidlloyd] 02/2/2019 12:03

Route1
Couldn't agree more. However it has been my experience that when IC say something positive on shares I'm following they tend to respond (price-wise) negatively....
It was meant tongue in cheekishly....
DL

[route1] 02/2/2019 02:52

David,I beg to differ on your comment IC "kiss of death " etc, etc.Unless I misread the article,it does have proportion of positive content.For sure there is as always the evercautionary Warning on debt, Bonds etc,which are always in the background,and cannot be ignored.However,taking into account the events of the past week; the news,theshare price, the gold price, and the 100% rise in IRC,s value since PH bought more than fifteen million shares last year, I think it somewhat unjust to view the IC article in that light.Rather I see it as a struggling rebirth,with a sustained "labour period ",but, with all the various "Midwifes" managing the situation, a new healthychild should emerge in due course!!!Tragic as it is,the Brazilian mining disaster has been beneficial to other iron ore miners worldwide, including IRC.

[davidlloyd] 01/2/2019 14:52

The IC kiss of death strikes???
:-)
DL

[malcontent] 01/2/2019 13:10

I'm level on my investment at this level but this one certainly can test the patience...
It's double-up for me once it gets going for real

[gersemi] 01/2/2019 12:27

b1 - no problem fella

It's all in the debt - debt is the cancer that eats away at shareholder equity....going forward it all looks very promising from here certainly on the operational front

[jp2011] 01/2/2019 12:12

This has been range bound for the last 3 years 5.5p-8.5p so it's either in overbought territory or about to breakout?

[bambo1] 01/2/2019 11:46

Thanks for that gersemi, very encouraging for a long term holder who is massively out of pocket with this stock. I only hope that I live long enough to see a profit on this unfortunate investment.

[gersemi] 01/2/2019 05:23

Tips of the Week - IC

Petropavlovsk’s promising production pick-up

IC Tip: Buy at 7.6p

Tip style - Speculative
Risk rating - High
Timescale - Medium Term

Bull points -
POX hub online
Production growth
Liabilities unwinding
Gold price strength

Bear points
High debt and costs
Poor track record

By Alex Newman

The combination of high debts and volatile commodity prices is rarely a winning investment formula. Long-term holders of Petropavlovsk (POG) will know this more than most, as shares in the gold miner are down 98 per cent since the start of the decade. But against this terrible track record – and after two years of chaotic boardroom wrangling – there remains a business with much potential. High costs and higher debts mean this remains a very risky and speculative share to own, but positive recent operational and corporate developments have also prompted us to include Petropavlovsk within our bullish view on gold miners.

For the uninitiated, here’s the introduction. The company joined Aim in 2002, and moved up to the main market in 2009. But since it was founded 25 years ago, Petropavlovsk has focused on the Amur region of Russia, where it has four operational mines: Malomir, Pioneer, Albyn and the ageing Pokrovskiy, now the site of the long-awaited pressure oxidation (POX) plant.

It hasn’t always been a happy story. Aggressive expansion, a lack of hedges, and an ill-conceived convertible bond collided horribly with the $600-an-ounce drop in gold prices between 2012 and 2014, and resulted in shareholder wipeout in a 2015 rights issue.

Since then, Petropavlovsk has been treading water, amid a protracted game of boardroom musical chairs. But now, with co-founder Pavel Maslovskiy back at the helm, and a supportive c-suite re-established, shareholders such as Kazakh oligarch Kenges Rakishev finally have tangible reasons to expect a depressed valuation could soon lift.

First off, production is set to climb by up to 18 per cent this year, after hitting 422,000 ounces (oz) in 2018. Reaching the upper end of this year’s 450,000-500,000 oz forecast requires further ramp-up at the POX hub, which allows the company to turn its refractory ore into gold. So far, the plant has delivered. After almost a decade of planning and stalled construction, first gold was poured on 21 December, and reached design capacity in record time. A rise in concentrate produced at the Malomir mine and processed at the POX hub was the chief reason why 2018 output comfortably beat original guidance of 400,000-410,000 oz.

In a trading update issued on 23 January, Petropavlovsk said the next stage will be to expand the plant’s spare processing capacity by up to 250,000 tonnes of concentrate, which will be filled by output from third parties. Additional gold output should come once expansion of Malomir’s flotation plant is completed, and the Pioneer flotation plant is in production.

Because much of these works were completed last year, Petropavlovsk’s capital expenditure budget is expected to more than halve to between $45m and $50m in 2019. That’s reassuring, because last we heard, group-wide all-in sustaining costs were forecast to come in between $1,050 and $1,100 an ounce in 2018. That number is declining, but is still much higher than fellow Russian precious metals groups Highland Gold (HGM) and Polymetal International (POLY). However, Petropavlovsk can point to two sources of top-line support: a contract to sell Gazprombank just under half of 2019 output at an average price of $1,252 an ounce, and (for the remaining output), a recent surge in the dollar-denominated gold price to $1,308 an ounce.

Of course, there’s little point celebrating a rising top line if the balance sheet is still overburdened. Fortunately, Petropavlovsk has restructured its onerous guarantee to troubled Chinese iron ore group IRC with a $240m loan from Gazprombank, and expects to be repaid $63m once the restructuring is signed off by shareholders this month.

IC View

Gold mining stocks are often valued against discounted cash flow models, which bake in lots of assumptions over many years. Analysts at broker Tamesis, applies a 12 per cent discount rate and a long-term gold price of $1,250 to arrive at a value of 14p a share for Petropavlovsk. Then again, an equally important argument for the shares is that debt, output, prices, reserves, costs and management stability are all moving in the right direction. There have been lots of false dawns for this stock, but closing the discount to net asset value suddenly looks viable. Buy.

Last IC View: Hold, 6.6p, 27 Sep 2018

-

Year to 31 Dec Turnover ($m) Pre-tax profit ($m)* Earnings per share (¢)* Dividend per share (¢)
2015 600 -81 -9.0 nil
2016 541 30.6 1.0 nil
2017 587 25.3 2.0 nil
2018* 563 19.7 0.0 nil
2019* 639 40.0 1.0 nil
% change +13 +103 - -
NMS: 50,000
BETA: 0.84
£1=$1.32. *Tamesis forecasts, adjusted PTP and EPS figures

[undervaluedassets] 31/1/2019 10:10

What is good for IRC is good for POG.

Strong performance there de-risks our exposure.

For the moment everything is aligning rather nicely.

[route1] 31/1/2019 09:00

Closed today up nearly 32%!!!Are you in yet?

[book5] 31/1/2019 05:56

Irc another 25% today (at the moment)

[route1] 30/1/2019 12:25

IRC up another 18% today.

[route1] 30/1/2019 12:21

Fill your Boots!!!I'm very pleased I did last week.

[wigwammer] 30/1/2019 07:23

IRC +29% :)

[route1] 27/1/2019 07:34

I confirm exactly what Book 5 recommended; that you can buy through any UK Broker that deals on the Hong Kong Stock Exchange.The Broker will buy for you in Hong Kong Dollars and then convert the whole transaction into Pounds Sterling for you.The British Pound is at the moment,strong against the HKD.

[book5] 26/1/2019 14:43

Any uk broker that offers buying in Hong Kong stock exchange as for instance

[bubloo] 26/1/2019 12:42

route can you please how i can buy irc shares. Do uk share brokers deal in the IRC stock
many thanks

[book5] 26/1/2019 06:47

Above should help iron ore russian producers, IRC and POG

[miss womble] 25/1/2019 20:32

What is all the fuss about. I thought the results were quite disappointing. Whatever I’ve sold out.

[undervaluedassets] 25/1/2019 16:18

reasonable start to the year for these.

Nice to close the week firmly above 7p

Interestingly the last divi that POG paid was 7p back in 2013.

Hence rather a long way to go on these one feels

[wigwammer] 24/1/2019 11:58

My understanding is first, they have already been stockpiling material ready for treatment - hence a large part of any wc related cash hit will already have been taken. second, capex more than halves to sub $50m inti 2019... both of those have a significantly positive effect on sequential free cash flow into 2019.