Polo Resources Share Discussion Threads

[spights] 18/9/2016 18:50

Does any one know anything aboutStirling Enterprises ltd

[spights] 18/9/2016 15:00

Who are Stirling Enterprises Ltd?

[spights] 18/9/2016 14:49

When did Stirling buy
I did not see RNS?

[paleje] 16/9/2016 11:07

Macquarie Bank published an article on gold on Wednesday, the bulk of it is BLK starts about 1/3 down but the whole article is readworthy:-

Macquarie says never a better time to build an Australian gold mine
Macquarie says never a better time to build an Australian gold mine
Published on: Sep 14, 2016 | by Trevor Hoey
Analysts at Macquarie Wealth Management highlighted in a recent review (Australian Gold Miners: 12 September 2016) of the global gold sector that there had never been a better time to build an Australian gold mine with developers benefiting from low operating and capital costs, highly skilled workforces and contractors, as well as the benefits of a lower Australian dollar relative to the US dollar.

The broker’s preferred plays among miners in the development stage are Gold Road Resources (ASX: GOR) and Dacian Gold (ASX: DCN). However, in the last 12 months shares in Dacian Gold have increased from circa 50 cents to recently hit a high of $4.00 (+700%) and are currently trading within 10% of that mark.

GOR’s shares more than doubled in 2016 to hit a high of 75 cents, but have retreated to 60 cents in the last two months.

It should be noted here that analyst’s forecasts and price targets may not necessarily be met. Similarly, historical trading patterns should not be used as the basis for an investment decision as these may not be replicated in the future.

A large percentage of gold stocks that rerated strongly in the first half of 2016 have come off over the last two months as sentiment towards the sector cooled.

This is reflected in the S&P/ASX All Ordinaries Gold index (XGD) which hit a high of 5760 points in July, but has since fallen to yesterday’s close of 4664 points, representing a decline of nearly 20%.

In delivering its take on the sector, Macquarie provided extensive analytical overviews of global metrics taking into account projected production, capital expenditure, operating costs, PE multiples and enterprise value to EBITDA ratios.

Examining individual stocks in the universe of companies covered by the broker and taking into account averages for both global and Australian based developers there was one company in Blackham Resources which sits outside its area of coverage that had comparatively compelling fundamentals.

Blackham Resources
gld

Blackham Resources (BLK) is at an attractive stage in that much of the hard capex intensive work has been done in terms of development, and material production is imminent.

Of significance though is the fact that production is poised to ramp up substantially over the next 2 to 3 years as the company expands existing projects and increases output by tapping into its four large gold systems which have a combined resource of circa 5 million ounces.

Consequently, there is better visibility around costs, production and earnings than is generally the case with developers that are more than a year out from maiden production.

While management anticipates combined production to hit the circa 200,000 ounces per annum mark in the medium term, in order to make meaningful comparisons with companies analysed by Macquarie we have focused on the group’s fiscal 2018 profile.

gld2

As is the case with any stock, BLK’s metrics are impacted by share price movements and it is worth noting there has been a pullback from a 12 month high of $1.18 to Tuesday’s close of 76.5 cents since sentiment towards the sector waned.

Given that this represents a 35% decline, substantially more than the pullback in the gold index, the company’s current trading range may represent a useful entry point. As a means of reference, the 12 month consensus price target is $1.15.

Reg Spencer from Canaccord revised his numbers in mid-August, prompting an increase in BLK’s price target from $1.05 to $1.20, implying upside of nearly 60% to yesterday’s closing price.

The numbers tell the story
Based on BLK’s current share price it has a market capitalisation of $216 million. The company had net cash of approximately $3 million taking into account debt of $29.3 million as at June 30, 2016. Consequently, its enterprise value is approximately $213 million.

The average enterprise value to EBITDA ratio of Macquarie’s universe of Australian junior ‘intermediaries’ (currently producing, but ramping up production in the near to medium-term) relative to fiscal 2018 projections is four.

BLK’s fiscal 2018 enterprise value to EBITDA ratio is 2.2 relative to Canaccord’s expectations of the company achieving EBITDA of $95.4 million in that year.

These projections are based on the company achieving production of 105 million ounces, a US dollar gold price of $1391 per ounce and a AUD:USD exchange rate of 73.3 cents. This would imply an Australian dollar gold price of $1896 per ounce as opposed to the current price of circa $1760 per ounce.

Analysts at Macquarie highlighted the impact of historical trend whereby the Australian dollar generally falls in the event of US dollar gold weakness, effectively providing a hedge for Australian gold producers. Consequently, Spencer’s projections look close to the mark.

Using a PE multiple comparison, BLK really comes into its own, trading on a fiscal 2018 PE of three. This compares with Macquarie’s average junior Australian producer intermediary multiple of 10.

Canaccord is forecasting BLK to generate a net profit of $62.9 million in fiscal 2018, implying earnings per share of 25 cents. Applying the average PE multiple of 10 would imply a share price of $2.50, a premium of 230% to yesterday’s closing price.

If BLK were to trade in line with its peers on an enterprise value to EBITDA basis this would imply an enterprise value of circa $380 million which would translate to a share price of $1.35.

Remember, past share price performance do is not guarantee future performance and a professional financial advisor should be sought if considering this stock for your portfolio.

Consequently, comparisons of metrics as outlined above suggest that BLK could rerate in the near term, but at the very least outperform its peers if sentiment towards the sector (particularly Australian producers) recovers

[failedqs] 07/9/2016 15:02

Disagree with your thoughts about management - Tang has been a complete disaster.

[heron80] 07/9/2016 14:19

i've taken a few profits here from 3p area. However! like a lot here, overall well down on higher purchases :(
this will come good i'm sure, mngmt are top notch. hope they have some further deals in the pipline.

[extrader] 06/9/2016 16:27

Hi all,

The only thing to apologise for (;->), is that all this underlying good newsflow isn't translating into a better shareprice - and if POL share price is our 'currency', we're limiting our potential to do other deals....

ATB

[paleje] 06/9/2016 16:14

No need to apologise spights, you're not making it up it's all true:)

[spights] 06/9/2016 14:59

Sorry about above all good news on BLk

[spights] 06/9/2016 10:12

hxxps://www.businessnews.com.au/article/Talk-is-cheap-but-not-for-Blackham-Resources?utm_source=Business+News+Mailing+List&utm_campaign=6977476500-dba&utm_medium=email&utm_term=0_e5391356e5-6977476500-289406073

[paleje] 05/9/2016 16:51

Good stuff spights, thanks.

Tiny delay but they'll be producing before end of month. Their share price has slumped below the placing price but with pog strengthening again and the yellow stuff very close I should think it's only temporary.

[888icb] 24/8/2016 14:21

Paleje
Thank you for the Hibiscus report which makes good reading. As you say not just BLK.
Perhaps Mr Tang knows what he is doing after all the comments to the contrary in the past!

[paleje] 24/8/2016 14:04

I know Blackam are getting all the headlines and rightly so but Hibiscus issued an end of year (June) statement this morning showing apart from their value gain they have operated profitably through Q4 in the Anasuria field. POL's 10.2% can only get better.

HIBISCUS PETROLEUM CLOSES THE FINANCIAL YEAR WITH A
SIGNIFICANT VALUATION GAIN AND OPERATING PROFITS FROM THE
ANASURIA OPERATIONS
 Fair value gain of RM364.1 million from consolidation of the Anasuria Cluster
 Anasuria operations contribute RM 78.7 million to revenue and RM 36.6 million to gross profit
since completion on 10 March 2016
 No further investments in exploration through Lime Petroleum Group
 Group’s Net Assets Per Share of RM0.45 as at 30 June 2016
24 August 2016 – 5 p.m.
Hibiscus Petroleum Berhad (“Hibiscus Petroleum” or “the Company” or “the Group”) today
announced its results for the fourth financial quarter ended 30 June 2016 (“fourth quarter”). For this
period, the Group recorded a profit before taxation of RM23.2 million compared to a loss before
taxation of RM34.3 million reported in the corresponding three-month period ended 30 June 2015.
Quarterly results have been underpinned by a significant contribution to profits derived from the
production and sales of oil and gas from the Anasuria Cluster located in the United Kingdom sector of
the North Sea. In addition, subsequent to the completion of the acquisition of a 50% interest in the
Anasuria Cluster on 10 March 2016, the Company commissioned RPS Energy to update its independent
report of its valuation of the asset dated September 2015. The outcome from the updated valuation
together with the finalisation of working capital adjustments and decommissioning provisions resulted
in an upward adjustment to fair value gain of RM228.8 million during the fourth quarter and total fair
value gain of RM364.1 million in the financial year ended 30 June 2016.
The Company also reported that during the period from completion of the acquisition of the Anasuria
transaction on 10 March 2016 until the end of the fourth quarter on 30 June 2016, operating
expenditure averaged approximately US$ 23 per barrel of oil equivalent. Average price achieved for oil
sold during the same period was approximately US$ 40 per barrel. During a time when business
operating conditions within the oil and gas sector have generally been challenging, Hibiscus Petroleum
has focused on the optimization of its offshore operational activities. Even though oil prices have been
volatile, the Company has developed a profitable, revenue generating asset within its portfolio with
economic production currently estimated to continue for about twenty years.

[888icb] 24/8/2016 07:03

Blackham just keeps on producing good news and the share price is resuming its move north as it digests the recent raising of additional funds.

[spights] 24/8/2016 06:55

High grades yehaaaaaaaaaaaaaaaaaaaaaaaAa

[sh0wmethemoney] 24/8/2016 02:00

More news at BLKhttp://www.asx.com.au/asxpdf/20160824/pdf/439l3nprd81my8.pdf

[888icb] 21/8/2016 22:43

Blackham has been doing very well and will continue to do so. But Polo has a number of other investments. Last month it was announced Polo had made a further investment I Hibiscus and become the second largest shareholder. There was also some information about a substantial increase in the value of a Hibiscus asset. It would be interesting to have an update on Hibiscus including its current value.
I am hopeful that Polo is coming on to a few radars as people realise it trades at a massive discount to its NAV and its investments are rerating as well. 7p+ next week?

[spights] 20/8/2016 14:23

Will not let me cut and paste

[888icb] 19/8/2016 13:43

A nice tick up this morning sees Polo at No 17 on the Riser Board UP 10%. A little push this afternoon and we could see 7p.