Pure Gold Mining Share Discussion Threads

[2gekko] 30/4/2015 09:41

It's not Simon Thompson although he has indeed tipped PUR in the past, something pretty good must be happening though, maybe get a news release soon.

[prop_joe] 30/4/2015 09:29

Maybe tipped somewhere? ST in the Investors Chronicle has been keen.

[puffintickler] 30/4/2015 09:17

Extreme price movement today...

[hutch_pod] 24/4/2015 14:38

Looks like positive sentiment returning. And deservedly.

[meijiman] 07/4/2015 11:21

Nice rise here -any reason?

[prop_joe] 12/3/2015 10:55

I also have the same view as Simon T.

[alan@bj] 12/3/2015 10:55

Me too. I have a relatively small holding and may add, but there's no rush at the moment.

[2gekko] 12/3/2015 09:53

That's exactly how I see it too.

Thanks for posting this Alan.

[alan@bj] 12/3/2015 09:15

Simon Thompson's latest view:-

There is no doubt in my mind that there is value on offer in the shares of Aim-traded Pure Wafer (PUR: 42p), a leading global provider of high quality silicon wafer reclaim services to some of the world's largest semiconductor makers and foundries.

Based on 28.3m shares in issue, the company has a market capitalisation of £11.9m, or 20 per cent less than its shareholder funds of £14.8m, which includes net cash of £1.1m. Pure Wafer reports in US dollars and I have used a conversion rate of £1:$1.50. However, this latest balance sheet figure is taken after the company was forced under accounting rules to take a $15.5m (£10.3) non-cash exceptional charge in yesterday's interim results in relation to the carrying value of its wafer reclaim facility in Swansea following a fire there just before Christmas.

In addition, inventory worth £1m was destroyed. It's therefore worth pointing out that the insurance policy covering the plant includes extensive three-year business interruption cover, so this impairment charge will reverse once the insurer pays out. The insurer has already accepted liability for the claim. In other words, at the current price the shares are rated on less than half underlying book value, a huge discount for a profitable business.

It goes without saying that the fire has led to massive disruption and it will take 12 months for full-scale production to recommence at the Swansea plant. In the meantime, some production will be transferred from May onwards to the company's other facility in Prescott, Arizona, to minimise disruption to the company's clients who have been impacted by this incident. Still, there is no getting away from the fact that on the basis the Arizona facility accounts for three-fifths of Pure Wafer's annual cash profits of £4m, and the company has a cash rich balance sheet, too, then in effect the Arizona business is now only being valued on four times its cash profits. That's not just a miserly valuation, but it completely ignores all the value embedded in the Swansea facility, which we know is at the very least has to be £10m, according to the aforementioned write-down.

Of course, we need a catalyst for Pure Wafer's shares to re-rate, a factor that is clearly lacking right now. But once the insurer agrees the size of the payout, and repair work to the Swansea facility commences, then at least investors will have greater clarity on the full financial implications for the company. It's my view that they are being overly cautious and I would continue to hold the bombed out shares for their recovery potential if you followed my earlier advice.

[tradermel] 10/3/2015 08:28

That chart hardly reflects "in line with company expectations"

With the insurance covering the fire and losses this maybe a share to look at for later this year, but not for me today :-)

[tradermel] 10/3/2015 07:39

Interesting, the share price chart does not reflect the view of todays RNS

[hutch_pod] 25/2/2015 14:23

Yes, looks good so far. Be interesting to see the business interruption payout too as well as the timetable.

[puffintickler] 25/2/2015 09:33

Trading update gives no new news but this in itself is reassuring. As expected some production will soon be moved to Prescott. No news on when rebuilding Swansea, it is a bit early for that but I would hope for an update within a month or so, the timetable for getting back to normal is important even if losses are insured.

[2gekko] 30/1/2015 08:58

Agreed Hutch Pod, I think we will see a good recovery in time

[hutch_pod] 30/1/2015 08:46

I think this is a good test of the quality of management.

ASOS, for example, suffered a fire in June 2014. By October 2014,it has received stock loss and other incremental costs from insurers and a portion of business interruption cover (£11.5m) . By December 2014, it announced a further amount (£6.3m) received during the quarter.

[itchycrack] 30/1/2015 08:01

Agree PUGUGLY, unfortunately from direct experience!
It will be a very long and protracted process, and if the markets top out, its only going to go one way in the short term.

[pugugly] 30/1/2015 07:55

JANEANNE:> Time is money and very difficult to quantify for purposes of insurance also from my experience insurance companies usually fight all the way to reduce their payouts so I anticipate continued management distraction and significant extra uninsured costs.

I hope I am wrong but insurance claims are never usually straightforward.

[janeann] 30/1/2015 07:32

I thought they were fully covered by insurance even for loss of operation, so isn't it just a matter of time till they get back up and running again?

[stegrego] 30/1/2015 07:18

You having a laugh??

[itchycrack] 30/1/2015 02:52

Easy money for the shorters at this price, can easily see single figure share price here, wish I'd got in much earlier on this one.

[mudbath] 29/1/2015 17:21

PUGUGLY
PUR does seem vulnerable to further bearish thinking.
I would be a buyer @ 2.75 should the share price plumb such depths.
Imo the share price had held above 40 pence for longer than might have been anticipated,given the whole uncertain background.

[pugugly] 29/1/2015 16:33

mud;> Looks as though still downward momentum - Another 13% off today - WH Ireland offering in quantity L2. 25K at 36 and looks as though volume behind as no change in volume offerd after 17K bought at 36p or less in last half hour. (all imo - having difficulty reading the entrails)

[solooiler] 17/1/2015 11:02

A tragic event :0(.

hxxp://www.southwales-eveningpost.co.uk/Pure-Wafer-extensive-repairs-needed-electrical/story-25876520-detail/story.html

[mudbath] 17/1/2015 10:50

"Severe cost pressures and constrained profitability in the semiconductor industry triggered by escalating energy prices, increasing cost of conformance to environmental regulations, undeterred rise in labour and raw material prices, are driving demand for reclaimed silicon test and monitor grade wafers."

Such was the conclusion of a 2014 Global Strategic Business Report covering the Silicon Reclaim Wafer industry.

With these cost pressures,including energy prices, going into reverse,allied to a general deflationary shift,we might see the number of wafer starts and foundry utilization rates weaken,with an eventual impact on the reclaim sector.

As for PUR,their is every chance that the share price might over react to its current slew of misfortunes,potentially providing investors with a great buying opportunity.