Tharisa Share Discussion Threads

[5teadyeddie] 30/12/2022 11:21

I've just been lucky enough to spend a few days on the Zambezi pre-Christmas. It's very obvious that there's plenty of investment in new tourist lodges on the Zambian side, but nothing new on the Zimbabwean side at all: the newest lodge appears to be Rukomechi, refurbished in 2008. I'm not sure if the problem is land rights issues, but no-one appears to be confident enough to invest in Zimabawean tourism in that area.

Flying back, the Emirates plane goes Dubai-Lusaka-Harare (where it refuels) then Lusaka-Dubai. Except it couldn't refuel in Harare because there wasn't any. (We had to divert to Dar-es-Salaam to get enough, but that's by-the-by). Life,fuel and electrical power in Zim are difficult: my farming cousin is trying to dry tobacco with only 5 hours power a day, plus diesel generators. He won't leave the farm as he thinks the diesel is too valuable and will be stolen.

Zimbabwe is a basket case economy run by henchmen of a corrupt government. Difficult to imagine investing in THS because of this. It can be argued that a new mine is a flagship and too significant for the government to interfere with, but surely there are many lower risk/reward scenarios?

[sotolo] 24/12/2022 08:26

Happy Xmas Tiger and all. I of course have all the same macro questions. On THS Thanks again, I could of course have got it cheaper but I am all for a company that invests so much in growth and Karo should begin to greatly increase profits in a coupe of years, though it is a gamble on what will happen to PGM prices. On another note, from the share board where we met, Centamin has been looking up, recovering by a third in last 12 months. How has your investment year been?

[tigerbythetail] 23/12/2022 12:52

Hi Sotolo!
I do think the underlying reason for the drop in the share price is that for one or some shareholders the risk of Zimbabwe is simply too much, and it has triggered them to sell up. The current depressed share price would be almost inconceivable if Tharisa were giving the cash they are generating back to shareholders rather than investing it into Karo.
I do believe from the book it is one largeish holder reducing a substantial position, rather than many smaller ones. But you can never be really sure about things like that.
Any road, at some point the seller(s) will be done, and any new shareholders that come aboard will have already accepted the supposed extra risks that investing in Zimbabwe brings. Personally, I'm a long term investor in CMCL, which successfully operates a gold mine in Zimbabwe, so I am fairly relaxed about that.
As for 2023, who knows what it will bring? I only have questions without answers. The most important being: Will the Ukraine war end? Will it spread and morph into World War 3? How will the Chinese housing collapse and Chinese Covid play out? Will China invade Taiwan? How deep will the likely coming recessions be in Europe and in UK? How low will the pound go?
I don't have many good investment ideas right now, but at some point (IMO, not yet) the bear market in bonds will turn.
Anyway, Happy Christmas all.

[sotolo] 21/12/2022 09:00

Tiger, I think maybe you’re reading this wrong and it is not just a temporary dump by one shareholder but secular concern about heavy investment needed in Karo, at a time of soaring interest rates and reduce profits. I believe it will all come good in a couple of years, but that is a very long time in the market, in the meantime PGMs havebeen pressured, despite what the analysts say bye the increase in EV’s and chromium is rather China dependent and would be affected by a worldwide recession.

[basem1] 21/12/2022 08:46

Especially when SLP are up !!

[melody9999] 20/12/2022 20:09

In SA at present and load shedding is much worse this year. I would not invest in SA businesses that are heavy energy users at present unless they have cost effective back up supply.

[ntv] 20/12/2022 20:02

Why are they positive now?
Management haven't done a good job with the fund raise in bonds
Graph looks terrible
Cut in dividend
Only chance for shareholders is a takeover bid imho

[basem1] 20/12/2022 15:47

There wasn't any real volume dump though it just looked like Pi sells But we seem to have turned. Coinciding with the chart support at 96 ish from a few months ago Very positive now

[tigerbythetail] 20/12/2022 14:47

I think I didn't quite read this morning's dip right.
Now I'm thinking that was it - the final dump of our persistent seller. If I'm right, the downward pressure should ease off the share price, and it should rise back to a "not quite so crazily low" level.

[tigerbythetail] 20/12/2022 09:25

Speculation:
Seller is trying to close out position by end of financial year??
If so, things could get "interesting" here, in a not very ho-ho-ho way.
But the value proposition here is outstanding, so eventually the share price will rise back to a more "normal" level.

[sotolo] 20/12/2022 08:59

Money man,over the last few year low dividend/no dividend growth companies have risen, just look at Amazon, without much payouts. THS to my mind is a growth company that happens to pay out 17% which is a huge 6% return. I invest here just because the company, as Bezos, had a long term vision, ploughs profit into the future and look to double output unlike SLP. Which should double share price ina couple of years, PGM prices willing. However chrome is near half profit and rising

[moneyman50] 15/12/2022 18:59

Said it before say it again -the market always reacts negatively when a company cuts it’s dividend-always gives the impression something not quite right.
Would have been nice if the company paid out 30% to 40% of its profit after tax and not a miserable 17%.-still would have a lot to reinvest
Shareholders not been properly rewarded hence losing interest and shareprice falling.
Let’s hope once Karo built company Tharisa pays dividends at much higher level and does not fined some other capital intensive project which once again puts shareholders at the end of the queue when it comes to payouts.

[tigerbythetail] 15/12/2022 13:08

The thing about share prices is that they can always go lower.
By all normal metrics, Tharisa is severely undervalued already. It's priced like it is a debt ridden zombie headed towards bankruptcy, when it is a debt free, highly profitable, growing and dividend paying company.
So how much lower can it go? 80p would be just plain ridiculous. Which doesn't mean it won't happen!
Anyway, good luck all in picking the exact bottom! I'll "splatter" my buys in the hope of ending up with a decent low average.

[lennonsalive] 15/12/2022 12:13

It's broken 100p, not good. Next stop 80p

[whitehunter] 15/12/2022 10:37

Ironically if the management were not so ambitious about building/growing the business the share price would be much higher and awash with cash for distribution to shareholders

[basem1] 15/12/2022 10:11

This is turning into a horror show the price action here

[moneyman50] 12/12/2022 14:29

Weak bond issue seems to explain the low dividend last week as I thought.
What a shame shareholders having to finance more of the Karo project-hope they are suitably rewarded in a couple of years time when Karo producing and income from Karo not pumped into another project

[podgyted] 12/12/2022 13:48

Just sneaked over the $25m - 3rd Party only $21.8m. It would seem they were indeed nervous about the fund-raise when considering the dividend.

[davidosh] 09/12/2022 14:02

yes on the next show this Monday evening

[ntv] 09/12/2022 13:39

Aren't they @ Mello next week?

[moneyman50] 08/12/2022 12:03

It seems the dividend might have been cut at the last minute-the company recently twitted about a record dividend which seems to have disappeared.
Perhaps the directors got spoked about the $50 million bond issue thinking there might be a shortfall in the amount raised !
We will find out how the bond issue has gone very shortly.

[ntv] 07/12/2022 21:50

They could have easily stated the dividend policy when they issued the first year end \RNS as they already knew they were going to cut it
VERY POOR PR

[robers98] 07/12/2022 14:36

Management was on sky business news earlier today.

[tigerbythetail] 07/12/2022 14:27

RNS out - official opening ceremony for Karo...

[moneyman50] 07/12/2022 11:42

I just wonder at this ridiculous low shareprice some major will come in with a takeover offer-even at £2 per share this would be an absolute bargain and pocket change for a major especially if done via a share for share exchange.
The 22.2% dividend cut was a schoolboy error by the directors and has sent a very negative signal to the market and potential investors and probably goes a long way to explaining the negativity in the current shareprice