Discover and read the best of Twitter Threads about #MetCoal
Most recents (6)
We are independent thinkers $WKT 1.2x 2024 (0.6x 2027) CF, $CKA 1.8x 2024 CF (0.4x 2027) and $AEE 1x 2025 CF (0.5x 2028)
#metcoal
#expandablegraphite
#uranium
#metcoal
#expandablegraphite
#uranium
We won't mention a position unless we own it or are accummulating it (and eventually scaling down, often due to size constraints of our 20 baggers), sometimes in size, we are paid by noone to promote anything. We are asset managers who investor near cycle bottoms.
Why is $AHQ a takeover target?
Cap < 5% of NPV
Trading at a 80% discount to peer group
Cap per tonne of Resource = 6c (or 70c of reserves)
Optimized cash margin per tonne = $50-75 over 2023-2024
Tenas Project lowest AISC and low capex start up.
#coal #metcoal #thermalcoal
Cap < 5% of NPV
Trading at a 80% discount to peer group
Cap per tonne of Resource = 6c (or 70c of reserves)
Optimized cash margin per tonne = $50-75 over 2023-2024
Tenas Project lowest AISC and low capex start up.
#coal #metcoal #thermalcoal
It's always interesting that those who loved the stock at 50c, hate it at 5c or indicate the risks are much greater at 5c than 50c....one thing is for sure, on successful optimization the returns are much higher at 5c than 50c. At 50c the discount to NPV was 88%, at 5c it's 95%.
Tenas NPV at $125/t price and only 15% of the resource is A$300m, at $180/t pricing and 60% of the resource the NPV is over A$2bn alone. The hidden gem of why $AHQ is a bargain at 5c #coal $CKA $WHC 
#coal: could coking spot move below thermal given a recessionary slow down in steel production, yet power generation deficit due to Russian sanctions? Creating elevated #metcoal prices for longer? Providing a boost to 2023 margins for the new undervalued start ups...
$CKA $AHQ
$CKA $AHQ
The 2023 economics:
1m/t production @ US$100-150 cash margin = A$140-200m CF
1.5m/t @ US$100-150 = A$200-300m CF
Valuation multiples of 1-1.5x cashflow, assuming material stock buy backs = re-rate to 2.5-3.5x is very possible.
$CKA $AHQ
1m/t production @ US$100-150 cash margin = A$140-200m CF
1.5m/t @ US$100-150 = A$200-300m CF
Valuation multiples of 1-1.5x cashflow, assuming material stock buy backs = re-rate to 2.5-3.5x is very possible.
$CKA $AHQ
Self funding #coal takeover bids? As cashflow run rates imply less than 2x cashflow valuations, or 50% cashflow yields, wouldn't it be attractive to announce a bid at say 25-30% yield? $CKA has had at least 2 bids in the past, insiders own around 50%, don't be surprised in a 3rd.
The life cycle of a resource nano resource cap through production & cashflow...95% fail over one cycle, 85% over 2 cycles.
We are seeing 3 through to completion currently, exposure in #metcoal, #expandablegraphite and #uranium
The initial resource stage....
1/
We are seeing 3 through to completion currently, exposure in #metcoal, #expandablegraphite and #uranium
The initial resource stage....
1/
...coupled with cycle lows presented caps of less than <$10m as entry points.
The project PFS and DFS stages coupled with an upward cycle produced caps of $70-150m, 4-6x on a diluted basis.
Then all are moving to production and cashflow over the next 3 to 24 months....
2/
The project PFS and DFS stages coupled with an upward cycle produced caps of $70-150m, 4-6x on a diluted basis.
Then all are moving to production and cashflow over the next 3 to 24 months....
2/
...with likely caps of $300-800m and diluted returns of 7-30x through 2024/25.
The average holding time will likely be 8-9 years for 14x return.
$CKA $WKT $AEE
Playing the long game over a project life cycle (and 1 or 2 up cycles) with low quartile AISC and capex.
3/3
The average holding time will likely be 8-9 years for 14x return.
$CKA $WKT $AEE
Playing the long game over a project life cycle (and 1 or 2 up cycles) with low quartile AISC and capex.
3/3
What's the benefit of low AISC mining plays Vs High?
A) profitable over the cycle
B) mint cashflow near historic peak spot prices
C) high IRRs near peak prices
D) ability utilize high cashflow for debt termination, stock buy backs and dividends
E) cycle bottom to peak often >10x
A) profitable over the cycle
B) mint cashflow near historic peak spot prices
C) high IRRs near peak prices
D) ability utilize high cashflow for debt termination, stock buy backs and dividends
E) cycle bottom to peak often >10x
Benefits of scaling production Vs peak?
A) doubling volumes with halving margins = steady cashflow
B) increasing economies of scale due to fixed costs spread over increasing volume
C) low AISC coupled with scalability at low capex is Cashflow minting in 4th quartile pricing
A) doubling volumes with halving margins = steady cashflow
B) increasing economies of scale due to fixed costs spread over increasing volume
C) low AISC coupled with scalability at low capex is Cashflow minting in 4th quartile pricing
We are asked often would we sell certain positions given declining spot prices Vs our target fair value prices.
The answer is a combination of is it trading on less than 1x implied annual cashflow (based on 2023 cashflows), will 2025 volumes more than double, 2027 triple?
The answer is a combination of is it trading on less than 1x implied annual cashflow (based on 2023 cashflows), will 2025 volumes more than double, 2027 triple?
