Home » Posts tagged 'glencore'

Tag Archives: glencore

AIM minnow Cadence punches well above its weight in Brazil

Since evolving from Rare Earth Minerals in early 2017, AIM listed Cadence Minerals (KDNC) has offered investors a proposition largely based on investments into selected lithium and base metal projects around the globe.

Taking cornerstone stakes in projects such as the Cinovec Lithium and Tin Project in the Czech republic and the Sonora Lithium Project in Mexico has seen the company portfolio exhibit excellent returns. However, the sell-off in Lithium stocks over the last two years has seen the Cadence share price drift in line with the underperformance of public investments in the sector.

December 2017 saw a strategic shift to invest and acquire assets directly, with the acquisition of hard rock lithium assets in Argentina. Following subsequent investments into three lithium projects in Australia, the iron ore supply squeeze in late 2018 threw up an opportunity in Brazil that did not go unnoticed by eagle eyed Cadence management.

Formerly owned by Anglo American (AAL) and Cliffs Natural Resources, the Amapá iron ore project is a large-scale iron open pit ore mine with associated rail, port and beneficiation facilities. Based in Northern Brazil close to the Atlantic, Amapá commenced operations in December 2007, and prior to its sale in 2012 due to a collapse in iron ore prices, Anglo American valued its 70% stake at $462m. Back then the mine was selling ore globally to Europe, USA and China.

With some $60m of iron ore stockpile sitting ready for shipment at the port, Cadence CEO Kiran Morzaria set up a joint venture company Pedra Branca Alliance Pte Ltd (PBA) with Singapore based commodities group IndoSino Pte Ltd to acquire the Amapá holding company.

A judicial restructuring plan submitted by PBA has just been approved, which astonishingly will see Cadence acquire, through PBA, a 27% stake in the Amapá iron ore project for just $6m.

“Opportunities such as this come along once or twice in a lifetime,” says Morzaria.

“To start a project on the scale of Amapá would require little short of $1bn capex. We (Cadence) will own 27% of a project, which when recommissioned should generate over $136m EBITDA per annum for at least 14 years, plus we will have the right and first refusal to acquire up to 49%.”

PBA expects to start shipping the stockpile by the end of this year, which will see a net $60m into the coffers to part complete the $168m investment required to recommission the mine, railway and port.

Rehabilitation of the mine, railway and port is expected to be completed by 2021, with first new production in 2022. A production ramp up will see 5.3 million tonnes of iron ore produced per annum by 2024.

KDNC CEO Kiran Mozaria explores Amapa’s sorting area

More significantly, mine net revenues after shipping is forecast to be approximately $265m per annum, with EBITDA of approx $136m per annum based on a conservative iron ore price of $61 per tonne. Currently iron ore prices are closer to $90 per tonne.

Of course there is another benefit in rehabilitating the Amapá mine. The local economy will be rejuvenated, creating hundreds of jobs and employment opportunities, along with new funding for local schools and hospitals.

“Previously Amapá’s output amounted to a sizeable chunk of the local economy,” adds Morzaria.

“Bringing the mine back to life will provide a huge boost to the region.” For AIM minnow Cadence, which currently trades on an asset backed market cap of just £9m, the opportunity and the numbers are hugely impressive and potentially transformational. Punching indeed!

Notes:
For full details on this story, the formal RNS announcement is here:

https://www.investegate.co.uk/cadence-minerals-plc–kdnc-/rns/approval-of-judicial-restructuring-plan—amapa/201908300700056390K/

Cadence Minerals website: https://www.cadenceminerals.com/

Cadence Minerals plc
+44 (0) 207 440 0647
Andrew Suckling / Chairman
Kiran Morzaria / CEO

Brand Communications
+44 (0) 7976 431608
Alan Green

Cadence Minerals #KDNC – Macarthur Minerals (TSX-V: MMS) Announces Glencore #GLEN Participation in Financing.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”), that further to the announcement of March 19, 2019, a subsidiary of Glencore plc (“Glencore”) has agreed to participate in the US$6 million secured Convertible Note (“Note”) on a private placement basis for US$2 million.

Glencore’s participation in this financing, strengthens the life-of-mine long-term strategic relationship between the parties in line with the previously announced binding Off-Take Agreement (“Agreement”) with Glencore for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) in the Yilgarn Region of Western Australia.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

Key terms to the note:

  • Each Note has a face value of US$10,000 following adoption of a loan note instrument.
  • The Notes (including accrued but unpaid interest) can be converted at any time after 12 months into common shares of Macarthur at the Noteholder’s option at a conversion price that reflects the greater of 80% of the average VWAP over 5 trading days immediately preceding the date of a notice of conversion and C$0.10 (in each case with appropriate equivalence to USD), with attaching warrants offered for one fourth of the commitment amount exercisable at the greater of C$0.10 or the average VWAP over 5 trading days immediately preceding the date of the Advance Date (such term being defined in the definitive documentation) (in each case with appropriate equivalence to USD).
  • The Notes will have a term to maturity of 3 years and bear interest at a rate of 12.5% per annum.
  • The Notes include a restriction on conversion that provides that such conversion may not have the effect of causing Noteholder to own 20% or more of the common shares of Macarthur or becoming a control person.
  • The iron ore mining licences held by Macarthur (or a subsidiary of Macarthur) in respect of the Lake Giles Iron project region of Western Australia will act as security for the Notes issued to the Noteholder.

Any shares issued upon conversion of the principal amount of the Note and any accrued interest will be subject to certain resale restrictions, including a restricted (or “hold”) period of four months and one day following the distribution date of the Note and warrant, under applicable Canadian securities legislation.

The consummation of the US$2 million financing commitment from Glencore is subject to receipt of all necessary regulatory approvals including that of the TSX Venture Exchange, the Australian Foreign Investment Review Board and satisfaction of the other conditions set out in the Investment Agreement entered into by the Glencore and Macarthur.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=8292361460422531&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “To secure a US$2 million investment from Glencore following the recently announced take-off agreement marks another significant milestone for Macarthur and its shareholders. As with the Exception Capital financing agreement announced yesterday, the terms are attractive, and provide Macarthur with funding certainty while potentially minimising dilution to Cadence shareholders.”

This news release is not for distribution to United States Services or for Dissemination in the United States.

– Ends –

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling
Kiran Morzaria
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce
James Sinclair-Ford
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

Cadence Minerals (KDNC) – Macarthur Minerals (TSX-V: MMS) Progress Towards Rail Haulage Agreement.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”) that it has partnered with Australian freight haulage company Aurizon (“Aurizon”) to finalise a rail haulage contract for its Lake Giles Moonshine Magnetite Project (“Project”) in the Yilgarn region of Western Australia. This news follows the Company’s recent announcement that it has signed a binding Life-of-Mine Off-Take Agreement with Glencore International A.G. for the sale of iron ore to be produced from the Project from the commencement of commercial production.

Macarthur has entered into a Negotiation Agreement with Aurizon to provide above rail haulage services including the supply of rolling stock for the purpose of transporting iron ore from the Project to the Port of Esperance. Aurizon already has rolling stock available that was previously used by other iron ore operators in the region including 325 wagons. The rolling stock is fit for purpose and compatible with rail unloading infrastructure at the Port of Esperance. This represents a key component of the logistics solution for the Project.

Aurizon was selected as the preferred operator based on its superior supply chain experience, safety and operating capability and its expertise in bulk rail freight that includes the transport of over 40 million tonnes of bulk freight and iron ore throughout Australia.  Aurizon has significant rail marshalling, maintenance and traincrew facilities at the Port of Esperance, a legacy investment from its previous Cliffs iron ore haulage contract. The open access rail network owned by Arc Infrastructure has available capacity and is accessible within 90 km of the Project and runs directly to the Port of Esperance.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=5047835856823328&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “The partnership with Aurizon to advance Macarthur’s rail haulage requirements represents an important step forward for the Lake Giles Moonshine Magnetite Project take off agreement recently announced between Macarthur and Glencore.”

“Equally significant will be the potential benefits of this agreement to the economies of the local mining communities surrounding the Moonshine Magnetite Project and those of the Port of Esperance community of Western Australia. As stated by Macarthur, these areas have recently suffered from a significant decline in iron ore export.”

This news release is not for distribution to United States Services or for Dissemination in the United States. 

– Ends –

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Hannam & Partners LLP (Joint Broker)                                 +44 (0) 207 907 8500
Neil Passmore  
Giles Fitzpatrick  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Cadence Minerals Plc – Macarthur Minerals (TSX-V: MMS) Signs 10 Year Iron Ore Off-Take Agreement for the Lake Giles Iron Project in Australia With Glencore International A.G.

Cadence Minerals (AIM/NEX: KDNC; OTC: KDNCY) is pleased to note the announcement today from Macarthur Minerals (TSX-V: MMS) (“Macarthur”) that it has entered into a binding Life-of-Mine Off-Take Agreement (“Agreement”) with Glencore International A.G. (“Glencore”) for sale of iron ore to be produced from the Lake Giles Iron Project (“Project”) at Lake Giles in the Yilgarn region of Western Australia from the commencement of commercial production.

Highlights:

  • Glencore secures life-of-mine of the project with commercial terms for approximately 4m tonnes per annum average for the first 10 years, with the option to extend for a following 10 years for all tonnes of future Lake Giles iron ore production.
  • Glencore agrees to release up to 70% of their off-take volume where Macarthur secures project financing from a Strategic Industry Investor, subject to their securing off-take of the product produced.
  • This Agreement with Glencore positions Macarthur to go forward to complete their project financing.
  • The Agreement is currently valued at approximately US$4bn in revenue over the first 10-year term ensuring Macarthur long term revenue and consistent sales per year.
  • Terms and conditions have been competitively negotiated reflecting strong forward demand.

 

High grade iron ore prices:

Metallurgical test work on the Lake Giles’s Moonshine Magnetite Project indicates that an export product of high margin +65% Fe can be achieved. ).  In its announcement, Macarthur states that the current market price for 65% Fe product is quoted at US$98/tonne (A$140 per tonne). Macarthur also states that the value of the initial 10-year Glencore off-take at current market price for Moonshine iron ore would be ~US$4bn.

Cadence holds approximately 10% of the issued equity interest in Macarthur, which is an Australian mining exploration company focused primarily on iron ore, nickel, lithium and gold in Western Australia. It also has a lithium project in Nevada, USA.

The full release can be found at: https://web.tmxmoney.com/article.php?newsid=6303739202199099&qm_symbol=MMS

Cadence Minerals Chairman Andrew Suckling commented: “It is gratifying to see that the confidence of the Cadence management team in its investment strategy into Macarthur Minerals means that our company can now participate in a transformational take off agreement between Macarthur and Glencore, one of the largest mining conglomerates in the world.”

“We congratulate the Macarthur Minerals management team on achieving this key milestone.”

 

This news release is not for distribution to United States Services or for Dissemination in the United States. 

– Ends –

 

For further information:

Cadence Minerals plc                                                    +44 (0) 207 440 0647
Andrew Suckling  
Kiran Morzaria  
   
WH Ireland Limited (NOMAD & Broker)                                 +44 (0) 207 220 1666
James Joyce  
James Sinclair-Ford  
   
Hannam & Partners LLP (Joint Broker)                                 +44 (0) 207 907 8500
Neil Passmore  
Giles Fitzpatrick  
   
Novum Securities Limited (Joint Broker)                                 +44 (0) 207 399 9400
Jon Belliss  

 

 

Qualified Person

Kiran Morzaria B.Eng. (ACSM), MBA, has reviewed and approved the information contained in this announcement. Kiran holds a Bachelor of Engineering (Industrial Geology) from the Camborne School of Mines and an MBA (Finance) from CASS Business School.

  

Forward-Looking Statements:

Certain statements in this announcement are or may be deemed to be forward-looking statements. Forward-looking statements are identified by their use of terms and phrases such as ”believe” ”could” “should” ”envisage” ”estimate” ”intend” ”may” ”plan” ”will” or the negative of those variations or comparable expressions including references to assumptions. These forward-looking statements are not based on historical facts but rather on the Directors’ current expectations and assumptions regarding the Company’s future growth results of operations performance future capital and other expenditures (including the amount. nature and sources of funding thereof) competitive advantages business prospects and opportunities. Such forward-looking statements reflect the Directors’ current beliefs and assumptions and are based on information currently available to the Directors.  Many factors could cause actual results to differ materially from the results discussed in the forward-looking statements including risks associated with vulnerability to general economic and business conditions competition environmental and other regulatory changes actions by governmental authorities the availability of capital markets reliance on key personnel uninsured and underinsured losses and other factors many of which are beyond the control of the Company. Although any forward-looking statements contained in this announcement are based upon what the Directors believe to be reasonable assumptions. The Company cannot assure investors that actual results will be consistent with such forward-looking statements.

 

Ian Pollard – Gooch & Housego #GHH Impacted by Microelectronic Headwinds

Gooch & Housego plc GHH updates that it is suffering from microelectronic headwinds despite which growth has continued. During the first four months of the financial year the business has seen a downturn in demand particularly from China. A cyclical downturn is also currently being experienced for industrial lasers.  2019 group trading performance is still expected to show low single digit growth compared to last year.

Glencore plc GLEN is pleased to report that it has delivered both record Adjusted EBITDA, up by 8% and significant cash returns to shareholders in 2018. The preliminary results also include net income attributable to equity holders down 41% and basic earnings per share also down 41%. Other highlights are that resolutions have been achieved with the Ontario Securities Commission regarding accounting, governance and disclosure matters and a refreshed management team has been appointed. Committees have been created to oversee the Group’s response to the U.S. Department of Justice’s investigation. Production guidance in all commodities for 2019 is that it is expected to be higher than 2018.

Intu Properties plc INTU  claims its management team has produced robust operational performance in a challenging market for the year to 31st December,  with increased like-for-like net rental income for the fourth consecutive year and 97 per cent occupancy. property valuations declined as sentiment weakened significantly. Valuations fell by a further 3 per cent  in the final quarter of 2018, in addition to the 9 per cent fall over the first nine months. Sentiment in the retail sector is at an all-time low.

Hochschild Mining plc HOC reports another strong year of record production and prudent cost control. Revenue for the year to 31st November fell by 3%, adjusted EBITDA by 11%, Profit from continuing operations (pre-exceptional) was down by 66% and Profit from continuing operations (post-exceptional) by 88%. 2018 operational delivery exceeded guidance.

Lloyds Banking Group LLOY 2018 results show that it was a year of strong strategic and financial delivery. The UK economy has proven itself resilient with record employment, which has enabled the bank to see profits jump by 24% whilst the total ordinary dividend of 3.21 pence per share, is up 5 per cent on 2017 In addition to this a share buyback of up to £1.75 billion is proposed. A continued strong performance is expected for 2019 with a statutory return on tangible equity of 14 to 15 per cent.

Find beachfront villas & houses for sale in Greece;   http://www.hiddengreece.net

Ian Pollard – Glencore #GLEN Strongest Performance on Record

Glencore GLEN claims that its 2017 performance was the strongest on record with industrial adjusted EBITDA rising by 60% and basic earnings per share by 310%, helped by rising commodity prices which are completely outside the control of the company and a strong unit cost performance for which it must be given credit. Net debt fell by a hefty 31%. As for the future it believes that its unrivalled positioning and commodity diversification can create superior long term value for all stakeholders – until the next commodity slump that is but in the meantime enjoy the ride.

First Group FGP updates that reported revenue for the year to date rose by 10.7% but in constant currency terms that was reduced to 1.1%. Greyhounds long haul business was affected by intense airline competition. Even the weather with heavy snowstorms on the eastern sea board as far down as Florida, proved to be a challenge.  Modest first half growth at Greyhound has turned into a decline of 0.4% for the year to date as the second half worsened with a 2.8% decline for the period from the end of September to January. At First Rail like for like passenger revenue rose by 3.2% both for the year to date and for the second half so far. TransPennine Express is described as producing industry leading growth which has got even stronger with the introduction of its new fleet in the autumn.

Bilby plc BILB Revenue and profitability for the year to the end of March will be ahead of current market expectations as the company continues to win new clients, new contracts and invitations from existing and long term customers to broaden the scope of work which it provides.Excellent customer service is regarded by the company as the clue to its success.

Gooch & Housego GHH is experiencing exceptional demand for critical components used in micro electric manufacturing, the order book as at the beginning of January stood at record levels with a rise of 48% compared to the same tie lasy year and put icing on the cake, overall market conditions are good.

Hotel Chocolat Group HOTC announces another period of strong sales growth for the half year to 31st December, with revenue, underlying EBITDA, profit before and after tax and earnings per share all rising by 15%. An interim dividend of 0.6p per share is to be paid following the maiden dividend of 1.6p at the year end in September. Mothers Day, Easter and Valentines Day results are all being looked forward to eagerly.

Inspirational Healthcare Group IHC has continued to perform strongly in the second half, as forecast the the half tear stage. Full year profit are expected to be in line.

 villas & houses for sale in Greece;   http://www.hiddengreece.net

Buy Glencore #GLEN say VectorVest. The stock is trending strongly upwards and offers a compelling growth story.

Swiss based FTSE100 giant Glencore (GLEN.L), formerly Glencore Xstrata plc, is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more than 90 commodities. The Group’s operations comprise around 150 mining and metallurgical sites, oil production assets and agricultural facilities. With a strong footprint in both established and emerging regions for natural resources, Glencore’s industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries. Glencore’s customers are industrial consumers, such as those in the automotive, steel, power generation, oil and food processing sectors. The Company also provide financing, logistics and other services to producers and consumers of commodities. Glencore’s companies employ around 155,000 people, including contractors.

Examine this trading opportunity and a host of other similar stocks. A single payment of £5.95 gives access to the VectorVest Risk Free 30-day trial. More here

On December 12th 2017, GLEN published an investor update, and said that the outlook for its “Tier 1” commodities – copper, cobalt, nickel, zinc & thermal coal were underpinned by persistent supply challenges and robust demand. GLEN added that it was the best placed large cap resources company for the Electric Vehicle revolution. CEO Ivan Glasenberg said the Company expects 2018 illustrative EBITDA of c.$16.2bn at spot/forward prices, adding that GLEN “looks to the future, confident in our ability to continue to create superior returns for our shareholders.”

Along with the other large cap resource giants listed on the FTSE100, GLEN has seen a resurgence in value since summer 2017. The mid December dip in the stock flagged the opportunity and trend both across RV (Relative Value) and RT (Relative Timing) metrics. RV, an indicator of long-term price appreciation potential, logged at 1.55, which VectorVest considers excellent on a scale of 0.00 to 2.00. Added to this, the GRT (forecasted Earnings Growth Rate) for GLEN logs at 37.00%, which VectorVest considers to be excellent, and despite a fair RS (Relative Safety) rating of 0.93 (scale of 0.00 to 2.00), at 409p the stock trades a long way below the VectorVest valuation of 610p.

The chart of GLEN is shown above in my normal format. The blue line study in the window below the price shows Earnings per Share (EPS) growing strongly. The share is trending strongly upwards after breaking and subsequently testing a 52 week high.

Summary: To some investors, mining companies represent a greater degree of investing risk. However, in the view of VectorVest, the sheer size and diversity of the Glencore business results in a relatively safe and stable investment proposition, while a resource hungry world and the EV revolution provides a huge market opportunity and a compelling growth story to buy into.

Dr David Paul

January 16 2018

Readers can examine trading opportunities on GLEN and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 30-day trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

VectorVest Unisearch

On VectorVest a simple search using the Unisearch tool will quickly find shares that are undervalued with good fundamentals that have just issued a Buy recommendation. This will give the active trader a short list of many high probability trading opportunities each week. Traders now have the opportunity to spend five weeks discovering VectorVest’s unique simplicity, automation and independent guidance. Just £5.95 buys a 5 week trial to enable deep exploration, or how the system can assist in smarter trading in as little as 10 minutes a day. Powerful tools. Proven strategies. Unique Perspectives.

Link here for more info and to set up a trial. 

European Financial Publishing Limited T/A VectorVest UK (VectorVest) is authorised and regulated by the Financial Conduct Authority under register number 543038. You should remember that the value of investments and the income derived therefrom may fall as well as rise and you may not get back the amount that you invest. Past performance is not a reliable guide to the future. This material is directed only at persons in the UK and is not an offer or invitation to buy or sell securities. If investors are in any doubt of the suitability of an investment given their individual circumstances, they are recommended to contact an investment manager or independent financial adviser who may be able to provide tailored advice. Opinions expressed whether in general or both on the performance of individual securities and in a wider economic context represent the views of VectorVest at the time of preparation. They are subject to change and should not be interpreted as investment advice. VectorVest and connected companies, clients, directors, employees and other associates, may have a position in any security, or related financial instrument, issued by a company or organisation mentioned on this site. European Financial Publishing Limited is a company incorporated in Scotland under Company Number SC357322 with its registered address at Exchange Tower, 19 Canning Street, Edinburgh EH3 8EH. Email: support@VectorVest.comFREE! For free VectorVest analysis on any stock, go to this link here

Ken Baksh – Do you have enough…..commodities?

 

Black Rock Commodities Income Investment Trust –ISIN GB00B0N8MF98

Commodities have made a strong start in 2018, rising to a three-year high. The Bloomberg Commodity Spot index hits its highest level since 2014 last week after strong readings for manufacturing activity around the world and  increased global demand forecasts. A weaker dollar and various supply constraints/worries such as Libya, Iran, North Sea pipeline affecting oil supply and Chinese shutdowns affecting various metals.

Resource companies themselves have cut spending on new projects and have generally stronger balance sheets and are returning more to shareholders.

One way of accessing this sector is through the Black Rock Commodities Income Investment Trust.

The object of this investment trust is to achieve an annual dividend target, (currently 4p), and over the long term, capital growth, by investing primarily in securities of companies operating in the mining and energy sector.

  • The fund predominantly invests in large quoted equities, the split between oil and mining being approximately oil, majors plus exploration/production 38%, mining 46%, miscellaneous 16% as at end November 2017.
  • Underlying major mining companies, have for the large part responded to the historic weaker trend in resource prices, maintaining balance sheet discipline and adjusting their cost bases.There have been some examples of spectacular self-help stories e.g. Glencore and Anglo American Mining.
  • Recent mining conferences have highlighted the need for increased use of Lithium, Cobalt, Nickel and Copper relating to Electronic Vehicles.BRCI has been building exposure to these elements over the last couple of years. For example, Glencore is now one of the leading global suppliers of Cobalt, a vital component for rechargeable batteries.
  • Rising economic growth projections, supply constraints and a changing OPEC stance have significantly helped the prospects of the major oil companies held. Royal Dutch, for instance, has announced much better than expected results and offers a dividend yield over of over 6%. Statoil and Total also confirmed the more favourable trend for oil majors.
  • As at End November 2017, the Fund ‘s major holdings featured Royal Dutch (6.1%), First Quantum (9.3%), Rio Tinto (6.7%), BHP (6.6%), Glencore (5.0%), and Chevron (4. 5%).The top ten holdings represented nearly 52% of the total portfolio, a relatively concentrated stance.
  • The global nature of these companies provides exposure to non-sterling currencies, especially the US dollar. This can benefit both capital and income when sterling is on a weaker trend.
  • On a TECHNICAL NOTE, it should be noted that energy and material stocks represent about 25% of the FTSE100 index. If using this as a broad benchmark, the weighting in these sectors can materially affect the relative performance of UK active and passive funds.
  • As well as targeting financially strong dividend paying equities the company also employs option writing strategies and an element of gearing, currently near 3%, to further improve the sources of income.
  • On an annual yield, over 5%, (payable quarterly), this trust represents a high income longer term value play, but investors should be aware of the volatility of the underlying sector-maybe another reason to adopt a pooled approach. The trust currently trades at a current discount to net assets of near 6%, near the year’s low, compared with the premium on which it traded for most of the last five years (see graph below). The company operates a discount management procedure from time to time.

https://www2.trustnet.com/Factsheets/Factsheet.aspx?fundCode=RWF98&univ=T&pageType=performance&skipre=1

https://www.blackrock.com/uk/individual/literature/fact-sheet/blackrock-commodities-income-investment-trust-plc-factsheet.pdf

Sources:Trustnet,London Stock Exchange,Corporate Web Site,Numis.

 

Independent Investment Research

by Ken Baksh

Ken has over 35 years of investment management experience, working for two major City institutions between 1976 and 2002.

Since then he has been engaged as a self-employed investment consultant. He has worked with investment trusts, unit trusts, pension funds, charities, Life Fund,hedge fund and private clients. Individual asset managed have included direct equities and bonds pooled vehicles currencies, derivatives and commodities.

Projects undertaken in a number of areas including asset allocation, risk control, performance measurement, marketing, individual company research, legacy portfolios and portfolio construction. He has a BSc(Mathematics/Statistics) and is a Fellow Member of the UK Society of Investment Professionals.

 

 

Disclaimer

All stock recommendations and comments are the opinion of writer.

Investors should be cautious about all stock recommendations and should consider the source of any advice on stock selection. Various factors, including personal ownership, may influence or factor into a stock analysis or opinion.

All investors are advised to conduct their own independent research into individual stocks before making a purchase decision. In addition, investors are advised that past stock performance is not indicative of future price action.

You should be aware of the risks involved in stock investing, and you use the material contained herein at your own risk

The author may have historic or prospective positions in securities mentioned in the report.

The material on this website are provided for information purpose only.

Please contact Ken, (kenbaksh@btopenworld.com) for further information

 

 

Corporate news review Thursday 10th August 2017

Amec Foster Wheeler AMFW reports net pre-tax exceptional gains of £47m in the half-year ended 30 June 2016 and says it has made a strong start to its transformation programme, with the first signs of progress now showing up in the order book.

Cineworld Group CINE reports half year revenue growth of 17.8%, with adjusted profit after tax up 23.5% to £42m. Looking forward the film release programme for the second half of the year includes a number of key releases namely “Justice League”, “Paddington 2”, “Thor: Ragnarok”, “Kingsman: The Golden Circle” and “Star Wars: Episode VIII”, and many more. Based on the H2 film slate the group remains confident of delivering a performance for the year as a whole in line with current market expectations.

DFS Furniture DFS publishes a pre-close trading update, and says H2 has been weaker than expected owing to significant declines in store footfall and customer orders across April, May and June. Overall, Group H2 revenues were 4% lower than the prior year, and following an increase of 7% in H1, expects to deliver growth of 1% over the year as a whole. FY EBITDA will be at the low end of the £82-£87m range previously given.

Evraz EVZ reports strong free half-year cashflow of $549m (H1 2016: $102m), and has reduced net debt to $4.28bn (FY2016: $4.8bn). An interim dividend of $0.30 per share will be paid, equalling an overall payout to shareholders of around $429.6m. Looking ahead, expects the results for the year to also reflect the positive trends on the global steel market.

Glencore GLEN reports adjusted half year EBITDA up 68% and EBIT up 334%, while net debt fell a further $1.6bn to $13.9bn from end of 2016. GLEN says its portfolio of Tier 1 commodities underpins ambitions to create significant long-term value for shareholders.

St. Ives Plc SIV updates on trading and says overall results for the year are expected to be at the top end of the range of current market expectations. H2 revenue was approx 17% ahead of the equivalent period last year and, excluding the effects of currency movements, like-for-like revenue growth was c12%. The group continues to be encouraged by the performance of the segment, which has now returned to strong like-for-like revenue growth, with a significantly improved operating margin. Trading conditions within Marketing Activation segment continues to be challenging, as reported in June 2017.

Brand CEO Alan Green talks markets, Hostelworld (HSW) & Burford Capital (BUR) on TipTV

Alan Green, CEO of Brand communications and Tip TV’s Zak Mir discuss fundamental and technical aspects of Hostelworld (HSW), Burford Capital (BUR), & Tip TV trade of the day – Sell Glencore. Also discussed is the most popular in business/finance, technical view on oil and gold from the Investors Intelligence, Oanda forex market sentiment, broker recommendation
I would like to receive Brand Communications updates and news...
Free Stock Updates & News
I agree to have my personal information transfered to MailChimp ( more information )
Join over 3.000 visitors who are receiving our newsletter and learn how to optimize your blog for search engines, find free traffic, and monetize your website.
We hate spam. Your email address will not be sold or shared with anyone else.