Whilst it may not be a huge deal, we thought it was good to see that the CZR Resources Ltd (ASX:CZR) Non-Executive Director, Adam Sierakowski, recently bought AU$51k worth of stock, for AU$0.012 per share. That purchase might not be huge but it did increase their holding by 15%.
Check out our latest analysis for CZR Resources
CZR Resources Insider Transactions Over The Last Year
There wasn't any very large single transaction over the last year, but we can still observe some trading.
Happily, we note that in the last year insiders paid AU$258k for 22.36m shares. On the other hand they divested 5.36m shares, for AU$54k. In the last twelve months there was more buying than selling by CZR Resources insiders. They paid about AU$0.012 on average. To my mind it is good that insiders have invested their own money in the company. However, you should keep in mind that they bought when the share price was meaningfully below today's levels, which is around AU$0.019. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
CZR Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership
I like to look at how many shares insiders own in a company, to help inform my view of how aligned they are with insiders. I reckon it's a good sign if insiders own a significant number of shares in the company. It appears that CZR Resources insiders own 20% of the company, worth about AU$11m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The CZR Resources Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in CZR Resources shares, given these transactions (along with notable insider ownership of the company). So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. For instance, we've identified 4 warning signs for CZR Resources (1 shouldn't be ignored) you should be aware of.
Of course CZR Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
It is not uncommon to see companies perform well in the years after insiders buy shares. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in RBR Group Limited (ASX:RBR).
What Is Insider Selling?
It is perfectly legal for company insiders, including board members, to buy and sell stock in a company. However, rules govern insider transactions, and certain disclosures are required.
We don't think shareholders should simply follow insider transactions. But it is perfectly logical to keep tabs on what insiders are doing. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
See our latest analysis for RBR Group
RBR Group Insider Transactions Over The Last Year
In the last twelve months, the biggest single purchase by an insider was when Non-Executive Director Athol Emerton bought AU$70k worth of shares at a price of AU$0.014 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.01). It's very possible they regret the purchase, but it's more likely they are bullish about the company. We always take careful note of the price insiders pay when purchasing shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
In the last twelve months RBR Group insiders were buying shares, but not selling. They paid about AU$0.01 on average. This is nice to see since it implies that insiders might see value around current prices. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
RBR Group Insiders Bought Stock Recently
Over the last three months, we've seen a bit of insider buying at RBR Group. Insiders shelled out AU$65k for shares in that time. It's great to see that insiders are only buying, not selling. However, in this case the amount invested recently is quite small.
Does RBR Group Boast High Insider Ownership?
For a common shareholder, it is worth checking how many shares are held by company insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. It appears that RBR Group insiders own 36% of the company, worth about AU$3.6m. We've certainly seen higher levels of insider ownership elsewhere, but these holdings are enough to suggest alignment between insiders and the other shareholders.
So What Does This Data Suggest About RBR Group Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of RBR Group we think they are probably pretty confident of a bright future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Case in point: We've spotted 6 warning signs for RBR Group you should be aware of, and 4 of them are a bit concerning.
But note: RBR Group may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
If you want to know who really controls Poseidon Nickel Limited (ASX:POS), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.
Poseidon Nickel is not a large company by global standards. It has a market capitalization of AU$143m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholders can tell us about Poseidon Nickel.
View our latest analysis for Poseidon Nickel
What Does The Institutional Ownership Tell Us About Poseidon Nickel?
Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.
As you can see, institutional investors have a fair amount of stake in Poseidon Nickel. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Poseidon Nickel, (below). Of course, keep in mind that there are other factors to consider, too.
Hedge funds don't have many shares in Poseidon Nickel. Black Mountain Metals LLC is currently the company's largest shareholder with 21% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 4.8% by the third-largest shareholder.
On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Poseidon Nickel
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our most recent data indicates that insiders own some shares in Poseidon Nickel Limited. In their own names, insiders own AU$5.4m worth of stock in the AU$143m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking if those insiders have been buying.
General Public Ownership
The general public, with a 40% stake in the company, will not easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
Private Company Ownership
It seems that Private Companies own 22%, of the Poseidon Nickel stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Poseidon Nickel (of which 1 makes us a bit uncomfortable!) you should know about.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. But the harsh reality is that very many loss making companies burn through all their cash and go bankrupt.
Given this risk, we thought we'd take a look at whether Energy Metals (ASX:EME) shareholders should be worried about its cash burn. In this article, we define cash burn as its annual (negative) free cash flow, which is the amount of money a company spends each year to fund its growth. We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.
View our latest analysis for Energy Metals
When Might Energy Metals Run Out Of Money?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Energy Metals last reported its balance sheet in June 2020, it had zero debt and cash worth AU$17m. Looking at the last year, the company burnt through AU$707k. So it had a very long cash runway of many years from June 2020. Even though this is but one measure of the company's cash burn, the thought of such a long cash runway warms our bellies in a comforting way. The image below shows how its cash balance has been changing over the last few years.
How Is Energy Metals' Cash Burn Changing Over Time?
Energy Metals didn't record any revenue over the last year, indicating that it's an early stage company still developing its business. Nonetheless, we can still examine its cash burn trajectory as part of our assessment of its cash burn situation. Even though it doesn't get us excited, the 34% reduction in cash burn year on year does suggest the company can continue operating for quite some time. Energy Metals makes us a little nervous due to its lack of substantial operating revenue. So we'd generally prefer stocks from this list of stocks that have analysts forecasting growth.
How Hard Would It Be For Energy Metals To Raise More Cash For Growth?
While Energy Metals is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Many companies end up issuing new shares to fund future growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Energy Metals' cash burn of AU$707k is about 2.6% of its AU$27m market capitalisation. That means it could easily issue a few shares to fund more growth, and might well be in a position to borrow cheaply.
So, Should We Worry About Energy Metals' Cash Burn?
It may already be apparent to you that we're relatively comfortable with the way Energy Metals is burning through its cash. For example, we think its cash runway suggests that the company is on a good path. Its cash burn reduction wasn't quite as good, but was still rather encouraging! Taking all the factors in this report into account, we're not at all worried about its cash burn, as the business appears well capitalized to spend as needs be. On another note, we conducted an in-depth investigation of the company, and identified 3 warning signs for Energy Metals (1 makes us a bit uncomfortable!) that you should be aware of before investing here.
Of course Energy Metals may not be the best stock to buy. So you may wish to see this free collection of companies boasting high return on equity, or this list of stocks that insiders are buying.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
The big shareholder groups in Greatland Gold plc (LON:GGP) have power over the company. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that used to be publicly owned tend to have lower insider ownership.
With a market capitalization of UK£884m, Greatland Gold is a decent size, so it is probably on the radar of institutional investors. Our analysis of the ownership of the company, below, shows that institutions own shares in the company. Let's take a closer look to see what the different types of shareholders can tell us about Greatland Gold.
View our latest analysis for Greatland Gold
What Does The Institutional Ownership Tell Us About Greatland Gold?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
We can see that Greatland Gold does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Greatland Gold's earnings history below. Of course, the future is what really matters.
Hedge funds don't have many shares in Greatland Gold. The company's largest shareholder is HBOS Investment Fund Managers Limited, with ownership of 9.1%. In comparison, the second and third largest shareholders hold about 6.5% and 4.2% of the stock. In addition, we found that Gervaise Robert Heddle, the CEO has 2.0% of the shares allocated to his name
On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Greatland Gold
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own some shares in Greatland Gold plc. This is a big company, so it is good to see this level of alignment. Insiders own UK£43m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public holds a 48% stake in Greatland Gold. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.
Next Steps:
I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Take risks for example – Greatland Gold has 6 warning signs (and 1 which is a bit concerning) we think you should know about.
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES
TORONTO, Sept. 15, 2020 (GLOBE NEWSWIRE) — CANSTAR RESOURCES INC. (TSXV: ROX) (“Canstar Resources” or the “Company”) is pleased to announce the appointment of Rob Bruggeman as Director and President & CEO of the Company, effective immediately. The Company’s Board of Directors is now comprised of David Palmer, Sam Leung, Patrick Reid, Dennis Peterson and Rob Bruggeman. The Company is also pleased to announce that it has closed the first tranche of the non-brokered private placement for gross proceeds of up to $2.0 million, as announced on September 2, 2020 (the “Offering”).
New CEO and Director
Rob Bruggeman has worked in senior management and consulting roles with mining companies for the past eight years and has invested extensively in the mining sector. Currently, he is Chairman of the Board of AbraPlata Resource Corp., a TSX-Venture listed company focused on silver-gold exploration in Argentina. Prior to joining the mining sector, Mr. Bruggeman spent more than 10 years working in equities research and institutional equities sales & trading roles at several brokerage firms, including five years with TD Securities as VP, Trading Strategy & Research. Mr. Bruggeman is a licensed Professional Engineer (Ontario) and a CFA charter holder.
Mr. Bruggeman commented: “Canstar has an excellent platform for mineral exploration in Newfoundland. I look forward to working with the Canstar team, as well as the technical team from Altius Minerals, on advancing the exploration of Canstar’s district-scale properties in the province. I am especially excited about exploration on the newly optioned Golden Baie Project in south Newfoundland, given the exceptional gold grades discovered at surface recently.”
Canstar would like to thank Mr. Dennis Peterson for his dedication as Interim CEO. Mr. Peterson will continue to serve as Chairman of the Company’s Board of Directors.
First Tranche of Private Placement
The first tranche of the Offering consists of an aggregate of 4,761,920 units (each a “Part & Parcel Unit”) at a price of $0.105 per Part & Parcel Unit for gross proceeds of $500,001.60. Each Part & Parcel Unit was comprised of one (1) common share in the capital of the Company and one common share purchase warrant (a "Warrant") at an exercise price of $0.21 per Warrant for two years from the date of issuance. Canstar intends to close a further $1,500,000 in subscriptions in a second tranche of the Offering, for an aggregate total amount of approximately $2,000,000.
The Company intends to use the net proceeds raised from the Offering for general corporate purposes, working capital, and exploration expenses on the Company’s properties, including Buchan’s/Mary March, Daniel’s Harbour, and Golden Baie. In particular, the proceeds from the sale of Part & Parcel Units will be used to fund the exploration expenditure commitment on the Golden Baie project, subject to the approval of the TSX Venture Exchange (the “TSXV”).
Directors and management of the Company acquired an aggregate of 1,820,050 Part & Parcel Units in the Offering for aggregate proceeds of approximately $191,100, which participation constituted a "related party transaction" as defined under Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). Such participation is exempt from the formal valuation and minority shareholder approval requirements of MI 61-101 as neither the fair market value of the Part & Parcel Units acquired by the insiders, nor the consideration for the Part & Parcel Units paid by such insiders, exceed 25% of the Company's market capitalization.
No finder’s fees were paid on the Offering. All securities issued pursuant to the Offering are subject to the applicable statutory hold period of four months and one day from the closing. The Offering is subject to the final approval of the TSX Venture Exchange.
About Canstar Resources Inc.
Canstar Resources is a mineral exploration and development company focused on creating shareholder value through discovery and development of economic mineral deposits in Newfoundland, Canada. Canstar is in the process of completing option agreements on the Golden Baie Project in south Newfoundland, a large claim package (660 km2) with recently discovered, multiple outcropping gold occurrences. The Company also holds the Buchans-Mary March project and other mineral exploration properties in Newfoundland and Labrador, Canada. Canstar Resources is based in Toronto, Canada and is listed on the TSX Venture Exchange and trades under the symbol ROX-V.
For further information, please contact:
Rob Bruggeman P.Eng., CFA
President & CEO
Email: rob@canstarresources.com
Phone: 1-416-884-3556
www.canstarresources.com
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, as well as the anticipated size of the Offering, the Offering price, the anticipated closing date and the completion of the Offering, the anticipated use of the net proceeds from the Offering and the receipt of all necessary approvals. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, an inability to complete the Offering on the terms or on the timeline as announced or at all, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
Whilst it may not be a huge deal, we thought it was good to see that the Oklo Resources Limited (ASX:OKU) MD, CEO & Director, Simon Taylor, recently bought AU$103k worth of stock, for AU$0.26 per share. However, it only increased their shares held by 7.3%, and it wasn't a huge purchase by absolute value, either.
Check out our latest analysis for Oklo Resources
The Last 12 Months Of Insider Transactions At Oklo Resources
Notably, that recent purchase by Simon Taylor is the biggest insider purchase of Oklo Resources shares that we've seen in the last year. That means that an insider was happy to buy shares at around the current price of AU$0.30. Of course they may have changed their mind. But this suggests they are optimistic. If someone buys shares at well below current prices, it's a good sign on balance, but keep in mind they may no longer see value. Happily, the Oklo Resources insiders decided to buy shares at close to current prices.
Oklo Resources insiders may have bought shares in the last year, but they didn't sell any. Their average price was about AU$0.20. We don't deny that it is nice to see insiders buying stock in the company. However, we do note that they were buying at significantly lower prices than today's share price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Oklo Resources is not the only stock that insiders are buying. For those who like to find winning investments this free list of growing companies with recent insider purchasing, could be just the ticket.
Insider Ownership of Oklo Resources
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Oklo Resources insiders own about AU$17m worth of shares. That equates to 11% of the company. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Oklo Resources Insider Transactions Indicate?
It is good to see the recent insider purchase. And the longer term insider transactions also give us confidence. However, we note that the company didn't make a profit over the last twelve months, which makes us cautious. Insiders likely see value in Oklo Resources shares, given these transactions (along with notable insider ownership of the company). In addition to knowing about insider transactions going on, it's beneficial to identify the risks facing Oklo Resources. Case in point: We've spotted 4 warning signs for Oklo Resources you should be aware of, and 2 of them shouldn't be ignored.
But note: Oklo Resources may not be the best stock to buy. So take a peek at this free list of interesting companies with high ROE and low debt.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So shareholders might well want to know whether insiders have been buying or selling shares in Peel Mining Limited (ASX:PEX).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, such insiders must disclose their trading activities, and not trade on inside information.
We would never suggest that investors should base their decisions solely on what the directors of a company have been doing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
See our latest analysis for Peel Mining
The Last 12 Months Of Insider Transactions At Peel Mining
The Executive Director of Mining & Director James Simpson made the biggest insider purchase in the last 12 months. That single transaction was for AU$520k worth of shares at a price of AU$0.17 each. Even though the purchase was made at a significantly lower price than the recent price (AU$0.27), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Peel Mining insiders may have bought shares in the last year, but they didn't sell any. You can see the insider transactions (by companies and individuals) over the last year depicted in the chart below. If you click on the chart, you can see all the individual transactions, including the share price, individual, and the date!
Peel Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Peel Mining Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Peel Mining. In total, insiders bought AU$1.0m worth of shares in that time, and we didn't record any sales whatsoever. This is a positive in our book as it implies some confidence.
Insider Ownership of Peel Mining
Another way to test the alignment between the leaders of a company and other shareholders is to look at how many shares they own. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 15% of Peel Mining shares, worth about AU$13m, according to our data. But they may have an indirect interest through a corporate structure that we haven't picked up on. Overall, this level of ownership isn't that impressive, but it's certainly better than nothing!
So What Does This Data Suggest About Peel Mining Insiders?
The recent insider purchases are heartening. And an analysis of the transactions over the last year also gives us confidence. But on the other hand, the company made a loss during the last year, which makes us a little cautious. Given that insiders also own a fair bit of Peel Mining we think they are probably pretty confident of a bright future. So these insider transactions can help us build a thesis about the stock, but it's also worthwhile knowing the risks facing this company. Be aware that Peel Mining is showing 5 warning signs in our investment analysis, and 2 of those are significant…
Of course Peel Mining may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
We often see insiders buying up shares in companies that perform well over the long term. On the other hand, we'd be remiss not to mention that insider sales have been known to precede tough periods for a business. So before you buy or sell Aspire Mining Limited (ASX:AKM), you may well want to know whether insiders have been buying or selling.
Do Insider Transactions Matter?
Most investors know that it is quite permissible for company leaders, such as directors of the board, to buy and sell stock in the company. However, such insiders must disclose their trading activities, and not trade on inside information.
We don't think shareholders should simply follow insider transactions. But logic dictates you should pay some attention to whether insiders are buying or selling shares. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Aspire Mining
Aspire Mining Insider Transactions Over The Last Year
Over the last year, we can see that the biggest insider purchase was by insider Tserenpuntsag Tserendamba for AU$34m worth of shares, at about AU$0.021 per share. Even though the purchase was made at a significantly lower price than the recent price (AU$0.078), we still think insider buying is a positive. Because it occurred at a lower valuation, it doesn't tell us much about whether insiders might find today's price attractive.
Over the last year, we can see that insiders have bought 1.60b shares worth AU$34m. On the other hand they divested 693.66k shares, for AU$63k. In total, Aspire Mining insiders bought more than they sold over the last year. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
Aspire Mining is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Aspire Mining Insiders Are Selling The Stock
Over the last three months, we've seen a bit of insider selling at Aspire Mining. In total, insiders sold AU$63k worth of shares in that time. But the good news is that Non-Executive Chairman David Paull bought AU$37k worth. While it's not great to see insider selling, the net amount sold isn't enough for us to want to read anything into it.
Insider Ownership of Aspire Mining
Many investors like to check how much of a company is owned by insiders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aspire Mining insiders own 61% of the company, currently worth about AU$24m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
What Might The Insider Transactions At Aspire Mining Tell Us?
We note that there's been a little more insider selling than buying, recently. But the difference is small, and thus, not concerning. But insiders have shown more of an appetite for the stock, over the last year. It would be great to see more insider buying, but overall it seems like Aspire Mining insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. So while it's helpful to know what insiders are doing in terms of buying or selling, it's also helpful to know the risks that a particular company is facing. Our analysis shows 4 warning signs for Aspire Mining (1 is significant!) and we strongly recommend you look at these before investing.
Of course Aspire Mining may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
Most readers would already be aware that Copper Strike's (ASX:CSE) stock increased significantly by 15% over the past three months. Given the company's impressive performance, we decided to study its financial indicators more closely as a company's financial health over the long-term usually dictates market outcomes. In this article, we decided to focus on Copper Strike's ROE.
Return on equity or ROE is an important factor to be considered by a shareholder because it tells them how effectively their capital is being reinvested. In short, ROE shows the profit each dollar generates with respect to its shareholder investments.
See our latest analysis for Copper Strike
How To Calculate Return On Equity?
ROE can be calculated by using the formula:
Return on Equity = Net Profit (from continuing operations) ÷ Shareholders' Equity
So, based on the above formula, the ROE for Copper Strike is:
17% = AU$565k ÷ AU$3.4m (Based on the trailing twelve months to June 2020).
The 'return' is the yearly profit. That means that for every A$1 worth of shareholders' equity, the company generated A$0.17 in profit.
Why Is ROE Important For Earnings Growth?
We have already established that ROE serves as an efficient profit-generating gauge for a company's future earnings. Depending on how much of these profits the company reinvests or "retains", and how effectively it does so, we are then able to assess a company’s earnings growth potential. Assuming everything else remains unchanged, the higher the ROE and profit retention, the higher the growth rate of a company compared to companies that don't necessarily bear these characteristics.
Copper Strike's Earnings Growth And 17% ROE
At first glance, Copper Strike seems to have a decent ROE. Further, the company's ROE compares quite favorably to the industry average of 12%. This certainly adds some context to Copper Strike's exceptional 38% net income growth seen over the past five years. We believe that there might also be other aspects that are positively influencing the company's earnings growth. For example, it is possible that the company's management has made some good strategic decisions, or that the company has a low payout ratio.
Next, on comparing Copper Strike's net income growth with the industry, we found that the company's reported growth is similar to the industry average growth rate of 34% in the same period.
Earnings growth is a huge factor in stock valuation. What investors need to determine next is if the expected earnings growth, or the lack of it, is already built into the share price. This then helps them determine if the stock is placed for a bright or bleak future. One good indicator of expected earnings growth is the P/E ratio which determines the price the market is willing to pay for a stock based on its earnings prospects. So, you may want to check if Copper Strike is trading on a high P/E or a low P/E, relative to its industry.
Is Copper Strike Using Its Retained Earnings Effectively?
Given that Copper Strike doesn't pay any dividend to its shareholders, we infer that the company has been reinvesting all of its profits to grow its business.
Summary
In total, we are pretty happy with Copper Strike's performance. Particularly, we like that the company is reinvesting heavily into its business, and at a high rate of return. Unsurprisingly, this has led to an impressive earnings growth. If the company continues to grow its earnings the way it has, that could have a positive impact on its share price given how earnings per share influence long-term share prices. Not to forget, share price outcomes are also dependent on the potential risks a company may face. So it is important for investors to be aware of the risks involved in the business. You can see the 4 risks we have identified for Copper Strike by visiting our risks dashboard for free on our platform here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
THIS NEWS RELEASE IS NOT FOR DISTRIBUTION IN THE UNITED STATES OR TO U.S. NEWS AGENCIES
TORONTO, Sept. 02, 2020 (GLOBE NEWSWIRE) — CANSTAR RESOURCES INC. (TSXV: ROX) (“Canstar Resources” or the “Company”) announces that, further to its press release dated August 26, 2020, it is amending the terms (the “Amendment”) of its proposed non-brokered private placement for aggregate gross proceeds of up to $2,000,000 (the “Offering”).
Pursuant to the Amendment, Canstar Resources intends to complete the Offering in two tranches. The first tranche will consist of the sale of up to 4,761,905 units (“Part & Parcel Units”) at a price of $0.105 per Part & Parcel Unit, for gross proceeds of up to $500,000. Each Part & Parcel Unit will be comprised of one common share in the equity of the Company (each, a “Common Share”) and one Common Share purchase warrant (each, a “Part & Parcel Warrant”). Each Part & Parcel Warrant will entitle the subscriber to purchase one additional Common Share at a price of $0.14 until the second (2nd) anniversary of the closing date of the Offering.
The second tranche will consist of the sale of up to 9,523,810 units (“Regular Units”) at a price of $0.1575 per Regular Unit, for gross proceeds of up to $1,500,000. Each Regular Unit will be comprised of one Common Share and one Common Share purchase warrant (each, a “Regular Warrant”). Each Regular Warrant will entitle the subscriber to purchase one additional Common Share at a price of $0.21 until the second (2nd) anniversary of the closing date of the Offering.
The Company intends to use the net proceeds raised from the Offering for general corporate purposes, working capital, and exploration expenses on the Company’s properties, including Buchan’s/Mary March, Daniel’s Harbour, and Golden Baie. In particular, the proceeds from the sale of Part & Parcel Units will be used to fund the exploration expenditure commitment on the Golden Baie project, subject to the approval of the TSX Venture Exchange and the closing of this transaction as announced on August 26, 2020.
The Company may pay finder's fees in respect to the Offering. Closing of the Offering is expected on or about September 15, 2020. The Offering is subject to the final approval of the TSX Venture Exchange. Securities issued pursuant to the Offering shall be subject to a four-month plus one day hold period commencing on the day of the closing of the Offering under applicable Canadian securities laws.
It is expected that certain directors, officers and other insiders of the Company (collectively, the “Insiders”) will participate in the Offering. The participation of Insiders in the Offering constitutes a “related party transaction”, as such terms are defined by Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The Company is relying on an exemption from the formal valuation requirements of MI 61-101 available on the basis of the securities of the Company not being listed on specified markets, including the Toronto Stock Exchange, the New York Stock Exchange, the American Stock Exchange, the NASDAQ or certain overseas stock exchanges. The Company is also relying on the exemption from minority shareholder approval requirements under MI 61-101 as the fair market value of the participation in the Offering by the Insiders does not exceed 25% of the market capitalization of the Company.
The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an applicable exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.
About Canstar Resources Inc.
Canstar Resources is a mineral exploration and development company focused on creating shareholder value through discovery and development of economic mineral deposits in Newfoundland, Canada. Canstar is in the process of completing option agreements on the Golden Baie Project in south Newfoundland, a large claim package (660 km2) with recently discovered, multiple outcropping gold occurrences. The Company also holds the Buchans-Mary March project and other mineral exploration properties in Newfoundland and Labrador, Canada. Canstar Resources is based in Toronto, Canada and is listed on the TSX Venture Exchange and trades under the symbol ROX-V.
For further information, please contact:
Dennis H. Peterson
Chairman of the Board, Interim President and Chief Executive Officer
Email: info@canstarresources.com
www.canstarresources.com
Forward-Looking Statements
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This News Release includes certain "forward-looking statements" which are not comprised of historical facts. Forward-looking statements include estimates and statements that describe the Company’s future plans, objectives or goals, including words to the effect that the Company or management expects a stated condition or result to occur. Forward-looking statements may be identified by such terms as “believes”, “anticipates”, “expects”, “estimates”, “may”, “could”, “would”, “will”, or “plan”. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties. Although these statements are based on information currently available to the Company, the Company provides no assurance that actual results will meet management’s expectations. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information. Forward looking information in this news release includes, but is not limited to, the Company’s objectives, goals or future plans, statements, exploration results, potential mineralization, the estimation of mineral resources, exploration and mine development plans, timing of the commencement of operations and estimates of market conditions, as well as the anticipated size of the Offering, the Offering price, the anticipated closing date and the completion of the Offering, the anticipated use of the net proceeds from the Offering, the closing of the Golden Baie property transaction on the terms as announced or at all, and the receipt of all necessary approvals. Factors that could cause actual results to differ materially from such forward-looking information include, but are not limited to failure to identify mineral resources, failure to convert estimated mineral resources to reserves, the inability to complete a feasibility study which recommends a production decision, the preliminary nature of metallurgical test results, delays in obtaining or failures to obtain required governmental, environmental or other project approvals, political risks, inability to fulfill the duty to accommodate First Nations and other indigenous peoples, uncertainties relating to the availability and costs of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in commodity prices, delays in the development of projects, capital and operating costs varying significantly from estimates and the other risks involved in the mineral exploration and development industry, an inability to complete the Offering on the terms or on the timeline as announced or at all, an inability to predict and counteract the effects of COVID-19 on the business of the Company, including but not limited to the effects of COVID-19 on the price of commodities, capital market conditions, restriction on labour and international travel and supply chains, and those risks set out in the Company’s public documents filed on SEDAR. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information, which only applies as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. The Company disclaims any intention or obligation to update or revise any forward-looking information, whether as a result of new information, future events or otherwise, other than as required by law.
There's no doubt that money can be made by owning shares of unprofitable businesses. For example, although software-as-a-service business Salesforce.com lost money for years while it grew recurring revenue, if you held shares since 2005, you'd have done very well indeed. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
So, the natural question for Arafura Resources (ASX:ARU) shareholders is whether they should be concerned by its rate of cash burn. In this report, we will consider the company's annual negative free cash flow, henceforth referring to it as the 'cash burn'. Let's start with an examination of the business' cash, relative to its cash burn.
See our latest analysis for Arafura Resources
How Long Is Arafura Resources' Cash Runway?
You can calculate a company's cash runway by dividing the amount of cash it has by the rate at which it is spending that cash. When Arafura Resources last reported its balance sheet in June 2020, it had zero debt and cash worth AU$23m. Importantly, its cash burn was AU$12m over the trailing twelve months. Therefore, from June 2020 it had roughly 23 months of cash runway. While that cash runway isn't too concerning, sensible holders would be peering into the distance, and considering what happens if the company runs out of cash. However, if we extrapolate the company's recent cash burn trend, then it would have a longer cash run way. Depicted below, you can see how its cash holdings have changed over time.
How Is Arafura Resources' Cash Burn Changing Over Time?
In our view, Arafura Resources doesn't yet produce significant amounts of operating revenue, since it reported just AU$58k in the last twelve months. Therefore, for the purposes of this analysis we'll focus on how the cash burn is tracking. With cash burn dropping by 17% it seems management feel the company is spending enough to advance its business plans at an appropriate pace. Clearly, however, the crucial factor is whether the company will grow its business going forward. For that reason, it makes a lot of sense to take a look at our analyst forecasts for the company.
How Easily Can Arafura Resources Raise Cash?
While Arafura Resources is showing a solid reduction in its cash burn, it's still worth considering how easily it could raise more cash, even just to fuel faster growth. Companies can raise capital through either debt or equity. One of the main advantages held by publicly listed companies is that they can sell shares to investors to raise cash and fund growth. By comparing a company's annual cash burn to its total market capitalisation, we can estimate roughly how many shares it would have to issue in order to run the company for another year (at the same burn rate).
Since it has a market capitalisation of AU$90m, Arafura Resources' AU$12m in cash burn equates to about 13% of its market value. As a result, we'd venture that the company could raise more cash for growth without much trouble, albeit at the cost of some dilution.
Is Arafura Resources' Cash Burn A Worry?
The good news is that in our view Arafura Resources' cash burn situation gives shareholders real reason for optimism. One the one hand we have its solid cash burn relative to its market cap, while on the other it can also boast very strong cash runway. While we're the kind of investors who are always a bit concerned about the risks involved with cash burning companies, the metrics we have discussed in this article leave us relatively comfortable about Arafura Resources' situation. Separately, we looked at different risks affecting the company and spotted 5 warning signs for Arafura Resources (of which 1 shouldn't be ignored!) you should know about.
If you would prefer to check out another company with better fundamentals, then do not miss this free list of interesting companies, that have HIGH return on equity and low debt or this list of stocks which are all forecast to grow.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
In this article we are going to estimate the intrinsic value of Hillgrove Resources Limited (ASX:HGO) by taking the expected future cash flows and discounting them to today's value. One way to achieve this is by employing the Discounted Cash Flow (DCF) model. Before you think you won't be able to understand it, just read on! It's actually much less complex than you'd imagine.
Companies can be valued in a lot of ways, so we would point out that a DCF is not perfect for every situation. Anyone interested in learning a bit more about intrinsic value should have a read of the Simply Wall St analysis model.
View our latest analysis for Hillgrove Resources
The model
We have to calculate the value of Hillgrove Resources slightly differently to other stocks because it is a metals and mining company. In this approach dividends per share (DPS) are used, as free cash flow is difficult to estimate and often not reported by analysts. This often underestimates the value of a stock, but it can still be good as a comparison to competitors. We use the Gordon Growth Model, which assumes dividend will grow into perpetuity at a rate that can be sustained. The dividend is expected to grow at an annual growth rate equal to the 5-year average of the 10-year government bond yield of 2.3%. We then discount this figure to today's value at a cost of equity of 9.1%. Compared to the current share price of AU$0.05, the company appears about fair value at a 19% discount to where the stock price trades currently. The assumptions in any calculation have a big impact on the valuation, so it is better to view this as a rough estimate, not precise down to the last cent.
Value Per Share = Expected Dividend Per Share / (Discount Rate – Perpetual Growth Rate)
= AU$0.01 / (9.1% – 2.3%)
= AU$0.06
Important assumptions
Now the most important inputs to a discounted cash flow are the discount rate, and of course, the actual cash flows. If you don't agree with these result, have a go at the calculation yourself and play with the assumptions. The DCF also does not consider the possible cyclicality of an industry, or a company's future capital requirements, so it does not give a full picture of a company's potential performance. Given that we are looking at Hillgrove Resources as potential shareholders, the cost of equity is used as the discount rate, rather than the cost of capital (or weighted average cost of capital, WACC) which accounts for debt. In this calculation we've used 9.1%, which is based on a levered beta of 1.137. Beta is a measure of a stock's volatility, compared to the market as a whole. We get our beta from the industry average beta of globally comparable companies, with an imposed limit between 0.8 and 2.0, which is a reasonable range for a stable business.
Next Steps:
Whilst important, the DCF calculation ideally won't be the sole piece of analysis you scrutinize for a company. DCF models are not the be-all and end-all of investment valuation. Rather it should be seen as a guide to "what assumptions need to be true for this stock to be under/overvalued?" For instance, if the terminal value growth rate is adjusted slightly, it can dramatically alter the overall result. For Hillgrove Resources, we've put together three additional elements you should explore:
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Risks: Case in point, we've spotted 3 warning signs for Hillgrove Resources you should be aware of.
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Other High Quality Alternatives: Do you like a good all-rounder? Explore our interactive list of high quality stocks to get an idea of what else is out there you may be missing!
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Other Environmentally-Friendly Companies: Concerned about the environment and think consumers will buy eco-friendly products more and more? Browse through our interactive list of companies that are thinking about a greener future to discover some stocks you may not have thought of!
PS. The Simply Wall St app conducts a discounted cash flow valuation for every stock on the ASX every day. If you want to find the calculation for other stocks just search here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
VANCOUVER, BC / ACCESSWIRE / August 28, 2020 / International Millennium Mining Corp. (TSXV:IMI) (the "Company" or "IMMC") reports that, further to its July 14, 2020, press release, it has closed its non-brokered private placement in trust, pending the final acceptance of the TSX Venture Exchange, in the amount of $659,465. The private placement consists of 32,973,250 units at $0.02 per unit, each unit is comprised of one (1) common share and one (1) non-transferable share purchase warrant entitling the holder to purchase an additional share at $0.05 per share for a period of thirty-six (36) months from the date of issuance (the "Private Placement").
The Company will pay up to a 6% finder's fee and issue broker share purchase warrants, up to 8% of the Private Placement units, with respect to $603,000 of the Private Placement. Each broker warrant will entitle the holder to acquire one common share at $0.05 for a period of thirty-six (36) months from the closing of the placement.
The Private Placement proceeds will be used to payout debenture loans and debenture loan interest of up to $130,000 incurred by the Company in 2019 and 2020; to initiate an exploration program on the Silver Peak property, pursuant to the Company's 2019 NI 43-101 Technical Report; and for working capital.
As it is anticipated that certain insiders will participate in the Private Placement, it is considered to be a "related party transaction" under Multilateral Instrument 61-101 – Protection of Minority Security Holders in Special Transactions ("MI 61-101"). The Company intends to rely on the exemptions from the valuation and the minority approval requirements of MI 61-101 provided for in subsections 5.5(a) and 5.7(a) of MI 61-101, respectively, as the fair market value of the transaction, and the consideration paid in the Private Placement, in each case, in relation to the interested parties, will not represent more than 25% of the Company's market capitalization, as determined in accordance with MI 61-101.
International Millennium Mining Corp. (TSXV:IMI) is focused on the exploration and development of its Silver Peak silver-gold project in southwest Nevada. The Company's common shares trade on the Exchange under the symbol: IMI.
ON BEHALF OF THE BOARD
"John A. Versfelt"
John A. Versfelt
President and CEO
Further information about the Company can be found on SEDAR (www.sedar.com), the Company's website (www.immc.ca) or by contacting Mr. John Versfelt, President & CEO of the Company at 604-527-8135.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release. This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs and other business transactions timing. Forward-looking statements address future events and conditions and therefore, involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements.
SOURCE: International Millennium Mining Corp.
View source version on accesswire.com:
https://www.accesswire.com/603877/International-Millennium-Mining-Corp-Closes-Private-Placement
Bisichi PLC's (LON:BISI) price-to-earnings (or "P/E") ratio of 6.6x might make it look like a strong buy right now compared to the market in the United Kingdom, where around half of the companies have P/E ratios above 17x and even P/E's above 35x are quite common. Nonetheless, we'd need to dig a little deeper to determine if there is a rational basis for the highly reduced P/E.
For instance, Bisichi's receding earnings in recent times would have to be some food for thought. One possibility is that the P/E is low because investors think the company won't do enough to avoid underperforming the broader market in the near future. If you like the company, you'd be hoping this isn't the case so that you could potentially pick up some stock while it's out of favour.
Check out our latest analysis for Bisichi
Want the full picture on earnings, revenue and cash flow for the company? Then our free report on Bisichi will help you shine a light on its historical performance.
How Is Bisichi's Growth Trending?
Bisichi's P/E ratio would be typical for a company that's expected to deliver very poor growth or even falling earnings, and importantly, perform much worse than the market.
If we review the last year of earnings, dishearteningly the company's profits fell to the tune of 68%. Even so, admirably EPS has lifted 118% in aggregate from three years ago, notwithstanding the last 12 months. Although it's been a bumpy ride, it's still fair to say the earnings growth recently has been more than adequate for the company.
In contrast to the company, the rest of the market is expected to decline by 3.8% over the next year, which puts the company's recent medium-term positive growth rates in a good light for now.
With this information, we find it very odd that Bisichi is trading at a P/E lower than the market. It looks like most investors are not convinced at all that the company can maintain its recent positive growth rate in the face of a shrinking broader market.
The Final Word
While the price-to-earnings ratio shouldn't be the defining factor in whether you buy a stock or not, it's quite a capable barometer of earnings expectations.
Our examination of Bisichi revealed its growing earnings over the medium-term aren't contributing to its P/E anywhere near as much as we would have predicted, given the market is set to shrink. We think potential risks might be placing significant pressure on the P/E ratio and share price. Perhaps there is some hesitation about the company's ability to stay its recent course and swim against the current of the broader market turmoil. It appears many are indeed anticipating earnings instability, because this relative performance should normally provide a boost to the share price.
Having said that, be aware Bisichi is showing 4 warning signs in our investment analysis, and 1 of those is concerning.
If these risks are making you reconsider your opinion on Bisichi, explore our interactive list of high quality stocks to get an idea of what else is out there.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
With the business potentially at an important milestone, we thought we'd take a closer look at Mincor Resources NL's (ASX:MCR) future prospects. Mincor Resources NL engages in the exploration, development, and mining of mineral resources in Australia. The company’s loss has recently broadened since it announced a AU$13.7m loss in the full financial year, compared to the latest trailing-twelve-month loss of AU$16.3m, moving it further away from breakeven. As path to profitability is the topic on Mincor Resources' investors mind, we've decided to gauge market sentiment. Below we will provide a high-level summary of the industry analysts’ expectations for the company.
View our latest analysis for Mincor Resources
Consensus from 3 of the Australian Metals and Mining analysts is that Mincor Resources is on the verge of breakeven. They anticipate the company to incur a final loss in 2021, before generating positive profits of AU$40m in 2022. So, the company is predicted to breakeven approximately 2 years from now. What rate will the company have to grow year-on-year in order to breakeven on this date? Using a line of best fit, we calculated an average annual growth rate of 64%, which signals high confidence from analysts. Should the business grow at a slower rate, it will become profitable at a later date than expected.
We're not going to go through company-specific developments for Mincor Resources given that this is a high-level summary, though, keep in mind that typically a metal and mining business has lumpy cash flows which are contingent on the natural resource mined and stage at which the company is operating. So, a high growth rate is not out of the ordinary, particularly when a company is in a period of investment.
One thing we’d like to point out is that Mincor Resources has no debt on its balance sheet, which is quite unusual for a cash-burning metals and mining company, which typically has high debt relative to its equity. The company currently operates purely off its shareholder funding and has no debt obligation, reducing concerns around repayments and making it a less risky investment.
Next Steps:
There are too many aspects of Mincor Resources to cover in one brief article, but the key fundamentals for the company can all be found in one place – Mincor Resources' company page on Simply Wall St. We've also compiled a list of pertinent aspects you should look at:
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Valuation: What is Mincor Resources worth today? Has the future growth potential already been factored into the price? The intrinsic value infographic in our free research report helps visualize whether Mincor Resources is currently mispriced by the market.
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Management Team: An experienced management team on the helm increases our confidence in the business – take a look at who sits on Mincor Resources’s board and the CEO’s background.
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Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
We've lost count of how many times insiders have accumulated shares in a company that goes on to improve markedly. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So shareholders might well want to know whether insiders have been buying or selling shares in Empire Resources Limited (ASX:ERL).
Do Insider Transactions Matter?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, rules govern insider transactions, and certain disclosures are required.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Columbia University study found that 'insiders are more likely to engage in open market purchases of their own company’s stock when the firm is about to reveal new agreements with customers and suppliers'.
Check out our latest analysis for Empire Resources
The Last 12 Months Of Insider Transactions At Empire Resources
Over the last year, we can see that the biggest insider purchase was by Non-Executive Chairman Michael Ruane for AU$158k worth of shares, at about AU$0.099 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$0.014). While their view may have changed since the purchase was made, this does at least suggest they have had confidence in the company's future. We always take careful note of the price insiders pay when purchasing shares. Generally speaking, it catches our eye when insiders have purchased shares at above current prices, as it suggests they believed the shares were worth buying, even at a higher price.
While Empire Resources insiders bought shares during the last year, they didn't sell. The average buy price was around AU$0.014. Although they bought at below the recent share price, it is good to see that insiders are willing to invest in the company. The chart below shows insider transactions (by companies and individuals) over the last year. If you want to know exactly who sold, for how much, and when, simply click on the graph below!
Empire Resources is not the only stock insiders are buying. So take a peek at this free list of growing companies with insider buying.
Insiders at Empire Resources Have Bought Stock Recently
Over the last three months, we've seen significant insider buying at Empire Resources. Not only was there no selling that we can see, but they collectively bought AU$71k worth of shares. This makes one think the business has some good points.
Does Empire Resources Boast High Insider Ownership?
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. I reckon it's a good sign if insiders own a significant number of shares in the company. Insiders own 16% of Empire Resources shares, worth about AU$2.0m. This level of insider ownership is good but just short of being particularly stand-out. It certainly does suggest a reasonable degree of alignment.
So What Do The Empire Resources Insider Transactions Indicate?
It is good to see recent purchasing. We also take confidence from the longer term picture of insider transactions. Given that insiders also own a fair bit of Empire Resources we think they are probably pretty confident of a bright future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. Be aware that Empire Resources is showing 6 warning signs in our investment analysis, and 3 of those make us uncomfortable…
Of course Empire Resources may not be the best stock to buy. So you may wish to see this free collection of high quality companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
Conductive targets identified by Typhoon™ surveys remain open for further testing
Photo 1
SM2020-1 semi-massive to massive sulphides showing chalcopyrite, pentlandite and pyrrhotite grading 2.70% Nickel, 1.47% Copper and 3.31 gpt Palladium over 1.50 m at a depth of 110 m from surface
Photo 2
BN2020-1 semi-massive to massive sulphides showing similar composition as seen at Samapleu and Yepleu returning 1.24% Ni and 1.14% Cu over 0.35 m at a depth of 540.2 m from surface.
Figure 1
Sama 2020’s Typhoon surveys completed and target zones remaining.
Figure 2
Samapleu deposits surface map showing holes SM2020-1 to 5 and the layout of the Typhoon survey.
Figure 3
The Typhoon target at the Bounta sector together with boreholes BN2020-01. The mineralisation intercepted in BN2020-01 couldn’t explain the high conductivity target (11,000 CT) defined by the surface Typhoon. The following-up field program will include DHTEM in BN2020-01 for a more precise location of the highly conductive target defined by the Typhoon.
Figure 4
Targets at the Yepleu sector showing the mineralized trend and results from the three boreholes drilled in 2020.
MONTREAL, Aug. 13, 2020 (GLOBE NEWSWIRE) — Sama Resources Inc. (“Sama” or the “Company”) (TSX-V: SME | OTC-PK: SAMMF) is pleased to announce the assay results from boreholes drilled during the first half of 2020. The boreholes targeted the highly conductive zones defined by surveys completed using HPX TechCo Inc’s (“HPX”) proprietary Typhoon™ electromagnetic geophysical technology (“Typhoon”). Boreholes were drilled at three sites: Samapleu, Bounta and Yepleu, and located over 25 kilometers of strike distance within the Yacouba Ultramafic-Mafic intrusive complex, which was discovered by Sama in 2010 (Figure 1).
Assay results (see Table 1 below) indicate the high potential for additional nickel-copper-palladium mineralization at all three targeted zones. The follow-up field program will include performing downhole electromagnetic surveys (“DHTEM”) in recent holes at Yepleu and Bounta for additional definition of the highly conductive targets delineated by the Typhoon surveys.
“It is clear that we are gaining a greater understanding of the entire system through the use of Typhoon and believe that our drilling is getting closer to discovering the sources of massive sulphides veins and lenses observed near surface. Our partners at HPX have been key to increasing the speed at which we are able to unlock this evolving new discovery,” stated Dr. Marc-Antoine Audet, President & CEO of Sama Resources Inc.
The mineralization encountered at the three target zones is characterized by aggregates of the nickel, copper and iron sulphides – pentlandite, chalcopyrite and pyrrhotite, respectively. Pentlandite occurs together with pyrrhotite, while the chalcopyrite is either mixed with the pentlandite and pyrrhotite or occurs as millimetric to centimetric sulphide veins/accumulations. The textures of the sulphide mineralization vary from disseminated to semi-massive and massive (> 80% of sulphide material).
Table 1: Drilling results for the 2020’s drilling campaign. Mineralised composites defined using 0.1% Ni cut-off-grade (“COG”) and including intervals defined using 0.5% Ni COG.
|
HOLE-ID |
From |
Composited LENGTH |
NI |
CU |
CO |
PT |
PD |
AU |
|
|
m |
m |
% |
% |
% |
gpt |
gpt |
gpt |
||
|
Samapleu |
|||||||||
|
SM2020-01 |
64.1 |
53.00 |
0.43 |
0.30 |
0.02 |
0.04 |
0.56 |
0.01 |
|
|
619659E, 857382N, 547RL |
Az310, Dip-75 |
including |
4.60 |
1.98 |
0.92 |
0.07 |
0.09 |
2.54 |
0.03 |
|
SM2020-02 |
480.15 |
166.30 |
0.20 |
0.13 |
0.01 |
0.10 |
0.24 |
0.02 |
|
|
619894E, 856663N, 569RL |
Az315, Dip-73 |
including |
2.30 |
0.61 |
0.94 |
0.02 |
0.03 |
0.56 |
0.04 |
|
SM2020-03 |
68.4 |
89.10 |
0.17 |
0.12 |
0.01 |
0.05 |
0.17 |
0.01 |
|
|
619739E, 857446N, 540RL |
Az310, Dip-65 |
including |
0.65 |
0.56 |
0.18 |
0.03 |
0.09 |
0.68 |
0.00 |
|
SM2020-04 |
51.5 |
88.45 |
0.20 |
0.14 |
0.01 |
0.06 |
0.17 |
0.01 |
|
|
619656E, 857385N, 548RL |
Az310, Dip-75 |
including |
1.80 |
0.60 |
0.47 |
0.03 |
0.12 |
0.82 |
0.05 |
|
SM2020-05 |
106.6 |
60.30 |
0.25 |
0.30 |
0.02 |
0.10 |
0.45 |
0.05 |
|
|
619664E, 857385N, 547RL |
Az315, Dip-85 |
including |
5.45 |
0.65 |
0.78 |
0.03 |
0.11 |
1.14 |
0.24 |
|
Yepleu |
|||||||||
|
YE2020-01 |
290 |
14.90 |
0.32 |
0.15 |
0.02 |
0.05 |
0.07 |
0.01 |
|
|
609516E, 839803N, 786RL |
Az15, Dip-65 |
including |
2.35 |
1.14 |
0.52 |
0.05 |
0.04 |
0.21 |
0.02 |
|
YE2020-02 |
369.15 |
31.15 |
0.25 |
0.10 |
0.02 |
0.07 |
0.12 |
0.22 |
|
|
609161E, 839592N, 712RL |
Az230, Dip-70 |
including |
4.70 |
0.76 |
0.32 |
0.04 |
0.20 |
0.47 |
0.07 |
|
YE2020-03 |
794.15 |
8.00 |
0.31 |
0.24 |
0.02 |
0.05 |
0.11 |
0.01 |
|
|
607565E, 839235N, 684RL |
Az100, Dip-80 |
including |
1.00 |
1.09 |
1.29 |
0.05 |
0.16 |
0.18 |
0.03 |
|
Bounta |
|||||||||
|
BN2020-01 |
533.2 |
5.70 |
0.38 |
0.25 |
0.02 |
0.02 |
0.11 |
0.04 |
|
|
615733E, 848484N, 642RL |
Az200, Dip-75 |
including & |
1.20 |
0.79 |
0.39 |
0.04 |
0.03 |
0.23 |
0.03 |
|
including |
0.35 |
1.24 |
1.14 |
0.05 |
0.00 |
0.27 |
0.05 |
||
Borehole SM2020-01 (Refer: Press Release January 29, 2020, Figures 1 & 2) returned 53 meters grading 0.43% nickel, 0.30% copper and 0.52 grams per tonne (“gpt”) palladium, including 4.6 m grading 1.98% Ni and 0.92% Cu and 2.54 gpt Pd (see Photo 1 below). SM2020-1 was drilled 200 m southwest of the current mineral resources and extended the mineralized trend of the Samapleu surface deposit.
Photo 1: SM2020-1 semi-massive to massive sulphides showing chalcopyrite, pentlandite and pyrrhotite grading 2.70% Nickel, 1.47% Copper and 3.31 gpt Palladium over 1.50 m at a depth of 110 m from surface
https://www.globenewswire.com/NewsRoom/AttachmentNg/d11378a4-9153-4b71-9733-f245dc8fa370
Borehole SM2020-02, drilled down to 688 m from surface returned 166 m of disseminated mineralization with stringers of semi-massive sulphides (Table 1).
At Bounta, a new discovery located midway between Samapleu and Yepleu, borehole BN2020-01 returned disseminated and a stringer of semi-massive to massive sulphide grading 1.23% Ni and 1.14% Cu over 0.35 m at a depth of 540 m from surface (Photo 2). The mineralization encountered by BN2020-01 closely matched the moderately conductive EM plate but could not fully explain the high conductivity target defined by Typhoon survey (Figures 1 & 3). The follow-up field program will include DHTEM in BN2020-01 to more precisely locate the highly conductive target defined by the Typhoon.
Photo 2: BN2020-1 semi-massive to massive sulphides showing similar composition as seen at Samapleu and Yepleu returning 1.24% Ni and 1.14% Cu over 0.35 m at a depth of 540.2 m from surface.
https://www.globenewswire.com/NewsRoom/AttachmentNg/9a7e1635-52ee-4b74-9ac7-9cef229b86a0
Figure 1: Sama 2020’s Typhoon surveys completed and target zones remaining.
https://www.globenewswire.com/NewsRoom/AttachmentNg/65d9bfc9-46cb-4daa-bbbc-05af3a4720eb
Figure 2: Samapleu deposits surface map showing holes SM2020-1 to 5 and the layout of the Typhoon survey.
https://www.globenewswire.com/NewsRoom/AttachmentNg/36c09474-ef35-4037-b6fb-dd83d78cc5d8
Figure 3: The Typhoon target at the Bounta sector together with boreholes BN2020-01. The mineralisation intercepted in BN2020-01 couldn’t explain the high conductivity target (11,000 CT) defined by the surface Typhoon. The following-up field program will include DHTEM in BN2020-01 for a more precise location of the highly conductive target defined by the Typhoon.
https://www.globenewswire.com/NewsRoom/AttachmentNg/490f5400-4228-4358-9a29-5af228965b73
Three holes were drilled at Yepleu (YE2020-01 to 03) were aimed at testing three Typhoon EM targets along a mineralized trend of more than 4,500 m of strike length (Figures 1 & 4). The mineralized horizon starts near surface, reaches a depth of more than 850 m toward the south-southwest and appears remain open. The very strong conductive target at 850 m depth from surface defined by Typhoon EM (15,000 conductivity thickness (“CT”)), remains untested as hole YE2020-03 deviated and intercepted the edge of the system. The mineralization encountered in YE2020-03 is encouraging but it does not explain high conductivity target defined by the Typhoon DHEM. Further downhole EM will better locate this target.
Figure 4: Targets at the Yepleu sector showing the mineralized trend and results from the three boreholes drilled in 2020.
https://www.globenewswire.com/NewsRoom/AttachmentNg/dfaab5c8-cb73-41bb-81bf-3a802e7270dd
About HPX
HPX is a privately-owned, U.S.-domiciled mineral exploration and development company. For further information, please visit www.hpxploration.com.
About Sama Resources Inc.
Sama is a Canadian-based mineral exploration and development company with projects in West Africa. On October 23, 2017, Sama announced that it had entered into a binding term sheet in view of forming a strategic partnership with HPX TechCo Inc., a private mineral exploration company in which mining entrepreneur Robert Friedland is a significant stakeholder, in order to develop its Côte d’Ivoire Nickel-Copper and Cobalt project in Côte d’Ivoire, West-Africa. For more information about Sama, please visit Sama’s website at http://www.samaresources.com.
The technical information in this release has been reviewed and approved by Dr. Marc-Antoine Audet, P.Geo and President and CEO of Sama, and a ‘qualified person’, as defined by National Instrument 43-101 Standards of Disclosure for Mineral Projects.
Core (NQ size) logging and sampling was performed at Sama’s facility in Yorodougou village. Sample preparations was performed at Bureau Veritas Mineral Laboratory’s facility in Abidjan. Sample pulps were shipped by courier to Activation Laboratory (Actlab) in Lancaster, Ontario, Canada. All samples were assayed for Ni, Cu, Co, Pt, Pd and Au.
FOR FURTHER INFORMATION, PLEASE CONTACT:
SAMA RESOURCES INC./RESSOURCES SAMA INC.
Dr. Marc-Antoine Audet, President and CEO
Tel: (514) 726-4158
OR
Mr. Matt Johnston, Corporate Development Advisor
Tel: (604) 443-3835
Toll Free: 1 (877) 792-6688, Ext. 5
Neither the TSXV nor its Regulation Services Provider (as that term is defined in the policies of the TSXV) accepts responsibility for the adequacy or accuracy of this release.
Forward-Looking Statements
Certain statements made and information contained herein are "forward-looking statements" or “forward-looking information” within the meaning of Canadian securities legislation. Forward-looking statements and forward-looking information such as “evidence”, “potential”, “appears”, “seems”, “suggest”, are subject to a variety of risks and uncertainties which could cause actual events or results to differ from those reflected in the forward-looking statements or forward-looking information, including, without limitation, the availability of financing for activities, risks and uncertainties relating to the interpretation of drill results and the estimation of mineral resources and reserves, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with the Company's expectations, metal price fluctuations, environmental and regulatory requirements, availability of permits, escalating costs of remediation and mitigation, risk of title loss, the effects of accidents, equipment breakdowns, labour disputes or other unanticipated difficulties with or interruptions in exploration or development, the potential for delays in exploration or development activities, the inherent uncertainty of cost estimates and the potential for unexpected costs and expenses, commodity price fluctuations, currency fluctuations, expectations and beliefs of management and other risks and uncertainties.
In addition, forward-looking statements and forward-looking information are based on various assumptions. Should one or more of these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in forward-looking information or forward-looking statements. Accordingly, readers are advised not to place undue reliance on forward-looking statements or forward-looking information. Except as required under applicable securities legislation, the Company undertakes no obligation to publicly update or revise forward-looking statements or forward-looking information, whether as a result of new information, future events or otherwise.
* Global diamond supply chains convulsed by pandemic * Diamond polishers in India switch to farming * Miners seek new supply deals to boost margins * Mines from Canada to Lesotho still shuttered By Helen Reid, Tanisha Heiberg and Rajendra Jadhav JOHANNESBURG/MUMBAI, Aug 12 – As the coronavirus pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming. Patel, who worked for a decade in India's Surat where about 80% of the world's diamonds are polished, joined the exodus of gem workers leaving the city as cases of the virus shot up. After taking up farming in his home village, he has no plans to return in the coming months. "I won't earn as much I was earning in Surat, but I won't starve and there is no fear of getting infected with coronavirus," he said. Demand for diamonds has plummeted during the pandemic, freezing sales and squeezing prices. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones. The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data. "There are a lot more enquiries from people seeking to buy these luxury stones as a hedge," said Chris Del Gatto, CEO of the DelGatto Diamond Finance Fund, the largest non-bank lender to the diamond, jewellery and watch industries. Prices for high quality one-carat diamonds are rising steadily and are currently around 12% higher than at the start of the year, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows. For an interactive graphic, click: https://tmsnrt.rs/2Pqtl74 "If you are in that top end, the demand is still there because the people who go for these type of goods feel the pressure of the market downturn less," said Gus Simbanegavi, CEO of Bluerock Diamonds. But only a few miners are lucky enough to have deposits of large, high-quality diamonds, leaving some producers at risk. GRIM YEAR COVID-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%. "What has happened in the second quarter, I have never seen in my life," De Beers Chief Executive Bruce Cleaver told Reuters. "There was no really properly functioning rough market." Indian imports of rough diamonds plunged from $1.5 billion in February to just $1 million in April, data from the Gem & Jewellery Export Promotion Council shows. For an interactive graphic click here: https://tmsnrt.rs/2XxZuhs Antwerp, another diamond hub, saw rough imports drop 20% year-on-year in the first half, according to data from Antwerp World Diamond Centre. The city's exports of polished diamonds fell 46%. https://tmsnrt.rs/2DEez9P REAL OPPORTUNITY In a bid to survive, some miners are trying to change the traditional pricing game by securing a cut of onward polished diamond sales, and miners may eventually have direct tie-ups with luxury jewellery brands, RCC Diamond Consultants managing director Richard Chetwode predicts. Australia's Lucapa Diamond Co inked a deal with an unnamed "high-end diamantaire" to sell some of its high-value diamonds from the Mothae mine in Lesotho for $505 per carat plus a 50% share of the margin on the future polished diamond sale. Lucara Diamond Corp,, which mines in Botswana, struck a deal in July with Antwerp manufacturer HB Group under which the miner's diamonds larger than 10.8 carats are sold for a portion of the estimated polished price. "There is real opportunity within the diamond business as a whole to modernise the sales system," said Lucara CEO Eira Thomas. Lucara has also set up an online diamond sales platform. In the meantime, miners are hoping production cuts will help prices recover. With Rio Tinto's massive Argyle diamond mine in Australia among those coming offstream soon, global diamond production will likely be reined in until 2025, independent analyst Paul Zimnisky forecasts. For an interactive graphic, click here: https://tmsnrt.rs/3icmNFm Several diamond mines shuttered due to the pandemic have also yet to reopen, including Stornoway Diamonds' Renard mine in Canada, Petra Diamonds' Williamson mine in Tanzania, and Firestone Diamonds' Liqhobong mine in Lesotho, which the company said would likely stay closed until April to preserve cash. Meanwhile, Africa-focused Petra Diamonds is in restructuring talks with creditors, while in Canada's Northwest Territories, Rio Tinto's Diavik mine partner has sought creditor protection, saying it cannot afford the miner's cash calls. Even De Beers is feeling the pain, saying job cuts are likely, as it remains unclear whether supply will shrink enough to meet plunging demand in the global diamond jewellery market, which Bain estimated was worth $80 billion in 2019. Industry hopes that the pandemic would boost sales of engagement rings as people reassessed life priorities and more made plans to get married have not borne out. In retailer Tiffany & Co's February-April quarter, engagement jewellery was the worst-performing category, with sales almost halving. Overall, fine jewellery sales are expected to drop 19% this year, compared to a 3% rise last year, according to Euromonitor. (Additional reporting by Zandi Shabalala in London; Jeff Lewis in Toronto, Silvia Aloisi in Milan, Melissa Fares in New York, Polina Devitt in Moscow, Sophie Yu in Beijing; Editing by Amran Abocar and Kirsten Donovan)
(Repeats to additional subscribers with no changes to text)
* Global diamond supply chains convulsed by pandemic
* Diamond polishers in India switch to farming
* Miners seek new supply deals to boost margins
* Mines from Canada to Lesotho still shuttered
By Helen Reid, Tanisha Heiberg and Rajendra Jadhav
JOHANNESBURG/MUMBAI, Aug 12 – As the coronavirus pandemic upended the global diamond industry, shuttering mines from Lesotho to Canada and disrupting supply chains, Rajen Patel swapped diamond polishing for peanut farming. Patel, who worked for a decade in India's Surat where about 80% of the world's diamonds are polished, joined the exodus of gem workers leaving the city as cases of the virus shot up. After taking up farming in his home village, he has no plans to return in the coming months.
"I won't earn as much I was earning in Surat, but I won't starve and there is no fear of getting infected with coronavirus," he said.
Demand for diamonds has plummeted during the pandemic, freezing sales and squeezing prices. With temporary mine closures at risk of becoming permanent, diamond miners are seeking ways to extract more value from their stones.
The lone bright spot has been steady demand for large, high-quality diamonds from affluent investors, according to financiers and sales data.
"There are a lot more enquiries from people seeking to buy these luxury stones as a hedge," said Chris Del Gatto, CEO of the DelGatto Diamond Finance Fund, the largest non-bank lender to the diamond, jewellery and watch industries.
Prices for high quality one-carat diamonds are rising steadily and are currently around 12% higher than at the start of the year, in contrast to still-depressed prices for lower-quality stones of the same size, data from trading platform RapNet shows.
For an interactive graphic, click: https://tmsnrt.rs/2Pqtl74
"If you are in that top end, the demand is still there because the people who go for these type of goods feel the pressure of the market downturn less," said Gus Simbanegavi, CEO of Bluerock Diamonds.
But only a few miners are lucky enough to have deposits of large, high-quality diamonds, leaving some producers at risk.
GRIM YEAR
COVID-19 has forced miners to cancel or delay sales, with major diamond shows scrapped due to health and travel restrictions. The few sales that have taken place showed rough diamond prices down between 15% and 27%.
"What has happened in the second quarter, I have never seen in my life," De Beers Chief Executive Bruce Cleaver told Reuters. "There was no really properly functioning rough market."
Indian imports of rough diamonds plunged from $1.5 billion in February to just $1 million in April, data from the Gem & Jewellery Export Promotion Council shows.
For an interactive graphic click here: https://tmsnrt.rs/2XxZuhs Antwerp, another diamond hub, saw rough imports drop 20% year-on-year in the first half, according to data from Antwerp World Diamond Centre. The city's exports of polished diamonds fell 46%. https://tmsnrt.rs/2DEez9P
REAL OPPORTUNITY
In a bid to survive, some miners are trying to change the traditional pricing game by securing a cut of onward polished diamond sales, and miners may eventually have direct tie-ups with luxury jewellery brands, RCC Diamond Consultants managing director Richard Chetwode predicts.
Australia's Lucapa Diamond Co inked a deal with an unnamed "high-end diamantaire" to sell some of its high-value diamonds from the Mothae mine in Lesotho for $505 per carat plus a 50% share of the margin on the future polished diamond sale.
Lucara Diamond Corp,, which mines in Botswana, struck a deal in July with Antwerp manufacturer HB Group under which the miner's diamonds larger than 10.8 carats are sold for a portion of the estimated polished price.
"There is real opportunity within the diamond business as a whole to modernise the sales system," said Lucara CEO Eira Thomas. Lucara has also set up an online diamond sales platform. In the meantime, miners are hoping production cuts will help prices recover. With Rio Tinto's massive Argyle diamond mine in Australia among those coming offstream soon, global diamond production will likely be reined in until 2025, independent analyst Paul Zimnisky forecasts.
For an interactive graphic, click here: https://tmsnrt.rs/3icmNFm
Several diamond mines shuttered due to the pandemic have also yet to reopen, including Stornoway Diamonds' Renard mine in Canada, Petra Diamonds' Williamson mine in Tanzania, and Firestone Diamonds' Liqhobong mine in Lesotho, which the company said would likely stay closed until April to preserve cash.
Meanwhile, Africa-focused Petra Diamonds is in restructuring talks with creditors, while in Canada's Northwest Territories, Rio Tinto's Diavik mine partner has sought creditor protection, saying it cannot afford the miner's cash calls.
Even De Beers is feeling the pain, saying job cuts are likely, as it remains unclear whether supply will shrink enough to meet plunging demand in the global diamond jewellery market, which Bain estimated was worth $80 billion in 2019.
Industry hopes that the pandemic would boost sales of engagement rings as people reassessed life priorities and more made plans to get married have not borne out.
In retailer Tiffany & Co's February-April quarter, engagement jewellery was the worst-performing category, with sales almost halving.
Overall, fine jewellery sales are expected to drop 19% this year, compared to a 3% rise last year, according to Euromonitor.
(Additional reporting by Zandi Shabalala in London; Jeff Lewis in Toronto, Silvia Aloisi in Milan, Melissa Fares in New York, Polina Devitt in Moscow, Sophie Yu in Beijing; Editing by Amran Abocar and Kirsten Donovan)
We often see insiders buying up shares in companies that perform well over the long term. Unfortunately, there are also plenty of examples of share prices declining precipitously after insiders have sold shares. So we'll take a look at whether insiders have been buying or selling shares in Aerometrex Limited (ASX:AMX).
What Is Insider Selling?
It's quite normal to see company insiders, such as board members, trading in company stock, from time to time. However, most countries require that the company discloses such transactions to the market.
Insider transactions are not the most important thing when it comes to long-term investing. But equally, we would consider it foolish to ignore insider transactions altogether. For example, a Harvard University study found that 'insider purchases earn abnormal returns of more than 6% per year'.
View our latest analysis for Aerometrex
The Last 12 Months Of Insider Transactions At Aerometrex
In the last twelve months, the biggest single purchase by an insider was when Independent Non-Executive Chairman Mark Lindh bought AU$100k worth of shares at a price of AU$2.13 per share. So it's clear an insider wanted to buy, even at a higher price than the current share price (being AU$1.31). It's very possible they regret the purchase, but it's more likely they are bullish about the company. To us, it's very important to consider the price insiders pay for shares. It is generally more encouraging if they paid above the current price, as it suggests they saw value, even at higher levels.
While Aerometrex insiders bought shares during the last year, they didn't sell. The average buy price was around AU$1.78. I'd consider this a positive as it suggests insiders see value at around the current price. You can see a visual depiction of insider transactions (by companies and individuals) over the last 12 months, below. By clicking on the graph below, you can see the precise details of each insider transaction!
There are plenty of other companies that have insiders buying up shares. You probably do not want to miss this free list of growing companies that insiders are buying.
Insider Ownership of Aerometrex
Looking at the total insider shareholdings in a company can help to inform your view of whether they are well aligned with common shareholders. A high insider ownership often makes company leadership more mindful of shareholder interests. Aerometrex insiders own 52% of the company, currently worth about AU$63m based on the recent share price. I like to see this level of insider ownership, because it increases the chances that management are thinking about the best interests of shareholders.
So What Do The Aerometrex Insider Transactions Indicate?
It doesn't really mean much that no insider has traded Aerometrex shares in the last quarter. However, our analysis of transactions over the last year is heartening. It would be great to see more insider buying, but overall it seems like Aerometrex insiders are reasonably well aligned (owning significant chunk of the company's shares) and optimistic for the future. While we like knowing what's going on with the insider's ownership and transactions, we make sure to also consider what risks are facing a stock before making any investment decision. When we did our research, we found 4 warning signs for Aerometrex (1 makes us a bit uncomfortable!) that we believe deserve your full attention.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.
For the purposes of this article, insiders are those individuals who report their transactions to the relevant regulatory body. We currently account for open market transactions and private dispositions, but not derivative transactions.
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
We can readily understand why investors are attracted to unprofitable companies. For example, biotech and mining exploration companies often lose money for years before finding success with a new treatment or mineral discovery. Having said that, unprofitable companies are risky because they could potentially burn through all their cash and become distressed.
Given this risk, we thought we'd take a look at whether BCI Minerals (ASX:BCI) shareholders should be worried about its cash burn. For the purpose of this article, we'll define cash burn as the amount of cash the company is spending each year to fund its growth (also called its negative free cash flow). We'll start by comparing its cash burn with its cash reserves in order to calculate its cash runway.
View our latest analysis for BCI Minerals
When Might BCI Minerals Run Out Of Money?
A company's cash runway is calculated by dividing its cash hoard by its cash burn. In December 2019, BCI Minerals had AU$35m in cash, and was debt-free. Looking at the last year, the company burnt through AU$2.1m. So it had a very long cash runway of many years from December 2019. While this is only one measure of its cash burn situation, it certainly gives us the impression that holders have nothing to worry about. Depicted below, you can see how its cash holdings have changed over time.
How Well Is BCI Minerals Growing?
BCI Minerals managed to reduce its cash burn by 77% over the last twelve months, which suggests it's on the right flight path. Arguably, however, the revenue growth of 106% during the period was even more impressive. Considering these factors, we're fairly impressed by its growth trajectory. While the past is always worth studying, it is the future that matters most of all. So you might want to take a peek at how much the company is expected to grow in the next few years.
How Hard Would It Be For BCI Minerals To Raise More Cash For Growth?
While BCI Minerals seems to be in a decent position, we reckon it is still worth thinking about how easily it could raise more cash, if that proved desirable. Issuing new shares, or taking on debt, are the most common ways for a listed company to raise more money for its business. Commonly, a business will sell new shares in itself to raise cash and drive growth. We can compare a company's cash burn to its market capitalisation to get a sense for how many new shares a company would have to issue to fund one year's operations.
BCI Minerals has a market capitalisation of AU$72m and burnt through AU$2.1m last year, which is 2.9% of the company's market value. So it could almost certainly just borrow a little to fund another year's growth, or else easily raise the cash by issuing a few shares.
How Risky Is BCI Minerals' Cash Burn Situation?
As you can probably tell by now, we're not too worried about BCI Minerals' cash burn. In particular, we think its revenue growth stands out as evidence that the company is well on top of its spending. And even its cash burn relative to its market cap was very encouraging. Taking all the factors in this report into account, we're not at all worried about its cash burn, as the business appears well capitalized to spend as needs be. Readers need to have a sound understanding of business risks before investing in a stock, and we've spotted 3 warning signs for BCI Minerals that potential shareholders should take into account before putting money into a stock.
Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies, and this list of stocks growth stocks (according to analyst forecasts)
This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.
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