tornadotony
16 Aug 2019
Taken long term position on Fresnillo and will add on declines After going through the second quarter report my own calculations suggest that the correction on Fresnillo was overdone by around 70p. My assessment considered all the extra cost and loss of opportunity in making larger profits in H1. The company is not getting any credit for earning $50M more from higher precious metals prices. They are not getting any advanced credit on likely resource increases to be declared later in the year. The position of the company stating H2 production was likely to follow original annual plans has not been considered or weighted positively in the recent correction. These might happen later in the year.
tornadotony
14 Aug 2019
Taken long term position on Fresnillo and will add on declines The earnings profile between Polymetal and Fresnillo in previous years are very similar. Both companies operate on investment debt models. The Fresnillo model has only 2/3 of the debt of Polymetal. Fresnillo debt repayments on 1.6B are broadly $50M on core debt and $130M on the recurrent debt also included in the total debt figures. Short term debt is not problematic for either company. This model works fine in a low bank interest environment and probably offers tax advantages as well. The free cash flow per year for Fresnillo is equivalent to 4 years on the total debt. The company reserves and resources have 38 years of life but allowing loss on conversions and exploration expenses say 29 years net. Once the current free cash flow is restored and its likely to be so in Q3 with the rise in precious metal prices than fair value at 830p or 22x earnings should be an anticipated target.
tornadotony
14 Aug 2019
Taken long term position on Fresnillo and will add on declines Fresnillo had a horrible H1 in 2019 and hence the lack of participation in the current gold rally. The punishment for taking a 24% depreciation charges and revising down production by 5% for upgrading various facilities and dealing with on-going short term issues is providing an excellent buying opportunity. The capex for the new mine which they own 56% will yield 6M ounces of silver per year from late 2020 at a cost of $5 AISC. The entire mine cost is repaid back in two years and has 9 years of follow on payback as a minima. It also adds 20,000 ounces of gold per year as the cherry on top. This development stabilises Fresnillo on its silver production side. The upgrade on one of its gold mines that is now happening should see production on gold stabilise next year to expected levels. The company is implementing cost controls across the business. I will be going through the debt repayment schedule and other costs today. I agree with a lot of the broker coverage that Fresnillo is likely to very good value in 2020. I believe Fresnillo might actually be the best pick of miners for future investment and one to include on the list. Tony
tornadotony
13 Aug 2019
Long closed from 692 692-707 booked over two block 4000 sells. In from 8am.
tornadotony
31 Jul 2019
Looking at 580 as entry point Has not formed a bottom yet after hitting 606. If it gets below the 600 mark it starts to look worthwhile although the next six months is still awful and they need to hit targets.
tornadotony
30 Jul 2019
Bought at 633 sold 645p Scalping trade. Now 690p. The volatility on this one is quite something.
tornadotony
15 Mar 2019
Likely bottom price is around 800p mark Bottom formation could be created if gold can now hold 1290 support and 15.2 for silver and move higher as it is doing so this morning. All miners are quite depressed bar polymetal.
tornadotony
01 Mar 2019
Likely bottom price is around 800p mark Likely to hit the 800p area if gold and silver pull back 5% or so. Unless something far more dramatic happens Fresnillo is I think is 5% near a bottom price. Currently holding no positions after selling off at 996p.
tornadotony
01 Mar 2019
14% pull back now achieved Just took longer to get there. It may well drift a bit lower with falling commodity prices.
tornadotony
26 Feb 2019
RNS on company website Results virtually a mirror image of Centamin with lots of trouble ahead for 2019. Probably sell on the news for this one. I would expect a 14% or so fall in stock price by close of play today is my opinion.
tornadotony
25 Feb 2019
Could well tank tomorrow just like Centamin on its news Fresnillo has experienced similar underperformance in 2018 and given a similar poor outlook for 2019. Could be an excellent share to go short on tomorrow. Over the past 12 months, bar today, the shares of both have followed the same path.
kebabforme
08 Jun 2018
Re: Lovely I know it was due a correction but this is ridiculous. Still, youre right, seems a good point to make some purchases for the long term.
shugg1e
08 Jun 2018
Lovely Im in great buy
kebabforme
06 Jun 2018
Move up coming? Silver is at a historic low ratio against gold, and the 50/200 MAs are on steady course to cross upwards. That together with the share price over the past 2 months barely ticking upwards and now appearing to head straight into the cross could pay off big (I hope!). Fingers crossed. Italys political scene is in chaos and nobody seems to know if they will stay in the Euro or not or what to do, indeed many feel there is no future for the EU in its present structure which cannot be changed without concensus, a few miles away Trump has set off a chain of ugly anti trade events which has world leaders shaking their heads in anger, Britain is totally embroiled in Brexit and its not looking good if you read the papers, well if everyone around you is having problems, and the US being the one country you pin your hopes on, is becoming outright and stubbornly protectionist, then who to do this much vaunted wonderful trade deal with? Not much to cheer about but at least there is something shiny out there called silver and gold.If you were to randomly stick a needle onto a map with your eyes closed, then chances are that country you poked really has some sort of very major economic or social problems which just cannot be easily resolved. Everything and everywhere you look, things seem to be slowly heading for some sort of big world wide upheaval and climax if you ask me. Next weeks FED meeting will reveal the next move on interest rates. That could be the near term catalyst for whether PMs goes up or down, but the way things are going, its time to have gold/silver under the pillow, before prices go beserk.So heres hoping Fres lives up to its reputation of making big moves when it wants to. Good luck all, we deserve it.
orsotoro
22 May 2018
Re: H&S Setup here I didn't say that the H&S would complete today, or at all. I merely stated the conditions upon which it would likely be valid. H&S are not a certainty.
