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Newport Exploration Ltd V.NWX

Alternate Symbol(s):  NWXPF

Newport Exploration Ltd. is a Canada-based company, which has royalty interests in producing oil and gas permits in the Cooper Basin, Australia, and a mining project in British Columbia, Canada. The Company holds a 2.5% gross overriding royalty (GOR) on several permits in Australia. These include permits being operated and explored by Beach Energy Ltd. (Beach) and Santos Ltd. (Santos), both Australian oil and gas producers. The Cooper Basin is an onshore oil and gas development area. The Company’s Chu Chua is located approximately 30 kilometers (km) north of Kamloops, British Columbia, with access and infrastructure. The deposit is a Cyprus-type volcanogenic massive sulfide body hosted in two steeply dipping lenses of massive pyrite-chalcopyrite and magnetite up to 40 meters (m) thick, with a strike length of 400 m and a known depth of 250 m.


TSXV:NWX - Post by User

Comment by JayBankson May 17, 2021 6:04pm
157 Views
Post# 33216871

RE:What's the catch?

RE:What's the catch?

RiceHammer4416 wrote: It's a profitable company with an 18 percent dividend. Am I missing something?

  1. Stability, the dividend paid out can change every quarter, in the past 4 quarters it's paid 1 cent, 3 cents, 1 cent & now 2 cents. 18% today might be 9% next quarter. https://dividendhistory.org/payout/TSX/NWX/
  2. As a Royalty play they do not control their income. They have no real influence on production of the current producing asset, all they do is pull a percent of the revenue. Lately it's been good and still forecasts that way, but it's been stated lately there might not be as much as previously expected and therefor not producing as long as expected but still 4-5+ years, the production company pulling the product can scale down or walk away at anytime (I'm sure there's some guidelines in the contract tho)
  3. The producing asset is in Australia and pretty much unknown over here, as a small cap it's not going to get much attention and the high dividend scares people like yourself away.
  4. They hold a Mining asset in BC that has no outlook for being productive yet. It's just a claim with nothing on it except a dirt access road
I don't worry about the payout ratio as much as the company is pretty much a pass through entity, they accept a royalty cheque, pay themselves to process it, hold a bit back to keep cash on the balance sheet for possibly anouther acquisition (that apparently they seem reluctant to do) or just a safety backup if there is a bad quarter, and pay us the rest.

I've been in for about a week, I'm already up almost 11% on value with anouther 5% coming end of next week. I don't expect that type of return often, but I'm pretty ok with it right now. Not everyone has that experience with it, as I expect there's a bunch of people in @ 45-59 cents and my gain could quickly turn to a loss.
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