RE:RE:Happy 2018
Psalm9012 wrote: It's good to have stepped back from this stock for a while but I think I will start watching it a little more closely in the new year. It is nice to have some positive surprises for a change - the Agrium plant purchase - not sure about the more recent GBL takeout short term though. I agree their communication is still poor respecting operating status updates, however, I also noticed from the Q3 report at the top of the page it says, "...the company continues to be focused on resuming operations at Itafos Arraias project in Q1 2018." That would tell me they still were not operating before the end of 2017 so there would be no info on sales or revenue anyways. That also means no sales from Itafos until likely mid-2018 when the next planting season begins in Brazil. But perhaps there is light at the end of the tunnel for us long suffering shareholders. Heck, even Chris's (kisstopherp) tone has changed for the better. Hoping it is indeed a happy and prosperous new year. Greg
Greg welcome back old friend. Happy New Year. Thanks for he shout-out (I think)
I'm mildly optimistic given the activities/actions that have taken place. They finally have put the company in a position to produce sales and hopefully achieve positive earning going forward.
My observations are (in no particular order)
1. As noted previously - Conda Phosphate acquistion IS a transformative game changer for the company.
Without having financial specfics we know it will provide them with instant revenue, cash flow etc. This will assist in promoting the sustainability and legitimacy of the company as a whole. Will also assist with sales and client relationships in Brazil.
More importantly they will immediately look at the: technical, financial and logistics feasiblity of expanding the plant's throughput to determine if Paris Hills (1hr away) can become feed for the plant. Expansion of the plant may be a fraction of the cost vs. building a new one at Paris Hills which was budgeted originally for $120 Million US.
Changes the Paris Hill IRR immensly if they can succesfully expand the Conda Phosphate Plant. Keep fingers crossed on this coming to fruition.
2. Itafos - They are in operations and are producing phosphate. What they aren't at is full scale commercial production or 80% run rate.
They are discovering that taking a mothballed plant from dormant state to full operations is much more difficult than planned. Everything is being restarted from scratch and as noted for Greg they will likely hit thier Q1 2018 target and have sufficient product to sell into the planting season in brazil.
Demand for thier product in the target market of Brazil is there (and rising) so it's a matter of getting over this operational hurdle once and for all.
3. GB Minerals 'merger' - There is no merger. It's an acquistion by ITAFOS. Like Stonegate GB minerals on it's own was dependant on ITAFOS for survival.
Short term - this is immaterial/negative news (immediate dilution) without any benefits realized.
Long-term - This is positive news. No duplication of overhead, leverage resources of both companies, minimize risk, full control of timelines and decisions, realize all of the benefits.
GB Minerals is indeed a world-class project, however, it is in Africa which means elevated geographic risk and requires $200 Million US+ in project financing to see the project move forward.
We saw what happened when MBAC in Brazil tried to build the plant and ended up WAY over budget and delayed. Ultimately lead to bankruptcy.
I'm still not sold that this group in particular has the expertise to build and operate a $200 Million plant in a foreign country. Time will tell.