RE:RE:First BerlinHi 5ilverlining:
We should give Mr Scholes credit for the attempt to build a model of Almonty's business although the company does not make it very easy to track the quarterly profitability of each mine.
What puzzles me in particular is the profitabilty of the Los Santos Mine:
Based on figure 1 on page 2 of the First Berlin report we have the following data:
total Almonty sales volume in Q4: 53,394 MTUs of WO3
total Almonty sales revenue: CAD 14.629 mill , approx USD 10.972 mill
(ROE 0.75 USD per CAD).
(this looks already iffy since it implies an average price of USD 205.49 per MTU which
looks very low).
Panasqueira sales volume was 25,484 MTUs of WO3.
Panasqueira sales revenue is not reported separately but since this mine has a fixed price contract for calendar 2018 at USD 280 per MTU of WO3 it should be
approx. USD 7.136 mill or CAD 9.514 mill.
This would mean that Panasqueira is generating 65 % of the revenue with 48 % of the volumes, unless they sell some of their tonnage at lower prices than indicated.
For Los Santos they show a Q4 sales volume of 27,910 MTU of WO3.
The sales revenue is not reported but if we deduct the CAD 9.514 mill of Panasqueira (see above) from the total reported quarterly sales volume of CAD 14.629 mill then we are left with only CAD 5.115 mill or approx. USD 3.836 mill and a price per MTU WO3 of
USD 137.44 which seems wrong.
The financial statements also do not help to understand this huge drop in revenue from Q3 to Q4, it seems that First Berlin was in touch with Almonty since they mention some facts that are not shown in the financial statement or the MD&A, e.g. that 2 - 3 mill of revenue was rolled from Q4 into fiscal 2018/19 due to shipment arrival dates and the drop in spot pricing that is impacting the Los Santos pricing but that does not help to explain the full drop in revenue from CAD 22.4 mill in Q3 to CAD 14.6 mill in Q4.
For me that matters mostly as it does impact the cash flow that Almonty can generate to provide their USD 20 million of equity for the Sangdong financing and minimize potential dilution.
I also find it interesting that in the December investor presention on page 4 the company is still guiding for target revenue of USD 60 mill for fiscal 2017/18 and EBITDA of USD 25 mill as "attainable", does this mean that in December they still did not know that their total revenue until Sept 30 would come in at CAD 65.171 mill ( approx USD 49 million, a cool 11 million below guidance) ?
Anyway, these are my two cents, let me know if I there any flaws in my thinking or mistakes in these assumptions and calculations.