RE:This company has played the shareholders.Everyone's frustrations are certainly understandable! However, don't make it sound like management is out to sabotage the company. Mining is mining: cash flows and profitability are dependent upon grades, costs, processing efficiencies, levels of concentrate and finished zinc inventories, among other things - but mostly metal pricing and treatment costs.
Over the last few years, we've seen a number of new zinc producers come on stream in response to some large deficit years, which adversely affected prices. Then last year, COVID impacted the demand in the world's largest zinc market (China), which in turn saw the zinc market go into surpluses, which then saw smelters' treatment charges rocketing to the $300/t level. Is it any wonder why TV had such a lovely 2020?
Yet, they made a number of operational improvements, which should bring C1 costs to the low 80c and AISC to just under $1. They've hedged some of their production which is smart, and they raised money in late 2020 which helped them eliminate some debt and strengthen their balance sheet. They further reduced debt by another ~$20M after December 31st from the collection of some receivables. So, it looks like they have cash from operations despite all the write-offs which are non-cash accounting exercises (which can also be reversed depending on the circumstances).
So far so good. They will be cash positive this year with C1 costs in the low 80c and AISC just under $1, and that’s before any reduction in treatment charges. I pointed out a couple of days ago, that they should have a huge windfall beginning this quarter when the 2021 TC’s are settled. 2020 TCs were at the $300 level, and the current spot TCs are at $70/t. According to the TV corporate presentation, each $100/tonne reduction results in about $34M in additional cash flow. So, if TC’s are settled anywhere near the current spot prices, TV should see an extra $80M in cash flow this year – which is itself enough to repay its outstanding debt.
Once the TCs are settled, we should expect the analysts to re-rate TV’s share price upward. You’ve held on this long, just have a little more patience. It won’t be long.