Another take on the VIC write upA couple of additional points over the Value Investor write-up : the author did identify a few catalysts but we now have the benefits of time as 8 months have elapsed since its publication in April 22.
A review of the catalyst.
- Continued strong commodity prices
Still the case. Nickel was at 15 and we are now at 13 something.
- Detail on MOA expansion
Ongoing and was change for a best bang for the bucks type of investments. Note that this will be up in running in 2024, say less than 18 months. This will add materially in the cash flow/EBITDA (60-80 million at 15/lb Nickel). Actually, only this increase is worth the stock price. As we get closer and closer to the production date, this should begin to be reflected in the stock price.
- Collection of Receivables
Ongoing and did not forecast the cobalt swap.
- Progress on Technologies unit monetization
Nothing yet…
Removal of Cuba sanctions
Nothing yet… but who knows, this would be a moonshot.
Offshore Oil and Gas Development
Nothing yet
NOLs
Well, their profits are shielded for a long time…
While the author predicted they would be net debt free by mid 2023 at NI $ 15/pound, he did not anticipate the major debt buy back they have been doing and should keep on doing. So they will not only be net debt free, but debt free in the near future. Interest savings will add greatly to their cash flows.
He pegs the share count at 468.1 million shares which includes the 70.8 millions RSUs, PSUs and DSUs. However, now Sherritt has 63 millions RSU/PSU outstanding and after February 23, will reduce this by 40 millions vested. If they issue 10 million for 2023, we will end up with 33-34 millions RSU/PSU or say 435 millions total shares O/S. This is almost a stealth share buyback. This will be a pretty good positive for shareholders.
Do notice they do not have any DSUs. Did they disappear when Pathe rode into the sunset ?
GLTA