RE:RE:All doubts eliminated 1. dividend
- admittedly small 0,007CAD (0,0047€) but finally the proof that the company is starting to share the profits with its shareholders. For me, this is an extremely important step and outweighs the disadvantages of expensive German taxation. It brings certainty that the investment will pay off. The costs are relatively low for the company at around US$ 6 million. The effect on the share price based on the dividend yield is probably the most certain
I consider the special dividend to be rather large being over 10% yield at date of announcement. I only know of Mineros SA as the other public gold company to pay a higher dividend. Agreed, the dividend will now attract new investors seeking predictable yield.
2. plan for the future
- MJS has still not published a plan for the future. In my opinion, it is likely that MJS shareholders will participate in PRG's profits based on their 70.5% stake in PRG -> receive an annual dividend. There is no confirmation of this yet
- What are the further activities? What Lithnium plans are there?
- The lack of a plan is still extremely poor Management has made it clear that the future is mine expansion at SJG leading to production growth and more free cash flow. Further growth is anticipated to come via acquisition too. The inaugural MJS dividend also signals more return of capital to come for its shareholders. Lithium projects have been shelved across the industry so I think there are no plans forthcoming on that end.
4. IPO of PRG
25% of the assets for 30 million US$ which nobody would have needed. New MGM which has to be paid for, 2 1/2 years wait with certainly rising asset prices for new mine acquisitions, high costs for the IPO as well as administrative costs in the 2 1/2 years before.
So far I see no benefit from the IPO. I understand and somewhat agree with your points here. Personally I would not want to give away a portion of a highly profitable operation. However, MJS has suffered from a low stock price that is extremely discounted from its intrinsic value. The IPO brings in more attention and a mechanism to potentially close the discount. Only time will tell if it is ultimately successful or not, but I remain optimistic.
What should be done now:
- MJS and PRG should buy back shares
-> THIS is important. With the Dividend (which is small), Sharebuy back it is a cost effective way to rise up the shareprice and "safe" costs on future dividends.
While I agree with you in that share buybacks are the most cost effective way to return capital to shareholders, my observation is that stock prices actually react more positively to rising dividend distributions. The dopamine hit when investors see cash paid into their investment account is psychologically more significant than a reduced share float which many don't even notice.
Aside from the above, I agree with your assessments which I cannot say better myself. Always appreciate your perspectives Richard, whether agreeable or not.