Nickel 28 Capital Corp V.NKL

Nickel 28 Files Fiscal Q3 Financial Statements

[Betteryear2]

December 19, 2023 06:17 PM Eastern Standard Time

TORONTO--(BUSINESS WIRE)--Nickel 28 Capital Corp. (“Nickel 28” or the “Company”) (TSXV: NKL) (FSE: 3JC0) has released its results for the quarter ended October 31, 2023. All figures are expressed in United States dollars, unless otherwise indicated.

Nickel 28 Files Fiscal Q3 Financial Statements | Business Wire

[ICNick]

Good results for Ramu overall. Price of nickel is terrible, turmoil within the Chinese construction, over production from Indonesia, quite a bit of cash on hand.  I'd be interested if someone could provide a health analysis of this investment near and medium/longer term and what you believe the Cie will do with the cash on hands near term. 

[microcaptt]

I think the debt repayment will take longer than we all hoped b/c of Ni price weakness.  Realistically I think we are looking at the end of 2025 unless Ni prices improve.  With that said I think we should be seeing the light at the end of the tunnel here.  N 28 has 49mm of total debt as of Oct 31, 23.  Net debt closer to 39mm with cash on hand.  They are estimating 11mm

[ICNick]

Thanks for your insight 

[Nemesis]

Here is my assessment of the situation. Ramu's debt will be completely repaid around June 2026 (or earlier, if nickel and cobalt prices increase or operating costs decrease). Debt balance as of January 31, 2023: $55,817,051 Debt balance as of October 31, 2023: $48,975,693 Cash as of October 31, 2023: - $9,805,248 Net debt as of October 31, 2023: $39,000,000 My estimate of the share of Ramu

[ICNick]

I agree with your analysis. I also do not believe nickel prices will go up in 2024. It will start going up aroung 2025 under "a normal economy".  As for the share price i do not know if 18x is the right multiple. Could you share the info with us? Finally, I hope OPEX will be much less than $10m/year, more around $5m/year as beside G&A costs there is very litttle in terms of

[Suppe11]

Noone with half a brain will pay a PE of 18 for this company. It's a finite ressource. The blue sky/hail marry royalties aside...you can more or less calculate the end of Ramu production and I guess it's not 18 years. Even if it would be 18 years...noone will pay "fair" value. Imho you can't expect more, than a PE 3-5 here. 

[microcaptt]

I would not use a  P/E as the proxy for valuation of a commodity company.  If I were to use P/E ratios I would be buying at 18 P/Es or higher and selling at 3-5 P/E (not buying). Buying low P/E commodity stocks is such a rookie move.  This company is a cheap option/levered traded to higher Ni prices.  If you don't have a view on Ni or not long term bullish than it's the

[Suppe11]

I agree, that the "PE-game" is more complicated. Often cyclical companies have their lowest PE at the top of the cycle = bull trap. But I think buying high PEs instead would not solve the problem.... Especially in finite ressources (oil, mining etc.) it's a valuable number....if your goldmine has gold for 1 year left....you should not pay a PE of 2.

[Nemesis]

I have revised some amounts based on data from the last four quarters... Here is my assessment of the situation. Ramu's debt will be completely repaid around June 2026 (or earlier, if nickel and cobalt prices increase or operating costs decrease). Debt balance as of January 31, 2023: $55,817,051 Debt balance as of October 31, 2023: $48,975,693 Cash as of October 31, 2023: - $9,805,248 Net

[microcaptt]

Your operating expense assumptions look off/high to me (or at least I hope that is the case).  I would not use 2023 as a proxy for the future operating expenses given the added legal costs associated with the Pelham situation.  The operating costs have historically been closer to $6-8mm per annum and that also includes non-cash 1-1.5mm of share based compensation.  So from a pure

[1930modelA]

I agree with your analysis of the lower costs.  However I would like to management use $5 million of cash to partially pay down Ramu debt. This investment is be managed as a 1 trick pony, so let's accelerate the the pay down down of the debt so management and the Board do not start thinking they should give the cash to themselves like they did recently.  There is no need for $10

[microcaptt]

The N28 management team and BOD have been a group of self-serving thieves that don’t care about the underlying stakeholders.  I am hopeful tthis changes or stops as a result of Pelham’s activism and some of the “checks and balances” that are now in place.  I don’t disagree that you don’t want these clowns with $10mm in the bank but I am not sure paying down $5mm will do anything positive