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29M - 29Metals Limited

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Quarterly Report for DEC 23.

Copper production below guidance due to slow remediation at Capricorn that was flooded early 23. Market didn't like the report and instos sold it down heavily. The day after the report there were a few broker downgrades making any possibility of a bounce unlikely.
 

Lower end of guidance but the sell-off looks unwarranted. Overreaction. There's been a bit of that going on.



 
That was my thought also (oversold), so bought more at 0.425. Sold everything at 0.395. Will wait for proper reversal setup.
 
peter2 said:
That was my thought also (oversold), so bought more at 0.425. Sold everything at 0.395. Will wait for proper reversal setup.
Click to expand...
I agree. Bought at early forty yesterday as an opportunity trade but today's depression killed my motivation.
 
Are we there yet? Have we hit the bottom?

Buyers have appeared at 0.255 with the close slightly higher at 0.28.



IMHO this has been a massively oversold reaction to the slower than expected production recovery after the floods. I suspect there's more issues than just this one.

I'll wait for a regular reversal setup before buying 29M again. The world will still need more copper in a years time.
 
Pete

Show your Houdini tricks to pump my Feb tip ( an orphan) to move up.
 

25c might have been a bottom, looks like buyers came in. But, I think I said that with some nickel stocks recently. Copper is different though so I don't think the Ni/Li crash should be effecting this, but maybe there's some transfer?

There seems to be some fuss about the tailings storage at Capricorn and approvals that need to come in before April for continued production. Not sure if that's the reason for a 50% plunge though, or justified.

 
@peter2 Ausbil ceasing to be a substantial holder.

Started selling on the 31st at 40c. Looks like they might have tanked it on about $7m worth of shares.

Poor timing with the broker review that came out on 31 Jan with a consensus 74c PT. Maybe that was Ausbil's trigger to sell. lol

Maybe if they sort out the tailings issue it'll make it there by the end of the year after copper takes off.





29 Metals (ASX: 29M)​

29 Metals owns two producing copper mines in Western Australia, Capricorn Copper and Golden Grove. Together, the mines contain a Mineral Resource estimate of 2.24Mt copper, 2.47Mt zinc, 1.32Moz gold, 78Moz silver, 153kt lead and 22kt cobalt. According to 29 Metals, both ore bodies remain open and resources could be increased by further exploration and development.

On Tuesday, Sandfire released its Quarterly Report for December 2023 Quarter. This is what the brokers had to say about it:

Citi

  • Broker estimates cash flow for both 29M’s operations “still in the red” and based upon current base estimate for copper price of US$8,000/t isn’t going to “get better” for Golden Grove in FY24
  • FY24 zinc production guidance of 54kt-61kt was below the broker’s circa 68kt estimate, while costs are 11% above broker’s estimate
  • Broker cuts FY24 EBITDA estimate by $87 million, and FY25 EBITDA estimate by $97 million
  • Retains NEUTRAL rating; Price target is cut to $0.50 from $0.73
Macquarie

  • Quarterly copper production was 20 below the broker’s estimate
  • 2024 guidance update for 18kt-22kt was below the broker's estimate of 22.9kt
  • Costs at Golden grove were 28% below the broker's estimate, while costs at Capricorn were 36% below the broker’s estimate
  • Broker 2024 EPS estimate by 219%, while 2025-2027 estimates increase by 6%-82% due to “uplifts in mining grades at Golden Grove”
  • Retains OUTPERFORM rating; Price target is cut to $0.70 from $0.80
Morgan Stanley

  • Quarterly copper production missed broker’s estimate by 7%, while zine production missed broker's estimate by 23%
  • Worst than expected costs resulted in a “continued cash draw” and 2024 will be a bigger cash negative period than originally expected
  • Broker expects a “strong recovery” in zinc production in 2024
  • Retains OVERWEIGHT rating; Price target unchanged at $0.70
Consensus View*

Just looking at the brokers we’ve sampled here, and this is not an exhaustive list of brokers which cover 29 Metals, the consensus rating is BUY/OUTPERFORM/OVERWEIGHT and the average price target is $0.743 (106% above the last price at the time of writing).

Clearly the brokers see some operational issues here, and they note that 29 Metals is burning cash. Still, they clearly see enough promise in the company to run with generally better than neutral ratings, and a price target which implies substantial upside from the current price.
 
Yikes! Another 20% off. Australia Super upped its stake to 14% a couple of days ago. Not sure if that's good for the fund at the moment.

Come on copper, do your thing.

 
Garpal Gumnut said:
My appetite for knife catching is not whetted atm.

Too much bad news in Materials generally.

It hits the little blokes more than the bigger.

gg
Click to expand...

This fall is so bad the company put out an ann on Friday to calm investors. Haven’t seen that in a while. I think it’s in regard to the TSF as mentioned previously. If they don’t get it approved it’s a disaster. On the other hand, if they get it fixed it’ll turn around. Would love to be a fly on the wall for that decision.
 
ASX ANNOUNCEMENT Friday, 16 February 2024

Letter to Shareholders from Chair of the Board

Dear 29Metals Shareholders and Supporters,

On behalf of the Board of Directors, I am writing to you our Shareholders and most important supporters regarding the recent negative trading activity. The recent dramatic fall in our share price is, in our opinion, unwarranted and is a serious concern for the Board of Directors.

The underlying value of the Company’s assets is unchanged:
▪ we have over 120Mt in Mineral Resources and over 30Mt in Ore Reserves, at very competitive metal grades of copper, zinc, gold, silver and lead; 1 and
▪ at both Golden Grove and Capricorn Copper, our Mineral Resources and Ore Reserves estimates have significant upside potential to sustain, grow and extend our business well beyond the current 10-year plus mine lives.

Without question, 2023 was a challenging year for the Company - as shown in our results at the half-year and our December 2023 quarterly report – and a challenging year for our shareholders. 2024 is a recovery year to set us up for long term success.

At Golden Grove: ▪ the ventilation system failures are now behind us which will allow continued improvements in development and mining rates from Xantho Extended – one of the richest ore sources we have ever seen at Golden Grove; ▪ labour market pressures in the West appear to be abating; and ▪ cost out programs in 2023 yielded significant savings, and in 2024 we have a company-wide program targeting additional sustainable costs savings. The biggest cost area at Golden Grove is the mining activities, and our mining contractor, Byrencut, is working closely with us to drive additional efficiencies and cost savings.

At Capricorn Copper, the recently conferred Prescribed Project Status is ensuring good engagement with the regulators and, whilst we don’t have a definitive decision in respect of our recent application to support short term tailings management, we remain confident of a positive outcome. If we don’t get the outcome we anticipate then we will implement an interim plan which will contain costs whilst we complete works necessary for a long term tailings solution, as well as continue to manage our environmental stewardship responsibilities.

Shareholders can be confident that the Board of Directors and the management teams across the business are entirely focused on achieving successful outcomes at both our operations and building the business for the future.
 
Price action for Feb 24: Started at 0.34 and went down to 0.185 before price rallied hard and now sits at 0.35.

The Chairman's letter seems to have worked.

FY23 Financial results.





Copper ASIC too high but they've had a horrible year with the March flood.
 

Would have been nice to pick that bottom.

Was way oversold.

 
peter2 said:
29M at 0.18%. Go you little beauty.
Click to expand...
Well I could tell you a story but you've heard it before.

I've been chasing 29M all the way down taking multiple losses as price kept hitting my "uncle" price. Loss, loss, loss.
My last purchase was at 0.26 and then it dumped again. I held. I seriously considered adding at 0.19 but didn't.
Just happy to recover a few of those losses as price rallies.
 
Another huge day for our favourite pocket rocket, 29Mmm.



Even though my position is >+100%, I am so rueing not adding at 0.19.
I might sell some soon though.
 
Poor old 29M. On-going rainfall has increased water levels that were already high from last years heavy rainfall (Mar 23). The water levels are so high that 29M have had to shut down operations at their Capricorn Copper mine (Qld).

. . .
29M share price falls 25%

So much for the El Nino classification issued by the BOM earlier in the year (bombed again).
 
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