IMD - Imdex Limited

[Dona Ferentes]

Imdex cruising - record FY21 results in the face of some covid limitations. Going to get bigger after a market crash I think. One of my top five for buying in a crash.

nice spread in the AFR this morning, with the results;


Imdex says the resources sector is moving to drill smarter and faster as it tilts toward metals that are essential to the electrification of the economy. Chief executive Paul House also revealed that a shortage of drilling rigs that had started to hold back exploration was not confined to Australia and was just as big an issue in North America.

Mr House agreed with former Northern Star boss Bill Beament and others that the future of mining was underground, with new discoveries likely to be made at depth through smarter and more efficient drilling campaigns.

Imdex is a barometer of exploration trends and activity because it has some sort of technology presence in about 70 per cent of all minerals drilling projects. The company reported record full-year earnings and revenue on Monday.

... Speaking from hotel quarantine in Perth after a month in the United States visiting operations and investors, Mr House said there were no spare drill rigs in major mining jurisdictions, except for countries where the pandemic had limited exploration activity.

“We are seeing the lead time for drill rigs go from two-three months out to nine, 10, 11 months. We are seeing clients put down million-dollar deposits in order to secure a place in the queue to get the next drill rigs that have been produced,” he said. “That is really quite a remarkable precedent, and it gives you a good indication of what they think the long term needs are if they are still deploying that amount of capital and what spending programs they have to back them up.”

Mr House said labour shortages, now easing in the US, and delays in rig access had accelerated digital transformation in the exploration sector.

“At the close of 2020-21 we had achieved the highest number of ‘rock knowledge’ sensors on rent and revenue from all regions had returned to near or exceeded pre-COVID-19 levels,” he said. “Record demand is continuing into 2021-22 and sales of drilling optimisation products are increasing in all regions, including South America.”

The number of metres drilled using cloud-connected technologies rose 60 per cent from the previous year to 173 million metres.

Imdex also noted a shift in commodity focus with increased exploration spending on copper, cobalt, nickel and lithium. Historically, about 50 per cent of global drilling activity goes into gold, about 20 per cent into copper and 10 to 15 per cent into cobalt, nickel and lithium.

“In this current calendar year, you’re actually seeing about two-thirds of new projects are in those battery metals areas,” Mr House said. “It’s a very clear signal that people are deploying fresh capital into fresh projects that are targeting those battery metals.”

 

[divs4ever]

i reduced my holding in May , to rescue the investment cash ( i bought for 82c average , in 2013 )

DYOR

have always been a bit nervous after the asbestos in the mud incident

 

[finicky]

Increasing the value of Blastdog to miners with this $20m acquisition. Blastdog optimizes blasting for reduced rock fragmentation, dust and upheaval. Now the data that is collected by Blastdog sensors is analysed by this new software to produce 3D imaging of the orebody.

 

[finicky]

Lightened up today (sold 10,000 @ 2.90) last price 2.95
Been a long term hold. Another one I hadn't planned to touch but want to add cash and IMD hit another 12 month high today.
Overvalued by a dollar by my crude reckoning. Worth maybe 3x book value. P/E high for a slow growth company. Might sell some more. Chart looks overbought and stretched but not sure as I thought it would have pulled back by now.

Daily

 

[finicky]

Sold some into today's news - 5,000 @ 2.99
Keeps adding to its technologies and growth potential but it's too expensive when a general market crash seems to loom.

 

[peter2]

So, that source of supply up at 3.00 was you, heh? I'm going to see that supply and raise it.
IMD has stopped fidgeting and is now rallying nicely.

Finally someone is tapping into the science of "rock knowledge". Rocks make excellent weather indicators. If the rock is wet, it's raining and if it's warm and dry it's sunny. Do you think this information is in the DataRock database?

 

[finicky]

There better be a crash or I won't be able to buy these back!

 

[peter2]

There better be a crash

Blimey, @finicky careful what you wish for. I was really liking 3.15 then whoosh straight down to 2.80 and I'm cursing you. Glad to see a few buyers appear late in the day.

 

[finicky]

Strange times for Imdex. They release fy22 results on Monday 15 August.
Back in March a non-nexec director sold all his 62k shares on market @ $2.94 to us plebs who could not possibly match his level of privileged insight into the company's prospects. I still can't say that it's undervalued based on historical performance.

The weekly chart is showing a hammer candle which is the only weak uplift I can see. It has very roughly taken place near a 62% retracement of the rally from March 2020. Against that I could speculate a $1.25 measured target from the topping pattern but I'm certainly not betting on that. There appears to be no goss on the company. Guess it's just wait and see till 15 Aug.

Held

Weekly

 

[sptrawler]

Who knows how much exploration is going on with this market sentiment, looking at current resources prices, maybe the miners are tightening their belts?

 

[peter2]

IMD impressively tripled off it's Covid low. I managed to get some of it (not enough) and I've been waiting to buy a pull-back, but the price keeps dropping. It's gone too low and now I need a reversal setup before buying.

Mining services sector seems a mixed bag atm. We might be in for a volatile reporting season soon as we find out about labour shortages and rising costs. I suspect margins have been squeezed in the past few months.

 

[divs4ever]

was buying this in 2013 ( av. SP 82.5 cents ) rescued the investment cash in May 2021 @ $2

maybe this will come good in the longer term , but would hate to have it as a major source of income , something for the bottom drawer for me ( a few bucks in divs most years but no cash at risk )

 

[finicky]

Mm good, another record FY result, revenue up on increased margin.
EPS ^+ 41% on FY21 @ 11.3cps, small currency tailwind.
ROE 16%
Net cash positive but down on F21 due to funding acquisitions and investment.
'Integrated solutions' (selling >3× products and service to clients) ^+11%

Nothing said about their lost intellectual property case brought by Boart (BLY) against Imdex over an application of Reflex tech.
Sold their first commercial contract for Blast dog.

Outlook: strong start to FY23 but mention continuing pressure from supply chain, inventory higher and client labour shortages.

Held

 

[finicky]

Bit of a break above resistance level by IMD, but not necessarily a break of trend resistance. Facing a gap now.
I see it as maybe a bit above fair value here so not a buy for me if I were so inclined.
Should do well if there is the inflation of commodities that some predict, e.g Peter Schiff in a recent vid. But where in the sequence will the crash happen?

Held
Hold

Daily

 

[peter2]

The price spike shown in the last chart didn't go on with it and price has dropped back into the tight range around 2.00.

IMD is thinly traded some days and this allows price to jump around a little more than I'd like. However I've started a speculative position at 2.00 with a large iSL as price has remained in this range during the recent market selloffs.

 

[divs4ever]

IMDEX INITIATES CORNERSTONE INVESTMENT IN SAAS BUSINESS KRUX ANALYTICS

Leading global Mining-Tech company, Imdex Limited (IMDEX or the Company) is pleased to announce it has
entered into a Heads of Agreement (the Agreement) to acquire a 40% interest in Krux Analytics Inc (Krux) for
$6.42m cash1. Other terms of the proposed investment are being negotiated and are subject to further due
diligence, mutual board approvals and customary conditions.
Calgary-based Krux develops market leading drilling analytics software, focussing on the collection and analysis
of exploration and production drilling data in real time.
Krux’s unique software development expertise and proven product offering, provide an opportunity to:
• Enhance IMDEX’s drilling data origination and analysis capabilities;
• Accelerate the delivery of the Company’s next generation IMDEX MOBILE™ software and pathway for
its Measure While Drilling offering;
• Support the digitisation of IMDEX’s Drilling Optimisation business; and
• Gain additional exposure to enterprise customers, particularly in the North American market.
IMDEX and Krux are progressing negotiations with a view to formalising documentation to reflect the Agreement.
The parties have entered into an exclusivity arrangement with the intent to finalise and complete the transaction
in early April 2023. Further information will be provided with the release of IMDEX’s 1H23 results. A detailed
update on the investment and its strategic fit will be made once the Agreement has been progressed.

This announcement has been approved for lodgement by the IMDEX Company Secretary


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DYOR

i hold IMD ( 'free-carried ' )

 

[Dona Ferentes]

IMD is in a trading halt of its securities in relation to a proposed acquisition and capital raising.

 

[divs4ever]

IMD is in a trading halt of its securities in relation to a proposed acquisition and capital raising.

that is interesting timing after just last week slashing cash at KRUX

time will tell but probably not participating in the SPP (but will look at the details , first )

 

[Dona Ferentes]

interesting timing after just last week slashing cash at KRUX

Best to take opportunities when they come.

Early talk is to raise $220 million by way of a placement and rights issue. And rather chunky as IMD has a market cap of about $1 billion.

The target is Norway-based Devico, a 30-year old privately-held core drilling services supplier to the mining industry and with a global distribution network.

 

[finicky]

Big news is the major acquisition but the H1 guidance looks good and with indications that are positive for the whole of CY2023 (macro speculation set aside). The majors and mid caps are expanding their exploration expenditure and the juniors have raised funds at a 12 month high rate. Clients are reporting strong order books. Supply problems have eased.

Held