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Trevali Mining Corporation (0VLM.L)
LSE - LSE Delayed price. Currency in CAD
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Trevali Mining Kept at Underperform by Scotiabank, Target Price Halved, Following Q1 Results, from 11:45AM ET on Monday May 16, 2022 by MT Newswires
11:45AM ET on Monday May 16, 2022 by MT Newswires
11:45 AM EDT, 05/16/2022 (MT Newswires) -- Scotiabank on Monday reiterated its underperform rating on the shares of Trevali Mining (TV.TO) while halving its price target to C$0.50 from C$1.00 after the company reported first-quarter results while not offering an update on its Perkoa mine in Burkina Faso following a flood that left eight miners missing and shut the operation until the company completes an assessment of its operations there.
"TV released solid Q1/22 results. More important, there was no material update with respect to the significant ongoing uncertainty at Perkoa following the recent tragic flooding event. Overall, we view the update as largely neutral for TV shares," analyst Orest Wowkodaw said in a note. "We rate TV shares Sector Underperform based on our muted outlook for zinc, a declining production profile, a relatively weak balance sheet, and a limited defined operating mine life outside of Rosh Pinah (including significant uncertainty at Perkoa). Our revised 12-month target of C$0.50 per share (vs. C$1.00 previously) is based on 0.7x (from 1.0x) our updated 8% NAVPS estimate. We have lowered our target multiple to reflect the Perkoa uncertainty."
I've never seen a company impacted by so many 'unexpected' events.
This was likely to happen, surface and underground activities suspended in Perkoa mine. 2022 production guidelines for the Perkoa mine in Burkina Faso??? 2022 zinc production likely to be reduced compared to previously released guidelines. Rescue efforts are on going for missing workers. These are hard times for the families envolved and the staff. Also not good for investors. As long investor, I am still in. Shorts may feed on this. Hope for the best for the families missing love ones.
High volume good sign they got memo to lift off!
Did this reverse split 10:1 twice in a short period of time or just once?
Trevali Reschedules First Quarter 2022 Financial Results and Conference Call
Yahoo Finance Insights
TV.TO reached a 52 Week low at 0.82
This might be the breakout we're look for. I think Glencore has nearly exercised all its options if you consider the volume the last 5 trading days. Price action should be unlocked at this point. Way under priced.
Just finished listening to the call. I didn't hear anything particularly negative. Missed sales will be delayed till q4 at an anticipated higher zinc price. And most importantly, RP2 project will be financed with debt, which by the sounds of it, they seem to have suitors. RS seems to be priced in at current SP and so is the missed q3 rev. What's the downside in the short term?
Stock is just being ignored by the market. The leverage this has to higher zinc prices is very badly understood. Potential to be a 10 bagger if zinc prices are anywhere near this going forward.
When a mid-high cost producer $1.00 per lb, sees the price rise from $1.10 to $1.60, their profit per lb goes from 10 cents to 60 cents, a factor of 6.
Trevali is expanding production, and produced strong EBITDA last quarter at much lower zinc prices.
A lot of long term holders are throwing in the towel (capitulation) right at the point of maximum upside.
Yahoo Finance Insights
TV.TO is up 12.04% to 1.21
I really wish TurboJesus would comment, but let me know if I'm wrong in my summary. They sold a mine that has AISC $1.08 to $1.14/lbs of zinc, which had target production of about 50 million lbs of zinc. Say price of zinc is $1.35/lbs - this mine SHOULD have returned about $10 million per year. But they sold it for $3.4 million dollars to another company (based on 10 million shares that seem to be worth $0.34/share), with some clawback options depending on the price of zinc.
Have I got this right? PLEASE tell me that I have some of the facts wrong. I'm completely bewildered by the management of this company. I'm dying to hear what they have to say for themselves on Friday.
This stock has been covered by a lot of analyst from big financial firms. The price target for a year in my brokerage account is .50 cents. This is one of the mining companies that are already operational. It is a top ten producers of Zinc. It is already producing revenues. Some of the companies that are still in the exploration has a higher price. I don’t get it. I’m invested in for long!
I anticipate with this upcoming ER will show operating costs (AISC) at $1.10-1.15, and with zinc averaging $1.28 per pound, this should be collecting 15-20m in profits for the quarter. Annualized this could be 50m in profits for this year. With current market cap at 250m market cap we're talking about 5x earnings and 2.5x forward earnings. This is ridiculously cheap. If management CA simply prove they can control operating costs, this is a multibagger after earnings. I've been holding 5his for a year now ($0.11 average) and I'm shocked it isn't 0.50 cents yet. Let's see what happens this ER.
TV can buy half its float with a year of FCF with zinc @1.33per and TCs at 159. This just isn’t adding up. How much longer can this stock be suppressed
Rosh Pinah Expansion will give them free cash flow of 471 million at 1.40/lb. Right now zinc price is 1.57. If inflation persisted for another 6-8 months than zinc can touch 1.90-2.50. With this, in my opinion, valuation should touch 1.5B-2.0 B
This is a very good outcome for share holders. Loans with no dilution to get the company through the rough patch is exactly what was needed. These recapitalization deals often involve massive dilution. Somehow the company managed to avoid that.
The only thing that would have made the deal better would have been a reduction in treatment costs. The problem is that a contract is a contract, and the bone headed management signed up for the highest treatment costs in history. Allowing the company to eat the treatment costs with a loan is the best way to spread out the cost. It will come down next year when the treatment cost contract is up for renewal.
Everything depends on the price of zinc now. The company should survive with zinc above $1.05. They might actually be profitable with zinc above $1.15.
The price action in last 2-3 months has been extremely suspect. Hard to say why volitility has been completely muted. Earthings should be able to explain shortly
Found this on TD Waterhouse investment research from July 22, 2019, explains a lot of the price weakness recently. Target price lowered from 0.60 to 0.30. Will be interesting to see the quarterly results to be released today.
We are downgrading our recommendation for Trevali to HOLD from Buy due to the
negative outlook on the zinc market in the near- and medium-term.
■ We have marked-to-market our Q2/19 price assumptions and lowered our
2019, 2020, and 2021 price forecasts to $1.17/lb, $1.10/lb, and $1.05/lb,
respectively (from $1.28/lb, $1.20/lb, and $1.15/lb), or by an average of ~8% over
the period. We have trimmed our zinc price forecast in light of recent spot price
levels (down 12% over the past three months to $1.11/lb), growing supply, and
uncertainties over U.S.-China trade. We have made no change in our long-term
zinc price assumption of $1.10/lb.
■ Shift to negative free cash leaves little room for organic growth — At our
updated zinc price forecasts, we now expect the company to generate negative
FCF over the next three years (2019-2021), based on our average consolidated
AISC cost estimate of $1.07/lb.
■ Although Trevali has a solid balance sheet, including working capital of $134mm
and net debt of only $62mm, our forecasts of negative free cash flow over the next
several years do not allow much room to pursue organic growth opportunities,
including further exploration work to extend the company's short mine lives.
Furthermore, at today's spot prices, we see an increased risk that the company's
highest cost operation, Caribou, is placed on care-and-maintenance.
■ Strongly levered to zinc prices — The company continues to guide for
2019 consolidated production of 361-401mmlbs zinc, 44-49mmlbs lead, and
1.32-1.47mmoz silver. We are modelling 2019 production of 386mmlbs zinc at
C1 costs of $0.91/lb and AISC of $1.10/lb. Given the high-cost structure of the
company's operations, Trevali is highly levered to zinc prices. A $0.10/lb change in
our zinc price forecast would have a $36mm change in our 2020 EBITDA forecasts
and $32mm change in our 2020 FCF estimates.
TD Investment Conclusion
We are lowering our target price to C$0.30 from C$0.60 and downgrading our
rating to HOLD from Buy. Given the weak backdrop in the zinc market over the
existing mine lives on the majority of Trevali's current operations, we believe that
much of the company's potential to generate significant FCF has been lost.
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