Like many other investors in these stormy times, I'm reviewing my entire portfolio, asking myself whether I should be crystallising losses, gritting my teeth and holding on, or taking a deep breath and buying more. (And of course, whether I should be taking entirely new positions too).
Overall I'm 50-50 cash vs stocks. I currently have about 3% of my total portfolio in Aminex which is one of only 2 holdings which give me real cause for concern. I've been surprised by the recent collapse in the SP following the disappointing outcome of the drilling at Nyuni. My perception is that the market sees everything now riding on the imminent drilling at Ruvuma. COS there is 10-20% ish which means the most likely outcome is failure. I am concerned that such a failure could lead to a furrther collapse in the SP.
Ive been trying to get up to speed on the situation at AEX, the current valuation and the impact that failure at Ruvuma (which is the most likely outcome) might have.
Shore Capital Stockbrokers is one of Aminex's house brokers. That means they have the advantage of being close to the company and hence should be well informed. The concomitant disadvantage is that their relationship with Aminex makes it more difficult for them to be objective and impartial.
Shore published a note on November 4th, which can be found via the Aminex website - link to Shore note. The note is, in my opinion, well worth reading.
The single most useful part of it is the valuation which looks like this:-
|
|
Unrisked |
CoS* |
Risked |
Unrisked |
Risked |
Risked |
|
|
US$m |
% |
US$m |
US$/share |
US$/share |
GBP/share |
|
US reserves |
70.0 |
100 |
70.0 |
0.09 |
0.09 |
0.05 |
|
Oil services |
2.8 |
100 |
2.8 |
0.00 |
0.00 |
0.00 |
|
Net cash |
… |
