Is Polymetal worth considering or is it too risky?

I am not entirely sure that I agree with the risks being quoted.   Granted the concern over high debt levels and seasonal cashflow are valid but this is not a Petropavlovsk scenario as I understand it where POG are between a rock and hard place where they are unable to pay a sanctioned bank to service their loans and are also unable to refinance their debt because of sanctions,  they are also unable to sell their gold because of counter sanctions placed upon them by Russia.  I think the situation with POLY is much different for reasons widely available elsewhere so I shall not expand on them here.

POLY's balance sheet is strong, their fundamentals are strong.  I am aware that their divi as been suspended and that they might get de-listed due to not having fully audited accounts, but this brings to mind the reason to invest in POLY at the moment.  I agree if all you are looking for is capital growth through share price gain, you might want to be a tad cautious, but what about the dividend?  Now they have obviously postponed the decision on this until August but if you are dividend (Income) focussed there is a massive opportunity here.  The shares are so undervalued that the dividend yield is running over 25%.  That means that once (If) they reinstate their dividend you would be getting a 25% return on your investment each year, assuming that the company's FCF remains stable and their policy of returning half the FCF to investors each year remains.  Now of course inflation will reduce their FCF and thus their actual dividend payable and of course at the other end of the equation if precious metal prices continue to fall then so will their revenues and FCF as well but when you are starting at a 25% return because you bought the shares as such a reduced price then even some slippage would return 15-20% I would assume and once inflation is back under control things would stabilise at 25% once again.  This is without any reference to a potential capital gain of over 200-300%

Now agreed this does rely on maintaining profitability as well as FCF but then so does any dividend related investment.

Reference de-listing, well Burger King, Dell and many others have de-listed and relisted at a later date, what really matters is WHY the company delists and for POLY it would not be for financial reasons it would be geopolitical and even if they are de-listed you still own the shares you just cannot sell them but with a potential income of 25% per annum would you want to?  You still receive dividends from unlisted companies, here's something you might find useful :  
https://www.ig.com/uk/trading-...

So, the greatest risk I suppose would be if they de-listed and were then unable to re-finance.  Of course sanctions could still bite POLY or their banks, the price of precious metals might fall through the floor.  However unlikely each of these are a lot will depend on how long the war in Ukraine will go on for (and it is not in anybody's interest to let it drag on - the West will not continue indefinitely giving its arms to the Ukraine and pressure will come about on sealing a deal before the global economy totally collapses.) And of course whether you can reconcile investing in a company with Russian assets with yourself.

Once you focus purely on the dividend and assuming it gets paid and that the company survives (Which it should given it's strong fundamentals)  I am struggling to see a downside to POLY at this price.

I value any and all opinions and thoughts....... 

I guess it could still reverse lower if another black swan appears but those who were brave are currently sitting pretty…

Stick or twist, I’m in for the long haul but may remove initial stake to derisk when we get to the  675p level (gap fill on chart).

Well, being a gambler, I think this is a 50/50 chance either way. If it crashes you lose your stake, if it doesn't you could x by 5 or 8 

That's a great bet for me, I am already well in profit, should I sell? no fun in that.

Only bet what you can afford to lose

Current position as I understand it

Polymetal has close to 50% of the business outside Russia, in Kazakhstan. Polymetal does not refine up to gold bar this avoids London Gold Market. It sells bullion (in bulk) and concentrate from Kazakhstan, from where it derived 48% of Polymetal's net earnings and 40% of gold equivalent reserves, were continuing as normal. In Russia sales are mainly to Russian banks.

It also sells silver concentrate mainly to Kazakhstan and East Asia, and refractory gold concentrate to Kazakhstan and China. It had received assurances from off-takers that all existing contracts were "in good standing".

Forthcoming Projects

The POX2 project scheduled to be on line at around year end. The POX2 is four times the size of POX 1, POX  is “pressure oxidising” extracting gold from default rock. Which in past couple of years has been very profitable.

Project for mining "rare earths" is progressing.   These are ingredients in mobile phones and other high tech kit

Politics

This is much discussed elsewhere, but it appears that the company has been careful in its position and IF it can steer a clear course, should be a profitable invest. Plans and management appear sensible

Caution

Over New Year 1998. I was in Russia in 1998 repricing goods in a Department store selling Western style clothes etc.  Process involved cutting three zeros off the ruble price anf re creating the Kopeck.  Later  August 17th was our highest sales day, but that was because Russia was in effect bankrupt.  A lady, outside one of our stores who ad bought a US$200 coat was bartering if for a sweet jat full of pickled cabbage to feed her family Money was worthless.   Reading airline magazine flying in to see what could be rescued I read a history of previous debacles.

This could be a super sized win or a zero bust.  A long time holder I am in for the win but know the risk. 

Hi, I think there is another thread where there were quite a few comments from people clearly quite clued up on Polymetal International (LON:POLY) and other Russian focused stocks. For what it's worth, I think you've hit the nail on the head and it's a complete gamble which way this now goes. For that reason, I've decided to stay away even though I personally see the company surviving in some capacity. 

Aside from the expropriation and de-listing risks that are often talked about, another substantial risk I see is the servicing of the debt going forward. They have not yet said if they have active finance from banks on the sanction list although the 2021 Accounts record that $500m is no longer available from the previously stated liquidity headroom for this reason. Will "Western" banks continue and/or extend existing financing arrangements while the company is so exposed to Russia? I don't know the answer to that, but if pushed would say I doubt it. Can the group service the reported $1.647bn in debt just from the Kazakh operations; again, I do not know but would suspect not.

I could write more, but it all goes back to lots of questions with no clear answers. I suspect at some point the group will have to take a position; divest Russian operations (likely at a nominal price) and look to refinance, or adopt a more pro-Russian angle with a likely removal of the London listing for the foreseeable future. That would be my guess. All the very best, and good luck. 

FWIW my view is you won’t be retiring young if you invest in companies such as this :)  of course it’s a punt on whether a satisfactory peace settlement will be agreed soon. My guess is it won’t and the price of Polymetal reflects that