Central Asia Metals – Accretive transaction boosts cash flow and dividend paying capacity
Central Asia Metals (CAML) has transformed itself from a single-asset copper producer to a significantly larger base-metal producer. The acquisition appears to have added a lot of value to the company and has added another low-cost base metal operation. Marten & Co’s model suggests that this could allow CAML to almost double its earnings per share (EPS), which in turn could allow it to maintain its dividend flow and yield.
The company completed the US$402.5m acquisition of the Sasa lead and zinc mine, in Macedonia, on 6 November. The deal has meant that CAML has had to take on significant debt and issue a substantial number of new shares, but Marten & Co’s model suggests that the debt schedule is manageable and there is the potential a steady stream of dividends that could exceed those derived from Marten & Co’s model prior to the acquisition.
Furthermore, despite a significant increase in the number of shares issued, the modelled NAV for the company has increased from 268.5p in May 2017 to 300.5p today.
Central Asia Metals – Accretive transaction boosts cash flow and dividend paying capacity
Caledonia Mining Corp PLC and its subsidiaries are engaged in the operation of a gold mine and the exploration and development of mineral properties for precious metals. Its segments include Corporate, Zimbabwe, South Africa and Zambia.
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CAML : Central Asia Metals – Accretive transaction boosts cash flow and dividend paying capacity