Ghost Bites (Equites | Renergen | Sibanye-Stillwater)

Listen to the latest episode of Ghost Wrap here, brought to you by Mazars:

Equites suffers a drop in the interim dividend (JSE: EQU)

The property fund is still on track for the annual distribution guidance

Back in May, Equites Property Fund guided that the distribution per share for the year ending February 2024 would be between 130 and 140 cents per share. The company has confirmed that it remains on track for that guidance.

For the interim period, being the six months to August, the dividend is 65.36 cents per share. This is a 19.9% decrease vs. the comparable period, which shows you what is happening to property funds in this climate. The company also notes the exclusion of income from cross-currency interest rate swaps as a factor.

Interim results will be published next week on 10th October.

Don’t do it this way, Renergen (JSE: REN)

The company is handling a social media storm in the wrong way, in my opinion

There are some very big personalities on local Twitter / X. Sometimes, they spout absolute rubbish. At other times, they ask pertinent questions. Distinguishing between the two isn’t always straightforward.

Renergen has been at the centre of a heated debate on the platform, led by outspoken local investor Albie Cilliers. Leaving aside any personal feelings I may have towards any of the parties involved, the reality is that a market can only work if both positive and negative views are given appropriate airtime. After all, for every buyer there must be a seller (and vice versa).

Now, where there are defamatory or untrue accusations, that’s a different matter. We have laws for that. But where someone is raising genuine investment concerns, they need to be dealt with appropriately. In my view, this excerpt from Renergen’s announcement on SENS isn’t appropriate (or correct):

It’s really very simple. With the share price having lost a quarter of its value in the past month, then the directors have the option to buy more shares (when not in a closed period) if they believe that the price is below fundamental value. That would send the strongest message to the market and would be far better than releasing a SENS announcement complaining about negativity.

Of course, the very best way to deal with the criticism is to deliver on the helium project. That will quickly put the naysayers to bed, at least in terms of the project getting off the ground.

Here’s how significant the drop has been in the past month, with a positive blip on Friday after the announcement was released:

Sibanye-Stillwater approves phase two at Keliber lithium (JSE: SSW)

The capex budget has been revised higher to meet water quality conditions

Sibanye-Stillwater has had a terrible year from a share price perspective, down roughly 42%. Mining is volatile, especially with limited commodity diversification. This is why the company is pushing forward with its strategy for future metals, like lithium.

The environmental permit for phase two of the Keliber lithium project was received in December 2022. Sibanye is querying 6 of the 144 permitting conditions, but this process won’t hold up the development of the project.

With a capital expenditure budget that has increased by €10 million to €230 million, the company has approved the commencement of the second phase of the project, which includes the construction of the concentrator and the development of the open pit mine. The increase is due to the revision of the effluent water treatment facility, as stricter conditions need to be met.

The total project capital for Keliber has been estimated at €656 million, which is well up from €588 million in 2022. Equity funding has been secured, with negotiations for debt funding in process.

Little bites:

• Director dealings:
  • A director of Motus (JSE: MTH) has bought shares worth R438k.
  • A prescribed officer of ADvTECH (JSE: ADH) has sold shares worth R222k.
  • Des de Beer has bought more shares in Lighthouse Properties (JSE: LTE), this time worth R140k.

• It seems like Delta Property Fund (JSE: DLT) can’t catch a break at the moment. The fund is selling a property in Potchefstroom and the price was originally agreed at R21 million. After due diligence, it’s dropped by R500k to R20.5 million. Transfer is expected in January 2024. The really important thing is that the buyer still needs to obtain funding, so anything is possible here.

• At African Rainbow Minerals (JSE: ARI), financial director Michael Arnold is stepping down after 8 years. Hamilton Mkatshana, the CEO of ARM Platinum, is also stepping down from the board. Notably, Brian Kennedy (who used to run Nedbank Capital) is joining the Investment and Technical Committee.

• Trematon Capital Investments (JSE: TMT) has been trading under a cautionary announcement since July. As a solid reminder that these deals don’t always come to fruition, the cautionary has been withdrawn.

• Hilariously, the liquidation date for Steinhoff (JSE: SNH) is Friday the 13th of October. Can this really be a coincidence, or do the lawyers just have a sense of humour?

• The business rescue practitioners at Tongaat Hulett (JSE: TON) hope to publish the amended business rescue plan within the next two to three weeks. The meeting related to the plan will be on 7 November, as approving the plan is urgent.

• Harmony Gold (JSE: HAR) announced a loss-of-life incident at the Tshepong North mine, in another reminder that mining remains dangerous for employees.

• After announced the resignations of a few directors all at once, DRA Global (JSE: DRA) has announced an executive appointment to the board. This is an internal promotion.

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