And don’t even get me started on Special K and its plug awful 4q18 numbers, announced last night. Q4 all-in costs of 1287/oz means in simple terms that they’re running to stand still and then guidance for 2019 added in $210m in extra capex….cute surprise, no?
But this post isn’t about the mediocrity at Kindross, rather another part of this whore-show, the sell side anal ysts covering these companies. To be perfectly honest, I didn’t pay attention to the notes published on K this morning by Canada’s finest, however A. Reader (smart chap and pal who will remain nameless) certainly did. Here’s the mail he kindly sent in to IKN Nerve Centre (slightly edited to protect both innocent and guilty):
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Reality distortion field this morning. The Scotia, BMO, TD, 8 Capital, GMP’s notes on the Kinross quarter all look like this:Q4: Blah blah Q4 was more or less in-line, Tasiast, Mauritania blah blahGuidance: production forecast slightly higher than expected, op costs expected slightly higherCapex: up to $1.05 B, higher than modeled $795mm, with the difference due to higher growth capital.Impact: NeutralWHAT?! $200mm!!! Explain this?! That means zero FCF @ $1300. I should note that Scotia and BMO DID NOT EVEN ADDRESS THE CAPEX. Using Ottotrans or The Law of Mining Translation theory, IMPACT NEUTRAL from the sheep = YUCK and FARK. Of course they will clarify this honestly and transparently after the call, right.
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On receiving the mail, I checked and yes indeed, all of Canada’s suited monkey notes mentioned were of this ilk. So yes, my friend’s point is an excellent one, how in the name of all that’s sane and healthy can a whole industry take figures published by Kindross, see that the sudden and unexpected 2019 capex lift of over $200m wipes all all free cash flow expectations for the year, consider that KGC will now make the sum total of precisely fuck all in profits in 2019…and either consider the event either neutral to its share price targets or, in the case of two of them, not even bother to mention it? It’s crazy.
We the long-suffering people on the sharp end of the shitshow, i.e. retail shareholders, are fed up with the fed up to the back teeth with the way these companies are run as insider-friendly jokes by management teams who think they are God’s second gift to the planet but in reality wouldn’t last in the C-suite of a normal, well-run capitalist sector sector for more than two minutes. However, the morons running companies like Kindross are being enabled by a kiss-ass complicit world of pathetic and conspiratorial brokerages who either don’t have the guts to tell the truth to their clients or they are so deeply in bed with the companies they’re supposed to cover that KY Jelly is the only way left to separate them. The above on K this morning (which checks out fully, I hasten to repeat) is a prime example. And these brokerages wonder why they’re going out of business.