About company
Rusolovo is the only Russian company, which is engaged in the extraction and processing of primary tin ores. It does not distinguish separate business segments, but includes three subsidiaries:
- Pravourmiyskoye LLC - the company mines ore at the eponymous deposit in the Khabarovsk Territory and produces tin and tungsten concentrates from it. With 2018 the company acts as a resident of the territory of advanced development "Komsomolsk", which allows him to receive some tax benefits.
- JSC "ORK" - a company "Tin Ore Company" includes assets near the city of Komsomolsk-on-Amur, Khabarovsk Territory: Festivalnoye and Perevalnoye deposits, solar processing plant. The company produces tin and copper concentrates and also with 2018 year acts as a resident of the territory of advanced development "Komsomolsk".
- LLC "Territory" is engaged in the development of the promising Pyrkakayskiye Stockworks deposit in the Chukotka Autonomous Okrug. By the end 2022 year it is planned to complete the audit of the resources and reserves of the field, and reaching the design capacity is expected in 2030 year. The enterprise is a resident of the special territory "Free Port of Vladivostok" with 2021 of the year. This status implies special tax, customs and administrative regimes.
Rusolovo implements the entire production cycle: exploration of deposits, design and technological research, mining and processing of ore, sale of products and reclamation of the territory. Products are sold within Russia, as well as in the countries of the Asia-Pacific region.
The company's balance sheet reserves are about 400 thousand tons of tin, 150 thousand tons of copper, 30 thousand tons of tungsten trioxide, 170 tons of silver, 20 tons of lead and 5,5 tons of indium. At the same time, the main reserves of tin and tungsten trioxide fall on the promising Pyrkakayskiye Stockworks deposit..
Rusolovo is constantly increasing its operating performance, year by year, extracting and processing more and more ore, producing more and more products. So, based on the results of 2021 years produced almost 3 thousand tons of tin concentrate and 0,42 thousand tons of copper concentrate.
The strategic goal of the company is to increase the production of tin concentrate to 13 thousand tons per year and getting into the top ten largest tin producers in the world.
Although Rusolovo has a leading role in the industry in Russia, its share in the world market is small. For comparison: the largest tin producer in the world - China's Yunnan Tin - according to the results 2021 produced 82 thousand tons of tin, and companies, closing the top ten world manufacturers, during the same period produced 9-10 thousand tons, that is, several times more, than "Rusolovo".
Production expansion, its modernization, and cost control allowed the company to reduce the cost of tin production. So, total cash costs per ton of tin for the period from 2019 on 2021 year decreased from 15 to 13,7 thousands of dollars, and total cash costs 17 to 14,8.
Also in April 2022 year "Rusolovo" announced, what plans to build a tin plant in the Khabarovsk Territory, to produce the final product, and not only use the services of the Novosibirsk Tin Plant.
Balance reserves of ores and metals of "Rusolov" for deposits on 1 January 2022 of the year
| Pravourmiyskoe | festival | Perevalnoe | Pyrkakay Stockworks | |
|---|---|---|---|---|
| Ore, thousand tons | 5501 | 6025 | 8736 | 96 375 |
| Lead, thousand tons | 68,3 | 44,5 | 43,2 | 243,4 |
| Copper, thousand tons | 35,0 | 88,9 | 25,1 | — |
| Tungsten trioxide, thousand tons | 2,7 | 8,9 | 1,7 | 16 |
| Silver, tons | 77,3 | 93,8 | — | — |
| Lead, tons | — | — | 20,6 | — |
| Indian, tons | 5,5 | — | 0,02 | — |
Operating results of Pravourmiyskoye LLC by years, thousand tons
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Ore mining | 131,5 | 178,1 | 226,2 | 244,8 | 273,3 |
| Ore processing | 138,7 | 165 | 222,3 | 243,8 | 244,6 |
| Tin in concentrate production | 0,8 | 1 | 1,4 | 1,2 | 1,3 |
| Tin extraction | 54% | 60% | 57% | 52% | 59% |
Operating results of JSC "ORK" by years, thousand tons
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Ore mining | 84,1 | 141,9 | 232,7 | 256,1 | 311,4 |
| Ore processing | 62,7 | 133,4 | 221,8 | 262,7 | 300 |
| Tin in concentrate production | 0,2 | 0,5 | 0,9 | 1,3 | 1,7 |
| Tin extraction | 48% | 59% | 59% | 51% | 52% |
Operating results for copper mining by years, thousand tons
| 2019 | 2020 | 2021 | |
|---|---|---|---|
| Production of copper in concentrate, Pravourmiyskoye LLC | 0,08 | 0,07 | 0,05 |
| Extraction of copper, Pravourmiyskoye LLC | 42% | 29% | 37% |
| Production of copper in concentrate, JSC "ORK" | — | 0,24 | 0,37 |
| Extraction of copper, JSC "ORK" | — | 18% | 26% |
The structure of Rusolov's revenue by type of product for 2021 year
| Tin concentrate | 95% |
| copper concentrate | 4% |
| Tungsten concentrate | 1% |
95%
Tin mining cash costs by year, dollars per ton
| TCC | AISC | |
|---|---|---|
| 2019 | 15 004 | 17 048 |
| 2020 | 12 151 | 13 121 |
| 2021 | 13 736 | 14 782 |
Financial indicators
The company shows good business dynamics. This is especially evident in EBITDA and net income., which in 2021 reached a new level.
The dynamics of revenue should also not confuse: to 2020 a significant part of Rusolov's revenue came from the sale of securities. Revenue from product sales was then much lower., than in recent years.
The company is actively expanding and modernizing production. Logically, that her net debt is gradually increasing, although in 2021 year, it was possible to slightly reduce it compared to the crisis 2020 year.
The structure of Rusolov's debt based on the results 2021 year is: 74% debt - in rubles, the rest is in dollars. At the same time, the main part of the debt is equity financing., that is, the companies are the lenders, associated with the majority shareholder.
Indicators "Rusolova", billion rubles
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| Revenue | 5,11 | 8,58 | 8,56 | 2,76 | 5,95 |
| EBITDA | −0,07 | 0,21 | −0,17 | 0,45 | 2,89 |
| Net profit | −0,08 | 0,24 | −0,40 | −0,43 | 0,96 |
| net debt | 2,15 | 2,87 | 2,47 | 5,3 | 5,16 |
History and share capital
The history of part of Rusolov's assets goes back to Soviet times. And the company itself was founded relatively recently - in 2012 year. In fact, Rusolovo is a tin division of a fairly large gold miner Seligdar, who owns 97,79% company shares. The rest are in free circulation..
The structure of the share capital of "Rusolova"
| "Seligdar" | 97,79% |
| In free circulation | 2,21% |
98%
Dividends and dividend policy
The company has never in its public history paid dividends and, seem to be, not going to do so in the foreseeable future.
Why stocks can go up
Growing business. Rusolovo is constantly increasing its operating performance and is not going to stop there, planning in the future to significantly increase production.
IN 2021 the growth of operating indicators, financial. If Rusolov really succeeds in realizing its plans and becoming a very large company in its segment, can be expected, that its stock prices will rise significantly.
Not a bad conjuncture. The commodity situation has favored many commodity businesses in the last one and a half to two years. This trend has not bypassed "Rusolovo": tin prices skyrocketed.
If in the spring 2020 years per ton of tin gave about 14 one thousand dollars, then in February 2022 price exceeded 47 one thousand dollars. After such an increase, prices have noticeably corrected from their highs., but still are at a pleasant price levels for manufacturers: at the beginning of August 2022 year is about 24,5 thousand dollars per ton.
Yes, and inflation rates record for decades in the dollar zone also create a certain upward trend for everything valued in this currency..
Why stocks might fall
Dependence on market conditions. When investing in commodity companies, you should always remember, that their business is cyclical. Besides, according to forecasts, many major economies will enter recession in the near future. This may adversely affect, among other things, on tin prices and demand.
Growth costs. Rusolov has big plans to increase production, what, On the one side, Okay, but, On the other hand, in the medium term, the company can increase its debt even more, and its investors can hardly count on dividends.
Equity structure. The vast majority of Rusolov's shares belong to Seligdar.
Firstly, this carries risks for minority shareholders in the form of unfriendly decisions in their favor by the majority shareholder, up to a possible forced buyback of shares.
Secondly, due to the low number of shares in free float, they have low liquidity and are included only in the third quotation list.
Not cheap. The company's shares have risen significantly over the past couple of years and 2021 years are very expensive.: multiplier value P / E exceeded 25.
Rusolov animators by year
| 2017 | 2018 | 2019 | 2020 | 2021 | |
|---|---|---|---|---|---|
| P / E | Lesion | Lesion | Lesion | Lesion | 25,6 |
| ROE | Lesion | Lesion | Lesion | Lesion | 17,9% |
| Net debt / EBITDA | Negative EBITDA | 13,7 | Negative EBITDA | 11,7 | 1,79 |
What's the bottom line?
Rusolovo is a tin producer with assets in the Far East. The company is constantly increasing production and has big plans for its further expansion.. They are mainly associated with the development of a huge field in the Chukotka Autonomous Okrug.
Thanks to the excellent price situation on the tin market in 2021 year Rusolovo managed to show good financial results. But the situation is worsening, which can cause the company to go into losses again.
If Rusolov succeeds in realizing its ambitious plans to become one of the ten largest tin producers in the world, then, buying company shares now, in the long term, they can be expected to grow significantly.
However, it is worth understanding, what if these plans come true, then not soon, and in the medium term, Rusolovo is unlikely to be able to return money to shareholders, investing everything in the expansion of production.
Now the company's shares are expensive. It is also worth considering the risks of, that Rusolovo is strongly connected with its majority shareholder, among other things, and debt obligations.
