Cadence Capital Limited outperformed the All Ordinaries Accumulation Index by 2.3% in February. The fund was down 1.7%, compared to the All Ordinaries Accumulation Index which was down 4.0% for the month. The top contributors to performance during February were Robex Resources, Evolution Mining, Chalice Mining, QBE Insurance, Origin Energy and West African Resources. The largest detractors from performance were Block Inc, Yancoal Australia, Regal Partners, Queensland Pacific Metals and Whitehaven Coal.
The gold price continued to trend upwards in February and ended the month up 2%. We have discussed previously our view that gold company share prices have not performed as well as they should have given the recent gold price rises, and we saw some share price ‘catch up’ occur in February with Robex Resources up 17% and Evolution Mining up 7%.
During February Robex Resources signed an agreement with the Mali government covering the operation of the Nampala mine. Robex has previously announced plans to divest this mine and we believe the signing of the agreement derisks the project and should lead to a better sale price. There has also been progress on Robex’s Kiniero project in Guinea. They recently signed a US$130 million debt facility to finance the construction of the mine and the CEO reiterated that the first gold pour is on track for Q4 2025.
Evolution Mining released their first half results during the month. A combination of strong operating performance and gold price tailwinds resulted in Evolution delivering a record 1H FY25 underlying profit of A$385m. Its low-cost base with All In Sustaining Costs (AISC) of A$1,638/oz helped deliver A$435m of net mine cash flow and a reduction in its net debt position with gearing now 23%. Evolution is targeting a further reduction in gearing to 20% during FY25. FY25 guidance suggests sustained production rates and incrementally higher net mine cash flows.
Half-Year Dividend
On 27 February the Company announced an interim dividend of 3.0 cents per share, partially franked at 50%. This interim dividend equated to an 8.7% annualised yield, or a 10.6% gross yield (grossed up for franking credits) based on the share price on the date of the announcement of $0.69 per share. After paying this dividend the Company still has around 9.5 cents per share of profits reserves to pay future dividends. The Ex-Date for the dividend is 10 April 2025. The payment date for the dividend is 30 April 2025.
DRP Operating for Interim Dividend
The dividend re-investment plan (DRP) will be in operation for this interim dividend. We would encourage shareholders to participate in the DRP as an efficient mechanism to add to existing holdings in the fund. The DRP will be priced at the weighted average share price over the relevant DRP pricing period. The Company will buy-back the shares it issues under the DRP. This buy-back will operate when the CDM share price is trading at a discount to the Pre-Tax NTA. At the time of writing this newsletter, CDM is trading at a pre-tax NTA discount of around 13%. If you are not registered for the DRP and you would like to participate, please contact Boardroom on 1300 737 760.
Half-Year Webcast
In the coming weeks we will be releasing the half-year webcast which will discuss the Company’s half year performance and dividend, the portfolio composition, its current investment themes and holdings, and the outlook for the rest of the year.
Fund NTA
Fund Performance
Fully Franked Dividends Declared Since Listing
After paying the upcoming interim dividend the company will have around 9.5 cents per share of profits reserves to pay future dividends.
Historic Portfolio Exposure
Portfolio Sector Analysis
Portfolio Market Capitalisation Analysis
News
To watch CDM’s recent AGM Investor Briefing please click here. In this AGM Investor Briefing, Karl Siegling starts by giving an update on CDM’s past and current year performance, discusses the portfolio’s current composition and highlights some important market trends. Karl Siegling and Chris Garrard then discuss in detail some of the portfolio’s positions, namely Evolution Mining, Westgold Resources, Meta Platforms, Netflix and Block. Karl then discusses some further investment themes and holdings before closing with the outlook for 2025.
To view all previous Cadence webcasts and interviews please visit the Media Section of the website.
We also encourage you to visit our 52 books you should read before buying your next stock page on our website. We have compiled a list of books/ documentaries that have influenced our investment style or helped provide insight into the Cadence investment process.
