ACG Metals Limited (LON:ACG) was the topic of conversation when DirectorsTalk interviewed Gervais Williams, Co-Fund Manager of Diverse Income Trust plc (LON:DIVI)
DirectorsTalk asked: ACG Metals has been progressing its copper and growth strategy. According to the latest RNS, its sulphide project is on time and budget to reach commercial production by the end of the first half of 2026. How do you assess the company’s ability to translate its asset base into sustainable cash flow and long-term value for shareholders?
Gervais noted: It’s an unusual one this, because it is actually building a new copper mine in Turkey. The full volume will come on stream probably about the middle of this year when it has completed its plant. Whilst it’s building its main production plant, it is actually obviously dealing with the overburden, mainly oxide, which they are now using heap leach to actually convert into cash. So, that will maybe be gold, there is some copper and specifically some silver.
What has been interesting about that is that actually it is generating a lot more cash than ever thought because the gold price has gone up so much. As it brings its new mine into production, you don’t just get the gold going forward, but actually a lot more copper going forward as well.
So, the share price has actually risen, it has risen by 180% since June, so it is already up an awfully long way. What is interesting about that is because people are underestimating just how much production will come through and the effect of all of the improvements in commodity prices, actually its valuation, comparative to many other copper mines around the world, is still about half the valuation, even after the share price has risen.
So, we are tremendously upbeat. It is not that big, it is about £350 million market cap but as it gets bigger, of course, that brings in more potential investors as well. So, the net effect is that it’s in a long period of appreciation, as people recognise it. As that comes through, we expect that to be converted not just into cash generation, but actually into dividends and dividend growth in time as well.
