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Global recession or not the world needs battery metals. Even with reduced car demand the% of EVs will still rise as they replace ICE regardless...
Tardis yes I guess the fears are two fold - recession - can US and China avoid it - that probably weighs on commodities sentiment and secondly - financial markets what is the sentiment like for funding. As I said on my other post if funding is super tight (again example from company I follow - horizonte - still no debt draw down a year aftdr agreeing terms with banks) - these are the kinds of fears which drive valuations lower - how many juniors survive the bear market to the commodity bull run. Where do thry get their money from to a. Survive and b. Fund their project when thry generate no revenue and market is risk off.
One of the reasons I like companies with little or no debt (armadale & goldstone are thr ones I am invested in) is they can weather this kind of cycle. But it doesn't get your mine financed so we need to see how that plays out as financial markets ease and the fear or global recession diminishes.
Recent news from Tanzania also highlights the slowness of even the biggest project, but equally the huge work they are doing hand in hand with the Gov to improve the working infrastructure in the area to support all following miners. The delay is easily overshadowed by advancement in this infrastructure in the benefit to the company than having plowed ahead in poorer times of financial support and pricing of in graphite market and building a mine reliant on diesel and building roads for others. It takes the sinister and trust issues away somewhat for why is there a good reason to go slower for now as evidence of the improvement in the area come to light.
ACP has been through the news rich zones of proving up resources, testing of resources, feasibility studies, licences and EISA. These items continue to bring news to the market with regularity and keep interest in a poor market. ACP sitting on hands and protracted GOV discussions are the opposite and those that like spoon fed a daily diatribe of twitter posts, presentations and interviews couldn't handle the silence and therefore think sinister and useless. Versus bidding time to advance in better conditions graphite market and in country development.
Miners swing harder at times of recession/market fear than other stocks. That said it is a bit strange the juniors got hammered so badly recently given most commodity prices remain good. Valuations are pitiful across many juniors on AIM, but the hope must be that they have bottomed out, with several rallying this month. How many large firms can warn about battery metal shortages in the coming years, without money being invested in to junior miners/explorers.
Whilst MB's lack of communication is infuriating, the company's cash burn is very tightly controlled, so in that respect he has done a good job, and unlike most juniors, there isn't the fear of dilution every twelve months. I think ACP are just biding their time at the moment, hence why they don't respond to emails - they can't publicly admit it for fear of hurting the SP more.
Has to be some good news at some point though...
SJ two big factors I think - juniors are highly geared to market cycles. Market falls -> juniors fall much more than FTSE. That makes sense - juniors need cash (generally) to function, and the market doesn't like to give them cash when it is risk off hence things like funding problems etc. So risk on/risk off makes a much bigger difference.
I've learnt a lot also - jurisdiction, management, resource, financing climate, not necessarily in that order are really important. Track record, skin in the game, etc.etc. Patience is key. I see a lot to like about Armadale (and off topic - Horizonte - a year from first production is really a steal at this level).
I guess the biggest questionmark here remains, and it is a valid one - do we have a management team who can deliver it (it being, a working mine, not a DFS, and not a finance deal). Tanzania is favourable - it wants to deal with China. And Blackrock have indicated that western cos are also happy to deal with Tanzanian graphite. The mine economics are stand out (as in, ACP) so as others have said, if any mines get financed, ours should get financed. And once financed it is meant to be an easy mine build.
You have to be prepared to ride out the rough periods in the market if you believe the company can deliver, and sometimes that means waiting for the right financing environment. Armadale don't have the $50m to build the mine so they have to wait till the iron is hot to strike. That should hopefully come with the graphite deficit. GLA
Oh yeah about the trading - yes there's an awful lot of +10% profit taking going on - so if your strategy is investing I think you have to ignore it and wait for production. Accepting that at production you are at multiples of pre production then that's good enough and timing news is always really hard - traders can get caught offside in both directions.
Sorry typo in my post. AVG on HZM, new money 99.97p.... which it was 9.97p !
I average (after a few recent buys). 4.03p here, and still also hold a pretty fair number of HZM from some time back. Apposite to Wasa' comment at (new money), AVG there over 3 years of 9.97p. after it hit £2 equiv many months back, and I held on. Never thought that one would see me back at base camp..... Hey ho...
However. Tbh I am fairly confident that by 2025 both there and here. I will be more than in profit. All being equal.
As an investor. I am happy with that timescale. But coming to realise traders not investors rule very much on AIM...
What I would say though. Is that even having been on the main markets since the mid 1980s. But only dipping my toe in to this cowboy country in 2019....That AIM has taught me such lessons in the last 4 years.
Prime of which has to be that; it's not a rational place a lot of the time. Sentiment and herd mentality can cause a stock to go ape (GGP...), And reverse ape the year after.... just as fast.
I respect Wasa a lot. He talks good fundamentals sense IMO.
But .... I think he's also been a bit taken back by the price on a few shares moving about big time on AIM that doesn't always follow the resourse potential and logic.....
AIM is a traders platform for the 10%ers big time, In think he will also see now? You can win big if you stick it out on good shares. But it's not as easy as the underlying logic would dictate........no sir.... Just what I have found...
Regards.
>>That should get most on here back to level then
That might be but
a. whatever the news is will be a further de-risk step on the road (be it offtake, licence, finance news, updated DFS, govt agreement whatever) and
b. by then hopefully Blackrock have funding and have started building (our) railway sidings, paved roads, and hydro dam
So you may at that point be at 'break even' (as many are on Horizonte right now) but you're that much closer to the jam which comes from production. GLA
That should get most on here back to level then
Once some good news drops this will double the price!
in case my first post seems negative - it isn't, it is the machinations of the market that amuse me. I am positive on Armadale, of course, $500m-$1bn resource which can be developed for $40m-50m, otherwise I wouldn't have bought 4.5% of the company and wouldn't sit comfortably at 50% paper loss.... the world keeps turning, graphite will have its day etc. GLA. Good to see a change in sentiment, both here and wider markets.
Also being an illiquid share - when Armadale announces it's own news that indicates we are going to build the mine, this will rapidly rerate to the former levels 4-5p area+. It can do easily a 50% rise on a day because there will be a few profit takers but being illiquid shares just won't be available. That news will come one day, it is why we are invested. It's why I don't particularly sweat the shareprice at a given point in time (except to add more). GLA
Sentiment
Shareprice is falling, no news, a seller quite keen to exit at whatever price. Little buying, why buy when the shareprice is falling you can probably buy later right.
Shareprice starts rising, murmurings of Chinese supply shutdown for winter graphite shortage looming Xi meets president of Tanzania, positive articles surface re. Blackrock. Seller has either exited or is on fumes. Or decided maybe it is worthwhile investment after all.
And, being an illiquid share, these factors drive a 30% increase in SP in what,? Less than 2 weeks?
Nothing has changed about Armadale, it is still the company it was. The resource is the resource, the mgt team is the mgt team, we already knew the deficit was coming, and we had plenty of evidence that Blackrock were progressing, not least because of the big financial commitment Urbix were prepared to put up recently (and they will have done plenty of DD).
So I stand by my earlier comment that 1.5p area was the buying opportunity. Sadly I didn't have funds at that level but as things progress this is still cheap here and I will be adding when funds land around February (unless we have massively rerated by then).
But the market, sentiment etc. never ceases to amaze. People will be feeling more positive because we're 2p rather than 1.5p, I think the other way, I wish it stayed at 1.5p till I had more funds because I am very positive on the investment opportunity overall. GLA