Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Suspension is just one of the possibilities. With the new non execs now on board I expect the sale of one mine and retention if the other more likely. Just more likely only. That would provide funding for the remaining mine plus a special dividend. All we do know is the probability of failure is receding rapidly now.
Good morning Amers
GM Folks - With all that stuff in the ground and approval of the flanks to be annoucned some time this week, I feel good blue week for the SP. Come on investors, there is nothing to fear, pile up or you be locked out, once the RNS drops and SP is suspenned, waiting for the T/O. Pile up as much s you can, before it's too late.
He keeps saying that. We generally ignore now. No calculation involved. Just an assumption based on prejudice.
How do you calculate that, de ramper.
"as usual at what point in the future never is part of this type of target."
Did anyone get what this botfly is trying to say? =)
Or is it just a bunch of words crammed into a sentence?
Botfly clearly does not understand the concept of NPV.
Brotherjoey - is that price predictions based on assets sale? If no sake goes through, what would you expect to happen to the SP?
Just to reiterate: prediction is 23p minimum based on our CONFIRMED 15moz Palladium. The flanks are a formality which are guaranteed. The DD has been done numerous times on the 15moz and it will certainly be factored in negotiations.
(If they buyer would have a problem with that, EUA will be quite happy to wait 3 months, when the Pd prices are much higher and our flanks licence approval will rocket the SP much much higher, weakening any limited negotiation advantage)
Although the additional 20 odd moz is outside of our 5km area it is dangerously close and will certainly be of interest to Eurasia/the buyer. As it would nearly double the reserve and they will have a high probability of being granted said licence.
Multiple DD around the areas by numerous players in the industry show there is definitely 15moz of Pd (and more) within our 5km radius.
Therefore, I stand by my valuation of a minimum of TWENTY THREE pence (23p).
However, it’s likely to be closer to 31p.
But it would not be a shocking surprise to see 50-55p +
Glad you made that contribution Brotherjoey: Under 3p for MT. Anyone else would have been a de-ramper with that valuation.
Some points - First have a target price of 12.5p apparently - as usual at what point in the future never is part of this type of target.
Next - the 13 million extra ounces have different costs associated not least the requirement for a detailed drilling programme to prove up the ounces before they can be claimed as a company asset. Beyond that 15 million ounces we are talking about areas of land over which the company has no interest - it explicitly says so in the last couple of rns.
I think your valuation of MT is under what it will be if sold - I goy 6.5p minimum. I know you stated that all of your MT calculations are low ball - so we are probably not far apart. The other ounces are overestimated in your calculation in my opinion as there s a long way to got to prove the extra 13 million ounces and even further to get a viable mining plan together. Highly risky to buy that area without proving the minerals are there.
Thanks for sharing your calculations.
Just to be devil's advocate, I want to point out that 40moz is for the whole area. We are automatically entitled to 21moz, as I understand. Not that you have used your 40moz in your calculation.
Another set of figures, following a different approach:
First Equity value us at 12.7p, of which WK is ~2.5p (from memory). Make MT 10p.
This includes 20% country risk discount that, just for example, NN won't have. That's 12p over 15 years.
15 years assumption is used for a company our size utilising Sinosteel contract. I don't think that it would be too unreasonable to assume that a major player, just for example, NN, won't mine it out in half of the assumed time, effectively, doubling the NPV to them. Remember, they have facilities down the road from us.
That's a rough fag packet calc of 24p boys and girls.
With this share price and market cap, an asset sale (or opting to mine) this appears to be a bargain.
Revisiting some quick conservative calculations to consider a ‘bad’ scenario.
If we look at two recent deals as a benchmark:
Noah Capital research suggests a per resource ounce basis
1. Implats’ bid for NAP ($214/reserve oz 3E) was more expensive than
2. Sibanye’s purchase of Stillwater Mining ($100/oz)
Okay, so let’s use the $100/oz resource for Sibanye. (Even though Palladium prices were lower back then)
Using the proven 1.9moz, and $100 = £77.90/oz,
= £148m for our 1.9 MoZ
- Let’s be very conservative and say we pay a TAX on that at 20% = £118.41m
- As we own 80% of Monchetundra = £94.7m
- And let’s give the Banks a healthy 10% for making this happen (generous!) = £85.25m
- Now we have 2.9bn shares to divide it with (when including directors options)
= 2.94p
2.94p is the lowest of low in an asset sale scenario we can expect based on ONLY 1.9moz.
We have 15moz (7.9x our proven 1.9moz).
For our Flanks included - we should expect a minimum of 23.2p, and that is getting a sour end of the deal.
Factors to consider in tactical negotiations:
1. We have a total of 40mOz reserve with our neighbouring areas which is open to licence applications, making this 3x worth above minimum SP.
2. A LOW $100/oz was assumed here. But Impala’s NAP acquisition was at $217 (would make ours circ. 50p!) (because of Low costs we could be asking for $300+!)
3. Our costs are lower than both of these mines. Which were approximately $575-675/oz.
I believe ours is nearer to just $400/oz. This LOW cost open pit mining is the most cost effective type of Pd extraction- in the World!
4. Palladium prices today - speaks for itself. No wonder banks and buyers are rushing. And the forecast is only set to rise, this is inevitable in the near future.
5. Rhodium hasn’t been factored in, with its ever increasing price and value, it makes a beautiful addition to our glorious basket.
Overall, a dividend payout of 23p is not unreasonable - without the above 5 advantages we have. I am sure the BoD hold a strong position here. A deal of this magnitude will need some ironing over, but has quite a large price tag to it.
I predict 31p but it’s very possible to get 50p + considering our asset and the current economical climate which has drastically changed our position (for the better).