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I know to a lot of people this isn't the most important thing but I have always believed this will fly on receipt of the marine licence.....and have been shot down many times for saying it. I'll take it on the chin again because IMO this has always been the issue that is holding the big institutional investors back and keeping the share price low. I was a public rights of way officer for six years and dealt with many public inquiries where the outcomes were a total surprise where what seemed like a solid body of positive evidence was overturned in the face of strong local opposition. I really believe that this licence will be granted and in the end it will in all likelyhood be a political decision but there is most certainly doubt surrounding it , indeed it would seem some local politicians are even against it (yes I know all the arguments that have been put forward to support it, including measures far over and above what is required have been put in place and world class people have verified that) .
The market doesn't like uncertainty.....IMO the day that is signed is the day we take off big time.
Happy to be proved wrong but that hasn't occurred yet, despite the great offtake news. Even equity/debt deals if signed imo will have to have a clause in it regarding it being subject to the granting of the marine licence......so there will still be some degree of uncertainty until granted.
All of the above just my opinions, not facts........just my honest and candid view.
I will be really happy to eventually see the public notice in the papers with the time to respond with official representations/objections to Daera so it can finally be decided by an inspector at public inquiry and put to bed.
Then I can see the share price rising to dizzy heights.
Meanwhile I continue buying.
GLA !!
GT
Excellent overview and indicates just what could be achievable here. Keeping 25% would be excellent and a showstopper as far as the sp is concerned, baring in mind Inca have already bankrolled over 5% of the capex costs your calculation and estimate may not be too far off.
The trouble at the minute is that the market doesn't seem to believe in the project or that it will proceed, something is up that's for sure? Manipulation? I can't believe we are where we re with Vito virtually on board although I have been involved in these situations before.
I agree 100% we need a new chairman as soon as, once that and a few other points are sorted I think the sp will rerate, as they say, patience pays dividends in the end. Our time will come that's for sure.
Back to Glasto now.
Mr T
I'm looking at an mcap of 50 to 60 million which I think is achievable in the next 12 months or so
Very well thought out GT430. I wouldn't disagree with very much of your calculations but I doubt that INFA will keep as much as 25%. So I'd see the 8.5p per share as a bit on the high side. Not much, though.
I was more interested in your reflections rather than the maths. I totally agree with your views in relation to the need for a chairman,( and perhaps a couple of more credible NEDs), but I tend to feel that the financing and the new chairman may come fairly close together. My feeling is that the finance provider will, more or less, dictate the chairman role. I agree also that INFA is not an "institutional" share but that could change if there were a change in the listing which I feel will occur.
Keep posting. I like well informed " calculations" posters.
Things seem to be quiet here so I thought I would stir things up with my calculation – this is not meant to ‘educate’ anyone but just for illustrative purposes. It is though loosely how I look at Infa and its potential.
So how much will Infa be worth in its first year of operation?
JW said they back testing has provided £50/£60m of revenue so let’s take £60m
Once up and running it won’t cost a huge amount to run the facility so let’s assume an 85% EBITDA margin which gives £51m EBITDA
I looked at some comparable infrastructure/storage companies and they trade around 12x EBITDA which gives an implied enterprise value of £612m
According to Infa’s last presentation the total capex for 7 caverns is £265m and let’s assume 60% debt funding so they will have £159m debt
This implies an equity value of £453m
This part is total guess work but let’s assume Infa is able to keep 25% of the project. They have spent ballpark £15m thus far and JW stated this would be returned and with 40% equity funding this would mean a total equity funding requirement of £26.5m. With some premium and Infa contributing back the £14m as their share of funding then 25% is very realistic – hopefully it will be more
This implies Infa’s 25% share is worth £113.25m
Assume they receive the EU funding and mgmt fees from next year so they don’t have to issue any more shares and stay at 1.4bn shares
This implies 8.5p per share
Clearly a lot of assumptions but I doubt I am totally wrong – I hve an upside case which shows more than 12p per share based on slightly more aggressive assumptions
That’s what I think is realistic and why I continue to hold. This though is an AIM company with no real serious institutional following so it will be volative and open to manipulation until the company gets a proper Chairman, couple more credible NEDs and some binging contracts. From there I would expect to see a gradual but volatile climb to the above figures as each step is achieved.
What do we think – am I totally wrong???
Wow a big Green Party was had in the orange hall.
I've posted my view on the malaise with INFA several time so I won't repeat them. But it is clear that after several years of mismanagement,(not by the current BOD), we need some solid good news with solid cash attached to it in order to stimulate the interest of new investors. We could also do with the appointment of a new chairman.
No problem, JW was clear his preference was upfront.
@ban4118
Thanks, that's very interesting info. I hope INFA has a plan for putting that money to good use, as that would be a LOT of cash to be sitting on for a company with £10m market cap.
Hi Kibuc, I previously shared my notes from the investor evening in Leeds. I’ve gone back to them regarding this point. JW insinuated it would come in as cash at PLC level and be used to fund new projects. The section from my notes is below: Investment to date will be recovered in full, in one block or in instalments, dependent on the chosen offtake partner. The investment to date is currently confirmed at £14.5m, but likely to be slightly higher. The funds will go straight into the PLC along with €1.6m EU funding and any fees for construction management - all debt sits at project level. Cheers Ban
well looks like buyers now returning
JW did say the costs would be recovered but could be by one payment or several, Whichever it is the circa £15mill will be added value to INFA. I would also prefer it in equity.
"the cash back alone is expected to be circa £14-20m"
I've seen people saying something along this line a few times before, but I'm not sure it's entire accurate. Not only is there a huge difference between £14mil and £20mil (and I'm not sure where that latter figure is coming from to be honest), but I also don't think there was a definitve statement in any of the RNS that cost would be recovered in cash. What would INFA do with that cash anyway? It's in company's best interest to retain as much equity in the project as possible, so I'd rather expect the costs to be recovered that way/
The meeting with locals will make no difference. It doesn't matter how little damage is done, they are not intrested in anything on their doorstep.
Offtake agreement with a blue chip organisation and financing discussions are well advanced. The share price at these levels is a gift, there are plenty of short term catalysts and financial agreement will transform Infrastrata. £9m MCAP is laughable, the cash back alone is expected to be circa £14-20m and then EU rebate of funds is imminent for £1.6m
Just getting over the last hurdle then it will be new territory for everyone (meeting with the locals will be significant once they see how much attention given to the environment), patience is the game for a few weeks (but expect a few bits of news before the big one). AIMHO
No discussion, no trades? after a week of falls in the sp? are we now lower than before the Vitol announcement?
News incoming:
The Company has now submitted the final EU application for the FEED study that was completed last year and the sum of EUR1.6 million is expected to be received in the next 8 weeks from the EU.
From RNS 9 May 2019? so got to be an announcement either confirming this or informing us of a delay? Can't think why the delay would arise as Infa should have been informed of the timelines prior to announcing it to the market.
Mr T
I still think the broker we are dumping in August has something to do with it AIMO.
Nobby, 250k was my buy, so think MM are still messing about. GLA
Still befuddled as to why on Earth all these sells are going on. Aren’t investors prepared to take any risk? It’s hopefully at least causing some consolidation in ownership but it’s taking time to occur.
Here's a biggie salt cavern planned, one mile deep three miles wide, FT - US launches large-scale project to store renewable energy https://www.ft.com/content/3a145844-82f2-11e9-b592-5fe435b57a3b
Gobsmacked why none of the protestors aren't just a few miles south at Kilroot coal power plant? According to Wiki, "Kilroot Power Limited opted into the Transitional National Plan of the Industrial Emissions Directive from 1 January 2016 to 30 June 2020. The Transitional National Plan allows the plant to pollute at a higher rate that would otherwise be permitted by EU rules as long as overall emissions for all participating plants are reduced each year"
It's one of 5 in the UK kept alive, (not including Moneypoint ROI). https://www.theguardian.com/environment/2019/jun/13/mild-but-windy-winter-was-greenest-ever-for-uk-energy-use
Great find Ben. It could have been written by INFA!
I notice that in response to the complaints about INFA trying to make it difficult to attend due to limited parking - they are laying on a shuttle bus. Hopefully this will reassure people that there is no cunning plan to limit the numbers.
https://timera-energy.com/resurgence-in-uk-gas-storage-value/
I suspect sp is being held back until the marine permit situation is better understood, I honestly believe there will be some of the mm's people at the residents meeting this week, if all seems good we may see good movement. I cant see any other reason for the SP being at this level. Worst case, we have to tanker the salt away which is doable but would be very costly (but not a show stopper) AIMHO