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It's simple. The risk is yours. If you did your DD, buy more at these levels. If you think this is pie in the sky, don't buy and move on.
Although it is healthy to hear a balance of views so I prefer the naysayers to stay around and keep the believers sane.
No Jazzza,, I'm a realist.. I suggest you look at the current SP and start being real to. If this was currently worth what Align say then why is the SP at 1p and not 3p or 5p.... Deluded folk on here!.
People expecting this will fly however even if a deal is done it would take years to build, along with dilution. Can see a retrace to 0.75p here.
Yes, let's hope the MM doesn't drive the SP down in the absence of buys, as the technicals look a bit iffy - the SMA50 is heading down towards the SMA200.
Just a few weeks more.
GLA
Looking foreword to a gradual move back up in the next 4 weeks as we get closer to the EPC.
Those big purchases of 4,000,000, 2,700,000 and another 2,700,000 over the last 2 weeks tells a positive story in my book
Everything's gonna work out... You'll see.
2.7 million buy at 14.44, always a positive sign, should help tomorrow, but all will be revealed in good time. Great buy
No way they’ll find the money from a share raise Albi, best laugh had all day. The consortium will either stump up all the funds or nothing. Really is a do or die project and as timelines go been reasonably accurate and Kore has ground down all the necessary elements to keep interest.
If the EPC does happen be beyond three pence a certainty.
Barraveli exactly Sepco are going to construct it without any upfront payments, if and when this is signed seal and delivered which I am very optimistic it will be, this share will rocket and all the signs are this is going to happen. EPC first, then financing agreement all completed August/ Sept
@Rock200 do you mean SEPCO will build the mine without taking upfront payment and simply be owed the money which will be paid with interest/royalty payments once fully operational? That would be significantly less riskier than failing to generate the massive funds upfront or obtain in tranches.
ALB1 you obviously have no idea, how the construction cost will be paid, on all accounts the cost to construct the Potash plant will be a debt to KP2, this debt will be paid off overtime through the huge profits they will generate and in time all the debt will be paid off. The 11 pence that Align say the company is worth is conservative when the plant is built and producing, it share price should hit 100 pence, it’s not just a 10 bagger, it’s potentially a 100 bagger.
99icecream, think about it , who's going to just hand over £1.5b for nothing?..no equity!... Hence 1.2 SP. There's some value but not what Align say.
Over 60% of company held by significant shareholders.
From Kore website..
Shareholder. ................... No. of Ordinary Shares % of issued capital
Princess Aurora Pte Limited (OIA) 661,885,171 19.35
Sociedad Química y Minera (SQM) 538,210,503 15.74
Harlequin Investments Limited 368,451,313 10.77
Dingyi Group Investment Limited 198,520,782 5.80
David Hathorn 144,237,061 4.22
Wadeville International 114,358,478 3.34
David Stevens 113,500,000 3.32
https://korepotash.com/investors/aim-rule-26/
There a 3.4 billion shares here and very little turn-over (even on a busy day) - so I doubt the change in share price tells you much about the opinion of those of us who are invested.
Very dependent on the details of the financial proposal and potash prices but it’s not really a stretch for this to be worth *when producing of 2.5 - 5 billion usd (500million FCF with a price to earnings ratio of 5-10)
Going off the current price action no one is giving kore any chance of pulling it off
Whats up Albie ? On Sunday you said that this was a "very possible 10 bagger" - today its worth "no where near 3p" !
Probs another one of those jam tomorrow stories here and huge dilution to come. What gets me is the likes of Align stating 11p per share blah blah blah,,,, don't see them buying though!.
Worth something if the mine is built however no where near 3p let alone 11p.
Like I say though, I.e Will there be a serious legally binding financing deal signed first and foremost. At present a lot of AIM coys are driven down helped by insiders and mm's, then only to be rescued by major holders or delisted at the expense of PI's with a huge discount. Happening a lot lately.
A note about the NPV calculations.
When they calculate an NPV ( e.g. NPV(10) ) we are using real rates of interest for discounting (i.e. a discount rate not including an adjustment for inflation. The assumptions about revenues and costs are in todays values.
An alternative is to assume what future inflation will be (e.g. 5%) and project costs and revenues adjusted for expected inflation of 5% AND also, discount the cash flows at a nominal rate of interest, i.e. 15% (10% real + 5% inflation). The result should be the same.
Either way, very undervalued at 1.3p (assuming a financing deal is completed that is). Very possible 10 bagger from here in a few years or less though! especially if the price holds up.
It's all on a serious financial package being agreed too.
To be fair the company quoted Brazilian MoP price is unusual. The global price seems to be around $560 / t which is historically very high. So $360 life of mine MoP price used by company is not unreasonable?
I don’t think there is any chance that we will be selling for 360$ per tonne life of mine, with inflationary factors alone starting at 360$ in year 1 year 31 we are at $755, throw in supply/demand factors maybe our average is somewhere around $750 life of mine
The other obvious royalty tool could be royalty price bandwidths sliding scale?
For example
Price per tonne MoP $200 - $360 ... 30% royalty
$360 -$500 .. 20%
$500-$800 .. 10%
$800+ ..5%
Good question..
It may give some idea to look at basic figures from RNS's and do a naive back of envelope calculation. I will start this off and probably get it wrong, but it starts ball rolling for discussion. Any finance boffins out there?
Annual production.. 2.2mt
Lifetime average MoP price per tonne.. $360
Operating cost (CFR Brazil).. $106
Thus potential profit per tonne.. 360-106= $254 (#is this even vaguely true? Is it far less, other accounting subtractions? )
Potential annual profit 2.2m X $254= $558,800,000 (thus roughly 1/2 a billion per year)
Mining building cost of $1.83bn plus interest that has to be paid off.
At 20% royalty pays off a rounded down $110m per year.
Life of mine that would be $110m X 31 years=$3.14bn
## that is not a great reward for a financer, thus either the royalty at that MOP has to be higher or financers takes higher MoP estimate and risk(!!).
## at current MoP of course $1100 this financing is a no brainer (# about 2bn profit a year) but where does the financer think MoP price will be for life of mine?
## Also, could the royalty vary? Eg higher for early years to pay off principal debt and lower in subsequent 'profit' years. Many ways to structure this.
See what you think folks?
Has anyone got a guess as to what the debt/royalty mix could be
Are we talking like a 7.5% royalty equivalent to a gold miners NSR so thats 82.5 million per year @ 500$ US/T for atleast 31 years which equals 2.55B but obviously continues if the mine does
Then a debt component of maybe 800 million @ 10% interest, With a holiday period till production starts
I literally have no idea I’m just looking to start the conversation as the dynamics of this proposal dictate what the company’s value is