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Looking at PRE shows the risks involved in financing big projects. #MKA needs a buy out to concentrate on recycling.
I wouldn't be sweating what happens elsewhere myself tbh but then I know with absolute certainty that the DFS for Songe alone lays out a value that's 4x the current mcap whilst completely disregarding the recycling stuff, or the Uranium or other commods in the offing down the line, so I'm super relaxed here.
If China pull the Rare Earths plug - again - then this is a very viable 10x from here, again, on Songwe alone.
The GBE MDA terms are informative for MKA and there's some read across. MKA's project is also unique of course so the shape of our MDA could be very different.
MKA is still a stonking buy imo. The broad mine refine recycle business, demand for REs without Chinese involvement, and our other assets etc etc.
The GBE MDA terms per se seem reasonable. A 5% (tiny .45% local) royalty (even gross) reflects the benefits of a stable political and tax regime (the latter written in to the MDA for 10 years). If the starting point is say 0 to 15% it's fair. 10% state golden share fits well too and the 10% fully contributary option is on balance positive for future funding.
Why the tanking SPs? Presumably the wider risk off approach of the market to growth stocks like these, credit crunch concerns for funding GBE/Songwe and geopolitical concerns with Malawi's difficult recent history etc etc.
Wtfdik and all IMHO of course but definitely a buy at these bucket shop levels and gla.
Announced there MDA a week ago and they are now trading below their pre-MDA level after a brief spike.
https://twitter.com/mkangoresources/status/1641510373311275036?s=21
And Allan Walton of Hypromag are speakers at Rare Earth Technical Summit in Texas next month....
https://na.eventscloud.com/website/54770/speakers/
Yummy.
"Volkswagen (VOWG_p.DE), Europe's biggest automaker, this month said that it would invest 180 billion euros ($196 billion) over five years in areas including battery production and the sourcing of raw materials."
https://www.reuters.com/business/autos-transportation/ford-signs-45-bln-investment-deal-with-vale-indonesia-huayou-ev-battery-material-2023-03-30/
Here it comes chaps ...
NOW - EU's von der Leyen: "We know this is an era where we rely on one single supplier. China. 98% of our rare earth supply."
https://twitter.com/disclosetv/status/1641379881471598593?s=20
Disconcerting.
https://www.foreignaffairs.com/united-states/xi-jinping-says-he-preparing-china-war
#XiJinping says #China is preparing for war
At the annual meeting of the Chinese Parliament, the PRC leader addressed the topic of readiness for war in four separate speeches, with one occasion urging his generals "not to be afraid of battle."
https://twitter.com/nexta_tv/status/1641379376343179265?s=20
I've mentioned the uranium in the past - it's not lost on me that it could be a stonking piece of icing on the cake going forward.
Did you not see the excitement on.possibillity of MDA this will rise fast on positive MDA news and now we know Malawi is finalising MDAs....but even bigger gains will come from recycling COTEC said profitability will come quicker here than from a mine...relax rare earths are neeeeeded
I can appreciate that sentiment. Been in the same boat with a few AIM stocks myself over the years. The only thing I would caution against is falling in love with the stock (any stock for that matter). Not saying that you are. Perhaps because I have only been a holder here for 10 seconds, I feel less attachment and I see serious global/macro issues that are growing, not receding. I certainly share your concerns about the delays and that is why I made my post a few days ago or so about not letting the clock run down, because in my firm opinion, the government can wait longer than we can, to be blunt. We all want a great deal, but for me, I do not want to hear management say that they are negotiating hard for shareholders in X months time with a deal still un-concluded and another raise required. We are a small cap, not a major, we lack the cashflow to potentially play hardball as the big boys can and sometimes do. If we are resisting the same terms as per the Global deal we have all had a look over now, then that IMO would be a mistake. But we have no idea if it is that. We are basically in the dark for now - and I think that is where many of us are going to become increasingly frustrated while that state remains. FWIW, I am still long here, but not 'come what may' long.
Being invested in MKA I often read this board. Very rarely I see mentioning the Thambani uranium tantalum niobium zircon project or the Chimimbe nickel cobalt project.
Without Energy and commodities, nations do not workproperly. MKA has tremendous potentials
There's also still the mysterious rutile asset lurking in the background.
I guess i'm a bit on edge with all the delays here. it's just that there's been a number of posts lately proposing the sale of songwe for a very lowball price and after being invested here for so long that is hard to hear. to me all the value here comes from providing a non chinese source of neodymium for ev market. everything else flows from there
Fair enough - I misspoke. I see the recycling business as being the more attractive, more reliable, long-term revenue maker here. Just an opinion, which I trust I have now made clear. No need for quite such hostilities, silvermaple.
what are you guys talking about with the recycling being the main business???? That is completely wrong. Stop it. Mining the ree at songwe is the main business and they have other promising mining plays in malawi as well. This is a junior mining company that has spent the last 12 years developing these assets. They are a minority partner in a a startup looking to recycle permanent magnets. That is in no way their main business and never will be. Stop saying that, it is false and misleading
If those are the terms, then those are the terms. If anyone is familiar with the arrangement that Centamin has with the Egyptian government, perhaps this will seem more reasonable. Get it signed and get this done, BOD! Then sell the asset (presumably via auction, or something similar) and use that cash to focus on the main business and hopefully never need to do a fund raise again. IMO tight credit conditions are going to last for a fairly long period of time; certainly for the next 24 months at least. Unless the central banks blink too soon, in which case inflation will probably be so high for so long that everyone will be distracted with other stuff.
Agree Lewis. And I'd rather be the second or third MDA under Malawi's new 2018 regime, than first. MKA can learn much from the GBE precedent and negotiate smarter now.
MKA will get this over the line on the terms they are happy with. Honestly 10% of nothing with no MDA, it is in the best interests of both to see this over the line.
It wouldn't surprise me if the 10% is not reinvested anyway as per the ASWF with Pensana. Malawi ultimately want a stake in their own countries resources and future.
The MCAP of MKA remains a joke even if they wanted 50%.
The equity option is a full contributary interest so they'd be in there with the pack
To be fair if 10% goes into the pension fund which I suspect that is exactly where it goes, then at least you are aligned with the country more in terms of creating SH value
I still think 10% with option to acquire a further 10% is a lot but the royalty is right where I expected it to be fair
Maybe I am coming round to this deal after all