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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
The royalty isn't but the equity is
They have been getting bad deals for many years, so its about time Malawi got a good deal even if the terms are less favourable for the miners
Then again at what price is the option to acquire another 10%? I did not see that part
I doubt the government will pay 10% of the costs?
Is 10% equity and 5% royalty really that "awful" GLR?
Seems to compare reasonably with other regimes in Africa and worldwide. And particularly given where Malawi are, what they've said to date and the historic problems with Paladin. There's some decent tax breaks and fx account provisions to satisfy lenders in there too.
Remember they've got the Rare Earths that everyone wants but nobody wants being mined in their own backyard chaps - the days of African's being stiffed for their natural resources by Whitey are over I'm afraid, this is how it's going to be going forward.
https://www.facebook.com/100063855766453/posts/pfbid023cAJgnGrBuYGhahoe38J2UcVnAEHm1nDjf66qDSvoXgXa3qo4ZUZSnak4BvxqQ72l/?app=fbl
I'm sure Mkango will be 'negotiating' the best MDA deal possible the Global one we can look at as a benchmark -it was always going to be the first over the line
At our current market cap it would do wonders on the same terms as GBE but we can't discount the project just because we 'really, really want the cash to fund HyProMag' :-P
10% of the project and an option to acquire another 10% plus a 5% royalty is awful, and I can understand why the MDA has taken so long to agree for Lotus and Mkango
However, ultimately it would still give us tremendous value, as Bonker points out below and I agree, I would discount valuations by around 20-25% should these terms be agreed, we could still sell the project for a very nice sum and get things moving with the recycling tech
At least Malawi has had to show its hand, should be incredibly helpful for future negotiations now, we have a base case to move forward with, although reading some articles the hold up appears to be around international banks and external bank accounts so hard to tell which way it will go short term
Morning.
If we end up with 80% and 20% to the government (fine by me - it means they have to pay for 20% of the costs too of course ...) then I'd mark my 57p valuation for Songwe down to c46p as a sellable asset.
That seems to fit very nicely with the chart and our apparent 11p bottom to my eye - funny old game ...
Wtfdik too but on the face of it a 10% golden share (with option to buy another 10%) and 5% royalty looks fair enough. The fx provisions look fair too. MKA's funding or sale plans may be further advanced too.
The Globe announcement in full...
https://www2.asx.com.au/markets/company/gbe
It's not so much how the market views it -what does AIM know? it's all in and out sentiment here, it's how potential financiers partners, or indeed buyers of the project view... need to remember there is a lot more to the Malawi mining potential for Mkango than only Songwe and rare earths.... Also, that recycling market in the West seems only to be going up up and up in potential and value
All buys so far!
Terms ok?
Anyone know?
Seem ok to me but wtfdik!
GL.
If I read that correctly they could have as much as 20% of the mine after construction. Keeping 80% of something is better than 100% of nothing. Not sure how the market will view it though
'Under the MDA, the Malawi Government will receive a non-diluting 10 per cent equity interest and an option to buy another 10 per cent upon completion of construction. The government will also receive a 5 per cent statutory royalty on all revenue earned.
GBE is required to make a decision to mine within 24 months of the MDA grant and to obtain a credit-approved term sheet from a third-party financer to secure development funds.
The company said it would commence mining within six months after final decisions after reaching a decision to mine.
GBE shares were up 19.1 per cent and trading at 10 cents at midday AEDT.'
So now we see what the Malawi Gov wants.... 10% ownership and 5% of profits ....
Is that too much?
Globe Metals and Mining (GBE) inks a Mining Development Agreement (MDA) with the Malawi government to develop its Kanyika niobium project in the country
This makes GBE the first company to secure a mining licence in Malawi since the enactment of its Mines and Minerals Act in 2018
Under the MDA, the Malawi Government will receive a non-diluting 10 per cent equity interest and 5 per cent statutory royalties of all revenue earned
Globe says with the MDA now in place, all relevant approvals have been received to allow it to develop the project
GBE shares are up 19.1 per cent and trading at 10 cents at midday AEDT
https://themarketherald.com.au/globe-metals-mining-asxgbe-strikes-mining-development-agreement-with-malawi-government-2023-03-29/
https://www.vbb.com/media/Insights_Articles/23-3-2023_CRM_Act.pdf
Friends on this board - BUY BIG now FFS!
I agree 100% with GLR, I think the big focus is the recycling asset and it's easy scalability onto a global scale in very short a period. Songwe is a very Juicy asset, and once the MDA between the company and Malawian Govt. is completed and we have a licence and a lucrative asset to sell.
Question is what could it fetch, well with the licence in our pocket, £150M+, with consideration on it being an easy in-fill mine with local infrastructure in place for transportation, and of course all associated permits. Remember we're amidst an REE war which may or may not be that evident, but with the Chinese being a dominant global factor and with the west to alienate or at least not be reliant on the Chinese. Tension currently there is no easing between the West and China, therefore rich REE deposits are becoming scarcer.
Financiers have been in talks with MKA BoD last two years and have probably built a financial scenario dependence on the different MDA outcomes within the BoD's scope of final outcome. This is why I believe they're sticking to their guns on points in the MDA as a lot of financial pre-work has already been accomplished. (IMO)
As GLR also states, the jewel in the business has focused to Hypromag and the global mandate at a crucial time when critical metals recycling has become ever more green'ily prevalent with majority of countries around the world. IMO it will be very lucrative. Mr. Treger of CoTec has already hinted at the billion-dollar valuation of the entity and is already in talks with the U.S Dept. of Defence and Industry, expectant on an outcome in months, which would give us a better direction for CoTec's North American vision. MKA BoD has already visited Japan and other countries to drum up feed and stick pins in where Hypromag will be establishing recycling hubs and super hubs!
The future is, in no doubt, very bright, but when this kettle starts boiling, I'll be glad to have had the patience to wait it out and reap the rewards!
No worries from me Silver but 100% understand anyone's frustration
We have two plants fully funded and three more in the pipeline, all in NA with Cotec on a 50/50 deal (how do I know that? I watched the last two presentations)
Should know more on the above in 3-6 months or less
As for Songwe, it is what is it, the country needs it lets not pretend that this will just sit there idle, we are at the final stages but as we know when you are doing any deal of significance, the final stages are always the longest and hardest
As for delays, this has really taken the biscuit, the miniters said they wanted it by the end of June, then July, then the end of the year, then January 23 and now, even in our own RNS dated early feb, we stated 'the coming weeks'
We have spent an almighty amount of money on this project, £14m from Talaxis alone plus millions of our own capital on the early exploration, and now all of the costs in getting the EISHA (which at least we have that one out of the way)
So, even if it takes another 6 months, the wait will be worth it, 10% of the NPV of the project alone is $59m USD give or take, thats almost double our current market cap, meanwhile we keep progressing with HyProMag, proving the tech, getting more grants as more legislation is passed, and expand globally, the revenue from that alone will be unprecedented
This will be £1+ in a few years and people on this BB will be buying in saying I think its cheap, this tech can scale from 10 plants to 100 plants and it could be worth £10+ (I doubt that happens, £10+ is a stretch) but its all set up for that, I am happy I am able to add around 11p even though my average is now higher, as I know eventually this will come good, the country needs it, the world needs it, the country wants it, the BoD are top class and we have brilliant partners, delays are frustrating but it will get done and when it does we will all be very happy and the SP will be many multiples from here I am sure of that
been there, done that. wearing a little thin
AIM, mining, delay, chill, buy
it's hard not to think that this has been a long slow prelude to us getting screwed. the constant delays, that ridiculous pp, and the dumping of millions of shares at 11 and 12p. getting a little worried here myself
Songwe has already received approval of its Environment, Social and Health Impact Assessment, and awaits approval of the mine development agreement, the last key step toward project financing and development.
https://twitter.com/Share_Talk/status/1640652862052003842?s=20
The most probable scenario in my view is that Songwe will be sold — likely for multiples of MKA’s entire current market cap — with the profits fed into MKA’s recycling and refining portfolio across the UK, Germany, Poland, and the US.
https://www.share-talk.com/the-aim-market-has-not-been-a-pleasant-place-in-2023-can-prem-pow-mka-angs-maru-change-things-for-the-better/
"Finalising the MDA in the coming weeks"
9 weeks on now... how far away can this be?? Will Dawes thought it was close and wouldnt have commited so much if it wasnt progressing. Maybe just a few tweaks after a read through of Globe's MDA?