The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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Birmingham to become UK’s first centre for rare earth magnet recycling. Rare earth magnets, one of the building block materials for clean growth, will be recycled at a plant at Birmingham’s Tyseley Energy Park
https://www.birmingham.ac.uk/news/2023/birmingham-to-become-uks-first-centre-for-rare-earth-magnet-recycling
Morning.
Very nice :)
Nice tweet from MKA half an hour ago:
https://www.mining.com/supply-of-rare-earth-magnets-wont-keep-with-demand-by-2040-report/
This could be HUGE.
More coverage
https://www.mining.com/uks-first-centre-for-rare-earth-magnet-recycling-to-open-in-birmingham/
Let's not forget what Julian Treger was up to before Cotec:
Mr. Julian Treger was previously the Chief Executive Officer of Anglo Pacific Group Plc.
During his tenure at Anglo Pacific Group, he executed $450 million of acquisitions, transforming the business from a coal-based royalty business to a battery focused streamer, at the same time increasing income from £3 million in 2013 to close to £60 million in 2019 pre-covid.
I'd say we're in pretty good company here!
Absolutely no way the yanks don't take this up.
M-U-L-T-I-B-A-G-G-E-R
NO RAISE NEEDED....Fully funded to production? Bill Dawes
Great News
GLA
A decent little Webinar and positive from Will to a question on MDA progress... obviously the parties are getting close to agreements on those sticking points
Funded to production according to William Dawes on WebCast :-) no raise needed.
Happy Hour is over chaps.
30% and you have to bid for all the company shares?
Super.
'VANCOUVER, BC / ACCESSWIRE / May 17, 2023 / CoTec Holdings Corp. (TSXV:CTH)(OTCQB:CTHCF) ("CoTec" or the "Company") is pleased to announce that it has notified Mkango Resources Ltd ("Mkango") and Maginito Ltd ("Maginito") of its intention to increase its equity position in Maginito from 10 percent to approximately 20.6 percent.
CoTec intends to convert its GBP2 million convertible loan note in Mkango into Maginito stock on completion of Maginito's recently announced acquisition of the 58 percent equity interest in HyProMag it does not already own.'
Got cut off at the end
Was going to say you realise there is a path to a ludicrous $1bn valuation
And if we fall short by a few hundred million, I doubt any of us will be complaining :-)
$1bn USD in due course Jem
People laugh at that valuation, of course it is silly at £25m, and I dont mean overnight, but in 5-10 years time it could certainly 40x from here, how?
The patented HPMS technology can be deployed anywhere in the world
It also generates revenue at a very good margin (tbc)
To get to a billion dollar valuation, you need either a valuable asset or a valuable scaleable technology / service
We have the latter (songwe is valuable but itll never get us to a billion dollar valuation)
We currently have three plants in development, and likely another three to come
from the three plants, two of them are looking to produce 100tpa of NDFeB
(NDPR price is currently 555K yuan, I know its been dropping, but 400K is historic)
https://tradingeconomics.com/commodity/neodymium
Yuan to GBP means it is currently £65K GBP per tonne
100t per annum nets you around £6.5m at todays prices
At 50% margin (now we own 100% hooray!) that's £3.25m earnings per plant
We currently have two plants, three in the pipeline
So by 2025 let say we have five plants, all producing 100tpa
That's £16.25m per annum earnings
On a very small PE of 10x we are therefore valued at £162.5m on the recycling tech alone, however as it shows saleability and profit generation, I suspect it would trade on a tech PE of ~15-20 which would be a valuation of ~£245-£320m
Now we wont own all of it, we currently own 80% (after cotec certainly take their option) and we wont own 100% of the US plants, but then who is to say we stop there? What if by 2025/2026 we have say ten plants producing £32m per annum in earnings? What if we produce 200tpa or more? Now you are looking at £64m+ per annum in earnings, and at THAT moment you have yourself a billion dollar valuation
Lots need to happen
1. prove the product is commercial, will need to send samples to offtakers (automanufacturers etc.) and they will need to extensively test its performance in EV motors etc.
2. has to also be commercial, if the price keeps dropping at what point do you fail to make a profit? (of course if the price rises then we get to $1bn much quicker!)
3. Fend off rivals and have faith the there wont be substitutes for Rare Earths (namely NdFeB) tesla is trying to move away however companies like apple are adopting 100% recycling
4. we dont have to dilute to fund projects 3 4 5 6 etc etc.
Further boosts
- US inflation act allows us to recoup 10% in tax / production costs as we are 'green tech'
- EU critical minerals act proposed that all member nations must source 15% recycled critical minerals domestically (this is incredible)
Money is already moving in ($27m investment into Cyclic from BMW, they literally are doing what we do only using chemical processing route I think)
https://www.electrive.com/2023/04/27/bmw-i-ventures-leads-investment-into-rare-earth-recycling/
So, when a $1bn valuation is proposed, it seems silly at first, but then you realise, there is
Plus the first using the patented/exclusively licensed HPMS tech ...
For RE magnet recycling of course ,It doesn't, this is/will be the first
https://www.birmingham.ac.uk/news/2023/birmingham-to-become-uks-first-centre-for-rare-earth-magnet-recycling
Pretty sure the UK has more than one recycling centre, mate
£126K delayed print from yesterday!!
Moving now..
My home town - I'm less than a couple of miles away from Tyseley right now ;)
UK'S first recycling centre for rare earth!!
https://www.birmingham.ac.uk/news/2023/birmingham-to-become-uks-first-centre-for-rare-earth-magnet-recycling
Birmingham to become UK’s first centre for rare earth magnet recycling
Rare earth magnets, one of the building block materials for clean growth, will be recycled at a plant at Birmingham’s Tyseley Energy Park
Malawi gave Globe Metals their MDA recently but they are changing/have changed LAWS to get this project going.
£28m mcap Mkango aren't in a position to get sovereign states to change their laws to suit them but I know someone else who does that sort of thing all the time all over the World.
Again, truth and value will out in time as they always do but this may look extremely obvious after the fact.
Https://mwnation.com/govt-guards-against-exploitation-in-mining/
This article referred to the Bank a/c point GLR1990. Basically Malawi want exports proceeds in Malawi bank accounts. MKA don't. Malawi has a chronic fx shortage. One question I imagine the lawyers are fighting about is to what extent and how fair is it for Malawi to use the MKA/Songwe MDA to help cure its general fx shortage problem.
Bonks that's a really interesting thought about US requirements maybe driving MDA terms.
The US will have pumped the better part of $1/2b into Malawi via "aid" and building a proper embassy enclosure etc.
They don't do anything unless there's a profit at the end of the line and the new embassy clearly implies they expect to have vested/strategic interests in the country sometime soon and for a long time - 20 years per chance (2025+LoM)?
Presumably the US govt would be very closely linked to whichever "private" entity pulls this stuff out of the ground as it'll be being bought with public money so, yes, I can well imagine that "special" types of international bank accounts will be required for that and whoever that private entity ends up being - I bet Cotec know the who/where etc.
I doubt it will be Mkango and that's maybe why they went so large on the recycling angle yesterday cos they know the Songwe sale (at 40p+) is just a matter of time - likewise the CEOs recent £100k buy at 12.85p.
As PIs we're always adding 2+2 to come up with 76 but if all of this lines up as we hope then in hindsight it'll have looked pretty bloody obvious looking at 2023's smoke signals so far.