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That’s very cryptic CK!
Thanks CK !
Daisy one way or another !
Looks like the hedge funds could be shorting SFR (6% shorts declared) and buying MOD for a quickie return. They then sell MOD and buy back into SFR. Copper market also affecting ASX negatively.
Cashking you forgot to to reply to my query whether or not you are invested in MTR?
Pinman ,did you mean diminishing liquid cash ( sandfire sp circa 20% down from deal announcement ) could go back up but also could go further down . Any thoughts re Deal announcement and plummeting SFR Sp ? Market maybe doesn't like it !
What ever strategy emerges it is now evident MTR future is looking a lot brighter than it ever has. TG has delivered an amazing asset but the costs to get it has diluted MTR. Now we have real hard liquid cash with dividends from SFR and already a couple of TG assets under MTR ownership like klm and cobre all got because of the special relationships TG has developed through evidential proven successful mining. No dilution going forward buy on the cheap in this crap current market and develops and seed assets ready for sale/IPO. Great to see some sensible debate and hopefully the idiotic posters are playing in a different playground now. Funds will be very selective where they place money and the only way into MTR is on the open market.....happy days....good luck game players....
What a really nice change. Two people - Joebop and DaisyRoots - disagreeing, but doing so in a really positive way: setting out arguments for/against potential courses of action, with intelligent rationales for their views; no name calling or other nonsense.
On balance, I tend to agree with DaisyRoots, but I see the sense of Joebop's points and respect his views more generally.
Re KML, the AEM tech being used is far better than the initial methods used on the MOD JV territory. As the MOD project progressed, the AEM was honed to suit the terrain. The KML projects will be informed by this and costs accordingly reduced. MOD made many wasteful mistakes in the years since the T3 discovery, not least the costly negligence in applying for necessary permits or the vanity projects like the LSE listing. Hence the KML project run by non limelight seeking geos will no doubt be a fully streamlined process on a tight budget. The Okavango and KitE zones excited the geos the most so I'm sure appropriate funds will be set aside to fully explore this potential. If they hit good mineralisation as well as the prospective contact, all well and good, as the opportunities for monetisation will increase.
Cobre's Perrinvale Project sits in one of the most desirable and established mining jurisdictions in the world. Analysis of the terrain continues at low cost. Drill assays are due. They will have enough info to know just what they are sitting on without the need to throw vast funds at it. Cobre Pty Ltd's Martin Holland and TG go back a long way and they will no doubt find quick consensus in moving the project forward as quickly and cheaply as possible. Martin Holland had great success in founding LPI on ASX , exploring , founding and developing one of Chile's highest grade and largest lithium mines in Chile. We all know Terry's past successes in WA. I believe they would work towards a quick monetising IPO if the 'VMS' results continue to be favourable.
The MTR board are well used to thinking longer term after the self serving activities and musical chair games of previous CEO's. They have built firm foundations on which to build their vision of Metal Tiger and it's going quite nicely in my book.
If they need to sell some of the SFR stock to pursue better opportunities that's fine in my opinion. Sandfire will quickly and aggressively explore the prime targets in the Exploration areas with any new discoveries highlighting the value of the 2% NSR deal. That 2% deal will also have its own independent value so could be monetised in whole or part at any appropriate time.
I trust tg to pick good prospects, by duds I mean delays in monetization of the assets.
I don't foresee kml being monetized for a long time yet. I do foresee drilling activities to cost them more than for the initial t3 drilling phases. The industry there was on it's behind when mod stepped in. That's before you even ask will the drilling results be akin to the drill campaign that hit t3, or will it yield results like the other T targets etc.
Cobra is an unknown as you say. WA ain't cheap though. I've no idea the exploration budgets/ mtr contributions planned for there, or the ipo timeframe. What if they decide to keep it private for longer? That would be a dud in the costs v monetization box, but a longer term win. (What I like)
It is bat **** insane, in this industry, to sell down a prized, valuable dividend paying asset in the pursuit of maybes. Sell down when you have a guarantee on monetization of a second asset in the future.
MM really needs to think long term, and holding onto the sfr shares is vital to that long term value being realised for everyone.
So how do they hold onto the sfr shares, keep financing current projects and fund new ventures???
You all know it's the right roadmap long term, if anyone can think of a better way to grow the company responsibly without chasing too many rainbows, throw it out.
But remember, a bird in the hand is worth a hundred in the bush.
We know that majors were after Cobre and that MTR were lucky to get the deal. The drilling news to date looks very promising. I also trust Terry's vast experience in WA . Can't see that being a dud. A quick IPO would deliver excellent dividends for MTR.
Adam Wooldridge and team at KML are highly experienced geos. Again, TG has been closely involved in this project selection. Even finding that the prospective contact is consistent will be enough for the likes of SFR and others to see the intrinsic value.
So I can't see them as duds, more that the values of both are simply unknowns.
MTR don't have to hold on to all their SFR stock. They want to make money relatively quickly by being flexible and choosing the best opportunities as they evolve. They were shackled to MOD for too long and I believe they won't entertain that type of relationship again.
MMc has proved himself to be an excellent deal maker in his own right. I trust the team to forge some good deals with other projects now. They are itching to show the market what they can achieve now that they are no longer beholden to Julian Hanna's questionable agenda.
Why would the sp go sideways? If kml and/or cobra turn out to be a dud.
We have a very bloody rare thing should this deal go through, and that will be a successfully monetised project brought from discovery hole to being bought out by a dividend paying, low cost producer looking to expand.
Protect what you have. They are rare finds.
If they can get a loan without a raise, super. But I don't see that.
If you want to see what can happen when a company sells down a prized asset, look no further than the red rock long term chart. I believe they had a circa 20% stake in jms, with a 100 yr mine life. 80m profit attributable a year. Company is near insolvent. That Sp didn't go sideways. It bloody plummeted. Probably a 98% fall.
For some reason you obviously support any idea that involves a raise and see the present no raise strategy as inferior!
Why would the SP go sideways? It's an unknown.
Sounds completely counter productive !
Sounds completely counter productive !
Illaquens, I haven't worked out the details, but a good broker should be able to cobble a good package together. ****, if red rock can get a loan of 10% apr on their jms shares....many options available.
I hear what you're saying about dilution. But say take a 5 Year time frame.
Option 1. No dilution. Sfr share sales and divi keep funding current projects. Relying on monetization of kml and cobra to replenish the coffers down the line. Sp goes sideways.
Option 2. Small dilution and loan. Sfr divi pays loan and running costs. Loan goes into new and current proojects. Well cashed up, multiple projects, sp rises, some (but not all) warrants exercised. In 5 years, majority of sfr shares remain + monetization of kml/cobra/new project. So a small equity raise with a loan could really kick-start the sp.
Now is the time to be bold, but not wreckless.
Even if they don't take on more projects, I'd rather them take a loan than sell down sfr. They have to be solidified as the backbone in the company. Have to be. Madness to sell them down without a dang good reason.
Ok Joe something different. Personally I do not want to see another equity raise at these prices. Too dilutive. The trouble with using shares as collateral the amount advanced would probably require the majority of SFR shares to back any loan. Banks normally have a loan to share collateral of 25% I.e £5m would require £20m SFR collateral plus a Forex margin and Interest lockup margin. Too much tied up at a time when there maybe opportunities to use a larger amount of capital. Banks today do not look at the collateral but at the ability to pay. The SFR shares are highly liquid and could easily be placed in the market should MTR need funds quickly.
I'm not a fan of dilution myself.
I'd go completely against the grain now to what you all are proposing.
Small equity raise for £1.5 - £2m to someone who is willing to lend say £5m on good terms secured against the sfr shares.
Put them in a great position to pick up and advance projects. If they have the right opportunities available of course.
MTR look set to come into serious funds at a time when many juniors are on their knees begging for funding. The more MTR have available to invest in the best undervalued opportunities the bigger the profit, the bigger the market cap and the higher the share price IMO. I'm happy to wait for real value to accrue.
Are you invested then Cashking?
Personally I would have taken the cash given a 10% special payment to all shareholders. Leaving the royalty in place and moved on , negating further dilution for a very long time
Agree, capital gain preferable. As for red flags, the thought that MTR won't have to raise for a very long time ahead is a bright green colour in my book. The board may not release empty bluster RNS's once a week like other AIM companies, but I can guarantee they're hard at work behind the scenes working on the deals that are taking the company forward. Glad that TG is still keen to select only the very best projects and a relief to see clear water between past CEO's modus operandi and the present board.
How much would you dividend out? Personally I would prefer capital gain rather than dividend and no more capital raises or warrants!
We will soon know if they are looking after shareholders or themselves ! Red flag if the bods get bonuses and shareholders get diddly squat !