Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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Thanks Bick for the excellent summary from last night. much appreciated.
Thanks Bick,
yes, I don't have any confidence in GR and there are clear signs that he is up to his old tricks. He just doesn't have a handle on the DFS and it is scary that he wants to buy all of MNH... he just can't have a handle on that either.
I'm afraid the more I hear, the more I think of Deja Vu!!!
That tipping point I was talking about has just disappeared over the horizon!
Steward,
It was useful to attend in person and hear what the issues are with the DFS and how they are being addressed (more onsite lab capacity) but it also highlights other issues which are more difficult to control, such as the long lead-in times for third party verification. I took very little confidence and was quite unimpressed by the lack of any extra definition on the DFS programme, both in terms of cost and schedule. I have said it before and will say it again, it is being made up as it develops. I have no confidence there is any logic underpinning the 14 months or $5m estimate. Hopefully the new COO, if one is appointed, is able to sharpen this up.
In terms of the improvement in communications and the additional engineering capability (via a new COO), we have heard this on numerous occasions in the past before and it has never come to fruition so I have my doubts there will be anything different this time around.
The shareholders who attended seemed to be quite unanimous on the preference to focus the efforts and cash available on the Zulu DFS as that is where we see the potential payoff for PREM. The closing point GR made about potential to acquire the remaining 81% of MNH was very disappointing. Even if he buys it at a knock down price of $4m (equates to 50% reduction on $8.1m based on what was paid previously and is a figure I have pulled out the air) it is money which needs to be prioritised on Zulu. Otjozondu has a chequered history also and I believe it is effectively owned by Stephen Dattels. I am not sure PREM should be buying a mine he is walking away from.
Bickmaster
Many thanks Bick for the summary.
Most grateful as I trust your analysis of last night far more than others as I know it will be realistic and unbiased.
Disappointed not to make it and meet you and others. Hopefully at the 2p party :-)
Overall, pretty positive. Just MNH…
Thanks Bick - that's very valuable info and does put things in a different light.
Definitely a major red flag that he still wants to pursue MNH! He can only do this through dilution and I doubt if any of us has the appetite to sink more millions into it. He does seem intent to use the headroom to buy questionable assets rather than for Zulu.
And if GR is asking for opinions about how Zulu should be funded then it seems a deal is a long way off.
Not only that, he has to phone Zim to find out when the next test results are due... surely that should be front and centre in his mind but it appears that he didn't have a clue.
His head is still in the clouds!
Thanks Bick, great summing up, very helpful, your last paragraph was somewhat disconcerting, lets hope that it is more than balanced out by all the positives.
We should be getting a new COO, if this person is well versed in comms and exploration we should be in good hands. GR can step back and be more the face and brand ambassador.
Fingers crossed we get a valid candidate.
Many Thanks Bick!! Did any one ask the question of "When will go retire GR???" at all or was all so polite and nice to this 2nd-hand car salesman at ??
Thank you Bickmaster for your detailed report.
Thanks to all who attended hope you got home OK, it was a filthy night. K
Good to meet you Bick ..
Excellent summary Bickmaster. Thank you
That's great, thanks @Bick.
Look forward to the upcoming news and price action.
Hope all these great words and propositions and plans come to fruition. If they do, as "early" investors, we are in a great position.
Thank you Bickmaster 84
Very good of you to give such detailed information from last nights meeting for our benefit.
Thank you for your detailed notes.
Really appreciate you sharing the insight that your were given at the meeting last night.
Thank you for taking the time to post that, appreciate it.
2/2
There was a discussion about funding. Number of attendees suggested a percentage of Zulu in return for funding the DFS to remove funding risk. GR pointed out the difficulty in knowing what is and what isn’t a good deal. For example, would 20% for £6m be a good deal. Other issue is the majors are less interested in 10/20%, they would want control. He is going to get a valuation done to support this going forward. I have my doubts that valuation will be made public but will be a sounding board for GR to use in discussions.
He didn’t confirm the cash position or provide any information on when the next placing will be. Contrary to what some what posted on here, he definitely did not say there wont be any more placings.
He showed the pit shell (resource model) from the previous geotechnical work which has taken place and the additional step out zones being tested now. He is looking at at a large increase in the resource, though all of this is still currently within the existing licence area rather than in the wider EPO area.
Then went through the economics highlighting the conservatism applied to the assumptions – e.g. petalite income based on $400/t when market is $800/t. Also mentioned the ‘hidden benefits’ of the petalite being high grade and low iron and the tantalum.
RHA – Discussions are taking place with minister in relation to the ownership structure. The plan is to capitalise the $20m outstanding from ZimGov in return for increased ownership. GR still believes RHA has a future and is doing more test work. He previous geologist believes an open pit could work at RHA. Biggest issue the market perception that it is a failed mine
given the history over the past number of years.
Circum – not much discussion. Updated DFS due soon. GR didn’t have a timescale for this.
MNH – GR gave overview of the issues with containers and work taking place to assess potential options to get the material the 140km to Walvis Bay. Interestingly the Indaba presentation shared yesterday said ‘cash generative asset’ for MNH whereas in the presentation GR said it ‘should be cash generative’. When GR was closing the presentation he mentioned potential to ‘follow through on’ MNH. I asked him if this referred to buying the remaining 81% of the asset. He said it did. I pointed out this would cost $8.1m based on the cost paid for the 19% already owned. He said he believes he can get it for much less than that. This obviously means PREM have overpaid for the 19% they have and, in my view, also shows the issues with the Bara valuation which was used to underpin the previous acquisition. To me this was the biggest red flag in the whole meeting and shows that despite how much the shareholders want GR to focus on Zulu, he is likely to continue to go off on tangents. It is also contrary to the point he made about PREM being good at exploration but being weak at mining.
If there are any questions let me know.
Bickmaster
1/1
Morning all,
Here is my summary of last nights meeting.
Communication – GR recognises this has been poor and has a plan to improve it.
Capability – GR said PREM has what it needs in terms of exploration capability but recognises need for more technical expertise and has plans to bring in a COO with a strong engineering background. He has a shortlist though some of the candidates wouldn’t be available to start until early 2022.
Zulu - GR said this is taking up more and more of his time and he needs to bring in more skills. He started by giving an overview of the route to get the Lithium out of Zimbabwe when it is mined – Bulawayo to Harare to the Port of Beira in Mozambique and said there is lots of capacity along the rail line. He said this is a big positive as there can be significant costs in logistics and handling and this would keep those costs down.
He reiterated 20.1MT /1.06% Li maiden resource from previous work with target to increase this to 60-80MT which would make it ‘one of the largest deposits around’.
He then gave an overview of the DFS work taking place. Third rig is on site and is operational – approx. 3200m drilled to date with the cores looking encouraging. Said the DFS programme is not dependent on no of drills on site but the time it takes for bulk sampling. He was asked about the programme and how long the DFS will take. He wasn’t able to give a definitive answer but said he previous specified 14 months when EPO was granted and depending on when you start that 14 month period it will be in the right ball park give or take. He was asked more detailed questions about this. He gave a detailed overview of the process from drilling, logging, splitting, quartering, crushing, pulverising, amalgamating/homogenising and forming the pellet which is then tested using LIBS. The process is slow and he is currently doubling the facilities for the sample preparation as it is the bottleneck in the process. Samples will need to go offsite for third party independent verification. This will take place outside outside Zimbabwe as there isn’t capability within Zim to do this. This needs an export licence which takes time to organise but it is important to follow the process to ensure there is a chain of control. Globally there is a backlog to get samples verified as there is a lot of exploration activity taking place.
There was a lot of discussion about the recent RNS and why the market perceived it negatively and when the next set of samples will be ready. He said the other 19 samples are ready for testing but . Initially he said 3-4 weeks, then 2-3 weeks, then after being questioned further he rang Chris Male who is in Zimbabwe and asked him when the next set of results will be due. Chris said a week but GR said to allow 2 weeks. It wasn’t confirmed how many samples will be released in the next RNS.