Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I wonder if the greenans are related in any way to the fighting Fitzpatrick seems they have got a pretty sweet deal
Well I'm glad you understand the deal HM because my understanding has just gone back a step.
44rj
I am criticising the clarity at the moment.
It’s clear from the comments on here that average retail investor Do not understand the structure of the deal. There appears to be a bit of smoke and mirrors on the companies part IMHO.
Do we really need a 30 page presentation for such a small deal?
RNS is not detailed so you have to dig through very dense presentation.
As I have said, the deal itself is OK, they just need to rapidly scale to cover the overheads and start generating free cash flow.
Mcr - taking over some debt as part of an acquisition is not uncommon at all. It has allowed the purchase of the asset with reduced "upfront" capex. All good in my book. The project is cash flow positive with proven empirical data, so again, all good in my book.
Also, it is absolutely normal to incur costs to administer the acquisition. Due diligence work, asset condition reporting, contract development, negotiation costs, etc etc. This work doesn't come for free. The amount for this transaction sounds perfectly reasonable to me. So again, all good in my book.
As I've said before, this is the right size transaction for SCIR at this stage, and provides a springboard for future acquisitions of similar assets. This won't make us rich overnight, but that's not the point. SCIR are attempting to build an asset base in a comfortable and controlled manner - let's see how they get on and criticize in future where appropriate, which is not right now in my view.
Highland. The 700k to EAG is a cash payment I believe for the 50% stake in the JV.
The 300k to reduce the loan down from 2.2 million to 1.9 million may well be repaid to SCIR. The presentation lacks clarity.
The 200k transaction costs have gone to gneiss and other assorted leeches.
SCIR have taken on half the green an debt (so 950k) through their 50% stake in EAG. Only gneiss can have dreamed up this house of cards!
SHS- Not quite. If you look at Companies House, Greenan has an existing loan of £1.9m on its balance sheet. EAG has agreed to buy Greenan for £700k. SCIR is loaning EAG £1.2m for the deal. £300k will be used to reduce the Greenan debt.
I have read the deal as costing £1.2M in cash which Scir has & that EAG gets a free ride.
The £1.9M is a loan with a 10% interest rate. Which looks like covers the £200k in costs.
I don't know if any questions drilled down on this deal today. Can anyone who listened shed some light?
Greenan has £2.8 million of liabilities so it is even worse than I thought.
Also forgot about our 200k in costs.
So all in this asset is costing us £3.7 million?
Wow.
No worries SHS.
I could be wrong but I think the £1.9 million is bank debt that we are taking on with the business. So total cost is £2.9 million. Not that great a payback period on this investment.
I’ll be honest the slides are basically unreadable, and the RNS fails to mention it so I could be wrong.
Just re-read my post & it does read as though I am saying next year Scir will post a net profit. Thats actually not what I meant, I was saying it would just be nice to reach that point.
As for leveraged, I was of the understanding that this was an all cash deal from current working capital balance.
Shs - scir will not be making a profit any time soon. Take a look at the losses from previous periods for an idea of how much money is flying out the door
Shs - the deal is leveraged to the hilt! £1.9 million debt we are taking on as part of the deal?
Also the cash flow here is not material when comped to our costs and also comped to what we can dream of getting in 2025!
The deal should be seen as a step in the right direction but requires rapid scaling to get us out of the bottomless pit.
I still haven't listened to the podcast yet so I don't know what was said, even if it was just a rehash; I would like to hear the questions submitted & answers provided.
As I understand it the deal hasn't been completed yet so anything can happen. But my confidence in the BOD is growing. The way I am looking at this is, instead of waiting till 2025 for cash flow. Its now weeks away.
Scir will now have an asset it can leverage or borrow against & has will have an income which can provide so Capex.
It will be nice to see year end statement where Scir is actually making a profit.
I don't know what there is to be downbeat about.
I think we must be or close to being threw that churn so past funding moving on ….
I think the only way to prove thumbs up is to buy the share and we can see not a lot happened but early days, if He1 rises above 25 and Licence & Seismic news drops drops then maybe we get interest here MAYBE hmmm
Well not quite true is it Chris? They issued shares recently -around 34 million?
And in October last year?
Also they spunked £60 thousand to the subscriber to set the thing up in the first place? Plus gneiss fees?
Always need to watch the back door with this mob. Always seems to be less in the coffers than one would expect!
No worries vike, they just said the same ref Ruvuma, they are engaged with parties but will continue to fund development unless an offer that is worthy of putting to shareholders is made.
Happy with the initial modest investment myself, a cash generative asset on the books without a placing to fund it. Is that not a first ever at SCIR + SOLO?
Yes indeed shs- 10k a month will just about py for the director champagne at the Christmas party.
They now need to QUICKLY scale the business to support the bloated carcass that they have built.
Was anything mentioned about the transaction costs? Gneiss involvement?
Really this is the sort of transaction that the BOD should manage themselves IMVHO.
Being as first revenue is expected in 2025 from Ruvuma, this diversification may be generating more reliable cash flow by then.
I don't want to get ahead of myself or sucked into a fairytale but cash flow is cash flow. If this opens the door to more deals or provides a solid platform for financing, it gets a thumbs up from me.
ShouldveSold nice one LOL, I`m sure the board know what they are doing and we do need some recurring cash so will have to wait and see now :o)
OK thanks @cp. I might skip the replay then and wait for the Ruvuma main course.
Yes the £450 PA EBITDA is correct, although they believe they can quickly add another 10% to that number with simple improvements.
@Vike, it was basically a walk through of the presentation that is up on the website.
Where there's muck there's brass!
Well even if Scir's net is £10k per month, that is £10k more than it is currently producing.
It is hard for me to get excited about an business I know nothing about. But evidently the infrastructure is in place & already producing income. That I can get excited about.
This is a solid first step into diversifying away from Tanz which I am very upbeat about :)
I was expecting Scir to dip to .9 but with this news & the HE1 progress, my outlook is changing.
I may have to take this out the bottom drawer & put in the drawer second from bottom.
From memory Greenan is £450k EBIT per annum.
ShouldveSold yes that seems to be around the figure but not sure if it is net tho