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Perhaps I had braced myself for worse but the actual problems encountered are nowhere hear as bad as I feared. Rather than any fundamental flaw in the infrastructure, it strikes me as an operational miscalculation regarding salt feed rate and requirement. The failure here is one of contingency and poor planning combined with borderline criminal communication to shareholders.
These issues, if encountered by a competent management, could have easily been planned for and funds raised well in advance at sensible market rates. The fact that the issues encountered are not wholly unexpected during a production ramp up makes this all the more sickening.
As I said, I was braced for some fundamental design flaw or a list of snagging issues as long as your arm. The fact that we are now over a barrel, having to accept lending terms way beyond what could have been secured in the previous fund raise (or the one before that; there's been so many) is a bitter pill to swallow.
In fact, I think I would have preferred to hear there was a major fire/explosion/design flaw; all these things can be fixed. Poor management, on the other hand, is less easily put right.
Unfortunately, the market reaction has been unsurprising for an RNS that says to me simply "more delays, costs, debt/dilution, reduced potential for profits, and increased overall risk - that the management didn't adequately prepare for or predict, whilst sending out messages of good progress". Benefit-risk ratio looks worse from the RNS and the market has reacted.
Well, he's out of luck!
The cat landed, didn't bounce, it flatlined.
If he tried to trade on a bounce...... LOL.
Latino is a trader who is after a quick buck. He'll be long gone in a day or two...possibly even gone already!
Sure, dead cats do bounce, but not that high.
Mind the bounce..
@Latino, you seem to misunderstand the basics of valuing a company.
We don't know how much of a funding shortfall there is. We haven't been told.
We don't know how many shares they are going to have to issue to raise the (unknown amount of) capital needed. So with reduced productivity, over a longer period of time we don't know what income number to use. Even if we could make a wild stab at the MCAP, we don't know what the fully diluted shares in issue will be post this emergency funding. So there is now way of working out the sp.
If this is left for 6 months = disaster!
Who would invest on that basis?
Very bad management IMO. Even the S04 twitter feed is crazy, their description is still showing Q1 2021 for first production!
This all needs sorting now.
Not implying they wait this year end of course, but the point is they have 4-5 months to raise and could be even 6 if they manage cost better. They are not in a desperate position as the some are implying...they just need to get the plant feed programme underway again and best to then fund raise.
You all are aware of grim shades of AIM market statistics, right? That's why it is called "alternative"..
But everyone keeps thinking they can beat it..
Broad portfolio diversification standards in investment are not just for nothing, especially here .. no matter how confident (delusional) you're in making right call about whatever company position is taken with.
@Latino.
If you were to invest, on what basis do you make a valuation to decide?
Awaiting funding, so is this to be a loan? If so what is the cost implication on P&L?
If to be an issue, how much dilution? at what price?
SO where do you pitch the price point to buy in? 16p? 7.72p? (i.e. now) 5p?
You just don't know until the funding details are known. This simply means the only buyers will be speculators/gamblers until we get clarity on this funding. More sellers than buyers means this will keep going down until we have numbers to rely on.
Waiting until year end is a big NO.
Brilliant last paragraph WelshFalcon, just about sums things up. The RNS states that details of funding will be released by 16th August which I feel will not make pleasant reading. Unless I misunderstand ASX listing remains closed until that occurs.
Nope...read carefully they need funding before end of 2021!
From the RNS "As a result of the revised pond ramp-up schedule and associated delayed plant feed salt availability, forecasted SOP production for FY'22 has been reduced and the Company will require further funding before the end of 2021 to continue operations at Lake Way. "
So yes, they need the funding now so that it is in place before the end of 2021.
This sort of woolly thinking and lack of having a contingency in place (for a new plant that may have commissioning delays) is why we are here. So lets just wait until nearer year end shall we, and panic fund then?
It appears, they don’t need the funding yet but by end of year. So they have time to get secure the funding and will start producing also by then...it’s not going bust and most likely change of BoD coming!