Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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The thing is Trin shareholders are getting really undervalued shares. That's why the transaction makes sense to them. They aren't losing any upside by selling because they'll still own great assets that can actually utilize their tax loss.
199 million as of q2 2023. I like the acquisition. Only wish we could pay in cash and not valuable shares but as someone else wrote; if they can take advantage of the tax shield, this is a case where 1+1= 4.
Luckily this merger is not one where the Trinity incumbents get to call the shots, clearly Touchstone is the one calling the shots, they have made it clear they see big opportunities for synergies (so removing duplication of non-execs and consultants). Touchstone with about an 80% success rate on drill tests seems to have this sorted and the business is cash flow positive and in most cases seems well run, the excesses that may have been in place at Trinity will be address and the benefits to both sets of shareholders will be additive and benefit both...
1. Top heavy Trin execs and board disappear at closing. Cost savings there.
2. Jacobin failure is fully factored in to lowish price TXP is paying for Trin. TXP will be doing all capital allocation going forward.
3. Financial hedges will largely roll off before closing. TXP will be making all hedging decisions going forward.
4. Cyber threats are ubiquitous. Trin computer systems will disappear as Trin operation is consolidated with TXP, reducing cost and vulnerability, if TXP systems are in fact more secure.
This won't close for 6-9 months. TXP needed the cash available for 2024 capital program.
I’m not sure Touchstone made the right decision in making an offer, or at least I believe they may have overpaid for TRIN.
1) Top heavy with Execs and non-execs – they appear to be quite top heavy with a lot of foreigners both at the executive and non-executive level all of whom are probably calling quite high salaries with no results to show. Why have they brought in all these foreigners I’m seeing on their site? Sure these people may have worked well in foreign geographical regions but they wouldn’t have a clue about the local subsurface developments or what’s required.
2) Jacobin Failure –
a. Surely, they should have put a cap on how much to spend on Jacobin instead of letting the costs run to $8 mln USD. These funds could have been used to maybe maintain current infrastructure instead. How did the petroleum and geological teams get the initial expected production so wrong for Jacobin? Yes it was a much greater depth than they tested before but there’s enough data on T&T and enough surrounding prior well developments to make proper gauges of what realistically they could have gotten out of a highly matured oil field. I think they got too greedy and expected to pull a miracle well.
3) Financial Hedges –
a. The hedging they had implemented for 2022 was absolutely crazy. My fear is they got too greedy again and didn’t consider the potential for prices to exceed what they became at the time. But they should have gauged their exposure better. They already knew before that what their exposure would look like, there’s no way they don’t have some sort of financial knowledge to test the limits of what they would have given up prior to the execution of the instruments. They know they aren’t a huge company that can offset such losses. Any little upside is what would have put TRIN in a much better position.
4) Cyber-attack
a. I’d genuinely worry about what the hackers could have gotten from the company at that point in time. Any additional access logs to data or software that may be corrupted and then transferred to Touchstone. Provided all of TRIN’s past failings in I wouldn’t expect much from their IT analysts and teams either.
Just trying to catch up on what’s been happening, maybe extended loan is just a security blanket incase Trin doesn’t go ahead.
When do Trin SH have to vote?
Sssshhhhhh we want this deal to go through .
Why did we go for the extended loan facility if we knew of this deal with all Trins cash ???
All quiet on the TRIN chat, last post on the 2nd May at 08:52, would have thought they would have been back and forth over this deal so surpising so little chat...
Good post johno @ 11:11 3rd may
...just catching up
Jb -, somewhere in Bolivia
Be greedy when others are fearful.
Today trading at 67 cents...Fifty percent upside from here to $1 CAD...crazy.
If you want to know what Trinity’s tax losses are all you have to do is look at page 91 of the 2023 Annual Report - see https://trinityexploration.com/wp-content/uploads/2023/06/Trinity-EP-2022-Annual-Report.pdf. There you will find this:
“Taxation losses at 31 December 2022 available for set off against future taxable profits amounts to approximately $227.5 million (2021: $234.6 million), with tax losses recognised of $24.9 million at the end of 2022. These losses do not have an expiry date and have not yet been confirmed by the Board of Inland Revenue (“BIR”) or His Majesty's Revenue and Customs (“HMRC”). Tax losses carried forward by companies engaged in petroleum production business in Trinidad and Tobago are restricted to set off against 75% of the otherwise chargeable profits in a year.”
No mention of the trin tax losses which on the trin board have been estimated at $166million. If true makes the deal much more attractive.
By that time we could be hooked up with huge production so I wouldn't stay out if your motive for selling is the deal wont be done till Q3 ... we could well be 60/80p by then and the TRIN shareholder will all be 100% committed to signing of the deal
Looks like end of q3 a good time to return here. Gla
Johnoxxx 💯 spot on
Great News wooster have a good one .
Thanks Supersport for your tip yesterday. And for sparring with Julio or whatever his name is I sold a chunk of TXP as advised and bought into Hex. Have a great weekend I am taking my missus down to Naples. Gla
Do you want him really sell it to TXP shareholders and big up how much of a bargain we would be getting? Clearly not, he’s going to keep fairly quiet until the deal is done? Surely that’s common sense.
JM used a good example on discord:
Maybe he doesn't want to say too much before Tiniry shareholders vote ?
“Have you ever bought a used car and been jumping all over excited when negotiating the price or before signing the contract? I haven't.“
And also a good post by H&H
“ To be fair he needs to not show how excited he is about the deal he secured until TRIN shareholders vote it through, and probably not until the deal is completed, otherwise they might start asking for a much higher offer. The real "sell" should start in Q4 when he shares the operational plans for the combined business for Q4 and 2025.”
Wow that was short and sweet, 15 minutes of Paul Baay talking and no Q&A, basically reiterating the RNS. Have to say the new PB's lack of interacting and excitement is really another step in the wrong direction of his approach for me, it's one thing to change from the 'wall of cash' mode to the 'I am going to show literally no excitement or keeness at all', somewhere in the middle Paul and vary it based on how exciting the news is, oh well have to wait for Q3 FY24 for the deal to complete anyway so we got time, Q1 results in the next week or 2 should give us a better idea of the direction of travel for the current business tho...
They participated in the fund raising some years ago during the heady days of a 95p share price
Premier Miton has had a big holding for ages.
What a waste of time with that "investormeet". Never seen him so uninspired - nothing new; no discussion, just robot reading.