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You are right PAD, momentum is keep going, volume is also all time high levels. Price as well.
I would expect this will continue from here now, once also market heard more about us we will be advancing further.
I would expect ACP will not be around these low levels for too long, time for double digit figures comes once we get firs binding offtake and funding talks began.
There is momentum with this SP and leading up to the AGM this will rise. You just have to look at the value traded daily to gain a sense of rising interest. Anecdotal evidence is on the boards including the other one where several weeks ago weekend chat did not happen or was very limited. There is now certainly interest in ACP.
Re. when a re-rate might happen, if only we knew.... But it is reliant on the newsflow and it is hard to predict exactly which individual bit of news might make people sit up and take notice. Wishful thinking Monday, good possibility by end of July (with the right news coming out), could be end of September / October?
Key news I can think of is as follows:
1) Submission of the mining license application - doesn't feel a 'big' step, but shows progress and confidence by the project team. Indications are this might happen in the next week or 2, so an RNS soon.
2) Details and confirmation of debt / equity financing - a big boost I think to the SP once this goes through because it means someone external is willing to stump up the cash i.e. additional validation based on the 3rd party doing a load of due diligence. The vides from the Matt Bull call seemed to suggest we might hear something about this in the next month, but that might be me being wishful.
3) Binding offtakes - I don't know how 'binding' a binding offtake is, but I'm assuming that getting these agreements confirmed gives alot more confidence in future revenue streams (for at least the first few years) once construction is completed. I'm hoping there might be news on this by end of July, especially given China has been out of lockdown for longer that Europe has and I believe manufacturers are starting to see demand pick up
4) Awarding construction contract - sounds like lots of good discussions on-going and there are some preferred candidates. Might be a couple of months off?
5) Approval of mining license - Matt said that they wanted to get the license approved in advance of the elections in October.
2) and 5) are the big ones imo, but all of them confirmed collectively mean that the odds of construction starting in H1 2021 become almost a certainty - which would then almost force the SP to re-rate even if the diggers don't move in until May?
What timescales do you personally see regards the re-rate to 10p you mention?
Apologies - just read the “taking stock” thread
And I’ve just realised the error you are pointing out - I’m betting on the former rather than the latter! Wine impacts quality control.... And a smiley face on an iphone shows up a ?? for some reason :)
Hi Piler, I’m not entirely sure what your point is but if you think I’m attempting to deramp then apologies if it reads that way, that wasn’t my intent. I was trying to order my own thoughts - in a balanced way - to help understand why the sp is being held back and what might unlock it.
I very much look forward to the day when they do move the graphite out of Tanzania ??
"Matt Bull being invested 6%+ either shows huge faith in the company or massive naievity. I've hoping (betting?) on the latter."
Didst thou drop thine guard there (perhaps the Strong Buy rec. be a ruse)?
And if Tanzania be unstable, maybe they'll just move the graphite to somewhere else...
I've been invested since 2017 having been put onto this opportunity by someone who was connected to the company. The news since then has always been positive but not always as timely as we would hope. I'm heavily invested having topped up on a number of occasions across the years.
My take is as follows:
-We are likely to start production in May 2021 (once the rainy season finishes), with production 10-12 months after that (March - May 2022).
-Once production is 'stable', we might kick off £30m+ after tax cash per year - which would be 3+ years from now, but profits of 2* current market cap. Big upside, with 15 year life of mine built into the updated DFS which only uses 25% on the resource available.
-Whichever way you look at in, once in production the market cap will be a multiple of annual profit. After tax NPV is ~£230m using a discount rate of 10%.
My view is that we re-rate between now and production, and we re-rate once we start production.
What are the risks between now and May 2021?
The big one is political risk, and the one which I think holds the SP down the most. Tanzania, although much more pro mining now than it was back in 2017, is unpredictable. The sense from the recent call that Matt Bull did was that they have very good relationships, and we've seen from other local miners (Blackrock, Syrah) that licenses etc have been granted. You'd hope that commercial sense prevails, but it is still a risk which I think is holding the SP down. Elections in October; granting the mining license is a big boost, no major political upheaval in October 2020 is another huge risk mitigant. Board appointments also de-risk.
Funding risk is next. Let's be realistic; most of the RNSs talk just about debt funding, but in reality we are going to be diluted in some form. The capital ask is relatively very low, so you have to think that someone with half a brain can see the sense in lending the majority of the funding via debt or providing the equity at a premium to the current SP. Big downside if we have to go full equity at a discount, but that is a low likelihood outcome.
Dilution risk - linked to the above, no shareholder wants their stake watered down. ACP has a habit of running small and tactical equity raises (a +ve) but there is also a big dollop of warrants out there as confirmed by the latest results - 100m with an exercise price in the 2-3p range. Those warrants would bring in £2-3m of additional capital, but it is a 20%+ dilution to shareholders. The SP volatility will be heightened because of these (we can't predict when the might need cash).
Execution risk is the last. I'm not a geologist or a mining engineer, but I 'hope' that these guys know their trade. Matt Bull being invested 6%+ either shows huge faith in the company or massive naievity. I've hoping (betting?) on the latter.
Overall I'm in this for at least the medium term because I believe there is a re-rate coming. 10p is the first hurdle, reassess after t