The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
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I am not here to convince others of Disko. That is a matter for each individual to assess. All that I would ask is are you looking at JAY through the right lenses at this juncture when the share price is at this low level with potential upside on the Disko project? If you are looking for a copper-bottom guarantee, forget JAY, and move on. For Pete's sake, we are looking at an early-stage junior miner who is still in the exploration stage. It therefore boils down to what Risk-Reward Ratio is acceptable, taking into account one's risk tolerance depending on the personal circumstances and investment goals. That's enough talk of the 3Rs!
Turning to JAY, I am expecting Disko to bring about a profound positive value change in the company in the short term and I am happy to wait patiently for two key events to play out and then take stock again:
1. Announcement before the end of March 2024 of a fieldwork programme including a drilling campaign this summer.
2. Announcement before the end of 2024 of the assay results following the drilling campaign.
I promise to return to this post before the end of March 2024 and then again before the end of 2024.
Back to the interview. Rod McIllree's words: "It's not something I am prepared to go into too much. KoBold is a very sophisticated organisation and they make their own decisions and they are very considered and competent people. We hope to have some news on some upcoming activities in 2024 but I leave that for the Managing Director (Eric Sondergaard) to elaborate" (4:00 mins into the video - https://youtu.be/i_9UOExW7Wc?t=5 )
The above is just one example of where RM was careful not to tread on KoBold's toes while they are considering Stage II of the JV but at the same time RE did his best to convey the positive message that there would be work activities at Disko in 2024. I can produce further excerpts from the interview where he conveyed similar kinds of positive messages about Disko but obliquely (e.g. forward wind video to 13:00 mins; 16:00 mins and 19:00 mins).
Patience is not the ability to wait, but the ability to keep a good attitude while waiting.
Thanks for the extensive post. Really informative and i do agree that Disko is where the value is
Good to see the book looking much better now. Won't take much to see this heading into the 0.5s
Directors have said they will be buying more
If so that should be another huge sign of confidence. They have already added at 0.4p and Rod took an extra 10m at 0.5p
The yhave to have a good plan and be confident of this trading over 1p quite easily
Bear trap chart.....cant beat them booties
a bit like he1 the other week at 0.19.....
Yea plenty happy to be negative or bearish down here
Cash in bank. Directors skin in game. Oversold. Stupid valuation given their assets
Disko going to be in play soon along with Kobold. Divesting other assets to bring in cash
It could easily be a star performer of 2024 from these levels
Investing I'd be careful being so bullish on this, at least until KoBold actually confirm they will actually drill this year. If they as smart as everyone says they are, why would they spend $11m to get 2% when they could do nothing and buy Bluejay's 51% for $6m next year, and own 100% of Disko?
Poor form hemo, you sold and now warn others. I had you down as better than that.
Bluejay could of course drill themselves and keep 51% .
I don't see it as poor form from Hemp, it's speculation - which is what most people post on here...
My own speculation on that is Kobolds reputation would take a big hit if they did that, remember Bluejay are not Kobolds only partners and a move like that would make others skeptical of doing business with them.
Not only would reputation (trustworthiness) take a hit but also would call into question their tech, they spend all that money all, identify large targets in Disko and pump out statements like most significant Nickel discovery in 100 years and they don't follow it up...
Add on to that, Norilisk Nickel is Russian and are so large a player they almost set the prices for Nickel concentrate plus Nickel is on the Americans critical minerals strategy - American strategy would love if Kobold can unearth High grade Nickel in a safe jurisdiction...
I remain 70/80% confident that they will drill this year.
I don't see it as poor form either, and the reason being I was and always am transparent. Poor form would have been not telling anyone I was out. Poor form is RE stating on numerous occasions KoBold HAD agreed to drill when they clearly haven't..yet. Don't get me wrong, I think they will but as I know to my cost here, just pointing out nothing is certain.
Well our new/old management team have done brilliant so far! lol.
IvRoche (1 February 2024 at 09:51): "My own speculation on that is Kobolds reputation would take a big hit if they did that, remember Bluejay are not Kobolds only partners and a move like that would make others skeptical of doing business with them. Not only would reputation (trustworthiness) take a hit but also would call into question their tech, they spend all that money all, identify large targets in Disko and pump out statements like most significant Nickel discovery in 100 years and they don't follow it up..."
I agree with the central tenets of IvRoche's message (i.e. reputation, trustworthiness, etc must matter for KoBold). My view is we should not assume every company is unscrupulous - https://koboldmetals.com/ethics
On 31 Jan 2024, I posted a note under this thread and said I was happy to wait patiently for the following two key events to play out and then take stock again:
1. Announcement before the end of March 2024 of a fieldwork program including a drilling campaign this summer. I based my expectation purely on the fact the 2022 fieldwork program was announced on 24 March of that year (with hindsight it was wrong to have placed too much reliance on the past timetable).
2. Announcement before the end of 2024 of the assay results following the drilling campaign.
Moreover, I gave an undertaking to return to the post before the end of this month and then again before the end of 2024. So, here I am as promised after the market closed on the last trading day of March (IvRoche - You can now see why I could not post this note any sooner and that I wasn't being cryptic in my earlier post for the sake of it.).
I attended the General Meeting in London on 5 February 2024 and posted a note on the same day. I also posted a note a few weeks ago on March 13th. Based on my research, I intimated in the two notes that it was unlikely we would have the Disko update in March. I am therefore not surprised at all that there has been no update this month.
I continually review my views in light of my ongoing research findings on JAY. Consequently, I have changed my view that the Disko 2024 fieldwork program update is now likely to come next month (April) - if not, then sometime in May (Yes, I repeat, it could even be May). The Disko 2022 fieldwork started in May and ended in September. So even if the JV decides to carry out the 2024 drilling activities as late as August/September that would give the JV some four/five months to complete the plan for the fieldwork program and get everything ready for the groundwork. I was told at the General Meeting that drilling rigs were already in place in Greenland and could therefore be moved to the drilling locations swiftly. I suppose if additional rigs are required they will have to be brought in but I did not check this. I must add that it is possible to carry out drilling activities even as late as October in Greenland. That’s exactly what Eclipse Metals Ltd did in 2022, albeit with their project located much further south of Disko - https://tinyurl.com/5c28ndv5
Moving away from the subject of fieldwork, I am of the view that the current JV would most likely be revised (> 90% chance). Furthermore, I will not rule out the possibility of a major miner joining as a partner sooner rather than later (at least a 50% chance). Whatever JAY is working on at the moment cannot be hurried just because shareholders are impatient. Moreover, I am sure no shareholder wants to see another aborted maiden drilling debacle like what happened in 2022 by rushing things unnecessarily.
Interesting times could be ahead at last!
"The pessimist sees difficulty in every opportunity. The optimist sees the opportunity in every difficulty".
Fair enough, but what are your thoughts on the lack of news on the sale of all the other assets? Been some time now, surely?...
Sometimes, a pessimist is an optimists' realist....
Take a look at the note I posted on 6 Feb 2024 at 13:53 where I commented on asset sales. I suggested a buyer for the Finnish assets could come from farther afield. These things can take time but please do your own research. I am in no hurry.
LWHL: re: sale of assets RMc stated himself in the interview that he did not expect a quick process and would likely take many months to complete. Expectation of any news re: sales is likely from June onwards not before.
Ashton: All fair points, I largely was aware of already, however while they can announce whenever suits them but still have to give 1 months notice to the Greenland BMP - I think it would be a big mistake taking a risk on leaving exploration drilling late as they run the risk re: bad / lack of day light limiting operations. The expression make hay when the sun shines springs to mind.
Greenland BMP Link Below:
https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://govmin.gl/wp-content/uploads/2019/09/Rules_for_Fieldwork_and_Reporting_regarding_Mineral_Resources.pdf&ved=2ahUKEwid5M_A35eFAxVRQUEAHQ6fAWYQFnoECBQQAQ&usg=AOvVaw2Dk3ImEa6TLqaesuMtlxu9
Daily Satellite Imager - Sea Ice Conditions:
https://zoom.earth/maps/satellite-hd/#view=69.67391,-53.41699,8.06z/date=2024-03-25,pm
Fair enough, although I still think the lack of detail concerning the cash runway at the very least, is not particularly shareholder-friendly. No updates on salary reductions etc, unless I missed it.
Ah well. If you guys are satisfied, then all good. Have a good Easter all.
Lol...Jeez LWHL - it's pretty safe to say none of us are satisfied but no point selling.
Fair point on cash runaway, but based on last cap raise and sacking a tonne of people - safe to say we have about 9-12mths runway.
Have a good Easter.
LWHL - Ref your question to me, "Fair enough, but what are your thoughts on the lack of news on the sale of all the other assets? Been some time now, surely?", IvRoche has responded with a reference to an interview with Rod McIllree. I presume you have not seen the interview since the answer to your question actually lies in that interview. That is, RM was expecting the Finnish assets to be sold (hopefully) by mid-summer 2024. Forward wind the video to 16:00 mins - https://tinyurl.com/yc8xfhf9
Apart from the Finnish assets, I am not overlooking the sale of the Thunderstone asset. There is the danger that too much pessimism can blind people to overlook the potentials of JAY. Please see my next post.
Section 4.02.02 of the document you have shared says; "For approval of drilling operations the application form in enclosure 4.01 shall be forwarded to BMP, filled in for all sections, IF POSSIBLE not later than 1 month before the drilling operations are commenced." - https://tinyurl.com/4kejpbmz
As you can see there is some flexibility over the 1 month notice period. That said, the one that I will be keenly monitoring is applications to perform field activities under a licence. Such an application must be submitted to the MLSA for approval by no later than 1st May of the year in question, although the authorities can extend this timeline if needed. So again, there is some flexibility here. I am expecting a Field Activity Approval Licence to show up in April/May.
There is something else I want to share with you in response to your comments to LWHL: "Fair point on cash runaway, but based on last cap raise and sacking a tonne of people - safe to say we have about 9-12mths runway."
I won’t be surprised if we have an announcement of a proposal to list Disko (to be precise Nikkeli Greenland A/S) on the stock market. Obviously, KoBold will have to consent to such a proposal as it owns 51% of Nikkeli. The fact that KoBold themselves have recently disclosed that they are prepared to consider listing their own shares in three to four years bodes well for them giving consent to the listing of Nikkeli so that when they list they will have an asset on their books (among their other assets), a listed subsidiary company, namely Nikkeli Greenland A/S, with an established market cap. All that said, I am not expecting the Nikkeli listing announcement to happen not until after the 2024 maiden drilling campaign and the follow-up assay results have been successfully completed, assuming of course JAY confirms the two events.
How will the share price react to the news of (a) Drilling in 2024 (b) A major miner joining in as a partner for the Disko project and (c) Listing of Nikkeli Greenland A/S on the AIM, Toronto and US markets.
"Dream on", a pessimist might say!
https://tinyurl.com/yvthswpa
A listing of Nikkeli Greenland A/S in my opinion is a huge huge stretch - unless the maiden drill program at Disko yields something off the ritcher scale. However, we are not there yet on confirmation of a drill program, I still believe it will happen this year - but the should get on with it.
Back to the huge stretch listing of Nikkeli Greenland A/S. Jay management have stated they are a single asset company and are disposing if other assets - so Jay would only have 49% of Nikkeli (Disko) and no other assets and then would list Nikkeli - Jay shareholders would get even more completely shafted than we are at present - holding shares of Jay with zero assets and a diluted shareholding (due to listing) in Nikkeli (Disko).
Best scenario, from my perspective which is also a stretch but probably better for shareholders, maiden drill program in 2024 and potential program in 2025, assuming assays are good (grade and tonnage) - Nikkeli (Disko) asset valuation is substantially increased - Jay dispose of a proportion of their holding i.e. 24% (leaving them with 25% and agreement of no ongoing financial commitment) and Kobold do something similar or just exit completely.
This means Jay retain interest and exposure in Disko with no financial obligations, have enough capital to develop an asset within whatever is left of the retained portfolio.
IvRoche - It is always good to look at alternative scenarios, so thank you for that. I am enjoying this meaningful conversation so let's develop it further. For ease of reference let's call the two scenarios Option 1 (Listing) and Option 2 (Non-Listing). Also, let's name the company to be newly listed as Greenland Nickel.
Option 1 (Listing) - which is what I have suggested - would provide several advantages. Depending on how much capital is raised via the IPO of Greenland Nickel, the funds could support the development of the Disko project for many years without the need for KoBold or Bluejay to inject their own money into the project. Senior managers of KoBold Metals would join the Board of Directors of Greenland Nickel. For example, either Kurt House (Chief Executive of KoBold) or Jeff Jurinak (Chief Operating Officer) could become Executive Chairman of the Board with Eric Sondergaard as Executive Managing Director [Note: The two KoBold managers are already on the Board of Nikkeli Greenland A/S - see below for details of the full membership of the Board]. This would bring much-needed management credibility and strength to the newly listed Greenland Nickel. This should in turn attract new investors in greater numbers to the company pushing up its share price. Since Bluejay shareholders would have received new shares in Greenland Nickel proportionate to their Bluejay shareholding, their investment value would rise correspondingly. One of the biggest advantages of Option 1 (as I see it) is KoBold would be more fully committed to the success of Greenland Nickel (its subsidiary company) since they would be answerable directly to the shareholders of Greenland Nickel - unlike under the present situation where KoBold is not answerable to Bluejay shareholders. Moreover, under Option 1, I would also expect Greenland Nickel to have more ready access to the resources of KoBold (e.g. Geologists, Data Scientists, etc). Finally, Greenland Nickel will not have the legacy baggage of Bluejay as it would be a fresh company on the stock market(s).
I don't see Option 2 (Non-Listing) providing all of the above advantages.
Current Board of Nikkeli Greenland A/S: Kurt House (Chairman); Eric Sondergaard; Jeff Jurinak and Rod McIllree
NB: As I have already stated before, I would not expect Greenland Nickel to be listed until both drilling and assay results have been successfully completed at the Disko project.
And therein lies the difference between the two options. "Funds could support" - realistically Disko wouldn't be fully permitted for atleast 8/9 years - I don't have the figures to hand but between drilling to prove up the resource, PEA, PFS, FS, Permitting etc etc it would cost mid to late 10s of millions -> Any stake Jay retained would be diluted and diluted over and over. I'm addition, while you put down your preferences for management -> we could very well end up with an analogue of current Jay management.
Re: My option is more akin to a Turquoise Hill type option. A major, i.e. Anglo, takes out Kobold and a chunk of our slice (no further dilution and no additional financial commitment / obligations for Jay). Plus to your point: the major would then be answerable to actual shareholders and would be seasoned at taking projects forward.
IvRoche - You say your preferred option is a major miner (e.g. Anglo American) takes out a chunk of KoBold's 51% in Disko or even the whole of 51% (i.e. KoBold exiting completely) and also a chunk of JAY's 49% (e.g. take out 24% leaving JAY with 25%) with no further dilution and no additional financial commitment/obligations on the part of JAY. Who can discount your option (or some variation of it) since none of us here know for sure what’s being negotiated behind the screens until JAY makes an announcement. I have been advised to be patient.
You say: "I still believe it (drilling) will happen this year - but they should get on with it." What makes you feel so confident about drilling in 2024?
The recent RNS on 12 February 2024 said: "Amidst these cost reduction measures, Bluejay is focussed on its commitment to deliver critical work programmes at the Disko Nuussuaq project, where it has an ongoing joint venture with KoBold Metals. As we progress, our PRIMARY AIM is to deliver on our critical work programmes, creating substantial and enduring value for our shareholders.'' - https://tinyurl.com/3sukv2uw
Eric Sondergaard (MD) has nailed his colours to the mast with the above statement. We now await to see whether he delivers on it. April/May is when I am expecting an announcement.
The recent departure of operational/logistical staff such as Hans Jensen and Thomas Levin is being interpreted by some posters here as not good signs for a 2024 field programme at Disko. There is another way of looking at it. Maybe if a major miner becomes a partner they would provide such expertise. No one here knows for sure how this is going to play out and it would be unwise to rule out one option at the expense of another.
In the note I posted on 28 Mar 2024 at 19:37, I said: "I will not rule out the possibility of a major miner joining as a partner sooner rather than later (at least a 50% chance)." I did NOT say this on a whim.