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And I guess that before taking a decision on the put, we would want to know about the 15% and exercise whatever leverage we have? So that would make your £9m receipt a little contingent/uncertain at this point? I also suspect JV may be in this for the longer game - it looks like there is more to play for.
Hi Quad,
I believe that we have the right but not the obligation to sell our 5% stake to Ascendant within a certain timeframe after the DFS is delivered. So I’m not even sure that we need the full project to be financed at that point, as long as Ascendant have enough liquidity to pay us 5% I think we can ask for our cash.
Obviously these things are complex so I could definitely be wrong about that.
Florence, the observation about April's new target date for the DFS ( it was due by June) can only help move things along. We might all hope the numbers will surprise on the upside?! I also noted that Brennan referred to certain recently drilled areas being excluded from the DFS, those would be future icing for the cake.
I am unsure how the put option might be valued - and can we be sure it will be exercised (I forget its terms)? Also, if I recall correctly, MAFL's future financial interest is struck excluding the project financing costs (which would remain for ASND's account) so MAFL is only interested in the fact that financing has been obtained and not in the terms of that financing. We also have the 15% interest waiting to be resolved (no doubt being worked upon but perhaps impacted by the imminent DFS?).
An interesting quarter ahead. GLA
https://youtu.be/8w8EoHGUarI
Suggests that we will have DFS by end of April. Which will be more than the PEA. Although unclear if this is more in value or minerals. It’s possible that mineral content could be higher but post tax NPV could still be lower due to increasing discount rate from 8% to 10.5%. My guess is they more or less cancel each other out which would leave the put option valued at about 9m GBP.
Good to hear that they already have multiple parties interested in funding the project in case we decide to hold our 5%.
Given that we already have 5m of liquid assets, a near certain 9m incoming within a matter of months and some interesting but hard to value things happening at Golden Sun… I’d say you’d be hard pushed to make a case that the equity value of MAFL right now is any less than about 10m.
Thanks for the reply - agree - it’s not really possible to buy - I’m in the same boat - got cash to add , just waiting to see if an offer price comes in around 17p and will nibble as others get bored .. but it’s stood pretty firm over the last couple of months .. not exactly riveting but making good money never is
GIVMESUNSHINE,
The after tax PEA NPV is $246m based on an 8% discount factor. MAFL will have the option to sell their 5% free carry based on a 10% discount, which reduces that NPV by around 10%. I think that the Feasibility Study will show an extended life of mine so the value attributable to cash flow from years 9, 10, etc will not add that much to the NPV [the 10% discount is a killer after so many years.
To me, it is prudent to value the 5% at around $12m / £10m as a cash option later this year if JV thinks it is wise to take the cash and pursue other projects. I make that a m/cap of around £17m or 48p a share with the potential for an extraordinary dividend or other future investment with a share price a little under 40p as shares like this typically trade at a discount to assets.
There is potential for other news as well; I am keeping an eye out for if/when too many get bored and the price drops further due to selling pressure.
What’s your thoughts on the PEA v the infills we’ve had to date - I’ve tried to compare the two .. not easy task but in general all the drilling done exceeded the PEA and most metrics have improved.. PEA appears to have been constructed in a conservative manner
Yup :)
'Results of the final variability, step-out and infill drill holes in the South Zone will be included in the resource update to support the Feasibility Study targeted for the end of April 2023.'
That 5% just got a little more valuable.
ASND press release [Feasibility Study to be completed end April 2023]
https://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2023/Ascendant-Resources-Announces-High-Grade-Copper-Assay-Results-Supporting-High-Grade-Copper-Corridor-at-the-Venda-Nova-South-Zone/default.aspx
Highlights of the infill/drilling results include;
ST_27:
4m @ 2.63% CuEq from 414m; and
9m @ 2.29% CuEq from 568m
ST_30:
5m @ 1.99% CuEq from 339m: and
3m @ 3.93% CuEq from 395m; and
10m @ 1.97% CuEq from 423m
ASND was another example of a well considered investment by MAFL at the right time. I'm looking forward to seeing what else in 2023 is worthy of investment.
Ideon was another good example IMO, the recent cash investment they have seen by Playground Global shows others agree with the future potential of the business model
Market seem to be warming to ASND now, fresh 52 week high.
I knew it looked a bargain a few months back. Oh well, MAFL hold just over 2.2 million shares.
Cerrado Gold (TSX.V: CERT) today announced full year 2022 production of 53,672 gold equivalent ounces (GEO), up 23% compared to 43,559 GEO produced in 2021 and at the top end of guidance range of 45-55,000 GEO.
The company said that in 2023, production is expected to be between 60,000 – 70,000 GEO at all-in sustaining costs of US$1,100-1,300 per ounce.
https://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2023/Ascendant-Starts-Drilling-Anomaly-D-Exploration-Target-With-Analogous-Signature-to-North-Zone-Massive-Sulphide-Deposit-at-Lagoa-Salgada/default.aspx
Unfortunately this will not flow into the next Feasibility Study on which MALF's cash-out option will be based. But it will influence any decision made by JV on whether to take the cash and run. As much as I like the idea of some sort of payout I am in no hurry if there is more value in waiting for metal out of the ground.
Ha. See what I meant.
Opened half a pence lower despite the late buy yesterday and another almost 50k buys in the morning but still in the red.
Market makers just playing with the spread really as the buy price is pretty much unchanged since the start of the week.
Yep MAFL is sitting pretty so no need for any worry.
I see a 75k buy was delayed today and only printed after market close so watch out for market makers playing the odd game or two here.
News, that's all and it will come. And we need patience!
I bought some in December and I'm in profit, but there are just a handful of trades per week. What do we need to kick-start this ?
This FT article caught my eye
https://www.ft.com/content/d34dfd79-113c-4ac7-814b-a41086c922fa
https://txtify.it/https://www.ft.com/content/d34dfd79-113c-4ac7-814b-a41086c922fa
Txtify open FT links if the FT link will not open for you. The article is about the rise of the 'petroyuan' and that the renminbi will become convertible into gold. It must make MAFL's Golden Sun investment shine a little brighter. This sentence was of specific interest:
"What’s more, the Chinese have offered up something of a financial safety-net by making the renminbi convertible to gold on the Shanghai and Hong Kong gold exchanges."
Notes with a few valuation possibilities
https://twitter.com/Bazreynolds9707/status/1610255233858568192?s=20&t=SAoPb3brpNgAXaDjTsKoqQ
Just having a breather if you ask me and may spike to the 20s once a few buyers coming in.
I doubt there can be any serious retrace as in the past, not with the known knowns that have occurred going into year end and which were not included in the recently released report.
There’s a lot of value developing here in my opinion.
7247 sells versus 25000 buy and sp drops 4%. Work that out!
MAFL is a ramp free company - there are no bills to pay that there are no funds for nor are there exploration costs that need a placing for. No ramping and little superfluous communication from management means there is little demand at the moment.
There is some Golden Sun news expected soon which might create some short term demand but the share price might aimlessly drift downwards in the mean time as short term speculators see sells and decide it is time to chase another shiny rainbow elsewhere.
Fine by me as I am always interested in grabbing another trading opportunity is the price drops far enough whilst we wait to see how the feasibility study at LS pans out and whether MAFL's remaining 5% free carry gets sold at the 10% discounted cash free value.
The BIG question to me is if there will be a distribution to shareholders if the 5% is disposed of as it would support a distribution of the current share price and leave a healthy NAV. Does JV want some retirement money in cash for a ski villa?