We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Surely for Mkango it is about securing the MDA that works for the potential partner/owner financier of that project as well we ain't paying for that mine with our Mcap and bank account .....
You would think by this time they have such a deal/s partners lined up.... So it is down if the MDA is acceptable enough to get those vital deal/s over the line to make the whole project actually happen...It is all about the money one side is being a bit too greedy for the other but yeah time is on Malawi's side not ours
I agree the recycling business has plenty of merits, but unless they can get the next fund raise away at a decent premium to the price today for that line (seems unlikely in this lending climate IMO), then we are going to need to see the BOD secure a deal with the government for what a lot of the current holders are here for in the first place - the MDA.
They have spent plenty of money progressing it to where it currently is. I appreciate that. It was a key feature and justification for the last raise. Therefore, failure is not an option and will not be acceptable.
It seems increasingly likely that they are going to have to bend to the will of the Malawi government, or at least hopefully be able to negotiate eg an 8% deal. I'm sorry, but if anyone thinks that we are going to win this battle if we hold firm...given the geopolitical stuff in play, then you are almost certainly wrong. I pretty much said this a few months ago and here we still are.
I just hope the BOD know this. They still retain my faith. For now. It is starting to falter though, I will admit. Tick tock!
Speaking from experience, the world becomes an awful lot easier to understand when you start to question not what you're being told but why you're being told it now ;)
Plenty of Africans would like a piece of MKA too ;)
The thing is Malawi has put that out into the open now so... it is a question that can now be asked of our BOD in the coming webinar :)
unless news trumps it... the fact is we don't know how progressed the MDA is ... can drop any day... It's certainly not off the table as it were
The recycling ought to be the most exciting as that will bring in profits years before any mine and could really take off fast if those US plants are announced but the market wants that MDA otherwise we are stuck with this derisory SP/Mcap and left wondering when is the next raise and at what lower than SP price
That may or may not be true but yes, the truth is usually in the middle somewhere - I don't think much of either Malawi's claim to 10%, assuming that means a royalty rather than 10% ownership with subsequent costs, or MKA's 3% offer unless it's a royalty only.
Someone needs to bag heads together clearly but delays like these often bring phenomenal opportunities - dry powder at the ready.
It will land in the middle. A year ago it was 5% sought. Just a waiting game. In the meantime more excited about magnets to be honest.
It seems Malawai is insisting on a Globe Metals-type MDA and Mkango is trying to bargain for something better.... but obviously getting nowhere with that...
I suppose it is down to whether can Mkango attract funding on that kind of deal or not but doesn't look like the Malawi Gov is budging
'A mineral extraction company in Phalombe district, Mkango Resources, is proposing to give Malawi 3% of the money realized from the extraction and sale of rare earth in Phalombe district.
The disclosure was made by the department of economic planning after receiving a query by the Public Accounts Committee on why mining activities are taking too long to take shape.
Principal Secretary in the ministry of Finance Patrick Zimpita disclosed that negotiations are taking too long because Mkango Mining Resources wants to get away with so many things, by paying a low royalty as well as tax exemptions.
Zimpita pointed out that government is not ready to have another Kayelekera hence pushing for a 10% royalty, rather than 3% adding that the government wants Mkango Mining Resources to pay certain dividends and taxes as required by law.'
https://www.facebook.com/search/posts/?q=malawi%20mining
Someone has been soaking up sells over the last few weeks. Usually a hint at something coming. Hopefully Monday in RNS
There is a hint of sarcasm in my great :)
However, they are now going to have to update investors on just what is happening with regards to the MDA ... so that is something plus other progress news
What is so great? feels completely desperate to me
That is great... There is only going to be one main question though lol... unless that is answered in the RNS before hand :)
More details to follow on Monday with an official company RNS https://twitter.com/Share_Talk/status/1677298692599042049?s=20
Geopolitics can be fluid. Maybe they did once have a very good relationship with the Malawi government, but global events and behind-the-scenes international 'negotiations' have altered this. Or maybe it is just the government dragging things out for a better deal? Hopefully the latter, but IMO the management need to update us on the current status.
I also agree that the strike price for their options should have been far higher, but like you, obviously hope that it is a sign of confidence that it will - finally and soon - be concluded.
Certainly not encouraged to increase my small holding here at the present time. Also not going to sit tight for an indefinite period either, if the months continue to roll by without completion.
Anyway, let us hope for good news soon. Or at the very least, a clear update. Will not be impressed if we continue to experience radio silence until the next fund raise request, for example.
I have been a loyal LTH in other similar outfits, given extended time and benefit of the doubt to management, adding along the way etc and paid the price. So my willingness to follow a similar path here is extremely limited.
West needs over $25 billion in Rare Earths to match China...
'But out of more than 20 projects outside China that could produce some 20,000 tons of NdPR every year, Goldman believes that "only 2-3 of these projects can get off the ground this decade."
https://www.reuters.com/markets/commodities/goldman-says-west-needs-over-25-bln-investments-rare-earths-match-china-2023-07-06/
Well we know one project that thanks to the Malawian Gov rug pulling games won't be one of them
My big frustration is that the Board don’t communicate and treat PI’s with disdain and I’ve been a shareholder since Sep-17. They have done nothing to shore up the slide in share price, they cannot even be bothered to update their websites. I contacted Will 10 months ago with concerns and again subsequently and have not even had the courtesy of an acknowledgement, let alone seen any improvements in comma. I suspect the MDA is still progressing given they have all recently awarded themselves cut price options upon approval of the MDA. The share price was 25p last June when we were expecting the MDA to be concluded imminently.
I think many of us were under the impression that management, and Mkango as a corporate entity, had established a very good working relationship with the Malawi government over the past 10 years. Now either that was never the case or something has changed. I mean to withhold the license to build the mine after all the hoops they have jumped through certainly seems to suggest a falling out. But as I said, maybe the relationship was never that good and we are guilty of wishful thinking
A good, bullish overview, GLR1990. Nevertheless, my take on the last raise was that it was primarily focused on getting the MDA over the line, based on that RNS. Sure, it mentioned other things, but that stood out front and centre to me. Do you disagree? Genuinely open to a different view, if applicable.
Say that hold firm scenario plays out, and we just sit tight in a staring competition with the government.
How long is our current cash runway to manage existing operational and corporate costs?
MDA finalisation not only gives the scope for a sale or partial sale etc, but also IMO better potential lending terms for a range of other things, for obvious reasons.
I bought in here after that most recent raise, so am not one of the (perhaps understandably) miffed longer term holders who were not entirely pleased at the discounted raise at the time.
Still long here, FWIW, and joined in part due to that decent CEO purchase outside of the raise....but as time ticks by, the risks increase considerably, IMO.
'Frances Wall: Well firstly, that there’s a real dominant player, which is China. There are definitely deposits in other areas, many of which have been under development for more than ten years now and could start up pretty quickly if someone decided to come along and pay the money. In Malawi for example, or Namibia. Stuff’s there in the ground, and at quite an advanced exploration stage, but only if people want to pay for it. '
https://www.mining-technology.com/features/what-role-does-the-uk-play-in-the-rare-earth-sector/
Todays article
OK, unbelievably frustrated but here is my view
Current market cap £23m
HyProMag 80/20 ownership with Cotec - current face value of ~£15m (so £12m net to MKA)
- we can argue about the valuation of this, cotec have brought a lot to the table and financed us for 12 months, we have two fully funded plants and three projects, with potentially three more in the US, the value we can add to this 'face' value entity is astronomical as we have already proven when we took a 42% stake for £500K
Milestones
- commercial NDPR H2 2023 (will double the valuation as it will then be proven)
- testing with auto manufactures in powerful magnets (will double it again and likely 4x from initial stage, as will be proven for a target market)
- Scale up (here is where the 10x to 100x comes into play, minus dilution along the way)
That leaves £10m face value for Songwe, which is around 2% of its NOV, you are not going to find a construction ready project even in the worst corners of Africa for that price, period (its already had $15-20m spent on just the DFS which was a success)
Whatever is causing the delay has knocked potentially ~£25m off the market cap here - however as it is a mining project, the material stays in the ground (not like technology which can be replaced or become outdated) aka the value is still there, albeit a drop due to macros impacting spot prices / basket prices
As much as id like to move on, selling the project during a very bad climate when we dont really need to sell it (we just raised funds only 3 months ago, £100K from the CEO) is exactly what Malawi and any potential buyers want us to do, to feel the pressure and let it go for cheap because the SP is declining and we are running out of funds
So my advice, as frustrating as it is, is to hold firm even if it takes another year - as investors we need to accept that this was and still potentially is our flagship project, its worth a small fortune IF/WHEN fully funded and construction begins, imagine we offloaded it for £10/£20m only to see a company like Lynas pick it up and make the projects we all envision in 2025/26, imagine NdPr and basket prices do rise as Adamas et al predict and we offload it today at a bargain price? That is not the BoD I have backed for several years, thats not the BoD that found Talaxis and got them to invest $14m in the project and take a 33% stake (now 29% in Mkango), its not the BoD that found Julian Treger and Braam Jonker, collaborated with some of the best mining experts in the business, who have a clear vision and track record of creating enormous value, its not the BoD that found a gem in HyProMag and worked a 42% stake for £500K before making arguably the deal of the decade taking the rest of it for £5m or thereabouts, its not the BoD that has found nearly £10m in EU/UK funding for the same technology
For a small minnow, we have tremendous value
You may be right but recognise that half market value of Songwe would be c20p.
Fingers-crossed for 9p.
"Refine, recycle, recycle"
PR company are frantically trying to rework the "mine, refine, recycle" slogan.
It's possible that the MDA is now just an unnecessary weight on the share price. Malawi are proving themselves uninvestable.
An option could be for the board to read the room and sell songewe for cheap with no MDA (or mothball it). Then at least the market won't continue to think that there will be big dilutions or fund raises to keep chasing rainbows in an inept African country.
Full steam ahead with the recycling plants IMO. Would be good if the board actually got some return on investment from our new PR company as well.