Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video 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.
Been hearing of a huge premium funding 100% +
ASX SP $0.31 still around 15p
Directors just took shares at 18p
Existing cash well over £50m and the market cap £45m
Strong institution backing talks
If this was a simple dilution of shares fundraise this would have been advised by now, the fund raise will be in the form of a loan IMO. I’m expecting a bounce with the next RNS.
Maybe any potential lender(s) want to see some product out of plant before committing. That way they would at least be lending against an income stream instead of forward projections that currently look a bit pie in the sky considering the deadlines missed and the huge cash burn.
A delay to the funding announcement until the 30th!
Obviously this emergency funding is not a done deal, yet. I would love to know what the sticking points are?
So a request from the CEO to delay the lifting of suspension on ASX until 30th August.
Record potash pricing, demand shifts.
https://stockhead.com.au/stockhead-tv/mop-record-potash-pricing-demand-shifts-and-outlook/
Final probably highly sensible selling before the news drops Monday?. I wonder if the bad news will be sweetened by the plant miraculously and coincidentally spitting out some sop over the weekend?. What a cynic!.
Good spot, thank you for the link. Sounds as if the increase in SOP is likely to continue. Pity we aren’t currently producing any from the expensive looking plant :)
Interesting development
This sanction will have impact, but at this stage with SO4 who knows what. If they had been in production it could have been very good. Maybe it will motivate a buyer or the BOD
Https://www.mining.com/web/us-sanctions-on-belarus-potash-leave-out-nations-sole-seller/
I'm with you @quantum.
Once we know about this latest capital raise - cost/dilution etc. I can then re asses. I do want to see some management changes too, though!
I was lucky (or maybe it was my own rules!) but I sold out after the previous unexpected raise came out of the blue. Having previous been told we were funded through to first production (which was to be Q1 2021 - still not happened!) to have an unexpected raise put this on my intensive care watch list. Ultimately I needed some cash for another prospect, so sold out at 26p. So, waiting to see what transpires and if it is enough to tempt me back in. Need the finance going forward to be fully explained and management controls/changes in place to prevent any more messes. Without this my cash will go elsewhere.
Quantumstar, I commend your decision to cut your loses and sell its never easy but does at least salvage something. I can't help but note that although we have the bad news about funding and reduced production what we don't have is news that a single gram of finished product has yet been produced. This surely can't be good as any production at all would surely be flagged up by the company to indicate that the project has some viability albeit with reduced prospects.
As an aside the presentation by Australian Potash was interesting but I can't help thinking that SO4 could have made a very similar presentation near the beginning of the project. I think the detail that may help them to better success is the greater time that their brine will spend 'in the sun' prior to being needed. The contingency fund mentioned is actually pretty small in reality.
it's happened in a middle of the trading day as off-book, lrgs, i think some broker has simply messed up with submission which skewed import/merge into exchange database.
Funding at this mcap, even non-equity/bank and otherwise could be a struggle to get a significant amount.What the hell happened?Easy prey for a big lending premium unfortunately with the current mcap, however great the business could potentially be.Aim is ruthless with pis money and company's too at times.
It may have something to do with the last trade also recorded here. Showing 25,000 bought at 650.00 (£162.50k total). Surely a buyer hasn't made such a grave error with decimal points!
Google gave me the shock of a lifetime... currently showing SO4 up 9,200%... if only!
Here is the Australian Potash presentation at the currently running Diggers and Dealers conference.
https://youtu.be/lRuTpJGVAxk
Note that their slides showing their funding includes an amount of contingency funding. He also stresses their focus on derisking in various ways, not just the offtake sales in place, but they have addressed cost overruns and performance delays.
This looks like a properly managed project!
So, there is competition for funding from other salt potash operations - our emergency funding will not be flavour of the month = excessive expense???
Yuri.F I agree with both your recent posts. With respect to the lower grade inventories I’m wondering if, in the instance this is about lower salt levels leading to difficulties with precipitation that there might be technical solutions to this in the longer term. However this will cost time and money so the ramp up pretty much has to go with the easier option of using the higher grade feed material.
The board certainly has no credibility and lenders can be pretty ruthless when their money is at stake. I’m still thinking the only reason they won’t pull the plug is to try to recover some of their debt. There is a limit to how much good money you throw after bad at the end of the day though. Someone could get a great deal if this falls into administration and the plant can be ran without the debt burden. This is AIM so expect something pretty painful. IMHO
and then this bit from RNS:
...The re-classification of lower grade inventories that have now been determined as unsuitable for plant feed during the ramp-up period...
It's effectively writing-off assets (and consequently equity) since inventory got spoiled/useless, not sure how much of it they can salvage into alternative use value-wise. With such technological failures - productivity and cost per unit of output has material risks of going too high.
200m of additional debt financing for 5 years at 10% will take more than 120m off their low-risk optimistic NPV8
(as 20m coupons will wipe out any nearest potential positive cash-flow items away from shareholders)
not to mention what more than 50% of it will have to be refinanced - again, something off NPV
(as previous accumulated cash-flow excess won't cover full principle repayment,
but once production is self-financing and sustainable then interest on debt can be slashed down with risk)
I would say current realistic risk-adjusted startup NPV (say NPV15) might be sitting slightly above £30m - which is way below current mcap
Another red flag is about governance and they way this BoD acts - they knew very well about financing deficit (otherwise what kind of director you are if you don't know the situation within your company) before raising equity at 18p-19p range month ago, collected money and then released statement about problems crashing price by more than 60%, if they have no problems playing that dirty - what to expect next?
Good point
Oh, they will lend. Of course they will.
You just need to wait and see how high the risk premium they will want! The eventual cost may be very high when they look carefully at the track record of emergency funding calls!
We need to know the size of the problem and the cost to be able to evaluate.
Would you commit to buying a car without knowing what size car you are buying and how much you are going to pay? Nuts.
Which bank/ lender would not want to get involved with this company
I feel for you @Quantum.
I was one of the lucky ones and got out after the last raise. Having been led to believe that we were fully funded through to first production (was supposed to be Q1, 2021) to have a sudden capital raise land put a higher rick factor on this one for me. The product is great, the territory is great, the market is good, everything is (or should be) in place. The management is now the big risk for me, too many broken promises and missed deadlines. After the last raise, I'd put this one into my 'intensive care' box. Ultimately I needed some cash for anther opportunity so sold out.
I'd love to get back in, but need some comfort about the management going forward! What other surprises may pop up and bite us? Past performance does not give me confidence. I'm hoping that the Institutional investors, faced with another emergency raise, slipping deadlines and reduced production forecasts, take up the reins to force some kind of review/management change that can provide confidence. I'll come back in if that happens.
The price is less of a concern for me. Yes, 7p would be lovely (depending on how big any dilution has to be suffered), But i'd be happy at twice that if it is an investable proposition. So I'm sitting on my hands until we get some positive news.
I have seen too many companies go under when they messed up the finance with everything else being fine. Finance and contingency planning is right up at the top of a BOD's responsibilities!
Yeah. Right.
With an unknown amount of capital raise/loan at unknown cost leaving the company open to a predatory takeover!
You really think that is good advice? Unless, of course, you are a day trader just after a marginal increase at the expense of others.
The company is ready to roll and produce 6p is not even a punt