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Re-iterating my answer from 29th December but revising based on today's results:
1. Whales Head (40%) and Deep Blue (10%) are in the FY2022 accounts at cost (£1 and £2). These will be revalued at fair value once operational (i.e. in the FY2023 accounts). (Should equate to a £0.5m gain** - or 10% of TTAU's market cap - this is based on KZG's book value - but not based on the independent valuation)
2. Clarification on the sale of Deep Blue 30% to the Black Economic Empowerment local community. The independent valuation is £150m. This values TTAU's 40% at £60m (12x current market cap). 80% of profits repay the £45m loan made to BEE. On the basis that the 30% share of net income is £0.9m/year (conservatively) then £0.72m flows to TTAU reducing from the £45m balance. If you compare my previous answer "what, if anything, we get for the 30%" this revelation is DYNAMITE! In my opinion.
4. Income from the 10% Whale Head and Deep Blue begins. (Worth around £0.3m/year)
5. Meanwhile We await assays on Specimin Hill and news of the JV.... "in the next couple of weeks" so during April 2023?!
6. Kazera is cash rich and investing strongly into the HMS and Diamond operations, has a strategic partner who (guess what) operates a HMS business nearby, is buying Align's 29.9% stake at over 50% premium to KZG's share price.
This share is an incredible bargain right now. The hidden value should reveal itself in the next set of results and on the JV news "in a few weeks". But holders need to remain patient. Bear Grylls could use this share to light a fire after keeping it in his rucksack for a few years it's such a slow burner..... but that's not to say the value isn't there. The catalysts for this to rerate are coming together, not least thanks to Dennis Edmonds leadership over at KZG.
GLA... I'm excited!
..The half year saw the team supporting our partnership with London listed Kazera Global Plc (“Kazera”) (LSE:KZG) on the Heavy Mineral Sands (HMS) and Diamond project site in South Africa. Our joint venture with Kazera in HMS in was awarded a mining license. This is the first and so far, only mining license inside Alexkor, the South African Government controlled and operated diamond fields at Alexander Bay. Previous testing has returned exceptional grades of HMS and independent studies conducted for Kazera valued this project at £150 million.
Tectonic holds a 40% economic interest in this project via a non-diluting 10% equity holding in Whale Head Minerals Pty Ltd (Whale Head) and a further 30% economic interest via a sale and loan agreement with a Black Economic Empowerment (BEE) consortium. In order to ensure compliance with South Africa’s BEE regulations requiring mining projects to have a 30% holding by qualifying local investors, when Tectonic sold 60% of Whale Head to Kazera, the Company sold a further 30% to a syndicate of local investors. Pricing for this 30% was based on the £150 million independent valuation conducted on behalf of Kazera. The BEE investor syndicate includes a South African private equity group headed by a highly respected business leader, two experienced South African entrepreneurs, a local community group and an employee group. Tectonic has financed this 30% syndicate with a share loan program under which 80% of the returns to the syndicate are paid to Tectonic until the £45 million in agreed loan value has been repaid.
Tectonic holds a 10% non-diluting interest in Deep Blue Minerals Pty Ltd, Whale Head’s sister company that operates an alluvial diamond concession in the Alexkor mine site. Diamond extraction is a regulated pre-requisite before the tailings containing heavy minerals can be processed by Whale Head. Kazera has announced that both Deep Blue and Whale Head are now funded to bring into production. This could be a significant source of cash flows for Tectonic to fund Mt Cassidy and new projects for the portfolio.
With success in our existing projects, real value being cemented in our joint ventures and new opportunities to take our pioneering work in IRGS exploration offshore, Tectonic is very optimistic about the future for our shareholders
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Wednesday 29 March, 2023
Tectonic Gold Plc
Unaudited Interim Results to 31 December 2022
Wednesday, 29 March 2023
Tectonic Gold Plc
Half-year Report to 31 December 2022
29 March 2023
TECTONIC GOLD PLC
(“Tectonic” or the “Company”)
Unaudited Interim Results to 31 December 2022
MANAGING DIRECTOR’S STATEMENT
Dear Shareholder,
The half year to December 2022 saw a significant milestone for the Company with the successful completion of our drilling campaign at Specimen Hill. After fires, floods and COVID over the past few years, access to drilling rigs and crew was limited, but we managed to secure a team to complete core testing of the continuity of mineralisation below the old Goldsmith’s Reef mine. Assays returned grades of over 8g/t gold and 5.99 g/t silver at 110 meters down hole, with additional intersections at 240 meters. Goldsmith’s Reef is approximately mid-way along the 4km+ strike that has delivered multiple discoveries for Tectonic between the Main Lodes historic mine in the northeast where we started field work and the Southern Copper discovery in the southwest which is our most recent rediscovery.
These grades are in line with the medium to high grade production reports from historic mining of Goldsmith’s Reef in the early 1900’s. The mine was operated on a small scale down to approximately 30 meters but was abandoned during World War I and never reworked. Tectonic’s advanced geophysical surveying program prior to COVID indicated that the textbook Intrusive Related Gold System (IRGS) structure at Goldsmith’s Reef plunged to over 500 meters depth. With positive gold and copper assays from diamond drilling now confirming continuity of mineralisation, we have been able to extend our database and attract parties into due diligence to discuss a farm out investment into the project. This is well underway and we hope to report progress in the coming weeks. Our objective is to have a well-funded group complete initial resource definition on Specimen Hill with a view to developing it as a copper-gold mining project. Tectonic will utilise all of the experience from Specimen Hill in prosecuting our next project area, Mt Cassidy. This is another textbook IRGS target which has historic workings and drilling. We have conducted our advanced geophysics reconnaissance and identified major structures below the old workings which we expect to see continuity of mineralisation at depth in. We are also in discussion to take our IRGS expertise into international gold exploration opportunities.
…
Interim financial report due by 31 March, hopefully some news before then.
Deep Blue Minerals (60% interest)
The Company has completed development of the new plant at Deep Blue Minerals' diamond project in Alexander Bay and can independently process similar volumes of gravel as were previously being processed at the Muisvlak plant. The new plant is also capable of processing gravel containing high quantities of HMS, and stockpiles of mined gravel are now being processed.
Furthermore, through its close association with the Richtersveld community, the Company has gained access to new mining blocks, tripling the area available for mining and giving it access to a further 28,000 carats of diamonds.
From Kazera’s rns this morning,
Whale Head Minerals ("WHM") (60% interest)
The Company is pleased to confirm that it has placed an order for the manufacture of equipment to undertake the separation of HMS at WHM's Walviskop Heavy Mineral Sands Project within the vicinity of Alexander Bay/Port Nolloth, South Africa. The equipment, expected to be delivered in approximately four months, will allow the Company to sell Ilmenite and Garnet as separate HMS components, which will attract higher value than a bulk product. It is anticipated that the introduction of this equipment will lead to the production of product exceeding a purity of 80%, for which there is a ready market. Consequently, the Company is in active discussions with several prospective purchasers for these products. In the interim, the Company is introducing a double-deck 500-micron screen with a view to accelerating production of the separated HMS product. The Company is currently building up stockpiles of HMS whilst identifying a site to dry material away from the moisture and dust of the coast.
The initial mine permit area applied for by WHM and accepted by the Department of Mineral Resources and Energy has been moved circa 100 m etres to the west due to conflicts identified with the original permit coordinates. This has resulted in the Mine Permit now being in the surf zone of the bay and not largely on the beach. The resource volume for the new offshore permit location estimated by CREO Design (PTY) LTD, which undertook the initial competent persons report and resource estimate, is determined to be comparable in volume to the initial volume estimate for the onshore area but at a grade of 49.9% total heavy minerals compared to the 62% total heavy minerals on the beach area. This can be explained by the wind playing a significant role in removing light sand grains from the beach and so enriching the heavy mineral deposited there. However, a major benefit of the permits being moved is that wave action is constantly renewing the resource and rehabilitating the mine site. This means that current volumes in situ are largely irrelevant as what is mined is naturally replenished. Furthermore, initial testing has confirmed that the planned separation plant will upgrade the material from 49.9% to in excess of 80%, which will be directly saleable and is believed to be one of the highest grades in the world.
The mining method used in the WHM permit area will remain a dredging operation as originally planned. With the entire resource being submerged, a further advantage of the movement of the permit area is that dredge mining can take place unhindered and at a higher rate, resulting in higher production levels at lower unit cost per ton mined. This means the new moved mine permits have the potential of outperforming the original heavy mineral production volumes of mining on the beach.
….
You have to wonder what's happening here with the sp, there are no sales to speak of, ok there has been radio silence from the company in regard to significant news, updates, which creates doubt within the market, but come on, it does not warrant this constant decline. No short selling as far as I can make out.
Is the price being brought down to accommodate a buyer, as you say Gold junior, they may well be in negotiations, I hope so, and if so, let's hope we get a result soon.
Are we not well overdue news on the last drills or am I missing something here? Surely they need reporting even if in negotiations?
From Kazera's RNS this evening;
'Operationally, the Company continues to make progress, with both its Heavy Mineral Sands (HMS) and Diamond operations now in production. The Company has also placed an order for the manufacture of equipment to undertake the separation of HMS at its Alexander Bay site. The equipment, on which the Company has made a substantial down payment and has sufficient funds to complete the purchase, is expected to be delivered in approximately four months and, once installed, will allow the Company to sell Ilmenite and Garnet. Accordingly, the Company is in discussions with several prospective purchasers for these products, whilst it continues to stockpile large volumes of HMS, whilst also separating out diamonds.'
This slide is just bound to happen with no significant news or updates. I feel that once Kazera announces their re listing we will be put in the picture regarding further developments.
The HMS side of the business seems to be the jewel in the crown at this stage of proceedings, a jewel which by the looks of it has been totally overlooked by the market.
Not good to watch.
aka
Interactive Prospect Targeting Holdings Plc (AIM:IPH
woodburne square
StratMin Global Resources Plc
Does anyone know what the original company was called , trying to consolidate some losses for tax reasons but don’t know when i acquired these and cost , likely to be over 10 years ago
Couple of things reading the accounts:
1. Whales Head (40%) and Deep Blue (10%) are in the FY2022 accounts at cost (£1 and £2). These will be revalued at fair value once operational (i.e. in the FY2023 accounts). (Should equate to a £0.5m gain)
2. Post Period sale of Kazera shares £50k gain (December 2022).
3. Post Period sale of Deep Blue 30% to the Black Economic Empowerment local community. Unclear what (if anything) they are paying for this 30%
4. Post Period Income from Whale Head and Deep Blue begins. (Worth around £0.3m/year)
5. Meanwhile We await assays on Specimin Hill and news of the JV!
GLA
Pdf,
https://www.tectonicgold.com/_files/ugd/666e6e_d796abd69b1949cd990e54f553c72be2.pdf
From Kazera’s rns today,
Update on Walviskop Heavy Mineral Sands project
In South Africa, the Company is pleased to announce that it has comfortably exceeded its target of producing 1,000 tons of bulk Heavy Mineral Sands at the Walviskop mine by the end of 2022, and has already built up a stockpile of almost 5,000 tons. Offtake discussions are well advanced with three different parties, all of whom have expressed interest in buying the bulk product with a view to entering into a contract in the future to purchase the product in the form of refined minerals, which attract a premium price.
Tectonic gets a mention for an explorer to be looked at in 2023 by Paul Renken the chief geology analyst for VSA.
We have to be close now in regard to the Assay results.
https://soundcloud.com/user-596578261/5mmm-20221216-084511-meeting-recording?utm_source=twitter.com&utm_campaign=wtshare&utm_medium=widget&utm_content=https%253A%252F%252Fsoundcloud.com%252Fuser-596578261%252F5mmm-20221216-084511-meeting-recording
KazeraGlobalInv have already exceeded production targets for 2022.
https://twitter.com/KazeraGlobalInv/status/1603017215338496001?t=Ek9os-fx5HE_ZUPpDaiX5Q&s=19
https://twitter.com/KazeraGlobalInv/status/1602320753126408192?t=_5LJv0OR40pO3NGhpZHS_Q&s=19
Ah ok. I didn’t know it was a competition!
Thanks for the info you two!
I didn't expect anything more really, junior company in the market of finding gold with little to no revenue with a market cap of 7 mil. I also didn't expect them to consider their pioneer/expertise status in the IRGS space, nor the potential world class discovery at Specimen Hill.
Next year would be a different story imo.
They were knocked out in the group stage
https://twitter.com/AquisStockEx/status/1597554395641573377
Does anyone know/have info on how the VSA presentation went?
Thanks