Dubs, thanks for the analysis of the twists and turns surrounding the crushing/screening issue.
I do think that regular contributors are placing more emphasis on this single, albeit regrettable, issue than it merits. It’s general frustration which seems to be driving comment on this issue rather than the bigger picture.
I don’t think, for example, that the sale of horticultural grade perlite under contract to the cannabis industry, whilst a welcome potential additional outlet for elements of the CS resource, is going to be the main or ultimate destination here. Nor, as some have suggested, is the mishap with grading going to destroy relationships or reputations. Annoying though they are, these things happen and everyone in business knows they happen particularly in instances such as this; geologists attempting to serve a potential industrial customer, in this case with preliminary samples. As far as “Global Cannabis Inc.” is concerned, it’s forgivable. It’s not the end of the world. It’s the frustration of delays which is getting to shareholder, not the absence of potential which we all know is there and largely proven.
The aspect of the CS Project which is key, is the current and progressing cooperation which is taking place with the CRMC. It’s not as fast as we’d like but it’s clearly heading towards one of two outcomes; an outright sale of the CS Project, which I favour, or some form of long term relationship. The results of the continuing collaborative approach between SRES and the CRMC are very positive and clearly emphasised in the Tuesdays news release:
“The Company has commissioned independent strength testing of mortar blocks made using a 20% substitution of ordinary Portland cement with natural pozzolan from a sub-sample of the 500-ton bulk sample in accordance with ASTM C618 (the test standard for natural pozzolan). Results show a mortar strength well in excess of the requirements of ASTM C618 after just 7 days curing. This result is consistent with previous laboratory testing of CS natural pozzolan by both the Company and the CRMC. Accordingly, the Company is expecting positive results from the CRMC's commercial trials once complete.”
I don’t think our perlite is a side show by any means but it’s not the main event, it’s part of it and if shareholders focussed on the ongoing CRMC dialogue a little more and a less on the regrettable but inadvertent “Kimball **** up” the mood might change and the real potential, and progress, here might begin showing itself in the share price.
PC needs to answer some important questions on Wednesday, that is clear, many of which have been expounded here in recent days. If Patrick is reading shareholder views here, it would be better to be as candid as possible with shareholders in the Webinar rather than gloss over the issues and frustration caused by the delays, whilst observing corporate responsibility.
Cont'd
I agree Dfens and Justone with the overall sentiment and think many of the comments this morning have focussed on individual frustrations rather than the positivity of the RNS, save for the screening issue, which we can all agree is regrettable, but resolvable.
The focus should remain on the CRMC trial results in due course and the Clayton results next month. The Perlite testing and other precious metals drilling results are also something to look forward to. The largely overlooked potential for industrial perlite is another element of the mix, which as the RNS points out, representing 84% of the market.
It appears from working through the timings given and the potential timings that flow from them that April, May and possibly June are going to be busy months for the company and those wishing regular updates may face a deluge!
Thanks Predator for sharing your reply, it’s what most of us thought would be the case and helpful to have it confirmed. I think a lot of regulars are getting a little too hung up on the assay results which, if good, will give the share price a welcome boost, but will be nothing compared to the results of the CRMC trials if the outcome is as hoped for. Looking towards that in the next month or so might help reduce current levels of anxiety.
Helpful analysis also Horny, thanks.
The problem is Safe, using your parliamentary analogy, you should be putting your points to PC but for some odd reason you seem unwilling to talk to him preferring to lead the “whinging wing” of your minority party with predictable rants! ?
Thank you Daddy, Dubs, Terrafin & LastCoyote.
Can I first of all support Mineralex’s suggestion on Thursday evening that all shareholders should consider taking steps to register/place themselves in a position to vote on company proposals in the future, if they’ve not already done so. When interest is expressed/an offer made we may feel it necessary to make our voices heard and from what I’ve seen, there are the numbers here to make a difference.
Regarding your point LastCoyote, it’s not an easy question to answer because there are a number of ways of structuring a deal.
With regard to price, regulars will know that my price range for a sale involving the CS Project alone is between 3p & 6p. The remaining portfolio has considerable potential but little value at present, until assay results are known and further drilling takes place across various projects. The former, relating to Clayton, as we all know are expected soon.
One obvious and relatively straight forward route, if a sale materialises, would be for the purchaser to effectively purchase all SRES shares in issue for which shareholders would receive a pro rate share of the sale proceeds. For example, if you owned 10m shares and the agreed sale price equated to 3p/share, you would receive £300,000 or 6p £600,000.
SRES could at the same time issues new shares to shareholders in a newly formed company, possibly on the same but more likely on a reduced basis, given there are around 3.7 billion shares currently in issue. So, for example, shareholders could receive 1 new company share for every 10 or 100 old SRES shares held, enabling them to continue to participate in the future fortunes of the company.
It’s not the only answer, but it’s simple and would reflect the asset being sold and the potential yet to be realised.
It becomes more complicated if the CRMC’s interest extends to the CS Pozzolan only, leaving the Perlite, as Dubs mentions. However, it’s not beyond the realms of possibility that the CRMC may want the Perlite too, for two reasons; primarily to retain complete control of the CS resource area and how and when it’s mined, and sell Perlite to the market, according to its own timetable, mining and commercial strategy and improve the CS Project returns over time.
Reading recent comments I can understand, as I’m sure most of us can, the frustrations being expressed by regulars.
I’ve made no secret of the fact that I believe, along with others, that the CS Project will be sold and whilst I share your frustrations, many of the frustrations we share can be explained and things begin to fall into place if SRES considers that the most likely outcome is the sale of the CS Project.
There would be little merit in expending large amounts of time and resources, with urgency, in preparing mine development plans, if since the statement was made to prepare a plan, there was a growing belief inside the company that a sale is most likely and a mine development plan less likely to be needed.
Nor would it be sensible or commercially prudent to advance too quickly towards agreeing commercial contracts with customers for perlite or pozzolan which may not be able to be honoured if a single buyer wanted the whole resource, which is likely.
As someone else commented a little while ago, it would also explain why the company recently undertook further work to better understand the full extent of the CS resource area.
As an aside, I also believe a JV at this advanced stage in the development of CS is unlikely with the CRMC because, from my commercial experience, albeit in another field, large commercial concerns see the involvement of others i.e. SRES in this instance, as introducing potential interference and complication to its decision making and operational activities and it’s always preferable to pay the price and go it alone. After all, SRES is run by Geologists not Concrete/Cement industry executives and the aims and objective of each are unlikely to meld.
So the lack of information we’re all frustrated by all point to the company waiting to see how the Pozzolan trial results inform the approach of the CRMC. The “future relationship” which PC referred to in a recent RNS. Those results, according to the concrete industry experts amongst us, will come sometime in the coming month. At whatever point they land, only then can meaningful discussions/negotiations begin, although market disclosure rules would be triggered at some point.
Frustrating though it is, there is nothing to be done but wait. PC is, in these circumstances, constrained by Stock Market Rules but more so by commercial prudence. The news we’re waiting for is commercially sensitive and price sensitive and the reason why we’re all getting hot under the collar to know!
As I, and others, have said previously, the recent focus on other projects also suggests that the company wishes to begin the process of advancing other opportunities should the discussion with the CRMC conclude with a sale.
And no, I don’t think you’ll regret buying that “big chunk” Daddy. Positive sentiment is what’s needed right now, we have a lot going for us, and we’ve just got to roll with it until there's an announcement.
I agree Terrafin, although the process can’t be too advanced or disclosure rules would apply. However, one clue to PC’s intentions has been the recent shift towards other projects. I also agree that it’s a sellers not buyer’s market here and Covid really isn’t a significant factor in such a long term resource.
The day to day price movements are irrelevant, it’s the longer term trend that matters and that’s just fine.
Twiggy, in the world of international business and very big numbers £100m or even £200m isn’t difficult to finance when you’re securing the source of one of your basic raw materials for upwards of 3 decades, especially if the CRMC is part of the international conglomerate mentioned here on numerous occasions. As Riche has pointed out, prices are only going one way, a factor of demand/supply and inflation, and a buyer would be securing a long term source of raw material at 2021 prices. Over 30 years a significant initial investment isn’t something that requires a great deal of thought, it carries enormous benefits and it’s low risk. The benefits to a purchaser are largely being overlooked here…..SRES has done the hard work.
I think you ought to raise your expectations chaps. Any BOD recommending to its shareholders the sale of its current principal asset, based on your figure Daddy, for around 5% of its value would be failing in its duty to shareholders.
I accept it’s not an easy assessment/calculation to make, but there was a similar discussion here early last year in which a number of long term shareholders, including myself, roughly estimated the value of the CS Project to be somewhere in the region of 3p & 6p. I see no reason to change that!
And Teddy, it would be an even more serious matter if the BOD recommended a sale at such a fraction of value and then compounded their error but agreeing it should be paid for over 5 – 10 years. That really would be “cake and eat it” for a purchaser!
Keep up the good work nottsbaggie, and thanks for the trading info. It's been puzzling me and many others what's been going on with so many trades posting as sales over the last few days but your 2 trades put a completely different complexion on things!
Morning Sheldrake.
Thanks for the numbers. Who you are isn’t particularly important to me, you’ve had a stab at producing some numbers something, understandably, not many feel comfortable doing. It’s not an easy task unless you’re well versed in the sector. I posted a while ago that in my view the company is worth pennies rather than a fraction of one, when some were under valuing the companies prospects below 1p. I broadly support your view and believe the reality is somewhere between 3p and 6p with what we know now. This doesn’t take into account the company’s other assets, which have yet to be developed. We will soon know the answer to the conundrum which is exercising us all after the company committed recently to providing shareholders with value information in the near future supported, no doubt, by the commercial discussions which are taking place. I also believe the company will be an acquisition target, if it isn’t already.