Member Info for Agricore

Research,

Point 2 was the FD (Finance Director) resignation and the FC (Financial Controller) taking on the role.

Mr Flibbles, thanks I wasn't aware of that forum. It looks good.

Post £40m of buy backs NAV drops to $615m but the shares in issue drop to 42.1m.

This would equate to a $1.01/share or 85p/share uplift in NAV. ($667m to $615m NAV and 49m to 42.1m shares in issue)

This assumes no change or improvement (or loss) otherwise to the NAV.

Each share of RSE @ £5.70 is worth the following (as at 31/03/23):

There's £1.52/share of Cash

There's £4.31/share of publicly traded Oil/Gas holdings

There's £1.13/share of publicly traded Decarbonisation holdings

Or £6.96/share of liquid assets ... cash plus public/liquid O&G/decarbonisation holdings. So you get £1.26/share back on top of your £5.70 purchase, from liquifying all listed holdings plus cash ..... get a free carry on £4.88/share worth of unlisted O&G/Decarbonisation shares.

ResearchCentre,

Going by the annual report 2022 they have net assets of $36.8m which over 110.8m shares is $0.332 or NAV of 26.5p per share. But it's not clear to me that these are in any way disposable. Current assets/liabilities net to near zero so there's 26.5p per share worth of E&E, property, plant and buildings (PPB) potentially realisable at zero. Both Romania and Tunisia are concessions - i.e. Serinus doesn't appear to own any land so the PPB is just plant and buildings. Do these actually have any kind of realisable value?

Both concessions require minimum levels of expenditure and this appears to be part of the problem. Plus perhaps some empire building on the management's part maybe? The comment made by management that Romania has delivered $100m of revenue is an interesting one. Yes it has, but what profit has it delivered? Looking at the 2022 accounts so much of the revenue gets swallowed in various costs which appear disapproportionate.... to deliver 163 BOE per day of gas in Romania (in Q1) required $0.6m of capital expenditure in Q1 - for what exactly? If it halves and halves again at what point do we say forget it rather than spending millions more chasing minor reward.

Some sobering thoughts - based on today's market cap of $5m:

1/ Not spending that $0.6m on Romania would afford a 12% dividend yield to shareholders!

2/ If Fairclough weren't replaced, and the FC manages the accounts with Jeffrey's help the company could provide a dividend equating to a 20% yield to shareholders.

3/ The Audit Fees were $450,000. Finding a way to half that gives another 5%. i3 Energy had an audit fee of just $120k in their last annual report.

It feels like putting a knife to the costs, seriously reviewing whether holding on to Romania is worth continuing (it's worth 13p of the 61p per share unrisked value), or even putting the whole company up for sale?

As a positive, running the numbers for the N-2 workover "should" deliver 173BOE/day. That's worth a further $3.4m of netback per year. It does illustrate how the Tunisian economics seem to exceed those of Romania..... so long as the company can get those damn rigs when they need them!!!

GLA

Https://youtu.be/xePyR0f4LW0

The diamond discussion is about 10 mins in

Hello, I've dipped my toe into ARCM yesterday. I see there's some unhappy voices and happy voices here.

I felt the investment from AA provides a compelling reason to join the (partially) merry band. The multiple anomolies they say they are quickly going after, which appear to be analogous to the hugely profitable sentinel deposit, appear to be nowhere in the price I paid.

GLA

Faramog,

I don't think your calculations are correct.

Orion's convertible of $13.5m @ 8p or ~$0.10 if converted equates to 135m shares which is 9.47% dilution (1.29bn shares plus 135m is 1.425bn shares so 135/1425 = 9.47%)

As part of the recent deal they have converted $4.5m @ 6p ~$0.075 which is 60m shares so that equates to Orion holding 195/1425 = a future 13.7% holding for Orion.

I agree it's a pound of flesh but it's also a lifeline and it's also a HUGE vote of confidence since Orion do know an awful lot about mine finance and you should also consider their successful track record of backing winners.... Atalaya, Horizonte are just a couple of UK listed which have "come good" in the past years...... See https://www.orionrp.com/mine-finance and DYOR

I take heart from the Orion announcement. Doing otherwise is a bit like a "Dragon's Den" mentality where refusing to give up X% of your idea to a Dragon who's going to help you grow that pie and succeed.... that's my perspective anyway.

I'd offer a further perspective.

The gearing of BMN to the price of Vanadium is now pretty exciting. I read the almost daily announcements of BESS investments going on around the world and the important role Vanadium is playing in that. Also the need for investment in infrastructure as part of Net Zero objectives..... Wind Turbines need vanadium reinforced steel for example.

I find it hard to think that the price of Vanadium is going to go anywhere but up based on the demand outlook.

Meanwhile the supply outlook is favourable too. Only about 1 i n 4 KG of vanadium supplied is primary produced (like BMN) so only a quarter of the supply can easily increase supply if the price spikes. In other words there's very favourable fundamentals. Which can stay favourable.

ARC's recent analyst note summarises this ratcheting perfectly. If Vanadium goes from $40 to $45 a KG the unrisked NPV sensitivity jumps from 21p a share to 33p a share for BMN. The 33p is based on a 8000t/year so yeah sorry, more pounds of flesh to someone like Orion...... but the 33p a share valuation is after taking account of the pounds of flesh being removed.

A fundamental point too is that a power agreement as well as solar/BESS hopefully puts the spectre of load shedding wholly behind us.

A final perspective is simply to look at the NAV which is a forecast $158.3m for 2023 or £126.6m. At today's market cap of £51.16 that's a 59.6% discount to NAV!! On assets which are forecast to produce an EV/EBITDA of 3.9.

In plain English NAV is *NET* asset value i.e. net of Orion, so even after removing the "pounds of flesh" it leaves a share which is unbelievably good value and should have better fortunes ahead. A takeover target maybe?

GLA

cenkos puts a target price of $10.10 which is 250% of its current market price. q1 earnings are out tomorrow.

you can read cenkos' 35 page analyst report here: https://*********************/companies/usa/electronic-products/backblaze-inc-class-a/research/cenkos-securities/cenkos-backblaze-inc-strong-cloud-base/39_cf89c869-23c8-4814-8132-259f72c503eb

gla

Today's (5th May) share price is slightly lower than May (Market Cap dropped from £280m to £275m) so about 2%. But ignoring that. But to put this in perspective....

The update shows each share of RSE @ £5.70 is worth the following (as at 31/03/23):

There's £3.68/share of publicly traded Oil/Gas holdings

There's £2.10/share of Cash

There's £0.96/share of publicly traded Decarbonisation holdings

So £5.78/share worth of liquid O&G holdings and cash...... (So a free carry on £5.19 a share worth of listed/unlisted decarb/ plus unlisted O&G

Or £6.74/share including liquid decarbonisation holdings. (So you get almost £1/share back from liquifying all listed holdings plus £4.23/share worth of unlisted O&G/Decarbonisation.

i.e. Unlisted holdings of O&G are £1.92/share and unlisted holdings of decarbonisation is £2.23 a share.

The IRA is a huge tailwind for the £3.19/share decarbonisation portfolio. The tax/subsidy benefits of IRA will begin to appear in 2023. Also of note in the commentary "Global investment in the energy transition totaled $1.11 trillion in 2022, a 31 per cent. increase in transition investment over 2021".

Meanwhile a further buy back of ~£10m will also be accretive. Assuming an average of £5.70 equates to 1.75m shares for cancellation dropping the shares in issue by end of 2023 to 47.35m. This equates to an £0.18/share increase. (So for every share you buy and liquid portfolio you get paid £1.18/share from liquifying all listed holdings plus £4.23/share worth of unlisted O&G/Decarbonisation for free.

All the above is baked in the price.

But if you think if reasonable that the decarbonisation portfolio could double and that the discount reduces to 20% then the upside is exciting.

But if you think if reasonable that the decarbonisation portfolio could double and that the discount reduces to 20% then the upside is exciting.

£10.97 NAV/share+£3.19 decarb upside+£0.18 buy backs = £14.34/share = £11.47/share

So future "fair value" is almost exactly double today's share price. That assumes no appreciation on O&G where there's reasons why that might be too pessimistic. For example Hammerhead have made progress yet the share price has been punished compared to peers. Meanwhile most holidngs have 30%-40% hedging so even if the oil market drops dramatically later this year (which I doubt) there's actually quite a bit of downside protection via the hedging.

GLA

Bumpingalong, why do you think investors will get "deeply involved" once Align sell to AMS? What is this "deep involvement"?

If "deep involvement" is indeed the way forward, then I have good news for you. Align seem to suggest today on twitter that they've completed the transfer to AMS.

iwant,
>> netted down by 10-20% for the royalties to the respective governments.
You need to net up. The Egyptian government take more than 20% from CEY.

Market Cap is pretty irrelevant in terms of comparison. Profitability, cashflow and assets vs market price (Price to Book) is what matters.
Price to Book for CEY is 1.2 whereas it is (according to June 22 accounts) 0.66 for HUM (even after the recent re-rate in market price). And that works based to a June 2022 NAV of 25p a share (for HUM). i.e. £153m net assets and 600m shares. I am 100% sure that in the past NAV of 50p a share was previously quoted for HUM. I think that the difference is because Dugbe is held at book value and I think Kourroussa is too. A "Fair Value" for the 2 assets would be based on a 26.3% IRR for Dugbe and @ $2k gold it's a ***93% IRR*** for Kourroussa (YES SERIOUSLY!! - slide 12 of this deck - https://wp-hummingbirdresources-2020.s3.eu-west-2.amazonaws.com/media/2023/02/2023-Indaba-and-121-Investor-Conference-Corporate-Update-Final-1.pdf). If HUM were an investment firm they could revalue, I think IFRS6 prevents you doing so.
So potentially 0.33 PB vs 1.2 .... it's a no brainer on that basis isn't it?

However I hold both HUM and CEY and that decision is based on (past) risk, dividends and cash flow. In fact I rather fancied that CEY might buy HUM as a turnaround some months back. Now, I don't think that will happen, of course, and it's tempting to sell CEY to top up HUM..... Hmmmmmm

GLA

I previously averaged down at circa 1.5p so didn't average down again today.
Echoing other comments the "going concern" was foreseeable. The key points I took from the numbers were/are:

NEGATIVES:
1. Admin grew to nearly £4m - about £0.5m ahead of forecast. This is justified as "investment in growth" but it is a concern to grow well ahead of budget (WH Ireland £3.5m vs £3.9). WH Ireland speak to costs being largely fixed, well clearly that hasn't been the case.
2. There are negligible assets to secure debt against. Property and Plant are £86k

POSITIVES:
1. Stock Write offs. Hidden in the RNS is the value of write offs: £140k (£3.2m x 5%) ("Normalising margins to account for the unusual level of write-offs seen in 2022 does see our margins at 20%, which is close to 2021.")
2. Growth of ~70% in the USA **far** exceeds WHI's 2022 forecast (of 12%). The lacklustre performance in China/Singapore was to be expected - although a key target is driving that in 2023. If you look up the current fortunes of somewhere like Macau, well it's booming. That for me is my esoteric benchmark over future success in China. Singapore is booming too.
3. 2023 Increase in Margin due to US Bottling said (by WHI) to be worth 12% improvement to margin (although strangely they foresee only a 5% increase to margin in 2023). Using 25% margin and extrapolating growth I arrive at 2023 Revenue of £6m and GP of £1.5m. Net of Costs there's a 2023 loss of £2.5m. (Therefore this is the likely level of debt funding being sought)
4. Stock of £1.7m. US bottling and run down of stock levels will mean a reduction of circa £0.6m working capital is possible in 2023.
5. Roughly, on a cash burn of £0.2m a month, this equates to 3+ months "breathing room" - until August 2023 to get funding in place. This could be extended a further 3+ months through measures like invoice financing (£0.5m) and then by cost cutting.

So to conclude while, yes, there's a risk that funding won't be forthcoming, I would point to the many other risks which this share faced in 2022 which have receded in 2023. Substantially receded, in fact. If you remained a shareholder in 2022 then you'd be an idiot to sell in 2023 on the back of today's foreseeable news. (Some idiots did sell today clearly). The adverse "admin" cost is largely investment into people, marketing and growing the business.

Painting an optimistic picture where the margin does increase in 2023 to 32% through bottling, logistic savings, price rises, while volume increases more quickly through that extra investment in "admin" say to £9m sales then a GP of £2.9m combined with streamlining inventory and invoice finance and you can almost see that £2.5m debt being substantially repaid by end of 2023 or dare I say it not even needed - by a whisker!

So the night is not really so black nor so full or terrors when you actually chew over the numbers.

GLA

Kroger is around 2800 stores. Walmart is 4700 stores. Dollar General is 17000 stores. Quite difficult to pin down which it is but the message here is that it's a substantial retailer whoever they are.

I was able to top up at 60.33p yesterday.

Based on the FY2023 numbers I've been working through the future earnings growth:
https://*********************/companies/uk/other/triple-point-energy-transition-plc/research/edison/triple-point-energy-transition-pitching-tent-a-diversified-energy-transition-story/3_32244xxx-c186-d772-062f-21fa22282e7a

Earnings per share per year:
1/ Lighting 0.3p FY2023 (Flat?)
2/ Hydro (RPI linked): 4.5p FY2023, 5.1p FY2024, 5.3p FY2025
3/ BESS: 1.2p in FY2023 growing to 2.4p in FY2024, growing to an assumed 5p in FY2025 (as 20MWH grows to 110MWH)
4/ CHP: 2p - assume static although Edison suggest reinvestment could be at a higher rate than 8%.
5/ Solar: +0.4p FY2024 (investment April 2023)
6/ £40m Leverage @ assuming an 8% return less 6% cost of capital: equates to an additional +0.8p

So 8p/share earnings in FY2023 looks to grow to 11p/share in FY2024 (ending March i.e. the next 10 months. Then 14.8p in FY2025.

This is far more than Edison themselves believe (6.6p/share or 1.2x cover). However by their own admittance they assume no recycling of capital repayments, assume little or no RPI increases - this alone drives a 13.5% increase in FY2023 to half the portfolio. I've assumed a lower 4% RPI rate for FY2024 and FY2025. Bizarrely they assume no additional cover from either Solar, BESS or debt drawdown when capacity increases from 20MWH to 110MHW in H2 2024. Admittedly there will only be 3-9 months worth of contribution if BESS come on line H2 2024.

TENT state they are committed to growing the dividend. There appears scope to grow the dividend by quite some percentage. If earnings can grow to 14.8p/share then maintaining 1x cover suggests a ~25% yield!

The above analysis also ignores the value of NAV growth. TENT has achieved. Ignoring the exceptional cost to move to the Premium segment the adjusted NAV return for FY2023 was 8.4%. Judging by peers GSF and GRID a NAV growth of 20% may be possible (BESS gets revalued from book value only once operational). The BESS portfolio grows 5.5X in the next 2 financial years.

What could derail TENT in what lies ahead?
Inflation? - It's 50% RPI protected.
Recession? - it's defensive and cash generative.
Climate Change Risk - attractive assets.
Counter Party Risk - it's well diversified, with contractual and covenant protections
Rising Interest Rates Risk? - optional use of leverage to boost returns - deleveraging would be logical if rates rose above ROI rates.

GLA.

There are several reasons why buy backs won't happen.
The official reason: The Board believes that share buybacks can only offer a short-term solution. To buy back
shares would increase risk concentration, as the proportion of the portfolio invested in Ocean Wilsons would increase which the Board wishes to avoid. The Board continues to provide transparency of dividend and buy back policies to shareholders in documents and presentations.
The unofficial reason: Directors are also large shareholders (Saloman family). But also that the charges are 2.02% buy backs would increase the percentage (spread among fewer shares).

The NAV is in a £3 to £3.10 range. But the look through on Ocean Wilsons is 50% discount to NAV so is worth another £0.40.

This is on a 50% discount to NAV whereas historically both Wilsons and Hansa were on a 20% discount. Suggesting there's a 65% (£1.05/share) upside, solely on the discount reverting and let alone its overlooked purpose (As driven by the Saloman family) for wealth preservation.

Today’s annual report showed an apparently solid performance. A labyrinth of terminologies so not an easy read. I also read Hardman’s research on Volta but is also useful to better understand Fair oaks and the CLO industry. I’m planning to double my stake in FAIR in the next week.

https://www.investorschronicle.co.uk/alpha/2023/04/04/investment-trust-discounts-could-tempt-back-tech-buyers/
Top of the pile of the top 25 in this month's investor's chronicle screening is FAIR. Z score of minus 5.6.
First time I've seen it getting any kind of mention.

Fish2, That's simply not true. This is an investment into Life Science and the future value of Life Science Research Tools. Covid diagnostics were a fairly simple application that ONT and other businesses diverted their efforts to help during the initial state of emergency. Surely you must know that?

ONT has a 5+ year horizon so along with most other jam tomorrow stocks it's been heavily sold off. The reality meanwhile, is that genomic sequencing opens up a myriad of health and industrial applications. Take the time to educate yourself at the links below.

I'm very happy that IP Group remain holders of ONT and that due to ignorance, short termism and lack of understanding, can be bought at 55p, earn a dividend of 2.5%, are cash rich, and whose book value are 2.5x and future potential are 25x.
If you strip out cash and listed each share costs a net of 15p to buy 111p worth of assets.... an 88% discount to NAV.

https://nanoporetech.com/sites/default/files/s3/investors/reports/ONT%20FY22%20Presentation%20-%2021%20March%202023.pdf

https://www.edisongroup.com/research/priority-companies-making-progress-in-2022/32172/

GLA

Results in May but a share on 42.5% discount has grown its NAV "significantly" and speaks to commercial progress on a number of holdings as well as cash generation through its advisory arm "largely covering" costs. PDS moving to Phase 3 trials.

So the cash flow risk is down, the risk of NAV contraction has reversed, lots to like.

Almost certainly going to be a ST article later today as this is a Bargain Share 2023. Hold on to your hats!

GLA

I noted the "predominant" garnet and rutile in the 29th March post on Twitter.
Referring to Align's research based on the 2020 report from CIS consultants CREO Design’s Technical Economic Evaluation of WHM’s mining prospect at Walviskop, was said to be 30.29% and 27.54% based on a 62.1% HMS.
(http://www.alignresearch.co.uk/wp-content/uploads/2022/10/Kazera_Align_Update_October_2022.pdf)
Thinking about the slight change of location (less on the beach and more in the water) and new 49.9% HMS I arrive at a pro rata 24.7% Garnet and 22.3% Ilmenite.

So at current market prices of $320/tonne for both of these materials and a production of 6000/month at 49.9% purity I arrive at circa $480,000/month revenue.
Align/CIS put the cost of production at $9.2/tonne so on 6000 tonnes = $55000/month. Allowing for this being too low, and I multiply that cost by 3X I arrive at an approximate $300k gross profit a month.
Of course, the marine diamonds alter those economics (Align estimated 300 carats/month at $600/ct). That moves the gross profit to more like $500k GP a month. The pan plant is located at the beach and is processing both marine and inland diamonds.

I notice, too, Zircon is present at about 1.2% of ROM and the market price of this is $2500/tonne. But requires further screening and capital cost. If added that adds a further $180k GP a month.

So we now arrive at $0.7m GP/month or a run rate of $8.4m GP per annum from July.
Or 75% of today's market cap of £8.9m. Or put another way a price earnings of 1.3 (excluding inland diamonds, and the 2.5% royalties of Tantalum/Lithium)

That's based on 6,000tonnes of ROM/month or 0.072mt/year. The resource is 1.5mt or 1,500,000 tonnes. The experience down the coast nearby is replenishment has meant the resource is potentially 4x that. But just working from zero replenishment it would take 20 years to exhaust the resource... or 80 years assuming replenishment. Which suggests expanding the extraction would make sense - and would increase profits further. Now we have an expert minority shareholder in AMS too.

For all the grumbling about "they only sold £50k" in the last set of accounts, that's in the past. In the present, and post period and during 2023 the capital equipment is ordered, stock piles are stockpiling, the pan plant is extracting marine and inland diamonds, unseparated HMS is being sold at $130/tonne, separated sales will begin in H2 2023. Cash is rolling in from Xinjian and it's all coming together nicely as far as I can see.

So why is the share price 0.9p still?

Go and read note 5 in the accounts. Share warrants expiring 31/5/23 at a strike of 1p. 157 million of them. I reckon there's 2 months while people pause to avoid dilution. The dilution would be 20% (if it occurs). June/July we'll see an update and off we go.

GLA