Member Info for Agricore

Richard08 definitely.... and the IRA is only part of a wider set of packages. Reminds me of this article I read last year. This quote from that article is poignant:
"Policy support continues to move from strength to strength: Although President Biden’s infrastructure packages are currently stalling in Congress, it is more likely than not that this will be passed in some sort of amended form." (!!)
From:
https://www.schroders.com/en/za/intermediary/insights/markets/five-reasons-why-energy-transition-stocks-can-weather-the-inflation-storm/

Pasejero, Don't believe either of these links are relevant to SUPP - Schroders do have a multitude of funds/trusts.

(Continued) ... Bringing it together for 2023:

WHM Mineral Sands/Diamonds = $9.45m GP
Inland Diamonds = $12m
Tantalum/Lithium = $4.8m
Overheads assume grow 40% = -$2.8m
PBT = $23.45m
PE ratio of >0.5 (at current share price of sub 1p)

These are best estimates out of publicly available information and I've sought to use conservative estimates for calculations or have followed other analysts methodologies.
GLA

My revised estimate of KZG (as at 17/08/22) is:

1.Whale Head Sands (WHM) Heavy Mineral Sands (HMS) @ Walkiskorp:
a/ Predicted to generate a GP of $300K per month of Garnet 30.29%, Ilmenite 27.54% also Zircon and Rutile. Also monthly GP $225k Coastal Diamonds (@$750/carat)
b/ Walviskop 3.1MT of 62% minerals. The point should be made however that through tidal activity the beach gets replenished like a magic porridge pot from mineral sands out to sea.
c/ Future: Neighbouring Beach also permitted it seems and has 34x the potential i.e. potentially 105.4MT?
d/ Future: Building a separation plant would mean 6x Revenue i.e. $1.8m/month gross profit.
2022 modelling: 5 months @ $525k = $2.62m GP
2023 modelling: 6 months @ $525k plus separation plant mid 2023 6 months @ $1050k = $9.45m GP

2. Inland Diamond Mining
a/ 1000 carats a month @ $250/Carat should generate at least $1m GP/month
b/ There is a build up of plant feed which was accumulated during the down times. This work in progress should mean a higher GP which I've not included in my 40% margin calculation.
2022 modelling: 7 months @ $500k plus 5 months @ $1m GP = $5.5m (less repayments on fixed asset Pan Plant $1.5m pay as you go) = $4m GP
2023 modelling: 12 months @$1m/month = $12m

3. Tantalum / Lithium Mining
a/ 3 Tonnes a month (volume is just a guess) at $160/Kg generates around $0.2m GP
b/ No lithium in 2022.
2022 modelling: 5 months @ $0.2m = $1m
2023 modelling: 12 months @ $0.3m Tantalum plus 51% of $0.2m GP

4. Bringing it together for 2022:
Overheads 2021 were $1m. New appointments and new costs assume this doubles in 2022 ($2m). I've factored in costs of production to each of the above 3 areas.
Gross Profit should be $2.6m + $4m + $1m = $7.6m
Assume Jan - July 2022 we only achieve what revenue we know ($0.24m) plus 5 months ($7.6m) = $7.84m less the admin $2m = $5.84m PBT
This equates to a PE ratio of 2.0

Badsterman, Look at at my post from the 21st June "Feeling Aligned?" where I did a best estimate calculation. I might revisit it based on what we now know 2 months on.

GLA

Think the point that's being missed is the AISC is relatively pretty good. $1381 overall and guided $1,330 - $1,370 for 2022 is better than most others (average is about $1500+?).

- Inmaculata's AISC of $1015 is superb.
- San Jose AISC at $1649 was marginally profitable.
- Pallancata's drilling is a do or die as far as I can see and if that had been put in care & maintenance in 2022 then the business would have made $5m more profit (assuming C&M costs $3m like Ares). The silver AISC to $33.1/oz (from $18/oz prior year) is eye watering.

We probably all see these various gold and silver predictions, and eventually there will be a run up (gold due to geopolitical risk and/or stagflation and silver due to demand from renewables). Interestingly the conflict with Russia may smoke out either the conspiracy theorists..... or the conspiracy. It's a fact that physical price exceeds paper price (sometimes by a lot, particularly silver). If Russia offers a 1:1 physical to paper exchange in order to out-rival the LME and supplant existing market makers, then this could drive a vast increase in prices. It would be a mischief Russia could inflict on the West if the stories of empty vaults, and double counting are true. Russia and its allies control a lot of physical gold and silver.

HOC is a waiting game for now.

Hodor!

Well it could settle the "rigged market" theory once and for all. It had occurred to me that any country which would offer a 1:1 exchange of "paper" gold and physical gold would stand to, in short order, pick up a substantial amount of that commodity's trade. It's so obvious I'm surprised no one has tried. The physical price whenever I've looked at it is far and away above the paper price - which does give credence to a "rigged market" given that a market's function should be to provide a means of exchange.

Reading Cenkos' analysis they say: We believe that satisfactory resolution of the company’s financing needs could act as a positive catalyst for the share price. However a bag of a fag packet calculation:
31/12/21 = £5.4m cash
HSBC Debt = -£7.0m
Shortfall = -£1.6m
Feb 22 Sapienza sold for £2m. £1m used to repay HSBC.
So we now have £0.4m net cash?? So what crisis? Do we not have a "positive catalyst" staring us in the face?! Joking aside, the September update should give some colour to how the ground lies. Much of the 2021 cash flow won't repeat in 2022 so there's a very good chance the coming 14 months are sufficient to keep cashflow neutral and be debt free.

Next problem is onerous contracts:
2021 Marine Margin 1%. 3 contracts are onerous. One of the 3 is 64% complete and ends 2027. Unclear about the other 2. Efforts underway to renegotiate. 2022 Trading update - behind target. At a guess there's a likely outcome of something between b/even and a -£2m loss for 2022.
2021 Service Margin 26%, 14% organic growth to £25.6m revenue; 2022 update - slightly behind but expected to recover. Assuming a further 14% growth and 2% margin growth could see a £2.9-£3.1m Op Profit.
Before you get too excited central costs will net that to near zero. That's a realistic case.
Of course there's a pessimistic case you can make..... and there's also an optimistic case where Key Defence Suppliers need to be safeguarded and a renegotiation is successful (i.e. if TPG went bust that creates disruption). Defence spending is going up and TPG is almost unique in this vertical, to not be enjoying a boon from the revival of Defence priorities.

To conclude, trying to piece together the 2022 picture out of the 2021 accounts has given me a right headache. I can see why the analysts copped out and said "there remains insufficient visibility to support forecasts for FY22."

What I can see however is a glimmer of hope. I can see how a lot of incompetence has been flushed through and a leaner, cleaner, sensible TPG is emerging. The Science Group people are not "nice". They won't throw a bone to TPG let a lone a loan. The £50k a quarter service charge for admin and £150k arrangement fee is taking their pound of flesh. However, you cannot fault the way they have cleaned the mess that came before and clearly it was what TPG needed. There's a good chance they cannot manufacture a crisis to "take the whole thing over". Clearly they a sitting on a large loss from their purchase of 27.8% of TPG at a 5p ish level (75% loss so £8-£9m maybe?)

The other ray of hope is simply that people who work there are happy. This was the reason I didn't sell up. I've monitored the glassdoor feedback since SAG's involvement and only found positives.
https://www.glassdoor.co.uk/Reviews/TP-Group-Reviews-E1697672.htm

GLA

Some more food for thought:

https://www.tipranks.com/stocks/blze/forecast
Backblaze has a forecast 110% aggregate upside based on 3 analysts. That would add back $0.94 to the NAV.
Based on my calculation earlier today of the increase in BLZE and BOLT since 30/06/22 to today that would add to the $7.84 "real NAV as at 16/08/22" to arrive at a future NAV of $8.78. At today's close price (up 3.2% today) that's a 52.85% discount to NAV.

Another fun fact is the average premium to NAV historically was about 30%. That's because this consistently grew at about that rate per annum. If we said "fair value" was this should return to that premium then that would be $8.78 x 1.3 = $11.41/share. Today's $4.14 is at a 63.8% discount to that "fair value" level!! (i.e. a double bagger)

TMT is covered by various UK Analysts Hybridan, Cenkos and Edison all of whom provide a slightly different perspective. It is also interesting to browse their holdings which are seed funds (pre Series A fundraising) and this segment seems to be quite resilient in the current market. As Cathie Wood says: Innovation solves problems - and we have plenty of problems right now. I particularly like Backblaze (am a customer) and have browsed the websites of various holdings such as Estate Guru and I've liked what I've seen. See: https://twitter.com/TMT_PLC

I notice the Investor's Chronicle have covered TMT this evening too:
https://www.investorschronicle.co.uk/ideas/2022/08/16/bargain-shares-capitalising-on-nasdaq-s-rally/

What I find interesting is there is a previous relationship with Bushveld (BMN) and their move into Vanadium Electrolyte (via a Bushveld Energy subidiary, now being spun out). BMN bought a fair chunk of IES and resold it in the 2020 "heyday" (you ain't seen nuthin' yet! :) ). The way things were left was that IES had first refusal but not the obligation to buy from Bushveld.

Clearly that relationship appears to be at an end with this JV. It would be interesting whether IES was purely motivated by the IRA (the inflation reduction act not the other one), or whether there was a falling out - or whether there were concerns with BMN that led them to seek out a new partner..... I can't think it was the IRA because you don't reach an agreement that quickly so I suspect the latter..... Poor BMN languishing down sub 6p today (maybe as a result of this RNS?). I'll let you ponder that one. I wonder whether Larry would spill the beans?

Meanwhile the IRA makes the economics of reshoring manufacturing worthwhile (freight and duty savings plus the various tax breaks) so with proximate electrolyte too (rather than shipping of that) the reshoring to the US really adds up. Finally I note IES are providing expertise into the JV, while they provide the rawa material, but there isn't any mention of cash. That's good coz we need every cent for our own expansion!

The analogy I'd draw is BELL took off in a 20mph breeze, LUCY bounced down the runway in the blast of choppy markets - but still got airbourne. Today's drop in TEK to 32p is very tempting to do a top up to be fair. Do I compromise on my portfolio balancing and instead be greedy when others are fearful?

I'd not thought about it this way until just now but are investors taking into account the value of warrants? Warrants are options that give you the right (but not the obligation) to buy a share at a future fixed price. $7.50 in LUCY's case.

So wasn't yesterday's drop of Lucy actually an increase overall?
If you consider someone paid $7.50 for 1 ordinary share and 2 warrants. At the close of yesterday the ordinary was $5.89 and the warrants were $0.90 each. That's $7.69 total - a $0.19 increase.

Wasn't the $7.50 start price always going to drop because people rationalised I can sell at $7.50 what has only cost me $7.50 less the value of these 2 warrants?

Wasn't it always going to drop if you think about the logic from the point of view of that person holding those LUCY shares and warrants?

Talk about hidden value in plain sight. Today's news of a "massive" reduction needs to be put in context.

But before I do even with today's news there remains a 40% discount to NAV. I maintain this is actually larger, and here's why:
1. The NAV is as at 30/06/22. As I write on 16th August there is an uplift BLZE of $0.24. The downgrade to Bolt was made based on peer valuations of Lyft and Uber as at 30th June. Yet each of these now trades 44% and 58% above their 30th June valuations. (in other words the reduction of 28% would be reversed if we redid it today). That adds back another $0.92. That gets to $7.84 or a 47.7% discount to NAV just based on those 2 facts.
2. The Russia exposure turned out to be far smaller than originally feared. The amount was relatively small but other write downs were smaller still.
3. TMT has $13m cash adopting a conservative approach going forwards
4. Lots of positive updates from the portfolio including from Backblaze which remain also well funded.

Smkr, just wanted to say thank you once again for all your insight here. Today's leap here was most welcome!

I only had a toe to put in the water (or should I say the aqueous solution) here, but it's gone from a little toe to a bigger toe at least!! :)

Interesting to note that LUCYW (Warrants to buy LUCY @ $7.50 before 08/2027) shot up today from $0.60 to $0.93 at the close. In other words there's clear interest in locking in an option for an effective $8.43 share price.

Bit of a no brainer you might say, and it's a pity us loyal TEK holders weren't offered any warrants, and these were given only to participants - newcomers? - in the small proportion of LUCY floated today.

Lucy's cash:
+$6.2m raised net of fees today ($6.62m gross)
Future funds through warrants = +$13.24m gross (& net?) of future funding
Future funds through Convertibles = +$1.25m (via a reduction of liability)

Dilution: I was going through what a fully diluted future looked like for TEK:
6,060,187 = Total Lucy Shares 14th August 2022
4,963,293 = Tek's "share" of the above.
1,096,894 = non-TEK holders of TEK 14th August 2022 (Crowdfund people & Directors exercised options?)
2,332,500 = Options granted to Management (not yet exercised)
235,562 = Convertibles (Lucy debts that could be converted to shares, not yet exercised)
882,353 = IPO shares issued 15th Aug 2022
1,764,706 = Warrants issued 15th Aug 2022 (not yet exercised)

TOTAL = 11,275,308 shares
TEK's share if fully diluted (all of the above) does occur = 44% (4,963,293 shares of 11,275,308)

Remember however that will be 44% of a much bigger cake and the assets today have swelled from an approximate $2.5m cash raised by TEK May 2022 to $8.7m and with warrants, convertibles etc above the Net Tangible Assets would be about $21.5m. (This would enhance TEK's "fair value" to $50m+ from the current $27m)

The immediate job now, whether we have $8.7m cash or more, is to grow sales by 16 fold. Assuming margins remain static we need to see a turnover of 16x which is $15.3m annualised to generate a $3.8m gross margin which would get us approximately to break even. That's just 0.05% of the eyewear total addressable market. (of $28.3bn in 2021). I think we can easily get there with the momentum and more still.

As Gandalf said to the fellowship in the Two Towers "One stage of your journey is over, another begins" so it is here. Despite a disappointing opening day (from a LUCY share price point of view), the important point to take out of today is that the cash is now in LUCY's bank, and the journey continues. Just as BELL blossomed now it's Lucy's turn to flourish too.

Did anyone attend? Be interested to know any feedback.

I didn't but I had some feedback in absentia when I wrote to Corcel to ask: I am unable to attend the AGM but I did have 2 questions I was hoping you could clarify. My sense is that there's much more going on than we appreciate and understand, and for my part I was encouraged by the clarifications. Clearly, with the wider energy crisis, one would think that the "roadblocks" should unblock at some point.

1. Burwell:
I noticed SMS energised their 50MW battery at Burwell a few months back. How did they overcome the issue of local grid congestion? https://www.sms-plc.com/insights/sms-energises-50mw-battery-energy-storage-site-in-cambridgeshire/

>> Yes at Burwell a number of projects where grid connections were applied for years ago made it “through” the system I guess you can say and have energized. Anything somewhat newer, applied for in the past several years effectively, are in the same boat as Corcel. We know of a number of batteries and other renewables projects in that area all with the same basic delays to be worked through.

2. Tring Road:
https://www.corcelplc.com/wp-content/uploads/2022/06/202206_CRCL_PPT_FINAL.pdf
I understood there was a battery storage opportunity at Tring Road? The presentation deck suggests this is only a gas peaker opportunity? Could you clarify please?

>> On Tring, it was developed solely as a gas peaker by Arlington Energy before we got involved in it. Now we are working with them to consider modifying it to a hybrid site of some nature. What that requires is a two way symmetric grid connection, whereas the gas peaker connection is really just export only. So some work to be done there, but it goes without saying we’ll be looking to make the project as attractive and viable as possible.

Thanks DJ I had puzzled why it was 15c lower than the SEC range!
Agree on the wisdom of being conservative in choppy markets (the bigger prize is the remaining holding which should appreciate dare I say strongly), and that higher 980,000 is a great spot - certainly does indicate a strong level of interest.

I looked for signs in social media Reddit/Tiktok for a "meme" campaign but couldn't find anything.... LUCY IPO feels like something you could imagine Gen Z's and Millennials getting excited over maybe.

You're missing the point TopCatz.

We are not seeing a 6.3p rise in TEK today, yet. So the market is underappreciating the increase in value - or is factoring in a risk premium to the IPO. The point is later today depending on how LUCY moves the market will know either way.

And TEK should continue to move accordingly.

GLA

I'd add the SEC filing was for a $7.50-$9.50 strike price meaning $7.35 is conservative and people reading the IPO will be aware of this.

Interesting to read what people reading about the IPO are seeing: (Would this pique your interest?)
https://www.robomarkets.com/blog/stock-market/ipo-of-innovative-eyewear-smart-glasses-for-every-day/