Member Info for Agricore

Strong update:

· Net Assets increased 13% to US$76.9m (30 November 2021: US$68.1m).
· NAV per share increased 6% to US$0.51 (30 November 2021: US$0.48) = £0.42
>>>(To think you could pick this up at >50% discount to NAV recently!!!!!!!)

· Portfolio valuation increased 16% to US$74.3m (30 November 2021:US$63.9m).
· Total income was US$8.0m (H1 2021: US$14.5m), driven primarily by the net increase of US$7.5m in the fair value of portfolio companies (H1 2021: US$13.8m).
· Profit after tax: US$6.7m (H1 2021: US$13.0m).
· Completed US$2.5m share placement during the period (H1 2021: US$5.3m).

So glad I loaded up on KZG - today's news will drive a further rerate of a bonkers share price.

Further £3m GM - fantastic!
Plus scope for further rerates on other minerals and the diamonds too.
Plus the 34X beach hopefully to come!

GLA

Interestingly it turns out Liberty Flights sells beyond the UK. These distributors cover Japan, Oz and NZ:
https://www.thrvape.co.nz/
https://liberty-flights.shop/

Comparing BAT's product to SUP's product it does appear to me that SUP is 7x cheaper for the same thing: (£6.99 vs £1):
https://www.vuse.com/gb/en/e-liquids/pods/vuse-epod-chilled-mint-nic-salts-e-liquid-pods
https://www.88vape.com/collections/16mg-e-liquid

Has anyone else seen this?
https://www.ii.co.uk/secure/my-news-feed/analysis-commentary/ii-view-vaping-boom-pushes-bats-smoke-free-customers-above-20-million-ii524802

>>>Revenue for alternatives, or what it calls New Categories, rose 45% to £1.28 billion, with customers for its non-combustible products up 2.1 million to 20.4 million. New category brands include Vuse, Vype, Glo and Velo.

Is 88Vape genuinely a fraction of the price of Vuse, Vype, Glo and Velo? If BAT are achieving 45% growth for their non-combustibles then surely SUP is also doing at least that? (Or better??? As we're cheaper?). I'm not a vaper, so it'd be great to get some insight from someone who's a vaping conoisseur!

NB: BAT sells internationally not just to the UK, so a good proportion of these 20.4m people using BAT's products aren't going to be SUP's target market.

Cenkos use a 45% H1/55% H2 split based on prior year data. If we apply this to the H1 numbers we arrive at the following revenue and EBITDA forecast numbers for FY2022:

1. Revenue rate £42m (above forecast £40.5m)
2. EBITDA £9.9m (about 20% ahead of the forecast £8.2m).

Apologies, reading SAG's update today the 12 month break is 3rd September not 29th Oct as I said before. If SAG bid before then they'd have to offer 6.5p (but could still bid). The analyst's view is that they won't move to takeover until the onerous contracts issue is resolved. Of particular note is that SAG trades on a EV/Sales of 2x and TPG is on an EV/Sales of 0.22 (suggesting of course a price of around 13p for TPG could be "fair value" longer term)

SAG has £48.9m of cash (i.e. a net cash position of £23.9m, and an undrawn £25m RCF). At current 1.5p SP TPG's EV is £15m. So SAG could "afford" 4.5p if it chose to - and still unlock 3X value based on the 2X sales multiple.

4.5p would still be painful, however it provides a perspective on where the negotiation lines sit (particularly I suppose for the II's). And how it's a possible 2 bagger from today's price for any new buyers?!

GLA

1. Revenue run rate £37.8m (below forecast £40.5m however a H2 weighting makes this still achievable)
2. By my calculations a 4% improvement to EBITDA and 3% to adjusted EBITDA gives an EBITDA run rate of £8.9m (**WELL** ahead of the forecast £8.2m) (EBITDA margin improves from 19.5% in 2021 to 23.5% in H2 2022 ---> £37.8m*23.5% = £8.9m)
3. Cash flow positive well ahead of forecasts (£3m run rate vs £0m)
4. Order book strong and ahead of 2021!
5. Successful onboarding of acquisitions
6. Successful achievement of synergies "as expected"
7. Not least the achievement of progress despite what could be considered a "challenging period"

Less positives:
-> Reduction in net debt was less positive than forecast (however was going in the right direction)
-> suggestion that China sales aren't yet where we want them to be (zero covid lockdowns are well publicised p.s. hey Mr China - what we got locked in our containers in Shanghai can help with your Covid problem - here's a UK university study!!!!)

Overall lots to feel happy about - I expect we'll see a Simon Thompson article highlighting the above and perhaps other insights in IC this week.

GLA

The way I look at this SAG have lost £7m-£8m in the value of its purchases of TPG at 5-6p. It would appear to me that they are tackling recent and old legacy issues (overseas acquisitions and onerous contracts). They want to buy this once fixed - not before.

Once these challenges are resolved and this is improving we will see a rerun of the takeover. (there must be a 12 month break which is 3 months away (29th Oct)). This will be because it's highly unlikely that shareholders will recognise the value but SAG will (they are the core of the TPG management team!!). If they offer 6.5p in SAG shares then I think most if not all will accept. If it's a lower offer then I just don't know but even the offer of say 5p will be more than triple from today's SP. Not great for long term holders like me but someone buying in today is laughing. I expect not many people are long term holders still?

TPG is in a great position for today's dangerous world and I have much more confidence in the new management team, but this share has required patience, a lot of patience.

GLA

Reasons to be hopeful and to turn a Hmm to a HUM

1. Part of the AISC are the sanctions and the effect of this on price and availability of consumables and parts. This was lifted early in Q3 2022 (2 weeks ago)
2. The AISC for Kourroussa was $900-$1000 last October. Yes this will have increased but extrapolating from increases elsewhere we are talking 25-30% with there being potentially a 5%-10% easing in Q3 2022 as oil prices have dropped from their Q2 highs. That's a revised AISC of between $1,012 and $1287. So it's substantially lower and profitable at current gold prices. The IRR for Kouroussa last October was an eyewatering 71%
3. In a related point the AISC for Dugbe moved from $893 (2021 Pre-feasibility Study) to $1005 (June 2022 Feasibility Study)
4. The interest rate is fairly reasonable at 8.5%. HUM has precedent for being able to tackle debt and pay it down aggressively, which will boost net profitability.
5. Dugbe has a Net Present Value of some $550 (~£441m) which is worth £225m to HUM (51%) against our current market cap of £36m.
6. Returning to Yanfolila the deterioration of grade (1.9g/t vs 2.3g/t expected) will be improved upon by proceeding with the mine plan. We know that 1.9g is not the best grade available there. There was also a 22koz shortfall in production. Canacord estimate that AISC will drop $200/oz to $1660. This is +$210/oz above the previous maximum guidance, and is not certain to happen.
7. The increase in resources and reserves is most welcome news too.
8. With a FY2022 EV/EBITDA of 2 dropping to 1 in FY2023 this is cheap but suffers a credibility challenge.

With a few steady quarters this will rerate, and any newsflow relating to a sale of 1 or more of its assets would cause this to spike upwards. Any increase of the gold price, similarly, would make this rerate too.

GLA

Next goes ex-div 11th Aug and payment 26th Sep

Rosannan, looking forward the P/E ratio for 2023 is one thing but what about a forecast to 2024?

Cenkos predict that TRIN could double its production by 2024. Taking the current 2022 estimate (3,229 BOPD) and doubling that arrives at 6,454 BOPD). Assuming that production is 100% unhedged by then and assuming a conservative $95/barrel (you might disagree on this but it is the position of Goldmans and a few others that oil will probably exceed $100 a barrel in 2024) then assuming the same EBITDA margin as that forecast for FY2023 (i.e. 41%) then we see growth to $225m revenue and $92.4m EBITDA.

That would be a EV/EBITDA of just 0.46 in 2024 (based on today's stock price). The corresponding PE would be around 1.0 .

If you consider a PE of 5 to be attainable then you are looking at a 5 bagger. If you consider a PE of 11 (like Serica is today for example) then it's an 11 bagger from here. Just to be clear, the market would "forward price" so by Q1 or Q2 2023 we will know the results of the 6 wells programme and whether a doubling has happened. By that point we should see the market repricing TRIN i.e. 9-12 months from now.

GLA

Drilling without any validation is madness. Providing a toolkit for assessing whether what you could find is economically recoverable is a sensible step that sets KAV apart from some other miners who'd press on as a vanity, then latterly find they didn't have a workable find.

Secondly provides a great marketing piece for potential buyers too. Remember KAV won't be finding $6bn - it's all about being to sell off a discovery.

The study is the right thing to have done... now on to the drilling!

https://*********************/newsfeed/article/unaudited-nav-for-june-2022-1448689

1. NAV drop of 1p (£1.76 vs £1.77) month on month
2. SP drop 7p (£112.5 vs £10.5.5) month on month
3. Cash accounts for £1.0133 of the above SP. Listed accounts for 29p/share. So you can effectively get paid 25p a share (£1.01+£0.29-£1.05) and still own 46p a share of unlisted biotech companies!!!!
4. Still sitting on same level of cash - no taking advantage of depressed biotech prices :(
5. Value of unlisted portfolio dropped month on month

GLA

Could I interest you Sir in something that conservatively provides an IRR of 17% and a NPV value of $3bn? Potentially 31% IRR. Potentially more still if you consider that $1600/oz gold or $7700/tonne copper for example is low balling?

Yours today for a market cap of £8m.

I do need to drill and prove it Sir but all the indictors say it's there. Results from three separate surveying techniques (gravity, magnetics and CSAMT) appear to correlate with one another, while the established presence of magnetite from Hole KSZDD001 provides a further physical exploration lead.

What do say Sir? Suits you Sir? Suits me, I can tell you :)

GLA

CMCL is currently at £8.90/share but Cenkos forecast it at £15.25 while Liberum see a £14.21 value.

So 800,000 shares if it reached £15.25 would equate to £12.2m while the NSR gross value based on the probable and proven 1,964koz and at $1,900 gold price would equate to $37.5m gross. Out of interest the NSR is capped at $75m which either would be reached if discoveries doubled - or the price of gold doubled or a bit of both.

If dividends from CMCL only remain static at 56c (46.6p) for the next 9 years then those equate to a further £373k per annum which over 9 years is a further £3.35m.

So BSRT's market cap is £68m and the Bilboes deal could generate £12.2m (shareS)+£31.25m (NSR)+£3.35m (divis) = £46.8m

Bilboes represents 13.6% of BSRT's NAV so using the market cap that "valued" by the market at just £9.1m. So I've concluded that there's a £37.7m disparity in valuation.... or 56% uplift of the current market cap.

Meanwhile Future (coal) and Cemos (cement) are both doing (very) well. Tungsten West doing better. And these are the top 3 holdings (Bilboes is 4th largest). Also Kanga (Potash) looks exciting too (albeit it's just 4.4% of NAV)
https://www.edisongroup.com/publication/nav-broadly-flat-in-fy21-after-strong-fy20/30462/

I tried to top up today but couldn't buy BSRT on the mobile (a missing disclosure document?) but on the desktop this evening it's allowed me to place a limit order so hopefully I double my stake first thing tomorrow. Cannot believe that it only went up by 0.8% on today's news. Totally overlooked.

GLA

My soliloquy continues: today’s news confirms my feeling that Bilboes baggins held upward value. The 800,000 shares in Caledonia realises the “book value” (assuming CLDN doesn’t drop in the following 6 months) however the NSR is worth a further $2.6m a year over 20 years so a NPV of £25m (assuming a gold price of just $1650) or a 40%uplift in NAV to a 60% discount to market value. This is completely overlooked by the market today (less than 1% move in price) so a screaming bargain in my opinion.

More so if you believe gold will exceed $1650 an ounce in the future or you consider Caledonia shares will increase in the future…..

This RNS had to arrive since the recent REE Kenya investment wouldn’t make sense without it. The encouraging comment that both diamonds and tantalum mining are now self sustaining is also welcome. A tantalum shipment would be a minimum 3 tonnes and depending on purity (assume 40%) would be worth $125,000 (50% GP is $62k and diamonds assume a $40k GP (per align) then we conservatively have a $1.2m per year run rate (and growing) contribution.

Certainly derisks it further - so I’m happy the news is following the predicted path.

Thordon how are you calculating TSL to be trading at a premium to Block?

Including the recent 9% capital return I make TSL to be at a 35%-39% discount to block (for no reason)

I'd also point out:
1. Paul Johnson can open a lot of doors and brings a lot of experience and contacts. Having a large supportive shareholder is a big plus in my opinion.
2. We know how well KAV can stretch funds and I'm excited by what £3.3m cash at a decent strike price can deliver.
3. I'd also point out that Ben himself has a large stake 1.79% so he's diluted himself more than you or I (in absolute terms).
GLA

Rather than worrying about being "stitched up" why not take a breath and work through what's happening here:

60m on 435m is 13.79% dilution. This is certain.
VP Warrants assuming taken at 3p - also assumes KAV share price rockets 60% by Jan 2023) would provide KAV £382,500 cash (3p-15%=2.55px15m). This is 3.03% dilution (15m/495m)
60m Warrants would provide £2,925,000 cash to KAV 4.25p and 5.5p and dilute a further 11.76%

So there's 13.79% certain dilution and potential for a further 14.79% dilution.
There's a NSR of 1% and a clawback if Kanye is sold for above £7.5m (which would be likely... if sold)

But look at the deal for us:
1. £3,307,500 of cash (if/when it happens) represents 42.78% of our current market cap.
2. By the time all that dilution happens, if it happens, compared to today we have tripled our money... made 318% upside (1.75p to 5.5p). I appreciate some - or all - readers are sitting on losses of X percent but I learned a long time ago to look at my shares based on today..... and going forwards. Can't alter the past, just decide the present which dictates the future.
3. If we rent the land post discovery (I think this is the most likely) then a NSR of 2% is a minimum. So we are equal with POW. If we can get more than 2% then we gain on any upside. 2%-5% is achievable folks. e.g. https://investingnews.com/daily/resource-investing/base-metals-investing/copper-investing/investing-net-smelter-royalty-returns/
If we sell the whole thing we share in the spoils. I would remind you that even achieving £7.5m is 97% of our current market cap - and we all know that the other holdings are potentially worth more.
If we sell some (up to £7.5m conveniently) and get an NSR for the rest that seems a possibility too?!

I think if you work the numbers should we be down in the dumps about the deal, while POW shareholders dance with glee? No, I think it's a fair deal done between 2 decent companies and I'm very happy with it. I am a POW shareholder as well as a KAV one. My KAV is 10x that of POW and do you know what I'm happy with that choice. Even after this news :)

GLA