Member Info for Agricore

The weakness in gold and silver has baffled me. Whenever I try to investigate I just find lots of a bullish resurgence is imminent. It's been imminent for a while. However I've stuck with gold/silver equities and HOC in particular. I remember well the point it hit 90p and quickly rose to £2.50 back in 2020 I believe. What impressed me today was to realise at current prices this yields 3.95%. Given the future upside from Amarillo, Aclara as well as continuing operations in Peru there's lots to like here. Analysts see a 100% upside from here.
GLA

CEY is on a Price Earnings using FY2020 of 8 or FY2021 of 11.5. (after excluding minority interest).
Analysts see a 40%-100% upside to the share price from here.
The pound is a low level.
Certainly could be taken out for what would be for Mac. an attractive price.
GLA

Doesn't matter how many reserves or what potential you have, if you run out of cash then you're toast! I think ATM bought the rights to Uis for some paltry sum from some toasted seller from back when tin was much lower.... and I just feel risk adverse about a 12% loan.

On a brighter Tin rebounded to $27k today after a scary drop to $24k yesterday.

The share price was at 5.3p when the AISC was at $33k, lithium and tantalum were but a wet dream, and no financing had been agreed. Think we are all agreed that the current price is too low.

Hopefully we'll see a rebound tomorrow.

CONTINUED
4. SUP's management deserve a heck of a lot of credit for being candid about the situation. I think absolutely all credit to them for raising it. I would 1000% rather be invested in a company that is trustworthy and honest.
5. There was no value placed on the customer relations introduced through the Liberty acquisition. The £1.5m uplift in EBITDA and 7X valuation could actually turn out to be much more if Supreme leverage their "it's not fair" upsell/cross sell approach to these new accounts.
6. Closed system vaping. People can moan about the "disposal" nature of closed systems but Sandy while wringing his hands from an ESG point of view can also rub his hands as the margin is *COLOSSAL*. I calculate it to be 25x more profitable (£5 for 2ml vs £1 for 10ml - appreciate these are RRP but the underlying margin is going to reflect this). And it's the larger market segment according to what I've read (I've never vaped). I do also get the value of giving customers the option to move from closed to open.

GLA

One interesting fun fact: back in December 2021 when SUP was £2+ the forecast EPS for FY2022 was 11.7p/share. They actually achieved 12.4p a share.

But it's the future estimations to which we now turn. My calculations differ slightly:

I get to a 37% increase of GP for Vaping forecast for FY2023 (£26.7 vs £19.5).
Vaping becomes 75% of total GP. There's a 30% organic increase forecast and a 7% GP contribution (£1.5m) from Liberty Flights.

Lighting: GP forecasts are £4m and £6m. I am still chewing over the 20 times the life and 5 times the cost logically suggests revenue should drop by around 75%. I therefore am sceptical about the GP figure for FY2023 and FY2024. But if it's overstated I would estimate a £3.5m and £5m GP forecast as being more realistic. The drop in sales due to LED lifetime, is partially offset by higher market share in the coming 2 years.

Batteries static at FY23 and FY24 of £3.8m. No reason to think that will change up or down. I think someone asked about any risk of LED batteries lasting a lot longer on the call today. Either that or Hannah got confused. Or I misheard. Has anyone heard of these LED batteries?!

Household again is the same as forecast.

Wellness. One question which has occurred to me following today's call is the extent to which the price of whey was emphasised. Forgive me if I've got this wrong but you only find whey in Keto shakes and protein mixes. The Wellness category is far, far wider than whey. So that has made me question why the forecast drop in profits. The 130% yoy was stupendous (although not altogether surprising). I do wonder why this hasn't been forecast more optimistically going forwards? I guess other ingredients have gone up too for vitamins etc..... but surely these costs can be passed on? I mean if SUP sell a year's supply of Vitamin X for £6 instead of £5 then sales won't fall off a cliff? I say this rhetorically as there is a wide variation of prices and packet sizes. I have noticed quite a lot of aggressive promotional pricing however. I bought several bags of Keto Shakes for £2 each I think which now seems an incredible bargain given the price rises. Was Sealions a bit naive in some of its pricing?

Other thoughts:
1. The capacity increase due to the Liberty acquisition enables SUP to scale the Vaping business so we could see surprises to the upside if some of the predicted migration of smokers to vaping does occur.
2. Wellness - a profitless exercise? I still think this could surprise to the upside. People still value wellness even in a recession. There's lots of opportunity for trading down from Holland & Barrett, and Millions in all the Pound shops is perfectly placed.
3. There's no value placed on SUP's proven capability to obtain value from M&A. This is a fairly rare gift.
4. SUP's management deserve a heck of a lot of credit for being candid about the situation. I think absolutely all credit to them for raising it. I would 1000% rather be invested in a co

I think you're all too optimistic thinking that the current climate would generate an offer of fair value. Today's tin price is a further drop of 5% to $24k . For now it's a case of batten down the hatches keep seeking to drive down production costs because reaching the AISC $20,500 could become increasingly critical.

I worry about the wisdom of further borrowing at high rates and have written to the company to express my concern. If their analysis is such that the pay back is worth it then fair enough but taking risks with precious cash, and wasting bandwidth on speculative takeover talks would be a massive mistake right now. In my opinion.

I am perfectly comfortable that things will rebound and there's a bright future ahead, but safety first.

I feel a lot happier on the back of the investor presentation. The "whoops" moment is the fact that LEDs have steadily replaced incandescent sales since 2018 and these have a 20X life and a 5X price - therefore the market size - due to technological improvement - has dropped by 75%. SUP's channel customers have merrily continued ordering the same volumes for years but suddenly found they are overstocked. This is described as an industry wide phenomenon - e.g. the lighting association reporting the same.

The lighting forecast sales per Equity Development were confirmed and actually indicate a *SIGNIFICANT* uptick in sales (taking into account the above 75% drop) and sales are forecast to *INCREASE* FY2024 (compared to historic run rate) on the basis of x20 life and x5 cost compared to prior incandescent sales..... however the revenue drops accordingly.

I can immediately think of some puns around why didn't someone remember to turn off the forecast - but hey - it's not like this is a loss of masses of customers or anything other than a step change in technology.

I sorely wish that I had funds to top up today and am contemplating cutting some of my other horses as 81p is incredibly cheap and tempting....

https://news.metal.com/newscontent/101880224/tin-prices-to-remain-weak-in-the-short-term-amid-growing-inventory-

I asked 3 questions on the call just now:

> Dugbe has a low AISC profile of US$1,005/Oz. What is the corresponding forecast AISC for Kouroussa?
> Second question the indicative g/t at Dugbe is substantially lower than Yanfolila, yet has a guided $1005/oz AISC. so how is it possible to be so low when its resource/tonne is much lower?
> Third have there been any severe weather incidents between April and June (the wet season)?

Justin didn't ask my first 2 questions (grr) but there was a positive answer to the 3rd. No there hasn't been any disruptive weather and moreover HUM are prepared for bad weather eventuality.

So at least we now know that leaves on the line won't stop the Hummingbird express in Q2 2022!!

Unhooked - It's actually a slightly higher dividend announced today of 2.2p vs 2.1p forecast for 2022.
However I take the point that the forecast 2023 and 2024 dividend is now lower. 4.7p and 2.6p vs 7.3p and 8p.
Based on a reduced EPS of 13.3p to 9.3p in 2023 and 14.6p to 11.7p in 2024 the forecast drop in dividend in 2024 seems overdone.
I'd echo the point made about today's drop being a large overreaction, and that at 90p we are talking about a business on a (reduced) forecast 2023 PE sub 10 that drops to a PE of 8 in 2024.... and that managed to grow its Wellness segment by 132% in the past year and forecasts 30% growth in its most profitable segment in the coming year.

Notes from the interview with Bob Rauker 01/07/22 on Vocks Mkts

> Distributors report a 1+ year waiting list for competitor products -> Opportunity for BELL
> Xplorer lighter weight, more oxygen
> Auto breath detect - if device doesn't detect breathing it triggers an alarm
> New App that provides connectivity. Unique selling point is that it connects to smart phones and to leading pulse oximeters Massimo and Nonen (i.e. not a bespoke app/device)
> Data is collected in Apple Health or similar and other info like weather can be incorporated - were you walking at the time?, what was the weather like that day? Pollen levels? etc etc etc.
> Phase 3 plan is to enable patient to set alarms and alerts - i.e. to physician or to a loved one. Proactively monitor health rather than once things have "exacerbated" in Bob's words.
> Expansion of mfg underway and further expansion planned.
> Commercial expansion to Asia Pacific/Innomax to come online by Q1 2023. ISO certified so can import production from China to the US.
> Distributors like the commission model (i.e. they don't have to buy and resell the product) instead BELL fulfil the order and despatch the product and pay a commission to the selling distributor.
> Also operating a direct to consumer model and the suggestion was made that the price point of Xplorer is below that of the competition.
> More product updates later this year
> "Can do" attitute is what Bob puts down to the success of BELL - cut out the inefficiencies.

2021 Accounts out at 7am. Perhaps we'll see a dividend announcement too.

2022 First Half Thoughts:

BSRT now contains a mix of "private equity" access to funded juniors and listed holdings who are for the most part in the process of starting production. Expecting a continued price rise across many commodities should continue into 2022 let’s see where we are:
Gold YTD down -1% $1810/oz
Coking Coal up 147% $388/tonne
Tungsten up 14% $362/tonne
Silver down 4% $20/oz
Copper down 18% $7,980/tonne
Tin down 30% $26000/tonne
Zinc down 17% $3,029/tonne
Potash up 154% $341/tonne
Other 4%
NAV dropped 98.4p to 87p (31/5/22) largely due to Tungsten West Plc and First Tin Plc
We were due to see “a strong backdrop” and “a number of IPOs” to crystallise value. So what happened?
Negatives 2022 H1
? Commodity price falls – I don’t think anyone foresaw that copper, tin and zinc would be between 17-30% cheaper than 6 months ago. These are “energy transition metals” (zinc not so much) yet these are sensitive to economic growth/contraction. Judging by the extent of the falls quite a nasty contraction is coming.
? No “NAV trigger” events yet in 2022; IPO market conditions are generally poor
? The Prognoz silver mine royalties (with Polymetal Plc) held through Polar Acquisition (PAL) has been written off

Positives 2022 H1
? Ukraine Invasion – a positive for BSRT's portfolio has been the price of potash, tungsten and coal.
? Longer term energy transition fundamentals have not changed
? Silver X – a JORC 14.9MT at 162.65 g/t, 2.54% Pb and 2.5% Zn was a 104% uplift
? No comms beyond a brief monthly NAV report and the 2021 annual report

Conclusion: The discount to NAV dipped to 32% in June and has since rebounded to 25%. This is still above normal and BSRT’s convertibles give an upside/downside approach i.e. they hold debt but can convert the debt to equity if it suits them. There’s a chunky discount in some highly prized commodities which is anomalous and the price drops in copper, silver and tin cannot be sustained by producers who are close to or below their cost of production – suggesting a rebound will come. Some positions including Kanga, Cemos, PAL and Bilboes have book values potentially far below their realisable value so quite a few areas of uplifts. Has 2022 gone to plan for BSRT? Not really. But don’t write off BSRT just yet – there’s gold in them there hills!

GLA

Cor! IPO now priced at less than 50% of its growing NAV where it holds plenty of cash to runway its holdings to profitability

Faramog, for a profitable and producing business to be below book value makes no sense. So from a book value if we assume the historic cost is below current market rates but in the event of a fire sale you don't get market rates then book value probably is around market value so 40% upside i.e. a 10p share price.

From an earnings valuation point of view - the better perspective as BMN isn't being sold off, far from it. The Price Earnings ratio is an estimated 2022 PE ratio of 5 and 2023 PE ratio of around 2.2 at current prices is clearly obscenely cheap. So fair value would be a PE of around 9 (is the average for the mining peer group) suggesting we arrive at a target share price of 31p - which is SP Angel's estimate too. ARC's estimate of 20p only looks at 2022 and doesn't attempt to peer into 2023.

We've seen progress at BMN so it is reasonable to assume that the projections are possible - especially projecting from the current quarter or even extrapolating the Q3 2021->Q1 2022. That's before any upside from VRFBs which many large names like Siemens are now getting behind. If FeV pricing returns to 2018 levels and BMN production expansion remains on track and a little optimism returns then 50p+ is absolutely possible here (again applying a forward PE of 9).

That makes it a future 7+ bagger. Hope that helps. And a mere 2 bagger if not!

GLA.

https://soundcloud.com/user-596578261/vsa-capital-technology-transitional-energy-300622

IES discussed at the beginning. Couple of interesting nuggets.

1. the idea of a Vanadium ETF where the V is stored inside a flow battery. So that would bring down the cost by 1/3 since the battery buyer owns the casing and not the contents........

2. Feedback from California 50% of storage will be non-lithium

3. Ofgem £20.9bn in upgrading the electricity network 2022-2027 for capacity and resilience.... This is the equivalent of a huge "road building programme" for energy storage providers :)

Generally talks about dislocation of value and bear market etc.

GLA

This one is full of red flags - I'm glad I got out despite the apparent and tempting dislocation of value.

No word of the restaurant Fook Lam that they "lost" ownership of.
No update on the Dolomite mine instead some general ramble about Chinese Magnesium sales in 2021.
I could go on.....
But a dreadful result, and a complete lack of transparency and accountability.

In my opinion you'd be throwing your money in the bin investing here.

TIN PRICES:

Whilst tin prices are languishing at around $26k this morning I'd also point out that tin inventories in China and in the LME (the 2 reference points for worldwide inventories) are still relatively low. They have recovered from near zero levels, when we saw the spike, however we are still in a tight market which suggests prices "shouldn't" fall much further based on demand/supply fundamentals.

https://m-q-news.wenhua.com.cn/newshare/#/share/20220608MM0164

Hi Kooky, if you look at PT Timah 2020 and 2021 accounts their cost of production is $25,116 (2021)
https://timah.com/userfiles/post/2205196285AF396A0A0.pdf

I've not found any peer where they can mine tin at sub $25k. In fact what baffles me is that peers like 1SN and CUSN are valued as high as they are relative to ATM. I indirectly own 1SN through Baker Steel and they are pre-revenue and pre-DFS. CUSN is "valued" at 30p with Hannam (and is substantiated by analysis) or 50+p SP Angel (without any real substantiation) but their tin - like ATM - is strongly supported by potential byproducts..... Zinc and Copper for CUSN so on a **standalone** basis the 2017 preliminary economic assessment for CUSN was $23,200 (and that's 5 years ago plus 5 years of inflation in 5 years makes that PEA more like $35k+ today). There's a £40m investment having to go in and they are pre-production by about 2.5 years.

Look I'm not trying to bad mouth other tin investments I'm merely pointing out that a 5.2p price for ATM is insane (at a £80m market cap) when CUSN is at £111m market cap and 1SN is at £50m mcap. On a relative basis we should still be **at least** at 9p. The numbers are the numbers. I've carefully considered investment into those but ATM is simply the better bet.

ATM is:
> cash positive
> producing
> on track to drive down cost of production to $20,500 in 2022
> on track via by products to drive AISC of the tin element to a *NEGATIVE* price (via by-products) in 2023/2024
> sits on multiple enormous resources - has been able to upgrade its JORC reserves
> potentially tin becomes the by-product and ATM renames "Afrilith" - Anthony thinks the lithium is far higher than we yet have defined
> Phase 2 expansion would expand the scale of the operation and revenue which would drive efficiency and far higher profitability.

Lots to feel happy about - happy 4th July weekend everyone. Tinnies all round.

Have read the accounts and compared the 2021 results to the brokers estimates (essential to establish which brokers are trustworthy :) )

My advice would be to chuck the H1 2021 accounts in the bin. You already know how dreadful they were. The 2021 results are only meaningful if you deduct the interims out (H1 2021) and instead double the H2 to understand run rate and trajectory. It is very illuminating. It gives me expectation that the 2022 PBT forecasts of $7m (SP Angel) - $14m (ARC) are perfectly achievable - in fact we will do better. From the Q1 update we know too that we are about 30% ahead ($40-$47/Kg FeV) on estimated price and just under 10% the run rate for 2022 production (but that's to be expected because of Kiln3 coming on line will mean H2 production is higher). Q2 FeV pricing is a little lower but around $39 by my estimation (so again ahead of SP and ARC's estimates). We don't yet know Q2 production but we know - at least - there's no RNS to tell us of issues.

Anyway, I've seen other people's estimates of $30-50m "profit" for 2022. I can only assume they are talking about EBITDA which in my view is not helpful (since the "I" and "DA" bits of EBITDA are substantial at Bushveld :) )

Bushveld Energy being spun out. I'm happy about that. We will be able to raise capital to fund it while retaining a stake. There are 3 benefits for BMN shareholders: 1. A smaller slice of a larger pie is usually worth it in business. 2. Bushveld Energy drives demand for vanadium so is a win-win for BMN. 3. Assuming it is sufficiently capitalised it takes the capital funding away from BMN. If you have read my past posts I was extremely negative about the capital being poured into Bushveld Energy in 2020 and early 2021 without any kind of accountability. Later revelations about appointing a consultant there justified my criticism I feel.

Going concern - has anyone read this? The Directors and the Auditors are happy even under stress tests that BMN is sufficiently liquid. For the non-accountants reading this think about the aircraft have reached sufficient speed to leave the runway before you run out of tarmac. I think the fact that the market hasn't seen this as an extremely positive aspect to the situation reflects the extreme pessimism.

So to the real kicker. Has anyone actually compared the current market cap versus the net assets? My calculations show that you can buy shares in BMN at a *30% discount to net assets*. $150m market cap is around $105m. For a business that has a (proven) trajectory of increasing profitability (I appreciate the 2021 and 2020 accounts show heavy losses but these are irrelevant to extrapolate the future - the trajectory has changed). It is crazily cheap - if you bought it up and shut the whole thing down you'd make nearly 50% profit on the book value of the assets.

All in all, I'm happy with the 2021 results but only because I've not read them at face value, and picked out what I believe to be key points.