Member Info for Agricore

Ironic too that Jp Morgan are currently supporting an IPO for energy transition partners With the Deepwater Horizon Disaster guy where they speak of waning enthusiasm for carbon-based energy !!

https://news.sky.com/story/former-bp-chief-hayward-plots-float-of-energy-transition-spac-12352984

Waning enthusiasm because we don’t have cop26 in a few months time, front page news isn’t climate disasters in many parts of the world (simultaneously), and there’s no political will to support hydrogen nor is there carbon taxes, nor a clear goal to achieve $1.50 green hydrogen, nor is an ESG agenda at all politically correct nor desired by investors. Meanwhile In other news there’s waning enthusiasm for JP Morgan.

Quiggers you’d also need to take into account a growing forecast deficit for PGM over the next 6 years. This means the basket price will likely grow too.

https://www.lbma.org.uk/alchemist/issue-92/world-emissions-standards-opportunities-risks-for-pgms-in-automotive-catalysis

Bounce coming tomorrow following the political tensions easing. Feel very sorry for the mess that SA seems to be in. Great country and a great people; hopefully tackling corruption will turn a corner for what should be one of the wealthiest countries in the world.

https://www.reuters.com/world/africa/ramaphosa-visit-worst-hit-province-south-africa-violence-eases-2021-07-16/

Skid35, you're in danger of doing the hokey cokey saying you're out, then in again. Hopefully not too long to wait for that 22p rerating and your b/e. That's what it's all about.

So what shares do you rate, and will invest in, when you sell out of Kromek?

My take on this is:

- Clearpay has some usps - the 5 star trust pilot rating for one. Look it up - there’s a real buzz behind people’s feedback from what I read
- could clearpay be an acquisition target? The legislative change means it’s not just a case of setting up shop
- price competition? Apple is famous for its high margins and they are in partnership with Goldman sachs I think. Neither will be doing this for a low price. Nor PayPal.
- e-commerce vendors are the ones who choose a pay later provider so it won’t be driven by the number of Apple customers per se
- first mover - I expect there’s a degree of entrenchment where you don’t move provider unless there’s a clear benefit to doing so

Great point to buy in - as the fear factor is overblown in my opinion

Still absorbing but 2 points of disappointment (and plenty of positives):

1. Why did Derek Bulmer get £192k in lieu of notice when it was his wish to resign?
2. Recovery of the £13m AROC exception (from 2020) is now considered doubtful and it has been revealed it relates to doubtful/bad debts (rather than written off stock held by Kromek - as Simon Thompson stated)

Positives:
1. Run rate in 2021 looks much better
2. Repeat orders are positive
3. Recent coverage on national news is where this needs to be - the market size beyond the military/security segments is surely the way to go - as long as the Covid detection is proven.

https://www.bloomberg.com/news/articles/2021-07-11/commodity-boom-dwarfs-oil-spat-as-emerging-markets-set-to-win

Russia is tipped to do well on the back of $80 oil in Q3 2021 and its enduring PB value.

Vanadium
2020 - $23.40/kg average price
2021 - $37.50/kg average price (YTD average - obviously!)
Used 2020 numbers from Bushveld 2020 annual report.
Used 2021 numbers from - https://www.vanadiumprice.com/

We know production is forecast to be 3400-3600 tonnes for 2021. Assuming costs are largely identical to 2020 then we are looking at a $30m profit for 2021. (Revenue grows from $90m to $135m)

But we know from BMN's 2020 report that there is a forecast deficit for Vanadium until 2025 when there will be a slight surplus (graph on Page 26). The surplus in 2025 assumes no growth of VFRBs but these could grow and double demand, leaving Vanadium in deficit.

We also know BMN are reducing costs but this post is about the revenue so I'm going to return to that on another post.....

So a forecast $30m profit for 2021 (and beyond) just based on revenue outlook could be conservative given the deficit in the market and growing demand. Also Vanadium is cheaper than steel. FAR's CEO makes a very good point: The degree of substitutability of vanadium steel alloy to reduce the use of (non vanadium) steel. Not just because of cost but also due to ESG concerns.

CEO of FAR said today (about Vanadium) - "two big drivers..... related to the greening of the economy and reduction of fossil fuels. The traditional one, steel, add a kilogram of vanadium into a tonne of steel and you can almost double it strengths which means use half as much. Making steel is a huge user of fossil fuels..... (and) much of the world economy depends on steel.
"
vanadium has a big part to play in reducing that amount of steel, reducing fossil fuels and of course, it’s an economic no-brainer because if you can halve the amount of steel you use in a given application then you’ll save money because saving half the cost of the steel is a lot more expensive than that kilogram or two of vanadium that that’s needed to achieve it. That’s been a growth factor for many years now and the intensity of vanadium used in the world per tonne of steel used in the world has been rising and driving the vanadium industry.

On top of that, we’re now layering another factor, which could double the amount of vanadium the world needs and that’s vanadium redox flow batteries. They’re just getting going, but they seem to be getting going very strongly and in the vanadium industry, because it’s small, there isn’t much stock holding, a little increase in demand can greatly affect the price as we found in 2018. So, the price is going to be strong, the pressure is upwards, vanadium is in abundant supply in the world, but it’s all in the form of magnet type, which is very high cost to develop.

https://www.***************************/symphony-environmental-solves-plastic-pollution-with-proven-d2w-technology-interview/4121009606

An interview today - no new information but interesting context if you're considering investing here.

The product undoubtedly solves a problem so I'm going to stay invested. It feels like this needs a decent guerilla marketing strategy to raise awareness and to drive demand.

e.g. Why are Greenpeace dumping plastic on Downing Street (today's news) rather than asking why D2W isn't made compulsory?

Aurora Satellite launched today (13th July)

https://cheddar.com/media/orbital-sidekickss-aurora-satellite-puts-technology-toward-a-sustainable-future

Great presentation from ALM portfolio company Orbital Sidekick. Onwards and upwards!!

One of their tweets took me to the gasification page: https://eqtec.com/what-is-gasification/

I would encourage everybody to read that as it contains some key reasons why an investment in Eqtec is something of a no brainer.

And when you think the size of the incineration market is around $100m per annum worldwide (https://www.marketwatch.com/press-release/waste-incinerators-market-size-is-estimated-to-grow-with-a-cagr-of-16-during-2021-2026-with-top-countries-data-2021-06-07) that entire segment needs EQT technology to reduce its emissions by 25%

I'm no fan of Musk but I disagree.

Space isn't about vague journeys to far flung places. Or being flung to the edge of space as a tourist (although there's an element of that). It's about driving technological change to communications and information. Predominantly around satellite technology. Achieving this will achieve:
1. Better communications - particularly around Edge computing, 5G,
2. Better detection through visualisation of the planet e.g. for detecting fires and assessing risk for fire or emissions detection. e.g. look at the work Orbital Sidekick are doing.
3. Better co-ordination of Transport - particularly around drones and autonomous transport

The fact that the cost of launching a satellite has dropped by a factor of 100 is why this is actually a very exciting area.

https://www.youtube.com/watch?v=IFNrwgk-6Fs

Reading a very basic moneyweek article about leverage without any real analysis, annoyed me into re-running my Afritin model numbers for 2021 based on a higher (current) tin price ($33,000) and based on a $2k credit for lithium/tantalum. The results are extremely interesting.

Basically profits double and PE goes from 25 to just 12.3. At the current 6p price it is a screaming bargain, so I've decided to top up next week.

Based on ATM's August 2020 numbers:
https://polaris.brighterir.com/public/afritin_mining/news/rns/story/xjy92nx

Assume 720 tonnes output. Assume byproducts. Assume $33k average tin price. Assume AISC is $19000 (I couldn't find a ATM basis for this but this is quoted as the AISC by a couple of posters on different boards, plus smelting cost. Assume OHs double to $2m/annum and Tax at 25%. Assume no dividend. Assume by-product credits of $2000/tonne for Lithium and Tantalum.

$33k+$2k-$1,577 smelting cost-$19000 AISC = $17,223/tonne x 720 = $12.4m EBITDA and $12.4-1.5 = $10.9m NP so around £7m less 15% to minority (ATM own 85% of UIS) so £6m NP
There are 1,112,334,912 shares in issue. Equates to 0.53p/share. So a PE of 11.3 (!!!) (based on current 6p)

March 2022 - Feb 2023
Using the numbers they provide in their DFS: https://polaris.brighterir.com/public/afritin_mining/news/rns/story/w0yvyzx

And assuming that we still see an average $32000/tonne price for 2022/2023 then I calculate the pay back to be 4 months, once the Phase 1 extension is complete.

I arrived at this via Tin Price/tonne $32k-$1,577 smelting cost-$16200 AISC = $14,223/tonne x 1200 = $17.1m

$5.7m capital cost/$17.1m = 0.333333 years

Assuming OH rise to $4m (particularly for higher depreciation of the extension), tax at 25%
$17.1m-$4m-$3.3 = $9.9m - 15% minority = $8.4m so £6m or 0.55p a share. A PE of 9.

So at 5p in June 2021 is not that far away from fair value, but as the Phase 1 extension gets underway and assuming this can take 8 months from June 2021 through to year end (Feb 22) then this is where profits move to a much higher level. You may think my assumptions that overheads quadruple to be too harsh - but in my experience you can't run a rapidly expanding operation on $1m bucks a year. Also you may feel an average $32k/tonne tin price is too high - or too low. I've also not included any numbers for other metals (tantalum or lithium) although I didn't read these were Phase 1 Extension - but in the presentation they seem to be aspirational phase 2. The 5 year plan with 10,000 tonnes production, developing other mines, and a basket price of metals this would start to look extremely tasty indeed.

Despite a lacklustre 2019 and 2020 and its financial numbers, the updates and particularly the Q1 uplift in production and the DFS show this has reached an inflection point, where there would be no further substantial dilution. This is why I decided to invest here in late June

Tin is up another $1000 ($33,076) since Frisby wrote his article a couple of days ago :)

I thought it was a very basic article re-explaining the leveraged nature of profits from commodities - but doesn't offer any sort of analysis.

Meanwhile we celebrate the continuing success of Afritin and am looking forward to news on the by-products.

Tinnies all round, gla.

Harel - cheaper but also at lower risk too.

Pete, potential revenue per share and the share price aren't the same thing!

There's a small matter of something called risk, something else called time and something else called cost which mean that $500m of possible revenue from contingent (not proven) reserves don't automatically turn into a particular number of bags of our current share price.

Who is participating, and why?

I've held IMB for quite a few years. I notice that there's not much attention made of IMB's forays into Cannabis. (It's all about the dividend and the mysteries of how much, and when LOL )

But my curiosity led me to read a little, and I was a little surprised to read the following:
1. $123m convertible debenture - so could segue to a take over bid of Auxly in time. Either if they fail, or if they succeed. Either way it presumably suits IMB to keep things arms length for now. They agreed in April 2021 that interest (which will be 5 years worth at 4% per annum can also convert to shares). The loan is approximately equivalent to the current market capitalisation of Auxly. The strike price of the debentures is about triple its current share price so no reason in exercising the conversion at present.
2. Great growth potential for Auxly circa 100% revenue growth year on year. 30% gross margins.
3. Imperial are supplying vapes to Auxly, and access to distribution channels, marketing, consumer intelligence - it's much more than just a research collaboration. More like Dragon's Den and IMB are the Dragon.
4. Auxly's historical terrible track record (2016-2020) of trying to be the "Wheaton of Cannabis" and failing miserably losing much of its investment. That strategy has been largely dumped in favour of a "Cannabis 2.0", whatever that means.
5. Ongoing cash flow and growth challenges for Auxly - the pains of growth. IMB's extended its loans in April 2021 for 2 years.

I'm referencing from these articles:
https://seekingalpha.com/article/4409412-auxly-2020-was-milestone-came-great-costs
https://www.cantechletter.com/2020/06/auxly-cannabis-is-a-buy-mackie-research-says/