Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The delays are associated with the labs. Nothing can be done about this. Its been mentioned a few times on various platforms.
But i do agree with you that an update stating that we have drilled x holes in x location, but we have been informed by the labs that there is going to be an x week delay would have been nice. But its just not how the company works, instead its a few whispers here and there...... But there is also an argument that this sort of RNS could have made SP worse, given the impatient nature of many AIM investors, at least this way there has always been some form carrot/FOMO that it 'might be tomorrow'. They may even have the results now but are deciding not to release them this week and wait for the new year in the new year to try and generate some momentum. Who knows.
But the bottom line is that the MRE would have been in September/October if it were not for the forest fires and then subsequently assay delays from the labs, nothing the company can do about that. The cannot control weather, climate change, or assay backlogs.
So i am sympathetic with the company, that said, if we do not hear anything in the first 2 weeks of January I will certainly be starting to lose my patience.
But I am afraid we have no other option but to trust the company, the geology and assays will speak for themselves in time, we just have to trust them that they make the correct decisions.
https://lithoquest.com/wp-content/uploads/2021/12/LDI-Corporate-Presentation-Dec2021.pdf
Info is on the lithoquest presentation.
Michu, of course you present an alternative view with some balance that is always needed.
Regarding the share price. Often easy to forget that this is one of the best performing AIM mining stocks of 2021, we are up for the year, most others are 40-50% down. This year, the global downturn in mining stocks has been the major headwind, not company specifics. Secondly, share price is not everything. I think markets can be pretty poor at foreseeing takeovers, particularly on AIM where too many focus on lines on graphs and momentum. I always think it is better to look at the fundamentals. The drilling results have ranged from a continuation of the BAM norm, to better than expected. While I think i share you disappointment with the 'dullness' as how some results are presented, in hindsight what else could the company have done this year (I am aware that if you stretched this to 'years' a longer list could be manifested).
I can see where you are coming from. For a transaction you need a seller (clear LND want to sell - as do most exploration companies ultimately) and a buyer. There are no guarantees a suitable offer from a buyer will emerge. You mention that LND have wanted to sell for a while but no buyer has offered a suitable price. I think there are a few key differences this time round:
Stronger M&A environment - Seemingly every week there is a deal at the moment, some with very comparable deposits to LND. Mid-tiers and majors are cash rich following strong gold price. Massive difference to a few years ago.
More clarity on BAM - BAM already was a sizable resource, but i think this drill campaign will add further weight/prove that it is a multi-million oz deposit and a worthy mine (e.g. at least 10 year mine cycle).
Why would a buyer not want to take it now? The alternative is paying more in a year(s) time.
Drilling results from the main drill program (~20,000 m) before it was curtailed by the fire risk were with Landore in September. If they wanted they could have had completed the MRE in October, used any peak in the SP for a raise and then drill again over the favorable winter drilling conditions.
Instead they are waiting for the completion of the drilling campaign (i.e. the meters that were planed before the fire risk), which is a relatively small amount (2-3000 m), to be drilled and assayed before completing the MRE. So, essentially the MRE has been delayed a few months (October to January(?)) for a small amount of drilling. If they had planned on carrying out another drilling campaign this would not make sense. Instead they would have gone ahead with another drilling campaign and used the current drilling in a subsequent MRE.
Its blindingly obvious to me. The are using whatever budget they have left to maximize the ounces on this MRE before sending out the expression of interests (formal for sale sign). There is no other logical explanation in my mind. If they had even the slight inclination that more drilling was preferred or needed, they surely would not be delaying this MRE a few months for only 2-3000 m of drilling.
I would like to think we will get an update before xmas, even if it just confirms a) lab delays and b) where they have been drilling. Has it all been put on the western extension, or split with felix?
greendave- the LSE algorithm that determines buys and sells is essentially useless. It should be ignored. It just takes the mid point as the boundary between a buy and sell, which is often not correct. It also does not account for any delayed trades. No conspiracies, no manipulation, just a inadequate algorithm to determine whether a trade is a buy or a sell.
Drill results/update within next 2 weeks.
MRE - hopefully before Christmas, maybe early new year depending on what they find drilling
Assets sale/takeover/corporate transaction anytime from MRE+1 day.
I just looked at the director dealing section and did a quick calculation of the CEO, Bill Humphries, average in his ~5.5% stake in the company. Not all his transactions are listed on the page, but from those listed his average is 55p. I actually think its even a little higher than that because some of the earlier transactions are missing.
He is not selling this for less than £1, and i suspect even a little more than that!
They started drilling on October 21st according to the last RNS. That is 6 weeks ago now. Realistically if you add the fastest possible turnaround drilling times, maybe 3 weeks to drill and 3 weeks for the assays to be shipped and analysed you would get to about now. This would be the absolute quickest any results could be expected, but in reality that the quickest possible time never seems to manifest.
I know BH said in the interview end of November MRE, maybe delayed by a couple of weeks if they include the western extension. I personally do not take his dates literally. All CEO's seemingly have a different concept of time compared to real time. But it this way, when a CEO says we expect results by x date, it is never before x date. Its always after.
There is no prospect of 'bad news'. This is not drilling on a new exploration site. They always hit gold of varying grades. If the grades are spectacular like the grades reported in the last drilling results we are probably adding maybe 75,000 oz more to the upgraded MRE, if they are more typical BAM grades then maybe this drops to 25,000-50,000 - really not a huge difference.
The big news here is takeover/asset sale, not the MRE or western drilling extension results.
Agreed Jimzi. The Marlbrough funds has been selling earlier in the year (June and July), but the latest morning star screenshot shows that they sold no further shares in August.
Nice find there sportbilly.
When looking at the NPV for each company based of PEA's it is very favourable.
Amarillo post tax NPV - $1550 gold price - $272 million (5% discount)
Landore post tax NPV - $1560 gold price - $ 227 million (5% discount)
This is obviously before our upgrade and not taking into account that Canada is more valuable ounces compared to Brazil.
We are looking at 3/4 x multiples minimum in any assset/takeover scenario.
I am only a landore shareholder because I think a takeover is near. Any takeover price will not be determined by the day to day or month to month gold price. There is no correlation between gold price and takeover price per oz.
Landore is not really a play on gold price. Its also not really a play on what you think the MRE will be. Its a takeover play at the moment.
We are in prime M&A territory.
A bit of consolidation is ok. A nicer picture than a few weeks ago, but 30p is still astonishingly undervaluing the company, with a market cap not much more than sum of the very early explorers who have not even started drilling.
One has to wonder what it will take for the wider market to realize that LND is a true takeover play... what do they want to here?
I saw of ADVFN that the Lamaune Iron website has been re-activated. Landore have a 90% controlling stake. Have a look at the fact sheet and presentations - albeit outdated now. What would Lamaune Iron be worth if listed as a stand alone company? Looks like an arguably better prospect to the like of UFO to me - who have a £30 million market cap...Got to think that this alone could be worth 15-20 million.
https://www.lamauneiron.com/
Would not be too excited about gold price - its nice to see it break 1830 for sure, but actually gold price will have little to no bearing on the final takeover price. i.e. there is no correlation between takeover price and gold price.
Key thing here is takeover, which we all think is on its way, and will be some form of multiple of todays SP.
Gold price will be more important if there is no deal and we go drilling again.
Gold appears to have broken out, it had failed at 1830 on 5 sperate occasions over the past 6 months, so potentially very significant. Hopefully it holds - not out of the woods yet I guess. Now is the best time to be in the most undervalued plays within the sector.
Not a time to be messing around for a 5-10% trade, very easy to get burned. Buy and hold.
BAM is a very desirable asset, its going to be offered out to potential bidders, much has been made about what a fair price is? Reasonable estimates of anywhere from x3-x5 of the current price
As I have mentioned before, please name a better value mining play on the AIM and I will sell all my shares and switch, I dont think there is one at the moment
Excellent post as ever UR! I to share yours and Samroy's sentiment here as well, even if my holding is not quite Samroys very impressive figure!
BTW is there was any doubt left that the Marlborough funds have been selling, have a look at the updated morning star. 100% confirmation for the first time that the Nano cap fund are completely out and as per the annual report the Micro cap fund have 9.5 million left as of end of July. I know JH dumped something like 10 million since then, but last months volume was 50 million alone, I really think they cannot have much of that 9.5 million left.
https://www.morningstar.com/stocks/xlon/lnd/ownership
No news expected. Its just a few people realising that this is the real deal, ripe for a takeover and horribly undervalued, and its not going to drift much lower.
Read the below, appolo have the same resource, same grade and have just had an offer at 4x our market cap. I say same resource, that is until it is upgraded by Xmas. O yeah, we also have the battery metals.
Aware of that, been following for a while. They have sold at least 4 million based on real data (cannot be more concrete than an audited annual report) , no innuendo. There has been no TR1, make of that as you will.
No plans of selling a single share. No better value AIM minning stock out there.
Micro sold 250k in June https://www.morningstar.com/stocks/xlon/lnd/ownership
Micro sold down to 9.5 million shares (I. E. another 1.25 million in July) click reports and accounts on this link.. https://www.marlboroughfunds.com/fund-details/Marlborough%20UK%20Micro-Cap%20Growth%20A%20Acc/
Nano completely sold out in July (2.6 million). Report not out yet. But they did because there was a large trade matching their exact holding.