Member Info for Bickmaster84

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I know you are a PREM newbie but I don't think you know the ins and outs of the Bacanora where shareholders were shafted. Worth some further research as it shows the steps the Chinese are willing to take to have control of assets.

Bickmaster

Snowking

Thanks for confirming "no placing coming or if there was it would be at a higher price, like premium".

Your position seems to have evolved since last Tuesday when you stated "I can confirm what you say is correct as i also spoke with company and was told certainly no placing .", " There is NO PLACING Coming ." and "we now know there is 100% no placing coming."

Would it be fair to summarise your current position as 'there is no placing coming but there may be a placing coming'?

Bickmaster

Welshy,

A fair post as usual.

Even if a JV was announced this week, which it won't be, it is not unusual for legal completion of the deal to take time.

Arcadia took 2 months to complete and that was for a straightforward sale which is quite easy to document. All you need is a plan showing the boundary of the area to be sold and the legal documents are quite standard.

If PREM is looking at a tiered JV which is much more complex and would require bespoke drafting I would have no doubt it would take a minimum of 3 months to document and more likely 6 months.

Would a JV partner put up a 'deposit' or provide some advance consideration to keep progress on track? Yes, I don't see why they wouldn't. But I am in the same camp as you Welshy and believe there are only ~2 weeks cash left in the kitty so a small placing to keep the drills turning , try to accelerate the core testing programme and allow more time for more detailed discussions with more parties would take a lot of pressure off.

Placing 588m shares (which would take shares in issue to a nice round 20b) should bring in £2m+ which takes the pressure off cash flow for at least 2-3 months.

I still think PREM would be better off going down the auction route on Zulu given the current heat in the market as it would guarantee best consideration.

Bickmaster

Agree happyhols,

Excellent results in today's RNS with a key point being that the Lithium is relatively shallow and has a good continuous strike length of over 20m. That is exactly what the majors look for as it means lower cost and higher throughput mining for them with a continuous run of good high quality material.

Should have another RNS about the three additional rigs being mobilised quite soon.

I believe the reason for the fall is that certain posters are setting expectations that a JV will be received this week. GR commented "Our current objective is to secure direct trade investment into Zulu from a potential leading industry partner and while there is no certainty that a final investment agreement will be concluded, negotiations, together with legal, corporate, and technical due diligence, continue." Somewhat of a nothing statement that would have been better left out of the RNS.

These things take time. Get more meterage drilled and keep the results flowing. The rest will follow in due course.

Bickmaster

Cheers Acker,

I know you're always looking out for me.

I can only assume MNH continues to be 'potentially profitable'.

Bickmaster

Acker,

I presume ‘all our other Lithium projects’ refers to the EPO area. The reason I am discounting them is because we don’t have a DFS for them.

Bickmaster

iky

Wise words. The ramping brigade are certainly out in force. Snowking has even predicted we may have some news this week - who would have expected that!!

My take on matters is that PREM only has two assets which are going to be worth anything. They are Zulu and the remainder of the EPO area. RHA, MNH, Circum, Katete, Ligonha, these are all either loss-making, unproven or so far away from development that I wouldn't attribute any value to them.

With Zulu and the EPO area, we know the price of Lithium and the demand for it. So it is really a question of how the asset is monetised. If I was in GR's shoes the decision would be based largely on the choice of buyer or partner.

If Chinese, I would sell 100% of Zulu and possibly even 100% of PREM if they are willing to pay for it. I'd value Zulu (based on 70Mt and the Arcadia comp) at 1.5p or alternatively I'd value the whole of PREM at about 2.5p, though there is a lot of uncertainty on scale of deposits as a result of the slow DFS and lack of results (we have only had 3 holes in 11 months since EPO).

If looking at entering a JV then the choice of partner is everything. If Chinese, I'll be selling out as soon as possible. If not Chinese, then I'll be holding but it will be 2 years before a mine would be generating any revenue, assuming they hadn't driven PREM out by that stage!!

Lots of variables and scenarios here, all with their own risk profile. A long term deal with the Chinese, in my mind, is the highest risk of the lot.

Optimistic for the week ahead but we need some news. Those 3 additional rigs should have been mobilised last week but we haven't had any news. Given we have only had results for 3 holes thus far, it would be good to get a few more.

Bickmaster

Did anyone here have shares in Bacanora?

https://www.ft.com/content/570ce735-6328-48cf-960b-efe574b633c2

Bickmaster

Edgy

If that's the case the PR person should be sacked on the spot for missing the easiest positive update they could provide.

As for the glass being half full or half empty. If your perspective is one of objectivity, the glass is both half full and half empty at the same time.

Bickmaster

Edgy,

Your logic doesn’t stack up. They are more likely going to the drills mobilised last year. If the three additional rigs are there the tweet should have provided photos of them drilling and stated they had been mobilised.

Have a step back and ask yourself what GR has delivered since EPO was announced 11 months ago. My understanding is we have test results for 3 holes, so about 600m of results in total. Approx only 6000m drilled. And he got the new COO on board but he is unproven yet.

The appreciation in the share price here is down to the market and the market alone. GR seriously needs to start delivering.

Bickmaster

These were supposed to have been mobilised this week. Surprised there hasn’t been a tweet if they had been mobilised. GR overpromising and underdelivering again.

Rafauo,

Calm down. You've only been here about 5 minutes.

Profitbags

Yes, as per the 7th Feb RNS "we have engaged Aqua Terra who have mobilised another three drill rigs from their operations in Mozambique and who are expected to complete their camp establishment and commence drilling during the week commencing the 14 February 2022".

So we should get a tweet by close of play on Friday showing them on site and drilling.

Bickmaster

Mafs,

Was it a little harsh. Perhaps.

Was it true. 100%.

Bickmaster

Johnny

You're not wrong there.

Steward,

I had to have a little chuckle at that. It is great to see that Snowking, who is quite possibly the most inaccurate poster on this BB and makes more wrong claims and predictions than anyone else on here, is being held up as a bastion for promoting accurate posting and comms.

Am I guessing Oranolio is being appointed as his deputy?

Bickmaster

Moggy,

Zulu's resource estimate is 20.6Mt at 1.06% Li2O with plans to increase that to 60-80Mt. Hence why I was working from an assumption of 70Mt as Arcadia's $422m sale was based on 72.7 Mt. Any additional Lithium found above this is great for PREM but my assumptions are clear given the lack of assay results to date.

The Rubidium is a bonus for sure, though global demand is not huge. It is definitely a bonus though, as is the Tantalum.
Better quality lithium... - we don't know this for sure as we have so few assay results. Arcadia's estimate is 1.11% Li2O, PREM is currently slightly below this at 1.06 Li2O but I would be hopeful the 1.06% will increase in due course as more assay results become available and the resource estimate is revised upwards. Again, this is very much dependent on more assay results.

As for the Lithium price increasing, it has increased 10% since the Arcadia deal was announced a month ago. Companies will apply a discount to the price when assessing what they would pay for an asset. Indeed the larger the asset the lower the marginal cost per Mt paid as the producer's cashflows are discounted more heavily the further they are away. Hence why there is benefit in PREM selling 70Mt at Zulu now (via a 100% sale) rather than a larger amount. It would also speed up DFS, subject to good assays being received.

If you feel 3p is justified then good for you. It would equate to a full disposal of Zulu at approx $1b, assuming USD/GBP = 0.74, Capital Gains Tax of 20% and 20b shares in issue. If that happens I would be delighted and I would not only be able to build the house I am planning to build in the next year without a mortgage, I would also be able to buy another house or two.

The JV approach means cashflows, whilst likely to be larger, are further in the future and the discount factor applied to those cashflows to take account of risk is significantly (Risk of doing long term deal with the Chinese, Country Risk, Country Specific Political Risk, Global Economy etc.). These are all material factors - especially the risk to apply to getting into a long term deal with the Chinese who have a deserved reputation as being bad business partners.

Hence why I really think GR has the strategy wrong on this. He should dispose of 70Mt at Zulu (just sell enough land where there is confidence of a 70Mt resource along with space for tailings and overburden management etc) and shareholders would benefit from that sale immediately.

A $500m sale of Zulu would equate to a price per share of 1.48p per share using the same assumptions as provided above (CGT @ 20%, 0.74 USD/GBP, 20B shares in issue. That would make me very happy and it is a low risk option.

Either way the potential is huge as I am looking at Zulu only.

Each to their own and best of luck.

Bickmaster

Moggy, valuing Zulu at 3p on its own would mean a sales price of $1b assuming 19.412b shares in issue.

Given Arcadia is more advanced than PREM and was sold for $422m that is approx 150% higher. Arcadia was 70Mt. Prem is targeting 60-80Mt at Zulu, so I am assuming 70Mt. I am also assuming a sale rather than a JV.

2p equates to a sales price of approximately $660m, so approx 50% higher than Arcadia. This assumes a 100% sale of Zulu.

But given GR is looking at a longer term JV with the Chinese (high commercial risk) in Zimbabwe (high country risk) one would need to apply a significant discount for these factors as well as discounting the cashflows which will be a number of years down the line from a JV rather than immediate for an outright sale.

Hence, I would be more than happy for a 2p for a PREM now.

Bickmaster

Acker,

How would the Pandora Group have any decision in the matter?

I'd be delighted with a low risk 2p in the next few months rather than a high-risk longer term deal with the hope of a higher payout.

Bickmaster

If Arcadia was sold for $422m, that equates to £312m.

less 20% Capital Gains Tax = £62.5m
less legals etc= £3m

Amount receivable after costs = £243.5m
Shares in issue (round up from 19.4b) = 20b

Value of Zulu sale based on Arcadia comp = 1.21p per share.

Zulu should be bigger than Arcadia and has lower iron context. Lithium prices are also higher now than when the Arcadia deal completed. So PREM must be worth 1.2p per share assuming a deal will be done.

Then there is the EPO area to consider which I would conservatively assume holds another 2x Zulus.

So I am quite happy to sit back, watch the action and wait for my target of 0.8p.

No rush here.

Bickmaster