Member Info for Bickmaster84

Wolf

You state "we have delayed DFS, in preference for early production."

I don't fully agree with this narrative. I believe the DFS timing is more of a consequence of (1) back-ending the drilling programme and (2) lab availability to analyse the assays which pushes the DFS programme into early to mid 2023 rather than being a PREM driven strategic decision. There is no reason (funding aside) why PREM should not be in a position to publish the DFS for the area covered by the approx. 25,000m of drilling done to date within 6-8 weeks of receiving the last assay result back from the lab.

The good news for us is that PREM have sufficient confidence the Lithium is there to crack on with the Pilot Plant.

I still haven't figured out why having a RUS of approx. 10Mt is of any benefit to anyone, apart from the consultant who will be paid to produce it!! Interesting 6-12 months ahead in any case.

Bickmaster

Shiny,

I have reposted the post in question below ( from 12 July 2021) for ease of reference. Simply, my analysis applied the Pilgangoora logic to PREM. The reality is that PREM and Pilgangoora are two different assets in two different jurisdictions with two different management teams. For the avoidance of doubt, I expect that in 12-18 months time PREM's SP will be a multiple of what it is now. I am still optimistic but I just think there will be some pain between now and then!! Hope that explains my position.

"Lets have a quick analysis of SP performance during the development of the Pilgangoora Mine in Western Australia by Pilbara Minerals. Pilbara is a 200MT resource, and the information below is based on Phase 1 which targeted 2M TPA (tonnes per annum) run of mill producing 314k TPA concentrate and 320k lbs per annum tantalum.

What I am trying to demonstrate is the difference in value at difference stages in resource/mine development, and the significant increases in SP, particularly during the DFS development stage. I have used three points in time during the development of Pilgangoora (set out below) and applied the outputs to PREM further down.

Pilbara
Stage 1. ~15 months before DFS complete - April/May 2015. ~660m shares in issue. Mcap = $24m AUD. SP = $0.04
Stage 2. DFS (Stage 1) Complete - Sep 2016. ~1250m shares in issue. Mcap = $650m AUD. SP = $0.50
Stage 3. First Production - August 2018. ~1740m shares in issue. Mcap = $1,670m AUD. SP $0.96

So from pre DFS to DFS, SP increased 12.5X. And from pre DFS to first production SP increased 24X.

Applying the same logic to PREM:

Stage 1 (where we are now) - 0.25p
Stage 2 (DFS Complete - assume late 2022) - 3.125p
Stage 3 (First Production) - assume late 2024 - 6p

This demonstrates the significant value available to investors during DFS development and in the period between DSF completion and production of first concentrate."

Wolf,

Yes, I trade PREM and have made no secrets of that but I also have a core holding. I think it would be fairer to say that I am speaking from the point of view of someone who has been through thick and thin (more thin that thick) with PREM over the past 9 years, having managed to average down significantly and actually turn a profit which is a good position considering 3 years ago, almost to the day, I had about £45k invested in PREM and it was worth about £7k. I have seen a huge amount of mistakes made and money wasted, all to the cost of the long time holder. As an example, there are now 68 shares in existence for every single share in existence when I first invested. And the SP is less than half of what it was at the time.

Fingers crossed GR will hit the milestones he needs to and we will all make a packet. I'm also invested over at COPL which is a very similar story to PREM and if both come in it will make life a hell of a lot easier.

Bickmaster

Johnny,

I am not certain he did say something along those lines, or, if he did, I don't remember it. He was recently asked about the relationship with Suzhou and said it was good but in the event PREM fell into a position where solvency became an issue and Suzhou did not advance more funds, there were other options available.

The issue other financial institutions will have is based on their inability to take a charge over the assets as Suzhou has first charge. So PREM still has the ability to secure funds from other parties but doesn't have the ability to use Zulu as security as they have already done this for Suzhou so it means other parties would simply have to charge a higher rate of interest reflecting PREM's risk profile.

That is my reading into the situation anyway but I stand to be corrected.

Bickmaster

Jenkoo

In terms of me trading PREM very successfully over recent months, I did sell out on a few peaks over the past few months and bought back at cheaper levels. I wouldn't however claim to be a successful trader or doing better than anyone else.

In terms of why I think it will drift back from current levels there are two key points - delivery and financing.

Delivery - building mines is not easy and PREM have never got it right before. They have a better team around them now but I don't see their programme as being realistic. I would very much like to be wrong though.

Financing - I don't believe PREM have enough funds in what has been provided by Suzhou to date, especially when they are also looking at RHA and MNH. I believe they will need to raise another $5-$10m around Christmas. Perhaps Suzhou will provide this - but on what terms?

If I am right I will load up at the appropriate time. If I am wrong I am holding 5m.

Bickmaster

Alert,

Indeed. I'd be delighted with ~1.5p special dividend per share in mid 2023 from a sale of Zulu. GR can always hold £50m back from the proceeds of a sale to DFS some or all of the EPO area and work on Zulu mark 2, though that money should be ringfenced for the EPO only so he doesn't waste it on RHA or MNH.

Bickmaster

Absolutely Roman,

Also a big assumption there will only be 25b shares in issue.

Bickmaster

speel,

I have funds for another 10m sitting waiting but haven't pressed the button as I think we will see a SP of 0.30 or below again. I have been wrong in the past though, albeit rarely.

Bickmaster

By my calcs,

Assuming Zulu sells for $800m, 25b shares in issue, transaction costs of £20m and CGT @ 20% - results in 2.14p per share, which is a 5 bagger from current levels. The recent strengthening of the dollar against the pound has impacted this positively - it was at about 1.95p per share.

Would I be happy with 5 bags? Absolutely. I'd be happy with 1p. Do I think we will get 5 bags? Perhaps but it is unlikely based on past delivery record.

Bickmaster

Alert, good to see we are on the same page.

Hammered, the pre-emption agreement was for 180 days from the Subscription Date (7th March) which is 3rd September. So Suzhou's Pre-Emption rights as agreed back in March have now fallen away, leaving PREM in a position where they can make deals with other parties without Suzhou having the right of refusal.

Alert,

Would it not be commercial suicide for PREM to given the remaining 50% offtake to the Chinese? Then they would have 100% of the offtake, effectively giving them control of Zulu's offtake and significantly reducing competition for a potential sale of Zulu in the future?

My strong preference would be for PREM not to sell any further offtake rights until they are selling Zulu, should they go down that road. It is also worth noting what Suzhou paid for the 50% offtake along with other rights. Suzhou previously paid 0.4p per share for 3b shares. Shares were trading at ~0.32p at the time. There are two ways to look at this, recognising Suzhou got a lot more than just 3b shares through the deal.

(1). Suzhou paid 25% above the odds (0.4p v 0.32p available in the market, resulting in a premium of £2.4m) for the 3b shares but they got all of the rights listed below for free.

i. Exclusive offtake rights on commercial terms to the marketing and sale of 50 per cent of all spodumene produced at Zulu ("Offtake Rights");
ii. An irrevocable right of first refusal for 180 days from the date of the Subscription to match any further equity or loan related funding that is contemplated by Premier, in particular any deal relating to Zulu, on terms no worse than those offered by another potential investor;
iii. A right of participation in any future funding so as to maintain Suzhou TA&A's shareholding of 13.38 per cent in Premier at all times; and
iv. A right to appoint one director to serve on the boards of Premier, Zulu Lithium Mauritius Limited, and Zulu Lithium (Private) Limited ("Board Appointment")

or (2), Suzhou paid market value for the 3b shares and managed to get all of the other rights listed above for £2.4m.

Bickmaster

Acker,

Two aspects to consider, throughput and efficiency. He can keep adding new modules (crushers, sorters, processors etc) to increase throughput but the efficiency aspects are dealt with by making sure what is there is working as well as it can through minor adjustments rather than adding new parts. An important consideration is that the crushers and sorters can be located near the mine face, remote from the processing equipment so there is only a need to transport high grade ore to the processing area to save on fuel costs and reduce wear an tear on machinery. There is a sweet spot at which this becomes more profitable that hauling everything to a single site for processing.

Plasmerman, equipment for mining Lithium is different from that required for Tungsten so let's rule than possibility out now please!!!

Bickmaster

Progress,

I imagine Suzhou's priority will be to get exclusivity over the EPO area. That protects their market position on the cheap.

Also, I view the 'interest free' deal as a misnomer as the interest rate will effectively be baked into the discount which applies to the Lithium Suzhou get from PREM. Similarly, the 0.40p paid by Suzhou per share also included significant other benefits to but it was painted as Suzhou paying a significant premium to PREM. Lots of smoke and mirrors!!

Bickmaster

Gemell,

I can remember being in Vietnam in Feb 2017 when PREM had a big spike. If I had sold it would have paid for the holiday a few times over. A great country, though the Chinese money flowing into places like Sapa and Hoi An is really changing it very quickly.

Make sure to use Mr Chi if you need a tour guide in Saigon, especially for the Cu Chi tunnels.

Bickmaster

Snowking,

Your post from 23:26 last night is the exact explanation of why there are almost 25,000,000,000 shares in issue.

Bickmaster

Johnny,

I was tempted in the low 30s last week but held off buying. That's all I will say for now.

Bickmaster

Steward

Agreed, though I would only be doing the bare minimum on the EPO area until funds are coming in from Zulu. The EPO exploration will cost money and the risk is he is spending the Zulu pot on the EPO, which means more dilution in early 2022 to pay for completion of the Zulu plant.

All going well this would be Q2 next year, though that is dependent on GR delivering to the timescales he has set out and coming in on budget....

Even if there is an offtaker for RHA output, we don't know what is in the ground and the mining kit has been sitting idle for a few years. Will be very hard to get it up and running for less than a few $m and even then, there is no guarantee it will actually make money given the economics at play. Whereas Zulu will have a significant price tag if it is actually delivered.

I'll say no more as I don't want to be called a deramper!!

Bickmaster

Acker,

We will continue to disagree on MNH and RHA!!

MNH - The price of manganese at the moment is poor and it is not likely to improve in the next 12-18 months as demand for steel will increase marginally but higher energy prices will hit both the mining and processing costs. Two other parties have tried to make MNH work in the past when Manganese prices were higher but they failed miserably. The Bara Report written a few years ago to provide the underpinning to value MNH wasn't worth the paper it was written on. One of the biggest issues is the transport costs of getting the Manganese from the mine to port. These costs will have risen significantly in the past 6 months without much movement in the price of the underlying mineral. I have a funny feeling GR would not have gone anywhere near MNH if it were not for Neil Herbert.

As for RHA, $20M+ down the drain already. And it is likely 10-12b of PREMs shares in issue are down to RHA. How many more $m will GR throw at it?

We shouldn't be going anywhere near them until Zulu is producing and generating revenue. Even then any income should be focussed on the EPO area which will provide a payoff multiples of what MNH or RHA could provide. It beggars belief GR would mention them at the moment, let alone be assessing projects which will detract the focus from Zulu.

Bickmaster

Acker

RHA--off take agreement
MNH--early move for Prem takeover

Both of these require PREM to spend money they should be prioritising on Zulu. This could well drive SP down below .30p again.

GR obviously has not learned his lessons from the past. I am fearful we are now in a holding pattern where the only news we will get on Zulu for the next few months will be 'It is all going fine and we are on track for production in early 2022'. The reality is that the majority of the operational/production risk on Zulu is loaded in the back end of the programme and the proof of the pudding will be the production numbers. We have had this in the past with RHA and MNH and both failed miserably.

Let's hope GR gets it right this time; there is a first time for everything.

Bickmaster

GR actively looking at RHA with potential off-takers again. Lovely how he throws in a grenade at the end when everyone wants him to focus on Zulu.

Other than that I am not sure whether there was anything of significance from the previous update we had a few weeks ago. Generally positive update overall though, apart from the RHA mention.

Still holding my 5m here with funds ready to take a few more when I think the time is right.

Good luck all.

Bickmaster