Member Info for Bickmaster84

Cheers Altag,

For the avoidance of doubt, I don't think my numbers are overly conservative. I haven't applied any country specific discounts or similar. I believe my figures are realistic.

Bickmaster

Redtrade,

The scenario you set out below - you don’t see any further dilution as you see prem negotiating a deal with the Chinese where they pay for the mine to be built and get paid back in spod. There is no way the Chinese would contemplate going down that route at 13% shareholding. Perhaps if they had 51% that might be a viable scenario.
The 13% shareholding is almost irrelevant in terms of capital appreciation. They will want 100%.

Applying my assumptions, the dilution required to built out the mine results in the payback from that scenario not being significantly better than if Zulu was sold in the morning.

Bickmaster

Snowking,

My numbers are based on assumptions which are clearly stated.

If I change my numbers to $4755 for contract spod and operational costs to $1000 (this is not unreasonable given the global increased of the last 6-9 months) and keep the other assumptions the same it gives a SP of 3.06p, so not massively different to the 2.28p predicted earlier.

Bickmaster

Redtrade,

Hence why I clearly set out my assumptions.

I'd be over the moon if we saw 3-5p but I don't see how this is possible given the dilution question. The other consideration is timescales.

Lets assume the following

1. pilot plant takes 9 months to design and build (operational March 2023)
2. PREM runs it for 6 months to provide enough data to design the main plant (takes us to September 2023)
3. Main mine takes a further 15 months to design and built (takes us to end of 2024).

Bickmaster

Acker,

It's still debt, the lender would be getting paid back in product rather than via hard cash. And the lender will need security against poor performance. The only asset PREM can use to provide security is Zulu, or else there would need to be an agreement whereby if PREM miss repayments the lender receives X shares @ discount to market price to make up the difference. This could happen monthly and drive the SP into the ground, massively increasing dilution like we experienced with Darwin in the past.

We can't assume the pilot plant will be a money making machine, will be delivered on time and will run profitably, especially given past performance.

Let's get Zulu sold (or PREM sold) and take the risk out of it for shareholders. I would be very happy with 2-3 bags from current levels, never mind 5-6.

Bickmaster

Watcher,

Lets assume the following.
- the pilot mine runs at 3t per hour (GR mentioned 3-5t per hour a few weeks ago, I would err on the conservative side).
- It runs 24/7 but has a load factor of 66% (i.e. it is down 1/3 of the time because of mods or maintenance - this is not uncommon with pilot plants, especially given the hard rock geology).

This equates to 1440t of product being produced monthly.

Let's assume $4000 per tonne for what is produced. This is below current market prices but production is ~6-9 months away and PREM will be selling in smaller amounts with more handling costs. Assuming operational costs of $1200 per tonne, USD/GBP of 0.8, this equates to monthly gross receipts of £3.2m.

My assumption is the pilot plant will cost $20m - $30m. Other expenditure will be required to open the mine and get down to processable material. The major positive is the results from ZDD036 shows part of the resource is quite shallow. Notwithstanding this, there will still be a few $m required in plant and machinery. In an ideal world the revenue from the pilot plant will pay for the pilot plant (i.e. debt financed with income covering the repayments). I don't see it contributing towards the construction of the larger mine (~$250m - $300m) in any significant way.

I am also assuming the pilot plant will not process tantalum or rubidium, the main plant at a later stage would deal with these.

We need to remember that both the pilot plant and the 'main plant' will cost money and will almost certainly result in significant debt or significant dilution. One thing for sure is that Suzhou aren't going to fund it out of the goodness of their hearts.

I have no doubt others will have their own models and assumptions.

Bickmaster

Watcher,

The assumption I would strongly challenge is on some of the tables provided on Twitter is they don't allow for dilution. There has to be dilution for PREM to build a mine, either by way of issuing more shares or giving a chunk of the company away.

Bickmaster

Alex,

All based on assumptions and mine are as follows.
100,000 tonnes per annum production,
Price of lithium at $3750 per tonne (having eased from current levels)
Operational costs at $1200 per tonne (having increased from the $800 per tonne announced previously)
USD/GBP = 0.80
P/E - 6 (P/E ratios for african miners have reduced in the past 2-3 years)
Shares in issue - 50b (the mine and process plant wont fund itself).
Corporate Tax rate in Zimbabwe for miners - 15%

Running the above through gives a SP of 2.28p.

By comparison, if PREM was to sell Zulu for $800m later this year or early next year, assuming USD/GBP at 0.8, CGT @ 20%, transaction costs of £20m and 22,418,000,000 shares in issue gives a SP of 2.2p.

I would obviously prefer the Zulu sale as it is lower risk and short term.

Bickmaster

Bickmaster

Can sell 15m in one transaction at 0.3408p which is a good sign.

Though I expect buying will drop off over the coming days on the expectation the RNS will be delayed until after the bank hol.

Bickmaster

Shiny,

I wish we were only bitten once!!

Bickmaster

Shiny,

This board is saccharin infused today and it could well be a pump and dump though I am hopeful it isn't. All will depend on the overdue news from GR (will be overdue by two weeks by close of play tomorrow). Market economics would appear to strongly favour PREM shareholders making very good returns from the current levels. However we also know that GR's inability to deliver is an overriding factor in why share price is at its current level. Talks of Circum dividend make me chuckle, especially when the civil war continues in the Tigray region, and, in the very unlikely event anything happens with Circum in the current climate, especially anything which would result in PREM receiving income, there is a need to fund the pilot plant at Zulu (if GR confirms that is the route to go down) rather than pay a dividend. Some posters seem to believe Suzhou will fund this for free. Also, we can't rule out a MNH curveball despite shareholders being very much against any further investment at MNH.

Overall I am positive, though news will be required to push this higher than current levels.

Bickmaster

bICKMASTER

Snowking,

I very much hope you are filthy rich by that date. As Bruce Springsteen said, nobody wins unless everybody wins.

Bickmaster

Wolf,

I know what is possible. That doesn't mean it will be delivered. I bought 10m more last week in the hope GR will get it right this time.

Bickmaster

Snowking,

With your reference to two RNSs over the next days and weeks, can you be more accurate?

Bickmaster

Motherlode,

If your sources are correct (RNS to be released end of next week), it would need to be released by close of play on Wednesday 1st June, given Thursday and Friday are Bank Holidays.

I am not sure whether releasing what will hopefully be a very positive RNS in the run up to a very long weekend is a great idea. I know a lot of people are taking the 30th/31st May and 1st June off as leave to get the full week off work so the market it likely to be quieter than usual.

That said, I am not expecting the RNS to have a huge impact on SP, I would be very happy with a 15-20% sustained rise. In my opinion, the bigger rise will come in August when the Suzhou pre-emption agreement is into its final month and they need to accumulate shares.

In any case I had a top of last week and have as many PREM shares as I am comfortable with.

Good luck all.

Bickmaster

COPL reminds me of PREM in so many ways. Both have head men who frustrate shareholders and both have a lot of very annoyed shareholders who have suffered down the years. But most importantly, the fundamentals are right at both and significant re-rates are possible over the next 6-12 months from their current undervalued positions.

Together they make up about 80% of my holdings and I will continue to hold them for the foreseeable.

Good luck all.

Bickmaster

We know how poor PREM are at project delivery so if they are to take a loan from Suzhou they need to be very careful how the loan is secured against their other assets and doesn't carry the risk of leading to significant dilution.

Bickmaster

Snowking,

I’d be delighted if I didn’t have to highlight GR’s poor performance.

Also worth remembering I am generally correct.

Bickmaster

Hammered,

Yes, you should see a 10m buy at 9.03 at 0.31 pop up . I can see a rise coming, not sure how significant it will be.

All depends on the RNS, and to be perfectly honest, GR has always let us down when it comes to RNSs. There is still a lot that could go wrong here but market economics should result in a rise.

May hold them for a few hours, days or months. Time and SP will tell!!

Bickmaster

Degrasse,

Yes, it was 45m when I posted. There has obviously been quite a few buys in 6 mins between our posts, including 10m of mine.

Back up to 15m shares.

Bickmaster