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Afternoon all,

Here are my initial notes on the presentation although my connection kept getting interrupted so rather annoyingly I missed some important bits.

The most immediate important part for me was management's belief that cap and floor announcement is imminent. That opens up the £18m of spend from UKIB which would be a significant number of projects + the ability to churn the money through further projects afterwards. But the current projects aren't currently in the 2025/26 forecasts so could well boost overall revenues beyond what was communicated today.

Also, Gamesa is not only fully on board but sounds like they expected the initial cost to be high (Invinity to I might add) and that it would be a process that began post confirmation of performance.

On the cost to produce Mistral it was clear to men that there are easy wins to be had through altering suppliers and their geographies. That is a different picture than the one that was built up from the trading update.

Mistral is shaping up to be a great product that is in high demand. Get the cost down and the margin up and there is a big story still to be had here. With all that in mind, perhaps the worst of the share price has now been seen.

https://x.com/BigBiteNow/status/1841133928213545173

What many seem to miss is that CMET had $3.1m in cash as of 31st March 2024 with a burn rate of around $1.3m per financial year which included $486k of exploration expenditure. The drilling that is due to commence in October is costed at c. $200k.

This means that CMET has c. 30 months of cash which would carry them to H2 2026. Of course some costs may rise as they pull together the cost plan etc for the revised initial mine plan (pending) but even on a conservative basis they are cashe dup for all of 2025.

In that time, they are due to release the updated cost/mine plan, complete drilling and published results, sign debt financing and possible take-offs, and complete FID. That's a lot of potential and they don't need to raise for any of it.

It all kicks off with drilling which we are told should start this month.

FYI.

One would hope they are planning for a big sales future.

https://x.com/Reuters/status/1840993837210059145

That NPV can rise a lot higher if/when they get the drill but turning.

We just need the news flow to begin.

You are spot on.

I am seeing investors focusing on past results and ignoring company-stated outlooks despite major improvements already confirmed. It is a very odd environment but I solemnly believe that there are big wins to be had for those that are brave and sensible enough to cut out the noise.

EXR still has stuff to prove but they are signalling confidence in their growth prospects so I am prepared to sit and wait because I feel there's a few 100% here when it clicks.

Confirm that drilling has commenced and deliver the revised cost plan and things could change around here very rapidly if the wider market begins to wake up.

The market doesn't like anything at the moment so the reaction is no reflection on EXR. I have several companies that have reported good numbers today and none of them have reacted. It is a sign of the times. But like them, EXR just needs to keep delivering starting with FY revenue expectations and I trust a positive FY25 outlook. Then let's see where we ard. There is a very big win to be had here I am sure but patience is required not only on EXR progress but also wider market activity.

I've added a few lumps back that I took off the table on Friday.

The response from THX has been very professional but very robust. The raising of the issue to the state governor is very telling but the most important part of the update is the reduction in the tax claim and the fact that THX now holds documented proof from the Osun State Internal Revenue Service that the claim is now a fraction of what it was.

This is supportive of an argument that this is more about poor process by the OSIRS as opposed to someone wanting to get their fingers in the till. If that were the case then surely that updated claim on 23rd Sept does not happen.

Now let's get some positive drill results out before delivering what should be big financials in November.

THX in country management response to the allegations made by the state.

https://leadership.ng/press-release-response-to-allegations-against-segilola-resources-operating-limited-by-osun-state-govt/

Morning all.

It is worth understanding the original transaction that acquired the Segilola project from several parties one of which was Tropical Mines Limited. It is this transaction that relates to the 60bn naira claim in the article. Note the total cost of the transaction across all parties. In 2016 the exchange rate was around 300 naira/usd. So that claim is so outlandish in value ($200m by my calcs) that it simply cannot be valid. But it’s still noise and until removed represents a risk.

The claim on the paye tax is much smaller and in the scheme of things not a big issue financially but again it needs to be put to bed convincingly.

THX needs to come out with a robust initial response to calm this situation down. It is also a damn shame that it arrives just as THX is about to deliver its most telling news period.

I sold a few on Friday as a precaution. My reason being that it is a big position for me that is already in a good deal of profit and I’ve been burnt too many times already this year. So I wasn‘t prepared to hold the whole position without more clarity even though I feel confident that Thor can answers these claims thoroughly and I see no threat to the actual mine operation.

Instead this looks to be a court led process at most and that is something THX can now afford to fight. That is why I continue to hold the majority of my position. My gut also says the local authorities are trying it on and when their bluff is called they may wilt away but as I say THXs position on this must now come out.

https://thorexpl.com/news/thor-announces-closing-of-acquisition-of-segilola-gold-project-and-private-placement-financing/

I am with your there Schmidt1. The cash flow statement is always where I focus when studying company results.

Sorry first proof read.

"But not enough to affect the production costs by so much in Q1" if the mining costs remained constant which clearly they did not.

"But we must NOT forget the other elements"

No problem Schmidt1 I also live in Germany and so can sympathise with the language barrier.

I will try to help where I can but quite frankly there is not enough information to fully establish why the production costs for Q1 were so low. What I can say is there was a marked drop in ore mined in the last two quarters vs. the last 3 quarters of 2023. But not enough to affect the production costs by so much in Q1.

But we must now forget the other elements that make up the AISC and there it is more clear that admin costs and sustaining capital spend were much lower in Q1 2024 vs. the previous 3 quarters. As an example, the drop in these two figures in Q1 2024 vs. Q4 2023 alone would have led to a c. $260/oz AISC saving if both quarters had sold 17,420 oz. So keep an eye on that and the amount of ozs sold too because this differs from actual production and some of it may be from the stockpiles which will be costed differently to the production in the actual quarter.

Be careful mixing up profits on the income statement with actual cash flows.

Inventory is booked at cost but adjustments in its value affect working capital which can be found on the cash flow statement. Inventory is an asset booked at cost until it is sold. The cost is then applied to the cost of sales when it is released although there are different ways even that is calculated depending on the method used of which there are several available under the accounting rules.

So the profit was as stated but cash available was adjusted for a multitude of other reasons with the operating profit the starting base minus non-cash adjustments such as depreciation.

I hope I haven't made this more complicated for you.

@Schmidt1 You have lost me with that statement on ore inventory. Could you please expand on what you mean because I don't see that at all.

Morning all,

I thought I'd just published a long post here but it seems to have disappeared.

Anyway, shortened version is that as suspected Invinity have given a much more comprehensive update today which questions why was the trading update even released given the unnecessary impact it would have.

A discount to the raise at 23p is absolutely in order but not by this margin given what we have been told today. So I expect a partial recovery here now supported initially by LODES closing and Mistral being launched.

The key to remember here is that technically Mistral works very well already and the project pipeline remains very large vs. what is required in yearly work to turn cash positive. Plus the company is cashed up to deliver the improvements required to make Mistral profitable enough and those improvements are plausible (because they have been better explained today).

Improvements are going to come. Project wins are going to come. Meaning positivity should now outweigh any negatives which says that a bottom can form here as investors build more belief ahead of heavily signposted updates.

https://x.com/BigBiteNow/status/1839576825657192595

Three things have been holding THX back and they have nothing to do with jurisdiction.

1. Senior debt and the fact that it hindered THX's ability to invest in exploration and indeed allow future dividends.

This debt will be cleared this year and elevated gold prices has brought forward Segilola underground exploration + further satellite opportunities and acquisitions.

2. Account Payables being very high driven in part by additional CAPEX spend late last year leading to a large working capital deficit.

This too is now coming under much better control although the evidence (much like with the senior debt) has yet to be presented to a wider market that isn't looking as closely as we are. Again by YE (at the latest), this should turn positive for the first time and that will be another shift in balance sheet strengthening that the market will not ignore Nigeria or not.

3. Segilola Mine Life Extension is still not proven.

THX have made is about as clear as they can that mine life extension at Segilola will come through but again it still isn't guaranteed and the costs to produce not yet defined. It is that sort of information that will prevent institution investment far more than country risk. Why? because cash is king in this game.

The percentages say this element will also be well on its way to being de-risked by YE and likely closed out in Q1 2025.

Deliver those 3 coupled with the Douta PFS (which again those invested fully understand but others may not care about until the figures land) and THX will be transformed by so much that sufficient interest will exist to deliver a completely different valuation here.

This is the wording on the Meta education site.

"The classroom of the future is yours to create with Meta Quest 3S

From fully immersive training simulations that transcend classroom walls in apps like Bodyswaps, to blended virtual and real world environments in VictoryXR, the possibilities for learning are endless. Students from all over the world can learn and collaborate as if they’re truly together, or even talk directly to a digital Neil Armstrong or Cleopatra in ENGAGE’s School of AI. Experience the future of education at an incredible price with Quest 3S."

Direct reference to School of AI which I would hope will also get a RNS related launch and associated PR.

Here's my thread on it with the link and a screenshot of the Meta page.

https://x.com/BigBiteNow/status/1839201846851674279

Great posts as ever oldtramp and much appreciated.

The market discount here compared to the potential is staggering. Yes, the market wants to see profitable revenues reached and the company could certainly invite the market in more but a current YE24 enterprise value of c. £1.7m is amazing value for what they have in their locker. Especially, when we consider that the company has reiterated its stance on FY24 revenues and its ability to reach cash flow positive status by H2 next year.

The Meta connection alone is worth 20x that YE EV. We may have to be patient but I have tucked away a chunk of these for the next 12-18 months and expect to be handsomely rewarded for my faith and willingness to wait.

I would just add that yes I agree that risks remain but this is not about removing them but understanding whether their potential impact is as great as the discount being placed on the valuation.

I recognise that mistakes have been made in the past and that left-field events can occur but these can happen to all businesses at any point. What is clear here though is the major teething problems on insurer coverage and payment reimbursement are at the very least much improved such that STX is just as capable of delivering much bigger numbers and further improved financial metrics in Q3 as they are stumbling.

All investors would be wise to remember that as we approach the figures in late Oct.