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My apologies I had not had my coffee when I wrote that post and the margin is wrong.

It should read $980/oz margin which is £31.7m (not £34.5m as stated).

That would equate to £63.5m in FY gross margins which is c. 63.5% of the current EV once all debt is paid off (Q4) but assuming zero net cash on hand.

Slightly lower than what I said earlier but still a significant portion of the EV.

I would be shocked if cash on hand at YE isn't north of $15m. That would knock c. £11.5m off the EV which would only continue to rise in 2025 as debt payments fall away completely.

The current valuation is a joke.

2/2

Douta alone should now turn into a +2moz confirmed resource. The PFS due later this year will finally put some numbers against the project.

Where does its value sit within that gross margin vs enterprise value calculation? 2024 margins are already set to take up 70% of the total valuation. What happens when Douta starts to be acknowledged? What is a fair price for it at the PFS stage when backed by a company that has a growing net cash pile on hand?

The valuation is a joke at these levels even when the worst-case scenario for 2024 production is realised because the gold price is just too damn high and their AISC costs too damn low.

But they have a very good chance of getting much closer to their guidance and making the set-up look even more ridiculous.

They need to deliver the Segilola mine life extension but the existence of 140Koz of known resources below the existing pit (which was designed for $1,600/oz and not $2,300/oz price) screams very loudly that they will deliver a solid first phase of extension. The market refuses to believe it because it is lazy and fearful. Those who can be bothered to read and investigate should find that the risk is much lower than perceived.

A big 6 months is coming here for THX. Especially if as expected gold prices push even higher. A possibility that looks to be strengthening as gold is currently attempting to make a new all-time high daily close.

1/2

I think the starting base for any discussion on production would be whether the current valuation is fair vs. the worst-case scenario.

From what I can see that is set at around 82,000 oz of production in 2024.

This is because the company has produced 41,331 oz in H1 and not 37,600 oz as stated below.

In 2023 THX produced 84,600 oz (so not too dissimilar) at $1,300/oz AISC. Note the naira dollar exchange has seen a truly significant depreciation since January 2024.

YTD average gold price is running at $2,220/oz and rising but Q1 does skew things following the surge in gold prices at the start of March and it is since then that THX production has increased following the plant upgrades.

Still, we are looking at an average margin of around $1,080/oz YTD.

At 41,300 oz produced in H1 that amounts to around $44.6m (£34.5m) in gross margins.

Debt has been reduced from c. $28m in Q4 2023 to $7.9m today and will be paid off by YE. Accounts payables reduction we are told in the latest interview has made "significant progress." Let's see what that means in August but it is highly believable when we see the worst case AISC vs. the gold prices being realised.

So first and foremost we are seeing a much stronger balance sheet being delivered against a shrinking enterprise valuation. That enterprise valuation post Q2 debt payments sits at around £106m vs £34.5m in gross margins over the first 6 months of the year. Worst case scenario. be it sales won't entirely match production but that does not remove its value. So, in theory, THX could well fall 13,000 oz short of their bottom-end guidance but still produce gross margins that would be c. 69% of their EV (based on the fact that all debt will be gone by YE) without taking into consideration any cash on hand.

For every $5m they have in cash the EV drops £3.85m pushing those gross margins up by 2.75%.

What this says to me is the current valuation is such a joke that it isn't even pricing the worst-case scenario in production fairly vs. current and YTD achieved gold prices. Price that in and then we can begin to tear down the company's achievements.

However, there are additional points to consider here.

Q2 gold prices averaged c. $2,330/oz. The current gold price is north of $2,430/oz. So as things stand the gross margins will be higher than the above worst-case scenario.

Furthermore, there is still gold in the circuit. At my last count, this should amount to around 9,000 oz vs the guidance given around Q1. Q2 has demonstrated that they are having success releasing it. Further success in H2 would see them much closer to their guidance and the above margin vs EV improved even more.

What all of this does is support the belief that THX can afford to explore. That means a strong chance of an extended mine life at Segilola. More satellite deposits and the delivery of a major upgrade in Doutra ozs + the PFS.

Lenovo's revenue effect will be late 2024/2025 so not super high on my list at the moment.

I want to see that they feel confident about hitting or getting close to the broker forecasts for 2024 of c. €5,45m. That would represent around 47% revenue growth which would be substantial and put to bed the pause in growth in 2023. However, that was explained as being due to longer negotiation periods on larger contracts.

I would also like some insight into how the reported €5m of pipeline work is developing.

Well said Legalwolf. I agree.

Agreed. The last two years it's been 1st and 2nd of August.

@PaulFG if you have a listen to the investor meet presentation around 7mins 30s it was made clear that "we will be drilling to the basement assuming we can reach it."

"We think the average basement will be around 10m...so there is a huge potential upside by being able to drill underneath that groundwater table and laterally further inland as well."

Whether it is previous disappointments, recent share price falls, focus elsewhere or whatever, the importance of today's news hasn't sunk in yet. Yes, they signalled that it was coming in a recent interview but there is a marked difference between a CEO saying something is coming and it actually arriving. Plus, investors can't have it both ways. If trust has been harmed by previous disappointments then the market isn't going to price in a promise from the CEO until it is delivered.

But more importantly, I don't think the market is looking closely enough at what this drilling campaign can deliver. Perhaps it doesn't care until results begin to arrive. But an average c. 525% increase in depth when a fraction of that has already delivered +17m tons + new target zones inland is significant and the authorisation to drill them was key. That is because it will inevitably drive greater NPV and open up stronger partnering or debt options for the development of the project.

"The average grade result from the 2021 drilling programme is 19.37% THM."

So that should be our starting point a c. 10% uplift in average grade is not to be laughed at when it's already the highest graded project in the world. It would also be enough to effect a significant uplift in NPV.

But given the up to 50% high-grade areas found I am hopeful that they can identify a first-up super high-grade section that helps transform the NPV but also the financing of stage 1.

When the project was moving towards being in Sheffield Resources' hands such a find perhaps wasn't so important. But it is fairly common for mining companies to go after a higher-grade section first if it is near to surface. I count 10m average depth well within that scope. So now CMET is going to start in stages again and attempt to self-finance later stages, then such a high-grade area potentially takes on far more importance.

Investors have every right to be a little more excited this week.

I prefer to focus on how the business is performing and so far this has been their best year to date. Trading update due end of the month. €5m of large contracts under negotiation. Smaller competitors falling away and EXR taking their business. Meta relationship is strong. Lenovo revenues are expected to kick in in H2.

It is disappointing that the discretionary clients are still selling but there is no guarantee that they will sell them all. But key here is the performance of the business and that looks much better than the current c. cash-on-hand valuation of the company.

Agreed Legalwolf.

Some monster grades (previously hit +50% ) over decent strike lengths should open a few eyes but previous results at the very least point to a substantial upgrade in resource and overall grade.

As I said yesterday well worth giving these guys the next 3 months or so before judging progress. Maybe longer now that we know that the main drill results will be Q4.

Feels like it is time for CMET investors to be looking upwards once more.

CMET management has responded positively to the Sheffield Resources disappointment and got themselves back on the front foot such that an enterprise value of £3.7m now looks far too cheap.

https://x.com/BigBiteNow/status/1810924581701447919

I am thinking be patient and let's see where we are in 3 months or so. The percentages say that the next major move in valuation will most likely be to the upside.

Morning all,

It is worth reading the AMG Vanadium section in their 2023 report to get a feel for what they have already achieved in vanadium oxide production from gasification and spent catalyst processing. They also give an update on where the Saudi project was as of the end of 2023. It is worth noting that AMG also has their own VRFB battery option but to be clear I was never trying to tie them to Invinity. It was more a case of demonstrating what Saudi is already doing to further VRFB take up. Meaning they aren't a fledgling market when it comes to understanding the tech.

https://amg-nv.com/wp-content/uploads/AMG-Critical-Materials-2023-Annual-Report_March-2024.pdf

Shell talks about it here also as they are partnered with AMG. So it's very much real and already being done at AMG's facility in Nuremberg Germany and Ohio USA.

https://www.shell-amg.com/spent-catalyst-recycling.html

Don't forget also that US Vanadium recovers "contained vanadium from a variety of post-industrial waste streams." They already have an MOU with Invinity and were mentioned in the recent investor call following my questions prompting an update. The answers were cagey but clear that they are part of the US market solution on local content. Invinity is clearly working towards a supply chain solution or partnering process to ensure they qualify for projects and financial support for US production expansion.

https://usvanadium.com/u-s-vanadiums-new-5-8-million-upgrade-improves-vanadium-recovery-increases-recycling-and-supports-continued-production-rates-for-ultra-high-purity-electrolyte-for-vanadium-redox-flow-batt/

@Cereal-killer,

This is the first thread I pulled together after the presentation and I included a link to an AMG project in Saudi Arabia which includes Sheel and Aramco. It is a major project that looks to produce vanadium products for the energy storage industry through vanadium reclamation from gasification ash and spent catalysts.

The presentation is from 2022 and I don't know how much progress has been made since but it is clear in its technological approach for the recovery of vanadium.

One of the primary and secondary opportunities listed is "Development of Energy Storage Industry in Saudi Arabia."

I have followed vanadium developments in Saudi Araba at various times over the years having noted that Schmid entered into a JV to develop a 3GWh flow battery factory in 2020. I have seen no further movement on this project since but it's another demonstration of Saudi's interest in vanadium and VRFBs. This is why my ears were pricked when IES specifically mentioned Saudi Arabia in their presentation.

Interesting times ahead.

https://amg-nv.com/wp-content/uploads/AMG-Saudi-Arabia-Project-Update-July-2022.pdf

https://www.energy-storage.news/schmid-jv-to-begin-building-3gwh-saudi-arabia-flow-battery-factory-this-year/

https://x.com/BigBiteNow/status/1808787857428914682

I think the Matt Harper's comments about the UK projects question (post 2) are of particular importance. They give insight into what is really happening under the surface for Invinity in the wider energy storage market.

These then need to be tied into the comments made by Jonathan Marren (c. 24mins) about customers no longer asking about VRFB tech but price and delivery.

Investors including myself are clamouring for new projects to be announced and that is of course very important but Invinity are telling us that the true breakthrough is the acceptance of vanadium and VRFBs. That potential clients are no longer asking what is vanadium or a VRFB but what is the price? When can you deliver? And these questions are coming from clients who are seeking long-duration solutions for GWh scale problems.

Each stone still need to be stepped across. Mistral has to reach launch but the door to 100s if not 1,000s of MWh of work per annum is now open wider than it has ever been and with the recent fundraising and capacity expansion Invinity is a big step closer to stepping through it.

It is not often that such a small company has the opportunity to land deals that individually can be many multiples of its current MC.

3/3

Sorry, there are 3 posts, not 2.

Mistral Launch

Mistral currently running at a simulation level for the customer and that takes time. Need to find any weaknesses and put them right.

"Still saying end of year. There are risks attached. We have to get it right. It has to be right. That means proven to perform well under a series of escalating stages. The product is designed now it is a matter of really pushing hard on it in the simulation of what the customer will see. So that we can find any areas of weakness."

"We are already building Mistral at pilot level."

"That is going to take through the end of the year and there are risks that it could move beyond that but I am not aware of anything that will cause it to be delayed beyond the end of the year."

"The time to build a Mistral is relatively fast."

Round trip efficiency "In the 70s."

Labour government

○ Invinity has engaged with both parties.

○ Spoke with Alan Whitehead the shadow minister for energy security.

○ Pointed towards GB Energy (labour policy) which is very much focused on energy security and not relying on dictators and so lithium from China. I would add VRFBs from China.

○ Said there could be a lot more support for businesses like Invinity but not guaranteed.

2/3

Gamesa launch to come with Gamesa projects? The launch is an open authorisation to sell and "talking completely openly about how they are going to be delivered. When they are going to be delivered and how." etc.

Main driver for UK projects now? Consultation not held up by the election. Daily conversations with the UK government team. Stand inundated with customers when cap and floor announced (46mins) SUPER IMPORTANT. Working capital was important also.

No indications to suggest that the consultation is being held up by the general election. "We are still having almost daily calls behind the scenes with DESNZ (Department of Energy...)."

"Main drivers for UK projects? It certainly was our capital position. So that has unlocked a lot of discussions. But also cap and floor I was there at an energy summit in London just as it was announced and our stand was inundated with developers, utilities and financiers wanting to come and talk to us and very much a 50MW 6-hour system is a 300MWh system and without giving any pricing away its probably north of 100-120m pounds of revenue for one single project to us. So those are enormous opportunities and the regime is focused very much seemingly exactly the technology that we have."

Matt Harper added

"While yes one of the near-term drivers for UK projects is some of those near-term regulatory developments like cap and floor. But without giving away too much we look at the companies with whom we are in the advanced stages of commercial discussions. The majority of them are global players. We just announced our second deal with EDF Renewables (Rincon project in California)...They are the parent of Pivot Power. Organisations like theirs are starting to see that there is a global need for non-lithium long-duration storage for electric grids worldwide. Now cap and floor might be the thing that will get those projects done in the UK in the next 3-4 years. But it's the global perspective around needing to understand these projects at a GWh scale and then being able to deploy those projects all over the world that those kinds of organisations are very much focused on. And we think that it makes great sense to have some of those primary projects in the UK and are looking forward to engaging and building some of those."

THE CUSTOMERS INVOLVED IN THE UK PROJECTS ARE GOING TO BE IMPORTANT BECAUSE OF WHAT THEY CAN THEN TRIGGER IN THE FUTURE:

1/2

Here now is a list of the best quotes along that I picked up on from the meeting along with my notes which you should find interesting, Read between the lines. Breathe in the detail.

US manufacturing

"We are very conscious of the fact that our DOE projects require a degree of US content. We intend to meet that content requirement and we are working closely with the purchasers of those Mistral deals that we meet those requirements and meet their timing. It's still something we're not ready to announce yet but we are making progress."

Deal closure question. One of the significant hurdles we had up until the last couple of weeks was around our capitalisation.

"Customers were looking at the multi-million or even 10s of millions of dollar deals they were trying to get done with us and were very nervous about our financial position. That has changed significantly. That was a big reason why we were able to get the 4MWh deal with Rincon contracted and announced a few days ago and we think that momentum is going to carry forward now that we are operating from that far more stable financial position."

No intention to compete with lithium on cost but on LCOS.

"We don't compete on price and don't intend to."

"We are today significantly less expensive than lithium per MW of energy delivered."

"It is that cost of actually generating power that ultimately is going to drive our success. We are today ahead of lithium in that regards."

US DOE see us as "the most clear line of sight towards the kind of costs of delivered energy that they know that the electric grid is going to need 5 to 10 years out."

"Because the cost of delivery is so low we are going to be very, very competitive and significantly out compete lithium in those years that we are talking about."

More partnerships coming along but they cannot be mentioned yet. Won't mention them until their partners are happy to say so. Hint being regions where energy storage is big. (44mins) I think he mentioned Australia.

"We won't mention them until our partners (emphasised this word) are happy for us to go and announcement those publicly."

"If you live around the world there are some very exciting regions for energy storage where we do not yet have announced partnerships. The Middle East would be one of them and some of the largest renewable projects in the world are being built in that region."

"We have some very active and interesting discussions there. It is not a region where we would want to enter ourselves but it is a region that has tremendously capable partners and tremendously capable organisations that could take our product and really make it a meaningful part of the energy mix in that part of the world."

This is very interesting. Could this be the Saudis who already have an interest in vanadium and VRFBs with recoveries from ash? Again this is something that Invinity has touched upon before. Vanadium recovery from secondary sources.

Afternoon all,

Having now watched the presentation several times it was clearly a case of hands being tied on most subject matter due to ongoing discussions or 3rd party drivers. So I would expect multiple avenues of newsflow from supply chain, partnering and project wins.

They are clearly very confident about Mistral and the 46% cost reduction vs. the VS3 is a significantly improved starting position for their new product.

Aiming for a 20-30% gross margin is certainly above my expectations although I accept that there is still much work to do to reach the upper echelons of this target. But semi-automated production lines in Bathgate will certainly help when they come.

102MWh average project size currently in the project pipeline indicates c. 64 projects are being considered.

The near-term goal of unlocking the advanced category projects means we can look forward to up to 500MWh of project announcements over the coming months. The larger the come the bigger the effect on the SP.

Plenty is going on and whilst Mistral itself may come late in the year what's key is that it working as planned and it is on its way to launch because it is an absolute game-changer for Invinity.

It is not unfair to expect the SP to now rise into that endpoint (helped by the above ongoing news flow) which I now feel will be a pivotal moment for the valuation of the company.

I appreciate the other opportunities remark and it is certainly a theme out there right now.

But is it really the case? If investors remove their baggage for a moment and look at this with a clean slate sp to speak.

We are talking about a current enterprise value of £3.3m for the highest-grade mineral sand asset in the world that is cashed up to hit all major milestones to get to a FID decision within the next 12 months. I've personally never seen a set-up that cheap before. I know the current market is offering up some crazy valuations and we are just beyond the point where the pain hurt the most here. Plus there are near-term opportunities that many would rather chase. But still, that is one heck of a value disconnect vs. growth/deliverables over the next 12 months.

More so when we appreciate that the business has now added a quality COO and should be about to get its drilling permit signed off. So sorry I don't buy the whole better opportunities elsewhere pitch. This is about front end progress and the change in sentiment that can bring. Then attitudes towards staying or going will quickly change. That is the beauty of sentiment in stocks. Yes they have to get these next few milestones over the line but the same applies to any other opportunity out there also.

If Sheffield's Thunderbird project didn't hit grade issues then the deal would be closed now and everyone would be sitting here saying how great Greg is to the backdrop of a rising SP.

The deal was solid. The approach made sense but misfortune came to call.

So no not always telling but needing now to tell once more because they have had to pick themselves up off the floor and start again. Signing up such a high-calibre COO so quickly is a very good start.