RE: What to Do?16 Nov 2024 14:44
@1pincher - i have plenty of positive things to say ! however, first i'll say that i'm a very large holder in andrada and i expect to be for a long time. i'm not in it for a 20% or 30% gain, i'm looking much longer term and much higher gains. i think andrada are carefully building up a multi-commodity, multi-region, large scale mining operation. if you're looking for a quick "pump and dump" type stock, then this isn't it.
andrada are not your typical aim "****co" who constantly tap equity holders for funds, never reach production and never generate cash flow, or are always "on the verge" of something.
they started small and have built incrementally. they gone from first tin production in 2019 to expanding several times, producing and selling tin, tantalum and lithium, and having just signed a deal with sqm, one of the worlds largest lithium producers. they have 3 major licence areas and a constantly expanding resource estimate. they have a great reputation within namibia, close relations with the government, and employ something like 300 locals from the uis area.
in a way, andrada are almost punished by the market for being in production. it's said they don't produce enough, their costs are too high, they don't move fast enough. if they were still at the "story" stage, of saying they have a great resource but not actually doing anything with it, they would probably command a higher share price, as small investors in aim mining companies seem to like "moonshot" story stocks more than real producers.
building a large scale mining company is difficult. raising the funds is difficult. andrada probably haven't got everything 100% perfect along the way, but they have done a great job of getting to where they are, and are still looking to the future.
right now in the growth of andrada is probably the worst point. they are producing tin and tantalum in volume and selling it month on month. however, they are also taking the costs of the lithium pilot plant development, the testing involved in producing a saleable lithium concentrate, and the accelerated pushback of the v1/v2 pit to access the higher grade lithium ore (which they've now finished). they are also taking the costs of expanding the tin and tantalum plant and implementing the ore-sorters, which will only pay off after april next year.
so, if you're able to wait - probably until this time next year - i think you'll see a very different andrada and a very different market rating. aisc will be much lower, revenue will be much higher, and they should be throwing off free cash flow. i expect a partner for the uis petalite to be announced between now and then as well and significant lithium revenue should be on stream. they are funded through all these changes, and as of 31st august still have £8.2m cash in the bank - as well as significant institutional bank backing. the ceo has said he doesn't expect any equity raise in the foreseeable future.
positive enou
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