Member Info for bonker99

Villa Maria Marlborough :)

OK - Copper - there's an IH&S on the chart suggesting that a three month drive to $3.6 off the back of the US/China ceasefire (and the current multi-year record low Copper warehouse stocks!) is viable.

Should that arise then my numbers (based on the new 3mtpa Base Case vs PFS Expansion Case sensitivity analysis) suggest that would add north of $200 of NPV compared to what I'm guessing the market is currently pencilling in re the likely very lowball $300m DFS NPV at the current $2.7 Copper price. So in that scenario you're then looking at a possible $500m NPV at *current market Copper price* on the DFS drop and that alone will net back *at least* £30m (2.5p - the next "placing"?) in value to MTR, disregarding all other cash/assets etc.

This is how you get proper fooked if you're still short at the current price and the macro swings against you :)

It's also why the Copper price going forward is so critical here - keep an eye on it :)

https://uk.reuters.com/article/us-g20-argentina/u-s-china-agree-trade-war-ceasefire-after-trump-xi-summit-idUKKCN1O031C

Three month ceasefire lol - you couldn't make it up ;)

Yes but our percentage holding isn't what counts, what counts is the value of that percentage holding, be it 25% or 12.5% :)

Drop an expected/decent DFS with funding going in at an appropriate value based on that DFS NPV value (clearly very capable of doubling MOD's mcap alone to c£/$100m) and I simpy cannot make the numbers work such that 1.3s here is not at the very least *a* bottom.

I cannot answer for what the HNWs that drive this up/down will do in the interim period but at absolute worst case, discounting every other factor to zero (cash - yes, including ignoring the possible/probable +$64m and other assets), I cannot see how the current SP isn't returned to by the time that DFS drops if they force her down some more in the interim period and on that basis, any weakness from here is clearly a big buying opportunity.

IF there is any weakness from here of course - if the deal/values/timing are already known (count on that being the case imo - they didn't pump then dump this down to here so rapidly for no reason ...) then 1.3s is a very viable rock bottom and you may well see unlimited buying power at this level because those guys already know the numbers and it's just a matter of boring/shaking PIs out at precisely the wrong time as per.

3-4 months up (1.8 > 3.4p), 3-4 months down (3.4p-1.3p), 3-4 months back up again (1.3p > ?.?p) isn't hard to justify on timing alone :)

There's always a way to work the numbers to a lower figure of course but that's going to depend on the view you take about likely DFS NPV values, the Copper price and cash/other asset holdings of both MOD and MTR of course. I certainly can't get it lower on likely DFS NPV values but the DFS isn't until Q1 and there are a number of variables at play outside of that - cash/other assets/Copper price/MOD funding deals etc.

I suspect we'll see some action around the 1.3s - it's a big tech pivot so will see some action on that basis alone - but on balance I guess you're going to have to see which way the wind blows on other news from MOD and the wider macro environment if you want a lower price here. Perhaps on that basis we'll see a bounce from this very oversold position whilst the market sticks its finger in the air re those other currently intangible factors?

BTW, it's not lost on me that the $64m of funding MOD are going for in London just happens to be precisely 30% of the required capex for T3 production and that funding deal needs to be done by the end of Q1 DFS date - difficult not to ponder a T3 production JV deal at 30% with a mid/major could be in the offing there (ala Rick Rules' favoured outcome)?

Also, $64m cash going into MOD puts *up to* +1p on our SP here if all other valuation factors remain the same which they may not do due to possible dilution of our MOD holding in the process of course. Worth bearing in mind though as it's not just the DFS that could move this £Large in an instant if that funding was to drop sooner than expected :)

All the more reason to watch the price action IMO as I don't doubt there are people out there who already know the what and when - there may well be a "hard cash" reason why the SP can't/won't go below 1.3s but we'll only find that out in due course as ever :)

Morning.

There seems to be a positive vibe going around at the mo with perhaps at least a suspension of further tarrifs on the cards but who knows what the reality will be - the US public seem to be cottoning onto the idea that the tarrifs are hurting them/their jobs so perhaps that'll apply a bit more pressure to make it good.

The timing of the drop here to this very point is, er, "noteable", of course :)

Fingers crossed we see Copper strengthen towards the Q1 DFS as while the Copper price hasn't mattered that much until now it matters a great deal for the DFS as the NPV, and therefore the value proposition here and at MOD, is likely to be extremely sensitive to that Copper price going forward.

I'd suggest the SB "shorts" were reversed at 1.35p - shares next ;)

https://www.kitco.com/news/video/show/Kitco-News/2196/2018-11-29/This-Will-Be-The-Breakout-Star-Of-2019---Expert-Opinion

Never.

Have a good one then peeps - G20 weekend remember - keep em peeled :)

Agree entirely about MOD - the SP is neither here nor there to us - it's the MCAP that counts but as a MOD holder the SP is somewhat pertinent! :)

InvisiTechPrint (tm) ;)

Indeed.

MTR funding the 30% share of T3 production costs is/was a £50m joke - never, ever going to happen.

Unknowable re MOD going to production or a T/O but it doesn't really matter - in either scenario (production/takeover) then your lowball number here is multiples of the current SP, the DFS alone is likely +1p imo.

Au contraire - the SP is a joy to behold :)

* Was a joy to behold lol!

I hear you but you'll have to come up with comparitive numbers to dis/prove any assertions as to possible/likely values of the different approaches. The JV deal made the whole enterprise very clean and enabled the big boys to get involved if they so choose on T3 - I "expect" that to be re-JV'd with a lorra money coming in to make it all happen.

We're not miners and never will be - we're scrappy exploration guys looking for an opportunity to multiply our (modest) funds and we got extraordinarily lucky with the 30% MOD JV. Here's to hoping we pull it off again with the new 50% KML JV down the road :)

Anyway, we are where we are and there's tons to look forward to over the coming months from this position.

PS: There's an awful lot to be said for carrying zero debt imo - especially in this market ...

@ CK - yes I could :)

Forgot to add:

The other driver for the JVMOD equity swap was to "clean up" the T3 project so that the only people/money involved in it directly are MOD themselves and the near-future funding partners, probably on a JV basis imo (and RR's ...).

Time will tell as to the specifics of the MOD funding deal and who those partners, via £London, turn out to be but the answer just may leave your jaws on the floor :)

You need to not be swayed by the plummet from 3s - easy to say I know but we're right on the paper value here - i.e. zero upside priced in based on current assets/cash - this is *precisely* the identical position to 1.8p at the start of the drive to 3.4p.

Just put the pump and dump down to "market machinations" and have a better idea of where the actual paper value is next time we move up :)

As things stand, and assuming MOD deliver anything like the PFS NPV in the Q1 DFS and the Copper price doesn't collapse, then they're going to be at a minimum £100m mcap by Q2 so I'm pencilling in 1.8p - 2.35p here based on that alone, applying no value at all to KML/THR/Thailand/cash.

The reason I like the JVequity swap is because MTR have taken the longer term/higher value approach. They know what the longer term value is here - factor in MOD's FCF per year for a decade on T3 production, we're talking about £50m+ pa at $3 Copper and if the Copper price explodes then the cash thrown off could be 2-3x that and as major shareholders we stand to benefit enormously from that whilst not having to fund any of it.

Moreover, with respect to mcaps/PEs and the like, the market will apply higher values to companies that can demonstrate growth potential and given the amount of Copper surrounding the T3 pit that potential is obviously there going forward. The T3 pit is just just the start but it's a bloody good one based on the PFS numbers and we've seen the resource size/categorisation/recovery rates/production costs improve markedly since then.

Yet more KCB land being scooped up then - I've said this before but MTR are showing extraordinary confidence and there must be a reason for that?

Everyone on the outside of the great sausage making machine otherwise known as AIM is "naive" mate :)

Best not fret about how those sausages are made imo but you do need to know how to value an asset by industry standards/averages :) I'm getting there :)

Re Copper supply/demand - at current usage levels (i.e. no growth in demand - fat chance!) all of the world's current total Copper supply will be gone in twenty years time.

Now just sit back and take that stat in - that's end of world as we know it stuff and happens to be true to boot.

Well there'll be a reason for that of course - feel free to review some of the posts made when we were at the bottom of the 1.8p > 3.4p drive lol

That said, it is true that there are a number of sizeable mines due to come online around the timescale that CK mentioned but you also of course have to factor in the (rapidly) diminshing supply/grades between now and then. Some of those big century old Copper mines (c50% of the world's primary Copper supply!) really are scraping the bottom of their respective barrels now as shown in the Codelco article I just linked to and they're not the only one - that's why they're capexing multiple $billions to go deep underground for their 0.3-0.5% scrapings.