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The price of SC6 according to Fastmarkets is $870 and trending lower. If you want accurate price news, you should ignore Ackers who quotes an irrelevant Chinese index, not a spot price. If the freight charges are $152 and one applies the agreed 15% discount to Canmex, then Prem are seriously under water. The other respected price assessor, Benchmark Intelligence, has spooked the already jittery market by declaring the Spod price will not recover until 2028. It is no wonder then that lenders are withdrawing funding offers to even the most efficient and profitable operations in Australia and North America. It follows that no serious main stream lender would comtemplate lending to the shambolic and potentially loss making Prem.
I wonder what Canmex makes of it all. The shareholders have declared their opinion by deserting the company in their droves.
An equity issue seems the only solution to short term funding. But who would be brave and foolish enough to allow GR more cash without proper oversight?
SMM has Australia Spodumene Spot Price at $910 this morning.
FastMarkets had it at $920 on Friday.
It is difficult to fathom why Ackers insists on posting inaccurate data. The Index he quotes is not a Spot Price and is atrailing Index to settle trading disputes.
One has to conclude that he is duplictious or inept. Which might explain why he assigned value to Circum and MNH when it was clear to any sensible observer that they were write offs.
FastMarkets were chosen by Prem and Canmax as the chosen SC6 price assessor to determine the value of Prem's produce. At $920 and with a discount of 15% it means that Prem will lose money on every ton sold, given an optimistic cost of $800 per ton.
Only the price of SC6 matters and it is too vital a component to be left to the much faulted and unreliable Ackers.
I recommend that Martinigirl gets involved with this. She has a rigour about her research that is sorely needed.
Ackers, the index used by you to post the spot price is not fit for purpose and is incorrect. It includes forward contract prices, inter alia. SMM, being aware of user complaints, initiated two new Spot Price columns a month ago; one for Australia and the other for Brazil. Just scroll down and you will find them. The Spot Price for Australia today is $980 (traded below $900) and Brazil is $920 ( traded down to $860).
Fastforward will confirm these quotes and Benchmark as well.
I point this out because producing miners will have to be efficient and well run to make a profit if the the spod price drops any further.
Before Xmas Arcadia in Zimbabwe announced that it was loss making and was compelled to give notice to 164 workers.
Canmax can buy all the SC6 it needs below $1000 and that will be a major consideration as it ponders the horror show that is PREM. THey will hardly throw good money after bad.
There will be a growing surplus of spod supply over demand in 2024. The LIthium party is over for the foreseeable future.
Corporate Governance is non existent at Prem. No Chairman, no Finance Director, no Independent Directors for starters. Throw in past suspensions, dodgy accounts and murky related party transactions and it is no surprise that institutions are forbidden to invest here. Without institutions any share price rise cannot be sustained. Therefore the insiders can carry on selling to the Innocents, the traders to the spivs and the spreadbetters can churn away to their hearts' content.
GR is a maverick and avoids oversight and board supervision. The AIM Team are on his case to appoint a fit and proper person to the board. For this we can take it that he will not be a crony.
The Lithium scenario has fallen into his lap. It will be no surprise to those who know him that he will let it spill before a competent executive can take over and steer the undoubted potential to a profitable outcome for all.
The Zim Gov will be very much involved with any third party purchase of Zulu and EPO. At Arcadia they made it very clear to Prospect from the outset that any buy-out must be constructed so that CGT would be payable in Zim and that is what happened. On completion Zim will receive c$100m and let us hope they spend this windfall wisely.
At Zulu the MoM may decide that Prem has done enough work on the property to retain control of the sale process subject to the CGT consideration of 28% to the Zim Gov. However, they will not be so obliging at EPO if they are not to be accused of dereliction of their duty to the people of Zim. The Gov could sell the EPO to the highest bidder, pocket 100% of the consideration and give Prem the outstanding worthless shares in RHA as a fee. Which is why GR has been spotted visiting the White elephant recently. Perhaps.
Fortunately, Stalker has recently taken up the post of Chairman at Bradda Lithium which leaves him unavailable for Prem. Thankfully.
However, he is still CEO at Circum where he, reputedly, leaves all matters on the ground to the new COO. And watches out for Dattels.
He has a simple motto, Why do one job well when you can do half a dozen badly? And still get ( stay) rich.
there is a civil war going on in Ethiopia and it has spilled over into the Afar region. The TPLF have closed the southern roads into Dalol and there is no ground access to the deposit.
It is difficult to see how a DFS report at this time will be well received.
Circum is effectively worthless.
I am delighted to see this bounce and long may it continue.
However, I am still miffed that our BoD have been so poor in the management of the market. The unnecessary volatility has driven away many investors and potential investors.
Forgive me, Ohmni, I am a Northerner myself, mostly.
I allowed myself to be irritated by the constant lies and false claims of that charlatan, snowflake. One has to call him out occasionally in a direct manner so that novice investors are not misled by his self serving nonsense. He is a wrong 'un.
GR and SD are both opportunists. There the similarity ends. GR is a nickel and dime merchant, a barrow boy. He has no institutional following. SD was able to raise over $500m for Uramin from hedge funds and mining specialist financiers.
GR, on the other hand, will continue to raise money in dribs and drabs with the lowest tier of last resort. ETX, for instance, is a spread better who happily admits that 70% of their clients lose money which is no surprise when they market to Teeside porters, Scouse Uber drivers and ****ney FX traders. Having them as shareholders guarantee that the share price cannot advance higher before being swamped with profit takers.
Arcadia raised $10m to complete their modest DFS. It is difficult to calculate a lesser amount for the more diffuse Zulu deposit. The prospect will tempt everyone to become traders.
Circum is near worthless but GR has allowed shareholders to believe it is valued at $200m. With the security situation in Ethiopia likely to persist for years, no short term improvement can be envisaged.
The MNH debacle is another related party transaction not in the best interests of Prem shareholders. To avoid an independent enquiry, Herbert should repay Prem back what was an obvious misrepresentation of its prospects and assets.
It goes without saying that GR ( who is in his 70s, by the way) should be put out to grass somewhere he can do more harm. Maybe, Snowflake could give him a trolley bed on Teeside and fantasize that everything they pass is theirs and worth billions.
Institutions have not bought Prem. The explanation for these miniscule holdings is simple; PIs can buy units in a fund by paying cash or by transferring stock to the institution at an agreed mid price. Very few AIM stocks are permissable in institutional funds and Prem is not on the list. This is not due to fundamentals alone but to size and corporate governance. GR is persona non grata at the table of respectable institutions.
A placing is now imminent. The quality of the recipients will be as fascinating as the size and price. LTHs will be hoping that Prem has moved on from spread betters and bucket shops.
Contractors work on small margins. They will only deploy their valuable rigs and equipment if they are paid upfront. Prem has little credit in the industry. GR has failed to secure investment from long term partners. It follows that he must now place stock with spread betters or bucket shops at a discount to the share price. Again. The choices are £1m at .16, £2m at .14 or £3m at .12. The DFS will cost about 10m. there will be regular placements to depress the share price. AIMHO
There is a deep satisfaction helping out a mate with other peoples' money.
The least GR could have done is to get a warranty that, in the event of no sale within 3 years ( or whatever) Prem would have their money reimbursed.
I am sure that GR will enjoy his use of the beach villa in Mauritius. Mates' perks.
Daz, nothing about GR is clear cut. He has a talent for obfuscation. Take Circum. Read the RNS on 15 June outlining the Rights Issue. It is cleverly constructed to disquise the true value of the ordinary shares. Then read the RNS on 28 June 2021 where GR maintains the fiction that the Circum shares are valued at $1.25 and that our holding in Circum is worth $6.25m. It is not.
GR emphasises his bias and lack of judgement by comparing Circum with Danakali without mentioning that Danakali are 3/4 years ahead of Circum and will be producing potash for sale by end 21. Circum will be wallowing in the chaos that is Afar for another 3/5 years without progress. It is effectively worthless for Prem shareholders. But GR persists in attempting to mislead us.
Do the maths and see what you come up with.
There are many, many more examples.
GR has misled shareholders about RHA, Circum and MNH over many years. He lives by the view that dishonesty in his world is not necessarily a negative trait. Added to the fact he is an incompetent manager and a useless negotiator, I believe it would be in our best interest if he departs post haste.
The DFS will cost at least $10m. If GR remains we will end up dumping billions of shares with bucket shops and spread betters. The SP cannot advance in that scenario.