Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I did email them weeks ago Kira. The reply I got at the time:
“Dear XXXXXXX, on number 6 there is a resource/reserve table on the West Kytlim page on our website, regards the other questions;
We are aware shareholders are expecting updates on a number of topics and these will be provided in due course. Support from shareholders is very much appreciated despite the lack of news flow, and in light of developments in the conflict in Ukraine. The Board and staff throughout the group are focussed on the work to hand and hope the situation stabilises in the near term.”
Another email this evening requesting further clarification/a comprehensive statement on what on earth just happened.
Brisk
It’s merely an admin move to avoid “directly” being connected. Not a problem at all so keep it moving.
From the FT article:
“ One of the world’s highest-grossing law firms intends to transfer its Russian business, which has roughly 200 staff and offices in Moscow and St. Petersburg, into the hands of its local partners to create an independent group with no ties to its former parent, according to two people familiar with the matter.”
No different to abramovich handing control of club over to the trust. Just a loophole move tbh. BoD have already told us no changes.
HC Wainwright we’re the private placing agents no…? If ii’s who bought in likes what they saw and chucked millions in the pot and these guys were placing agents they must have seen the info the ii’s so too no? 70p very interesting.
Very interesting blog Folio thank you for sharing it. There was definitely something going on behind the scenes when Putin/Xi met recently and yes I agree that it is now coming to light. I don’t think China’s lust for taking over Taiwan will be much further behind given the now huge global distraction in Ukraine. The idea of trying to weaken the $ is an age old attempt to bring America down, Saddam tried it back when he started selling Iraq’s oil in € and that’s why they couldn’t stand by and let him do it, it was going to destroy the $ given Iraq was one of the largest producers in the world. Russia and Iraq have long been allies so Putin may have got the idea from Saddam’s approach back then?
As a few people here have said, I honestly don’t believe this current situation will hinder the sale of assets here as in any case I don’t believe the seller is a western entity. Putin has the west over a barrel as far as I’m concerned, he has all the minerals (literally) to switch gas off to mainland Europe and isn’t afraid to do so. This is another minor land grab like Crimea was and he’s increasing his buffer zone to NATO barracks.
Why prod the beast when you don’t want beef. Ah yes….so you can sell weapons ;)
Thanks for the post Folio.
Brisk
Hi Valueplay,
The day the travellers broke in was honestly the longest day of my life. I remember our site security ringing me at night to say someone had turned up in a pick up truck with a caravan on the back and I knew we were f**ked. By morning there were over 10 caravans on site all plugged in to the site power!!
Believe it or not it took two of our labourers grinding the padlocks the travellers had put on the gates, around 20 riot police, a police helicopter, two security dog handlers and Tim Steiner flying a drone linked to his phone screen over the warehouse to finally get in and remove them. They, left, s*t, EVERYWHERE.
I remember the women casually walking through the office block and into the staff showers, cleaning up and then walking back out into their caravans, all whilst I and around 100 men stood in the car park, locked out of our own project. It was surreal. I actually have some photos from that day I must try and dig them out!
Anyway, I was too scared to start investing (in anything) back then but remember everyone talking about the tech and back then the SP was around £2.50ish….if only I was a bit older and had some money saved up to get stuck in back then! I think the company have always been backed by the City, given Tim and co’s past, and they’ve always been open about being a technology company and not “a supermarket/grocer” so to speak. The intention has always been to roll out CFCs and improve the robots/grid/tech with each iteration, and try to sell licences/agreements to big companies around the world who will benefit from the tech. The Grid/Hive is INSANELY compact and I remember looking through it whilst the fitout was ongoing and just thinking to myself this looks like something out of a sci-fi movie.
The licences to third parties worldwide will pick up (in my opinion) because it just makes sense. You either save construction cost by reducing the space needed compared to the conventional conveyor belt system, or you get more for the same warehouse size by using the grid system so you can run more efficiently.
From memory the tech extended to the software in the service delivery office where drivers would be allocated a van for the day and be given their entire day’s worth of deliveries and routes planned out to reduce time taken and reduce environmental impact too.
Just taken myself on a trip down memory lane!
Brisk
Jack/Fred,
I think waiting until end of March until we start querying where WK’s production results are is probably the best way to go then. At least give the BoD the same time frame as last year to produce, compile and release the report I guess.
If the opportunity arises to ask for WK mineral resource estimates then I’ll take it and ask the question directly. Granted it’s only a small cog in the EUA wheel but cash is still cash when it’s coming through regularly through a producing mine, so it would be nice to know what it’s worth to us.
Side note about MT - the last ACF research note which was released on 20/12/21 stated “ EUA’s share of Monchetundra flanks 40 Moz could be worth more than £3.3bn alone”
If we assume no additional value added to that value of £3.3bn and the company sells MT for this price (could be more as ACF say but we’ll use it as a base figure) then taking the dividend policy of at least 80% of net income to be paid back as dividends (assuming WK makes no money which we already discussed previously is unlikely, as it’s producing right now) that would give the BoD £2.64bn to pay out which would work out at 91p/share.
I suppose the caveat to the £0.91 potential dividend is the company need to minus various fees to advisors/the banks/solicitors and what have you (I should have added this caveat to the NKT dividend calc I posted previously too to be fair), but this is literally impossible to work out as no idea what these advisors etc are working to % wise or fee wise, other than “success fee basis”. Both divi calcs for NKT and MT have taken base figures from info already out there though so are “lower end” assumptions.
Brisk
Agreed - the BoD will be more than “jubilant” to propose the dividend for shareholder vote I’m sure.
Would be nice to have some resource numbers for West Kytlim as this appears to be the project the BoD are looking to keep as a consistent cash earner moving forward. I’ll see if I can find anything later on if I get some time.
Annual production report would make things much easier of course!
Brisk
Good points guys and thanks for carry the convo on, it’s good to gauge fellow shareholder’s thoughts on these things.
@Martingw - good point but we’d need to find out who determines the discount %. Does anyone know WHO determines this? If WAI independent then that’s one thing, if it’s the company they’re producing the report for does then that’s definitely too specific a number to not mean more in the bigger picture here I think, and yes perhaps it’s the % that’s gone into an agreement with a potential buyer.
@GMAN - I also noted that they’ve referred to these being quick to bring online in a number of RNS announcements lately.
@oldspursfan + Tigra - I’ve just come across this document regarding AIM transactions which is interesting and easy to read, check out page 3 (hoping the link works once I hit post message):
https://www.burges-salmon.com/-/media/files/publications/open-access/aim_companies_corporate_transactions_and_the_aim_rules_for_companies.pdf
Interesting that the bottom of the flowchart on the left on page 3 it states:
“Nomad contacts LSE to seek a derogation from the requirement to seek shareholder approval”
I don’t see the company wishing to go down this route but interesting to know that NOMAD can try and bypass a shareholder vote. Given the massive success in previous votes I highly doubt the BoD would instruct the NOMAD to do this though, plus we’d all take great pleasure in voting a decent deal through.
Brisk
Thanks Jack.
What gives with the WK secrecy? I can’t seem to find any meaningful data through the historic RNS releases. Both WK and it’s flanks application which was approved don’t seem to have much meat on the bones by way of data on reserves like the resources/reserves table issued this week! Very odd! We’ll have to wait for the EOY results at WK I guess, be interesting to see the positive impact the 2 addition draglines had made.
Have a good day all.
Brisk
Ah the Erith CFC. I built that warehouse! I remember when we had a group of travellers break in overnight and try to take over the whole site, we had to get the police involved and before we knew it tabloids had taken photos from outside the boundary and reported travellers had helped themselves to items off the shelves at Ocado’s warehouse. We hadn’t even finished building the job, let alone Ocado moving in and stocking it up….and they don’t have shelves either as that’s the whole point of their tech!!!
The grid was an absolute mind boggling concept to us at the time, was incredible to see the machines zooming about up top towards the end of the fit out and the tech team carrying out their testing.
I’m not invested in Ocado but it’s always been on my radar since the construction days at Erith.
Anywho good luck to all holders I do think Ocado will deliver (excuse the pun) once they sign up a few more companies to their tech licences and if funds should become available I may jump in here myself.
Brisk
Hi Jack,
Thank you for your input, much appreciated.
To this point:
“ So - I assume EUA have received further data on some of the assets based on the Russian code (possibly from Rosgeo) and the data released clearly includes the NKT area (including the open pit).”
I agree here, I think this latest resource update is only based on Russian code too, and all of this may potentially go up (or down - although Russian code so far has tended to underestimate) when further JORC compliant reports are released.
Have we seen any MRE for the WK or MT flanks? Or are those also further additions we are awaiting.
Thanks for your input all, good to discuss things like this.
Brisk
Hi B1ll & GMAN,
I honestly cannot make heads nor tails of the CPR for NKT when it comes to the open pit info, it spins my head trying to dig (lol) through it all. Our most recent update on resources will probably have been as a result of the following being carried out (extract from the WAI NKT CPR):
“It should be noted that the database contains a significant amount of historical drillhole data where assay analysis was carried out only for Ni and Cu. The data for Pd, Pt, Co, S and Au was obtained using regression formulas derived from recent drilling data where assay was carried out for all metals. WAI believes that there is a lower level of confidence for approximation of Pd, Pt, Co, S and Au values from this approach and use of regression. Notwithstanding, certain parts of the deposit have been drilled and trenched (24 trenches) and defined as reserves under Russian classification as B category by Norilsk Nickel, however the drill core and the trenches have not been analysed for PGE, and after the PGE assays are complete this data will be used to re-estimate the Mineral Resource.”
But that doesn’t clarify whether any open pit info is included - I actually don’t think it does and we may have more to come from NKT still. I do think the latest resources and reserves RNS includes the completed PGE assays.
Interestingly, rereading the latest reserves and resources RNS just now to pick up on this bit:
“The reserves and resources are stated under the Russian classification. The reserves and resources under the JORC Code (by Wardell Armstrong International), further to those already announced for a portion of the NKT deposit, will be announced separately.”
I do believe there is a further JORC compliant report due for the rest of the NKT deposit which the company has stated above only a “portion” of which has already been announced (WAI’s JORC MRE).
There is some contradictory information though (I think). The 16/12/21 NKT RNS states:
“ The Competent Person's Report ("CPR") has been prepared by WAI covering the open pit part of the NKT as well as the underground part of the NKT.
· The net present value ("NPV") using an 8.33% discount rate for the underground part of the NKT project is $1.2bn under the WAI price forecast and $1.7bn under spot prices. Work on the open pit part is in progress and the NPV of that part will be announced separately.”
If anyone can help decipher it I’d be much obliged as I’m not sure why WAI would include the open pit part in their MRE JORC CPR but not provide an NPV….any ideas anyone? Unless the open pit part minerals were never included in that report….but the report seems to state it does!
Huge positive from that NKT JORC RNS though - “Metal recoveries remain a significant upside for the next NKT MRE update.”
We need a breakdown of the table of reserves/resources in the latest RNS from the company - break down by mines/projects as well as by metals would help us put a value on ea