The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
If MOD/MTR have sold out at far too low a price then another buyer will appear with a better offer. Cashking has bored us all for the last two years with messages about placings and cash running out. Now there is the prospect of £1 million per annum in SFR dividends plus smelter royalties on top once T3 is in production.
It's 2% of the net amount resulting from deduction of transportation and refining costs from the revenue from all sales of copper across the JV area. Capital costs are not deducted. So, in simple terms (in practice it won't be quite so simple) MTR gets 2% of profit from copper sales across JV area. The NSR is capped at $2m for T3 but seemingly uncapped for the rest of the JV area.
You've overlooked the 22 million extra MOD shares being offered to buyout the JV.
This should put a rocket under MTR SP in the morning.
I was sharing research, which is what this site was created for before it became infected with people with different agendas. I'm as happy as anyone to read informed comment or research that is negative on copper, or on MTR.
But if you prefer to read or write ill-informed twaddle then, yes, please go to another board.
Tamesis initiates coverage of MOD with target price of $0.67 - over 100% up on today's $0.30 SP. A good, detailed note - worth a read.
https://www.modresources.com.au/sites/default/files/research_reports/Tamesis%20-%20Lifting%20the%20%28calcrete%29%20lid%20on%20the%20Kalahari%20Copper%20Belt_0.pdf
No
You don't miss a chance to talk this share down, do you cashking? Unfortunately, contrary to your hopes the copper price is currently rising.
Interesting interview with Michael McNeilly. At the end he makes pretty much the same point I've made here twice already.
On the basis of Sandfire's 38c per share offer for MOD, MTR's stake in MOD, plus £4 million cash (yes, that's what he said, LGO-fan) is greater than its current MCap.
So the market is currently giving no value to MTR's 30% MOD JV share; to KML, where it has invested £1.6m; to Spain; to KEMCO; to Sable Resources; to Pan Asia Metals; to Veta Resources; to Thor Mining; to Greatland Gold; to Connemara.
So less confetti issued then. It's all good.
Only in March, MTR raised £3 miilion. So there's no concern about lights being kept on.
... thinks this is a good home for their money, having just spent £26,000 on MTR shares.
Keith
Yes, we sold only the interest in the small parcel of land around the prospective T3 mine. We still hold 30% of the vast majority of the original JV area.
cashking: a reminder of the key parts of the T3 deal is below. It shows that options are at nil consideration, but MTR would need to sell some existing MOD shares in order not to breach the 12.5% limit.
Agreement Structure and Commercial Terms
Under the terms, Metal Tiger will sell its 30% stake in Metal Capital Limited for a total consideration of 17,200,000 MOD shares and 40,563,566 Options.
The Options to be issued to Metal Tiger will not have voting or dividend rights and are exercisable at nil consideration within 3 years. Metal Tiger may exercise the Options by converting them into one MOD share each, provided Metal Tiger owns equal or less than 12.5% of MOD after completing the conversion. The Options reduce the impact of any dilution of Metal Tiger's shareholding from any future MOD equity issuance.
The New JV will be created by a transfer of 17 of the 18 exploration licenses within the current joint venture which will be subsequently transferred from Tshukudu Metals Botswana ("TMB") to a newly incorporated joint venture vehicle, Tshukudu Exploration (Proprietary) Limited ("TEP"). TEP will be 100% owned by the New JV, a new UK incorporated company, Metal Capital Exploration Limited, to be owned 70% by MOD and 30% by Metal Tiger. The remaining licence, PL190/2008, which includes the T3 Project, will be held on trust by TMB for TEP, and all areas excluding the T3 Project will form part of the New JV.
The T3 Project comprises the draft planned mine and plant layout as per the January 2018 T3 Pre-Feasibility Study and covers a total area of 24.34 km2.
Metal Tiger's funding commitment of the T3 Project has ceased following signing of this Agreement.
You're both right and wrong: we sold our 30% stake in T3, but as a result of that deal we have over 30 million MOD shares and zero-cost options for 40 million more. So we have a major interest in T3 success (whether mine development, JV, or MOD buy out) via our huge MOD shareholding.
Was going to write about KML soon. This is a nice RNS this morning. Values MTR's stake of KML at £1.735 million (43.9% of $5.2 million at 0.765 GBP to USD). A nice premium to the money MTR has invested in KML.
But the really big pay off comes when KML/MTR drill the anomalies they've found just a few miles from MOD's planned T3 mine and if they find commercial rates of copper there.
They've got prospective investments in a number of companies that I think might mutli-bag. That will depend on the market, those companies' performance and MTR's selection of investments.
The trading arm's stats are bound to look bad at the moment, as the entire commodity market has been in a downturn for the last year.
But remember the trading arm bought GGP at 0.1p, with warrants at 0.2p, and finally sold at 2.30p or thereabouts; and multibagged on KIBO and on LION too.
Lurker5
I think you were right to challenge my use of the word of "correct". It's why I used quotation marks originally. But let's try the argument another way with an analogy to the wider market. The older amongst us will remember he dot.com bubble, when sentiment was incredibly high - it drove share prices well beyond the intrinsic value of the companies affected. A decade later, after the financial crash, sentiment was incredibly low, and the FTSE100 dropped into the 3000s, well below the intrinsic value of the companies affected. For those brave enough to buy then it was a great opportunity, as the FTSE100 rose into the 7000s within a few years.
My hypothesis is that MTR was in the former situation - overbought, driven by positive sentiment - last summer; and is now oversold, driven by negative sentiment. A great buying opportunity if I'm right.
Sorry - here is the CG report
https://www.modresources.com.au/sites/default/files/research_reports/Canaccord%20-%20DFS%20sets%20the%20scene.pdf
At the turn of the year, the copper price was $2.56/lb; it's now $2.91/lb
MOD has now published its DFS on T3, showing an ore reserve increased by 61% to 34.4 million tons. This gives a $368 million NPV at 8% discount over the 11 life of mine, based on a long-term copper price of $3.08/lb. Not bad for a company with a £60 million MCap. (And remember Wood Mackenzie predicts copper nearer to $4/lb.)
Soon we'll have the completion of the T3 infill drilling programme, after which MOD will move to drill at its A4 target. Sprott already gives MOD a $50 million exploration value.
On the back of this, Canaccord Genuity (CG) give MOD a price target of A$0.85. Now MOD is a client of CG so they have an interest in this. But their research report - see below - provides a clear rationale for their target.
IF MOD achieved that - e.g. through M&A, through improved Sandfire offer or an approach from another - then that would equate to 2.20p per share for MTR just for MTR's share of MOD (i.e. leaving aside MTR's share of the JV, its interests in KML and many other companies). That's a big if, of course. But that's one of the ways in which MTR's SP can recover significantly and quickly.