George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Hi dontpanick
I think that sums up one of the main opportunities and threats of AIM. Unlike, the main market there is often a significant mismatch between the share price and the "correct" underlying value of the share. This is due to investor sentiment - often misjudged - driving the SP. Sometimes (e.g. with MTR last summer when it hit 3.35p) sentiment is too high and the SP driven higher than it should be; sometimes (e.g with MTR now, I believe) sentiment is too low, which provides buyers with a real opportunity to make a high return.
Obviously, people who bought at 3p won't be ecstatic about that potential opportunity. But others may. More to follow soon.
Casey
As a LTH of MTR I'm feeling more postiive than I have for many, many months.
Reason #1:
MTR holds 31.8 miilion shares in MOD, with options to acquire another 40.8 million shares for free.
MOD shares have risen 60% this year, following interest from Sandfire and the recent publication of its T3 DFS
MTR shares have risen only 17% this year, so there's plenty of scope for a re-rate in the MTR SP.
So a totally made-up number. Just like the rumour of the BCN placing that you heard when you said it to yourself earlier this month. "I hear rumours of a placing at 0.10p" or words to that effect you wrote on the BCN board - and now BCN is at 0.22p.
So where does the 0.4p prediction come from? Why not 0.1p, or any other number?
I think bsg4's modus operandum is to predict placings and lower SPs, with no strong rationale, wherever he goes. (At least that's what his posting history suggests.) I see he recently predicted BCN would place at under 10p and since then it's risen to over 20p.
I too found Jeremy's interview very impressive.
I bought into HZM a fortnight or so ago, when the SP fell on the major II selling. I had been watching HZM for a while but the decision to buy was opportunistic. I'd expected the SP to recover more than it has by now but, tbh, that's not too important; and a continuing low SP may tempt me to add more later this month.
This looks like very good buy/hold to me.
Interesting to see Australian Super has increased its MOD holding further: up from 10.4% to 11.76%.
I guess they too are planning on a good/great DFS, rising copper price, and one or more interesting bids for MOD, or to JV.
Copper price has softened slightly from recent highs at $2.96/lb or so to $2.89/lb.
But it's interesting to see Wood Mackenzie in a recent report on the short-term outlook for copper forecast $3.28/lb this year and $3.85/lb next year. Who knows if they will be right or close, but It's fairly clear what such prices would do for MOD's T3 DFS, for potential offers MOD might get to be taken out, and for interest in MTR's other copper interests.
At the risk of being admonished for daring to post another bullish assessment of the prospects for copper, I must say I enjoyed watching this.
https://www.youtube.com/watch?v=y_9d2dNcb7E&feature=youtu.be&app=desktop
Yes, MTR has 73.8 million Thor shares. Was already in profit overall. Today's THR RNS is a good one, showing promising signs of focus from Thor on core assets. Every chance Thor will continue to rise, as commodity prices rise. Copper is up to $2.94/lb today.
Someone likes this morning's RNS: a 1 million buy.
I bought in for the first time today. HZM has been on my watch list for a while so, when I heard rumours of distressed institutional seller and saw the price drop, I took a punt here, buying between 2.10 and 2.04.
HZM story had looked promising; and nickel looks well set. Hopefully this turns out well.
20 buys then at last one sell.
For avoidance of doubt, none of that was said. Just my opinion.
I wouldn't take those sale price numbers too seriously. I think they give an order of potential scale but ARCM clearly wants to get the best deal it can (hence no sale yet) and is fully aware of the growing gold price; and of majors/others wanting to buy across the world.
On this basis, every reason to expect ARCM to play a long game, given it has no pressing need for cash. If it thinks it will get a better deal in 6 months (as I would, though I'm no expert) then it may well be happy to wait, notwithstanding its divestment strategy.
... at 35c - that's 60% up on its close a month ago; and copper now at $2.92.
Not surprising people are finally buying MTR but surely more to come.
Sorry you feel that way, p00rman.
I listened in to the call live. It encouraged me. Highlights for me:
- further soil sampling work as soon as rains end, narrowing gaps (i.e. closer together than before) over anomalies at Cheyeza West, hopefully in time to inform drilling to start before end March. That sounds tight to me so I'd pencil it in for April myself
- Kalaba drilling: resource should be issued "imminently" (sounded like a matter of days) for the demonstration plant (where rain has slowed things)
- Placing: ARCM very pleased that they were approached by two family houses that will be sticky holders buying at spot, with no placing costs. Had enough money to last well into 2019 already; this gives a clear run for drilling at Cheyeza West and Lumbeta - which highly excite ARCM. When asked why place and not go for JV, NvS said that might work for other targets but for these two priorities, giving up 80 or 90% for a JV - which is what a major would want - would be giving up too much too soon, so placing a better way forward.
- Working on non-core sales: Andiamo announced today (sorry: none of those worked up about this this morning were on the call or were bothered enough to ask a question); they're working on both Sturec and Casa and seeing heightened interest in both, especially in light of better external picture (trade, resource picture, etc). A fellow caller asked if NvS could quantify the potential sale value (e.g. to give a base case for them). With some reluctance, he was drawn to say, I think, mid single figure $m for Sturec; and mid teens $m for Casa - this is probably the basis for the John Meyer comments. Progress here would fund full drill programme for 2020.
- Finally from my notes when questioned about the Zaco arrangement and loss of some km2, this arose from need to work within Zambian code, where 100km2 was a limit and a relatively small parcel of land had had to be lost to keep below that. Zaco arrangement was a flexible response to the need to work within the Zambian code.
Am sure others will add or correct as appropriate.
Casey
A follow up on why not open to all shareholders. Well, that can be done, e.g. through a rights issue, or through a public placing, but here there are not insignificant broker costs to manage that that reduce the income raised.
As I understand this deal, it was a private deal done with two family set ups; and at a premium to the then SP. So if we take ARCM at their word, they weren't looking to raise in Feb 2019, but knowing that they would need to in 2019 this was an opportunity not to miss.
Good questions, Meercats. I'll cover the placing with warrants. No doubt NVS will cover the longer term stuff in the Q&A.
What will money be used for? "Proceeds of the Placing will be used to fund the continuing exploration and development work on the Company's Zamsort Copper Project ("Zamsort") in Zambia and for general working capital purposes."
Is it sound practice to have offered warrants? You'll get all sorts of views from people. Clearly, in an ideal world companies wouldn't have to raise money, as that causes dilution; or if they do, not to offer warrants. But the idea of warrants is that they offer an additional incentive to the purchaser; but the purchaser is only getting an option to buy at a future higher price, and if they do elect to exercise the warrants the company gets yet more cash at that point. The downside is the potential for people to "flip", by selling their existing holding when exercising their warrants, thus putting a ceiling on the share price just above the warrant exercise level. I'm not sure I entirely buy that, though there is something in it. Here's an example from my own portfolio:
- in 2016 Metal Tiger (MTR) bought Greatland Gold (GGP) at 0.10p, with warrants to buy more at 0.20p. GGP got much needed capital injection; and later got more when MTR exercised its warrants. MTR got an investment in a gold prospect.
- in 2017 GGP hit 2.40p. By then MTR had exercised its warrants and sold up, as it thought the price was overbought (it's since bought back in)
So this for me is a good news story of warrants working for both parties. But there are obviously times when it doesn't work out that way - either because the SP doesn't reach the exercise price, or because "flipping" constrains the SP.
I agree. But a lot of wild talk over a relatively small sum (c 1% of MCap). Given there's an investor Q&A in 4 hours it might be worth hearing the full story before jumping to conclusions.
... before profit-taking took hold. It closed up a little at 33c - still a high since the spike caused by the SFR offer in January; and up 50% on its close a month ago.