Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Until a few months ago it was prudent to be sceptical about the company's prospects: an order from Nigeria which disappeared into thin air, no orders, no revenues.... RR's appointment could be the inflection point for the company. The fact that he is expanding the Lainate factory well beyond 20MW capacity should give investors confidence that some fairly chunky orders (RTZ? IME? EAV? SAF? 2GW vertical - Offshore drilling platforms?) are going to materialise in the next few months and that the order newsflow will ultimately drive the SP higher. I still think there is a risk that we will see a capital raise over the next 6 months but if it is to accelerate capacity expansion, its not necessarily a bad thing.
Great summary. Many thanks. Clearly VDTK are very confident if orders materialusing or they wouldn't be expanding capacity si aggressively. In addition to Lainate don't they have 10MW at Moura and the potential for OEM capacity expansion elsewhere (mentioned in a recent RNS)
My main question (apologies if it is a dumb one) is why it has taken them so long to generate orders and revamp the sales team. Back in 2018 management were predicting orders would materialise in 2019 but they didn't seem to materialise. Was thisxdue to lack of certification, poor S&M, the need for further product improvement/evaluation?
Has anybody had any luck talking to VDTK management in the past? I've emailed the company to arrange a chat, so far without much success!
I agree - graphene commercialisation could kick in at some stage but prudent not to factor it into any investment decision at this stage.
Prior to the adoption of any new platform technology (with VDTK - graphene integrated SPVs via their JDP with Paragraf) it is always easy for sceptics to make the following argument:
1. Since its discovery over a decade ago graphene has been touted as a miracle material and millions of $s have been invested into commercialising it by tech heavyweights such as Samsung Electronics and Apple. So far (with the exception of a few things like tennis rackets and integrated graphene in trainer soles that aren't going to set the world alight) the results have been pretty pathetic.
2. If the "big boys" can't crack the graphene puzzle (due to a plethora of well documented technology issues) what chance has a small AIM listed company (VDTK) which in 2019 generated zero revenues! To think otherwise is to indulge in the ultimate "rainbow chase"
Maybe this is sound logic however, you could have applied a similar argument to a small Cambridge company called Acorn Computers in the early 1980s. This company went on to become ARM Holdings which in turn developed into a multi billion pound company which was sold to Softbank for £24b in 2016. There is a strong possibility that the company will be relisted on NASDAQ sometime in the next 12 months. Anyone who has followed ARM will know the initial scepticism with which its core IP was treated by investors until it started gaining significant traction in the late 90s with the growth of the mobile handset mkt.
However, there are some important parallels between ARM and VDTK/Paragraf as follows:
1. Both Paragraf (VDTK) and ARM originated in the Cambridge University science hub, which has now developed into Silicon Fen.
2. The original ARM IP was developed in Cambridge by, amongst others Hermann Hauser. It is interesting to note that Hermann Hauser has a long track (over 30 years) record of successful technology investment. He established a VCT called Amadeus Capital which invested heavily in Paragraf's last capital raise.
3. Paragraf and VDTK's JDP were the first company globally to successfully produce a proof of concept GISPV in June 2019. 12 months later they are openly discussing the probability that the next 6 months will see material announcements regarding the commercialisation of GISPVs. If they are successful, VDTK and Paragraf would be the first company to achieve this and the impact on the SPV mkt and VDTK's SP would be transformational. It is possibly significant that of all the SPV companies with whom Paragraf could have chosen to form a JDP, they chose VDTK.
If VDTK are able to successfully commercialise GISPVs (increasing efficiency levels from 21% to mid 30-low 40%) it would be transformational. The likelihood of this happening is still unclear, but VDTK investors are effectively getting access to this SP catalyst for free because the market still believes that the likelihood of a small Cambridge (Paragraf) based company cracking the graphene puzzle, is remote........
Feeks - Would echo those thoughts. As a newbie to VDTK I really appreciate your insights and views and it would be a great shame if one moronic poster was to trigger your departure from this BB.
Agreed. In relatively illiquid stocks like VDTK it often doesn't pay to try and exit and buy in at a lower price. It always seems harder to buy on the dips and the spreads usually widen significantly. If the investment case hasn't changed then I would just use dips in the SP to top up. You ever know when an RNS will land.
Rumour of a placing could be a possibility or just a typical retrace. 21 day average SP is 7.4p. VDTK have said they will be CF positive by YE2020 but if orders are coming in thick and fast/there is substantive progress on graphene SPVs with Paragraf then a capital raise wouldn't be impossible. All of it is pure speculation at this point of time.
Seems difficult to pick up shares at the moment!
A year ago VDTK were targeting 25% efficiency in graphene SPVs. She's recent Vimeo interview discussed efficiency levels from mid to high 30% to perhaps as high as 40%+. That sounds as though the JDP with Paragraf has made significant progress over the last 12 months. AH also expressed optimism that the next 6 months would see announcements about commercialising production of graphene SPVs. Could of course all be bluster but it was a bold prediction to make.
Where do you reckon FV is with and without Paragraf coming good?
Where do you reckon FV is with and without Paragraf coming good?
Does anybody have any views about whether VDTK will have sufficient w/c to finance production over the next 6-12 months? There was a comment on fintwit today suggesting that they might need to raise £5m to fund w/c at some point and that recent capital increases haven't raised significant funds. In the Cov19 space both ODX and AVCT have reaised capital recently, some of the funds were allocated to w/c as production is scaled.
I agree! I'd like to see a pull back to 7p so I can accumulate more but I somehow don't see this happening!
Normally get a pull back in the days following an RNS so would be surprised if we see 10p breached today. However, if you look at SAE's SP there seems to be a lot of buying interest in green/renewables from PIs so I don't think we will see a massive retrace.
Further digging suggests that £1m was converted in Dec 2019 leaving just £117 so it is a bit of a non issue! Apologies!
Gavin Mayhew is a non exec director: ****************************/articles/verditek-receives-conversion-of-cln-from-non-executive-director-5f28c5e/
Of course Mayhew may just convert his loans into equity and enjoy the ride!
Looks like Mayhew's CLNs have a conversion price of 8p which would represent 6% dilution (including accrued interest) according to a vox mkts article in Dec 2019. Not sure how much of the CLNs have been converted but it could explain some of the recent trading volume Once cleared there could be a lot of upward pressure on the SP!
VDTK have £1.17m of convertible bonds which expire on 17 Dec 2020 and were issued on 17 Dec 2018. They carry a coupon of 10% so I suspect VDTK will want to convert them to equity. Some suggestion that there is a 10p conversion level but I've been unable to find any confirmation of this. If converted at 10p then dilution would be around 3% and interest savings of £117,000 pa. Worth doing some more digging on the conversion price but it suggests management will be very keen to see the SP above 10p by 17 Dec 2020!