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Agree with you here - particularly around the use of IPO proceeds and the 90p raise. Some real question marks for me now and I think integrity and trust needs to be rebuilt before the share price can move higher. They're obviously full steam ahead in Madagascar but the speciality applications carry significant margin and upside (think the Al-Gr Composite) and these were a key part of the investment thesis for many people.

Definitely a few points that need to be answered.

Strange to me to see the SP down at these levels and I just wonder what the market is pricing in here? Is it because HBR don't have a well defined strategy regarding the energy transition?

When you look at the majors they are all positioning themselves for a green future; however companies like HBR seem to be solely focused on O&G and trying to maximise the last decade or so of north sea extraction.

I think the windfall tax has affected HBR so much because it's stripping profit out of what is arguably one of the last oil booms for the company. Having your earnings capped in goods times and then not cushioned in bad times, doesn't really make for a compelling investment case.

From the last set of financials (Sept-21), the company had £6.4mn cash on hand. Given we are now 9 months down the track, it will be interesting to see how that figure is looking now.

That’s the key unknown variable and perhaps the reason the SP tanked today. It will be interesting to see the FY results to March, just to get a feel for cash burn and required CAPEX to scale up.

I haven't been invested here for a while but I'm surprised to see the share price this low. TGR is quite a simple company to model so I thought I'd run a few numbers to see if the SP is under or overvalued right now.

Let's see assume that the business achieves 30,000 tonnes of capacity by Q4 this year and that they can maintain this level going forward. On that basis you could expect (roughly) the following:

Revenue - 30,000 tonnes * by assume average sale price of $850 = USD 25.5mn (note that average price was $866 during the last quarter)
Gross profit - USD 25.5m * 50% = USD 12.75mn (GP% was 54% at the last set of results)
Operating costs - assumed at USD 3.0mn, which is a bit of a guess but let's go with it.
EBITDA - USD 9.75mn
Tax - USD 1.85mn (yes I've skipped depreciation for the sake of simplicity)
Net Profit - USD 7.89mn
Convert to GBP @ 0.80 = £6.32mn

Then take current shares in issue = 87 million
Divide net profit by shares in issue to get an EPS of 7.26p
Divide current share price (33.5p) by EPS gives a forward P/E of 4.6x - which is pretty low in any industry (let alone a growing one)

So overall I believe this is undervalued and a buy at these levels. The key thing to understand is the capital cost of building up to 30,000 tonnes and whether or not a new raise is required to fund this. The workings also don't assume any value from the specialty products at TSG.

Good luck to all holders - the market is a minefield at the moment and I don't think many investors are getting out unscathed. TGR seems like a good bet though, particularly amongst the micro/small caps.

I'm not invested at the moment but always watching with interest as to developments here. A couple of questions have been on my mind lately around this Disko demerger and the long overdue Dundas funding.

The main one really is - do the management team have any interest in managing this company long term? Or is their whole purpose to find a big deposit and sell out?

The length of time it has taken to get Dundas over the line has been painful to watch, and it makes you wonder if they want the project to get underway at all.

I guess it's a key question with many pre-revenue companies on AIM - can the management team actually run the companies that they are promising to build and what will be their capabilities in such a scenario?

The current management team doesn't exactly fill me with confidence, but there's definitely money to be made here if Disko goes well and the SPV is sold to a bigger multinational. Remember that KoBold don't want to mine the site either, so it feels to me that a sale is definitely the current strategy.

It's been a tough few trading sessions for HBR and I'm not sure if the bottom is in yet. Fundamentally, I think many investors will find it difficult to invest here when profits are taxed at 65%...

I know there's quite a bit of nuance in that figure and the effective tax rate will likely be lower (given PMO's tax losses carried forward, north sea CAPEX spend, etc); however it just doesn't look good and will be putting many people off.

Essentially, it means that HBR will have lower growth prospects for the next few years and this is being reflected in the current share price.

I sold out in the 470's after learning of GIC's sell down. But good luck to those still in and I'm sure it will turn around in due course. It just might take some time now given the aggressive tax environment.

Agreed - it definitely helps you sleep at night when HBR are printing money and have a relatively low valuation. Expecting some serious uplift in the SP but it will take time.

Most fund managers are holding their breath for US CPI data which is out at 1:30pm. The market is expecting 8.1%, so it will be interesting to see how it comes in.

Could be the FTSE250 ETF’s unloading before the move tomorrow?

Who are these sellers? We’re only up 1.6% now… crazy given how good that update was.

Surely not the PMO creditors still? Thought we’d moved well past that.

Solid update as I thought. $600m of debt paid off in three months is more than all of last year, so I wasn’t far off. No exact FCF numbers but people can do the maths. It was a very good three months.

There’s quite a bit of upside here if commodity prices stay high.

Also interesting to note the capital reduction which will shift about $6bn from share premium and merger reserves to retained earnings. This means those funds can be used for share buybacks and dividends going forward, where as currently they can’t.

And that estimate does take the hedging into account.

I’m working off a breakeven of $35/boe and average price of $80/boe on a blended basis. 205,000 average daily production.

Anyway, interested to see how what kind of numbers they’re throwing off in the current market.

I think tomorrow’s results will be a blowout… in a good way.

Based on how high O&G prices have been, I’m going to go out on a limb and say HBR made more free cash flow in the first quarter than all of last year.

That could be a wild overestimate, but all the majors have had a huge Q1.

Let’s see how it plays out.

Gas prices always come down as the weather gets warmer. It's the normal cycle.

For the year to date, prices were well above 200p a therm until mid April and peaked at 480p in early March. Futures for Autumn and Winter later this year are also above 200p a therm.

So I think it's looking pretty good in terms of average pricing for the year.

I'm expecting Q1 results to be very healthy and hopefully we get a nice lift when combined with FTSE100 inclusion.

Have to agree with you there Wideboy and was going to say the same thing. KoBold will have made this decision given they are 51% owners of the JV. Maybe they thought it was better to use this summer window for surveying and analysis, then spend next summer really going after the targeted deposits.

Disappointing for shareholders right now, but I can see the logic in it.

Interesting looking at Brent & UK Gas futures today. Even with the strategic reserve release from the IEA and US, Dec-22 Brent contracts are still holding at $96.40. UK Gas is pricing in an upward trajectory even through the summer months, suggesting further tightness to come there. Winter-22 is currently at 269p per therm.

All in all, looking very good for HBR right now.

https://www.theice.com/products/219/Brent-Crude-Futures/data?marketId=5166944
https://www.theice.com/products/910/UK-Natural-Gas-Futures/data?marketId=5253319

Yep agree - if you're smart you have to have exposure to O&G in the current market.

Thanks for this - very interesting reading. With a calculated NAV per share of 631p (by Jefferies) this is a no brainer at current prices.

Looks like they would be producing 7 days a week, so let's go with your figure of $3.44bn. Even better!

I'm assuming five business days of production times 52 weeks, but obviously FCF would be higher if they are at it 24/7.

Yep - feels like the usual post news drift has already begun. The problem with junior miners like Bluejay, is that the gaps between announcements are so long that investors end up losing interest and moving on.

Once Dundas is up and running this will be a thing of the past, but until then it will be the usual SP cycle of pump and then drift. Great for trading though if that's your thing.