Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
Are we expecting that VOG has solved the Eneo contract in the coming days when they will report the H1 results?
mick,
I dont think the company is cash constrained anymore (if the payments keeps coming in).
The net debt has been reduced to $11m and will come quickly down to zero with the current production and payments.
What I fear is that Eskil worked as Sterling CEO for a while with the aim to acquire new E&P assets, which never materialized (probably because of the ownership situation of Sterling). So I think its fair to assume that he has a short list of assets in Africa which he is interested in. I dont think its always wrong to buy assets, but the last acquisition of E&P asset I have seen on AIM has been at NPV-10 valuation of 2P reserves / resources, and these transactions would be dilute for WRL shareholders.
I agree with you that Tembo dosent look to good. Complex geology and with plenty of issue in the local area. I have asked Eskil and Katherine and they have said that they will only move forward with that asset if they get farm-in, I hope they keep that promise.
In any case the share wont turn until after Oslo delisting as their is a steady sale flow on the Oslo line everyday.
mick2020,
The minority shareholder are better protected in Oslo listed companies compared to UK listed companies. Its easier for a UK listed company to delist and to sq. out minorities in a take-over situation. When you compare the securities laws in the two countries they are pretty different.
It has crossed my mind a few times that doing the Oslo delisting will depress the share price and the larger holders gets "easier" laws to deal with, if they wanted to take the company private now when things are moving in the right direction.
The Oslo line has been considerbly more liquid compared to the UK one, which makes the Oslo delisting a little bit odd, but at the same time only 15% is held in Norway.
In any case it feels like the BOD dosent tell the whole story behind the Oslo delisting.
In my view, its questionable if Wentworth should remain in its current form. As:
1. The company is valued to 40% of NAV while they are currently realizing the NAV with signficant production and cash generation.
2. WRL isnt operating Manzi Bay, so why do there need to be WRL HQ / Corp costing the shareholder $4-5m per year?
3. Any acquisition for cash or shares would be value destruction compared to buying back the own stock.
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I am new to the stock what is the next pieces of newsflow we are waiting for?
I agree mick.
The other thing is the overhang coming from the Oslo delisting. Most holders there can move the shares to CREST, but if you are a retail holder in Norway you may just sell out and not bother to get shares listed in an other country. I think the stock will remain around the current level until the delisting in Oslo is completed in October. However in Q4 there are all chances of significant pick-up in the share price as all the starts seem aligned for Wentworth for once.
Cash build will be better in H2 compared to H1 due to a few things 1) No one-time SG&A cost related to the London move, 2) The last payment for June fell into July, 3) Operating leverage is kicking in as the opex is almost fixed while avg gas sale for H1 should be better if they meet their outlook statement from the H1 report, 4) Less interest cost, helping on the margin.
They wont pay down debt to rapidly as they already have the debt repaymet schedule in place. But the cash position should build quickly.
The stock was at 1p before the exclusivity agreement was announced. I guess it will go down close to that level.
From advfn:
"Implication of the RNS “Changes to Chief Executive Offices (“CEO”) contractual terms
Background
- BPC was listed on AIM Sep-2008
- BPC has been trying to farm-out their blocks in the Bahamas for the past 10 years
- The closes BPC has been to actual farm-out was the JV agreement they signed with Statoil, which was later dropped by Statoil in 2014.
The current CEO, Simon Potter, was appointed 13-Sep 2011, after BPC found Alan Burns had to step down due to illness.
- BPC CEO Simon Potter proposed himself in April 2016, that 90% of his compensation should be deferred in 50% cash and 50% in stock. The CEO would only get the deferred part if a successful farm-out was accomplished. The CEO clearly made a significant sacrifice.
-> BPC signed a Confidentiality and Exclusivity Agreement 3 May 2018, where BPC and the other party would:
BPC 3 May 2018 RNS: “conclude a detailed technical evaluation of the Company's licences in The Bahamas, and at the same time seek to develop a commercial framework for a potential transaction”
BPC has been clear in the past that in a farm-out deal they are looking to get: 1) Carry for at least one exploration well, 2) Recovery of proportionate back costs.
Even in the 2017 annual report, published 18 June 2018, the company was clearly seeking to recover back costs:
BPC 2017 annual report, published 18 Jun 2018, page 3:
“A successful farm-out or funding agreement would in turn see the exploration programme funded (at least through to the first well) and potentially the addition of further cash resources through the recovery of proportionate back costs”
-> The 6 Aug 2018 RNS with the changes to the contractual terms, creates a significant question mark to how the farm-out process is evolving. The CEO agrees to lose his deferred cash of $1.2m so the company can "removing future cash obligations".
This doesn’t add up, if BPC would recover back cost, lest say the farm-in partner gets 50% of the blocks, BPC would recover in the region of $50m. The CEO deferred cash of $1.2m is peanuts compared to a cash recovery of $50m.
-> The other big question mark is, why would a CEO who has been with the company for 7 years and who might be the one finally after 10 years signing a farm-out deal, be rewarded with:
-> 62.5% salary reduction
-> Losing $1.2m in deferred cash
That doesn’t make any sense, Simon Potter should be getting a special bonus if he delivers a farm-out.
Even Ascent Resources, CEO Colin Hutchinson, was getting a better treatment this week with only a 50% salary reduction after being close to bankrupt the company and fail to sale the business.
Bottom line: something might be very wrong here, BPC will lose its licenses if they don’t drill within a year and that would be the situation without a farm-out. The stock could be back to the 1p level if the current negotiations fail.
How large stake of the blocks do you expect that BPC will be able to keep in a farm-out deal?
Do you think they will recover some back costs?
VRS invested as a group invested £280k in PPE during last year down from £977k the year before. A little bit odd that investments are going down when they are looking to grow.
It says in the post its a forecast, so how can it be fake numbers? A forecast is always estimates/guestimates.
What are you expecting from Thursdays results?