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Interesting find. Noted that the author talks about miners keen to invest in solar to reduce reliance on Eskom. Got me thinking again about your 'diamond studded' post the other day MM.
A quick search showed me that Orapa is partly owned by De Beers, which is owned by Anglo American. There's some deep pockets right there if they are interested.
But Whizzer, the share price is dictated by the retail market - that's us. I don't want the BoD to focus on short term share price at the expense of long term share price. As far as I'm concerned the short term price is irrelevant if the company is either bought out or becomes a medium sized power provider. View the short term price as a life changing opportunity for some people to buy an overlooked share at an absolute bargain. If the current SP was 30p instead of 2p would you sell then? Or would you hold knowing that further rises were on the horizon as the company gets closer to producing power? If you would hold awaiting further rises then the current share price is irrelevant.
MM. I think that their strategy of working on the govt permissions prior to investment and building is the right one, for obvious reasons. Lots of opportunities ahead - which have all been discussed here.
Alos the length of time that it took Tlou to go from a standing start to where they are now is a barrier to entry for newcomers. Large power providers/miners/utilities (or a conglomerate of them) can either do a DIY job or get credit and buy an existing company with all the right permissions. And as those of us who have worked with big companies know; they don't speculate on new business opportunities, they pay (a lot more) to buy certainty.
MM thanks for the update. I seem to remember you posting something a few months ago about a 100Mw Solar farm that the Bots govt had sent out an EOI (or similar) for year end. Tlou could be front runner for that one as they have the first IPP solar generation licence. That would be a nice medium term venture in addition to the current 2Mw-10Mw-beyond CBM/Solar.
So there is an interesting but simple equation at the moment. The current ask price is 2.2p. So rather than take up the offer of 1/6 of current shares at 2.2p and 1/12 at 4.4p, plus any excess I want to buy. Why don't I just buy them all on the open market at 2.2p?
All that changes however if the price were to rise before cut off date though (and looked like it would continue to), in which case it makes taking up the offer a no brainer.
I think raising the money will be fine BTS. They need 3m AUD. $2m is underwritten by Melbourne Capital Ltd and management are committed to buying $750,000 AUD. So the gap is only 250k AUD. The entitlement offer and then selling remaining at share list price will likely cover that, and it's not that much of a shortfall anyway. So if no-one else buys they still have 2.75m AUD.
Thanks MM. I think I need to read the offer again. Slowly and in more detail!
Vizhy. Lol. Yes I think we will be fine. I'd say that up until now (aside from dewatering taking ages) all the delays have been at the Bots govt end. Tlou can't publicly say that or even allude to it, as it would severely damage their commercial relationship with said govt. After finance approval, most of the subsequent hurdles will be dealing with the private sector as most of the govt side of the house has been cleared (environmental, generation licence, landowner (bar 3 or 4)). That allows them to push ahead and get the damn power infrastructure built. The idea of clearing govt hurdles before private sector ones makes sense and I'd do the same in any country I was working in (btw I've spent 4 years working in Africa and 3 in Iraq and I know how low level govt officials can really bung up the works even on strategic projects).
I know there have been a lot of false dawns with Tlou, but hopefully we are leaving the shallows and heading into blue water. Now lets see how quickly they can get the major (hopefully debt) finance signed.
I was thinking about all of this last night particularly wrt the recent 2.2p share offer for existing holders. My hope was that this would ultimately be a 'thank you' to those who held and didn't sell over the past few years. If finance is imminent then there would still be a 2-3 month due diligence period before they can use it. Being Botswana, that could easily stretch by a month or two. Raising finance now allows them to get the ball rolling almost immediately whist waiting for the finance to be rubber stamped over the next few months. It would also raise the share price and allow us long term holders to buy an extra 1/6 at a nice discount. I thought I was being too trusting and hopeful on that, but based on this morning's news this could be a win win for Tlou (immediate finance) and existing shareholders (buying at a discount). Great news at last!
My understanding is that there is environmental approval for 20MW of solar and for the transmission to the grid. Hurdles for building the transmission line may be one or two landowners. Other than that, I'm not aware of any regulatory/permit issues to get solar up and running.
Thanks for the initial post of the presentation yesterday MM.
It makes sense to issue the presentation as a precursor, so that investors can see the rationale of increasing the importance of solar. Funding can easily pay for solar and transmission lines to be constructed whilst dewatering is finished. Then both solar followed by CBM can be plugged into the grid. Botswana is embracing solar - which MM posted in another link today (2 x 50MW plants) then Tlou will have another head start as they would have developed the track record and understanding of making solar work in Botswana. First mover advantage. Easy to scale up and they can then add more solar plants to any more CBM finds they discover. Also if CBM runs at night and peak day, then CBM useage may be 50% or lower than it otherwise would be. Which doubles the life span of the reserves. The more I think about it the more I like it!
On another note, Moneyweek magazine had an article about investing in the Aim (2 issues ago). The explained that any company worth less than £100m has a share price that is solely (nearly always) determined by the retail investor. So whilst people are complaining about the 'market' and share price, well right now we are the market. If the price gets a re-rate, say above 15p then expect big investors/hedge funds to take notice.
I know it's been a frustrating few years but an interesting summer may lay ahead. To all the other holders (or are we holdouts?) - maybe the future you will thank the present you for holding on and not selling!
Thanks again MM.
It does make sense to add solar, and a 20MW station won't been too large. I checked online and there is a 200MW solar power station in the US which is sized at 7km sq. So my thoughts are that Tlou could start with 20MW and easily increase to 100MW provided they get the area(s) - maybe spread around to give various villages employment. Combined with CBM it would then stretch the reserves out for a few more years whilst still delivering 100MW. A long way to get to that point but solar does seem a viable turnkey add on and O&G/Energy majors do want to show their green credentials. So it may become a more compelling take over target in the future.
Chukkers, yes I think you are right - I also remember it was 80mcfd (with the 'm' being thousand rather than million - something to do with Roman numerals I think). So commercial rates could be for just 2MW, to get started.