Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Chukkers, maybe I'm reading it wrong but I wouldn't say it's a stretch. I agree it's a repeat of the 24th March RNS but that's what the Q1 report is. A summary of Q1. Here is the key line:
"sufficient data has now been gathered indicating the presence of potentially commercial gas in the coal seams"
I guess like most things in life only time will tell!
I don't see them agreeing finance until after commercial flow rates are announced as they will get better terms once they prove gas that can be sold. They have given themselves a few months leeway to get the funds so that manages investor expectations and shows lenders they are not desperate. So my guess is: Flow rates, followed by debt funding. 10MW negotiations are not that relevant now as they have the 2MW one to link to the grid.
So reading the below from the quarterly I think that they have commercial gas flows, and are waiting for third party confirmation of the data. Once that is given, they can shut-in the wells and save gas. It looks like there is a shed load more gas there, so they need to drill more wells and dewater for months in order to reach peak flow. Can anyone else come up with a viable explanation as to why they would shut-in the wells unless they had commercial flow rates?
Lesedi 3 & 4 Production Pods
The Lesedi 3 and 4 production pods have been flowing gas for many months with sustained gas flow rates having been achieved from both pods.
Increased sustained gas flow rates are anticipated to take some considerable time, based on the currently available data, unless additional wells are drilled to facilitate the dewatering process. A decision to drill additional wells is being considered but no decision has yet been made.
During the quarter, the Company proposed to shut-in one or possibly both of the production pods as sufficient data has now been gathered indicating the presence of potentially commercial gas in the coal seams. Shutting-in the wells reduces unnecessary expenditure and stops flaring of gas that could otherwise be converted to electricity and sold once the project is connected to the grid. Bringing the pods back on-line should not take too long given the current understanding of the production process gleaned from the comprehensive data base acquired.
MM - so I assume the broker now has to fill the trade at the best price they can. I guess they win some and lose some when they offer a guaranteed fill.
Lovely for the price to finally be trending up with very few sellers. Managed to get a few more into my ISA on the 7th in the high 2p area. Now to sit back and finally watch the price trend up.
6 month state of emergency. Not sure if that's a 6-month lock down though.
https://city-press.news24.com/News/covid-19-botswana-parliament-endorses-6-month-state-of-emergency-20200409
If you read the previous RNS (24th March) they stated that they may shut the wells as they have the data they need:
"In the coming weeks, the Company is intending to shut-in one or possibly both of the production pods as sufficient data has now been gathered indicating the presence of potentially commercial gas in the coal seams."
I think the next 2-3 weeks will be very good with finance and possibly flow rates announced. Might be the last opportunity to back up the truck.
Botswana government will pay 50% of staff salaries for affected companies.
https://ewn.co.za/2020/04/02/botswana-brings-in-more-measures-to-ease-financial-burden-during-lockdown
It is interesting and I think the FDA have just approved chloroquine, so it seems to work. The only thing I will say though is that having spend 4 years of my life in sub-Saharan Africa I found that most locals except those with spare cash don't have that much access to healthcare. I don't know what Botswana is like, although I assume it's better than most African countries.
That aside, I think and (I may be wrong) that chloroqine is a cure for malaria rather than a prophylactic. I had an injection of 'quinine' into my bum back in 2006 when I caught malaria in Southern Sudan. If that's the case, then the local population won't be resistant anyway (not that Africans take malaria prophylactics anyway due to costs and long term side affects). I'd say however that Bots medical facilities should have a load of this in stock, and could roll it out to treat those with C-19 whilst ordering new supplies.
Happy to be corrected by any medics on here, or those with experience of Botswana.
Very kind of you to apologise Whizzer, although there's no need to.
We'll see what they do now. I still think that the key issue for Tlou is to secure funding. An initial loan of $10m if they can get it, will see them through this and out to the other side. What I don't know is how long they have to last before they run out of current funds. It was originally up to H2, and now there has been a small cut in overhead by the board which will give a small extention. I can't see them cutting local staff wages, so they will need funding.
A couple of sentences at the end of their Q1 stating their financing plan for the rest of they year would be ideal. And by that it would need to be more than 'talks with BDC/Barclays'.
Best of luck Wizzer. I'll not be selling at such a low price. If they can get credit for the remainder of the year, then I'd say they would by a buy again. But I won't consider this a buy until something concrete comes out.
Now they are about to go on lock down, we'll see what this does to Tlou's timeline and share price.
https://africa.cgtn.com/2020/03/31/botswana-declares-emergency-confirms-first-3-cases-of-covid-19/
"Whilst the state of public emergency is in place, Masisi said there shall also be “extreme social distancing commencing on April 2, 2020 at midnight for a period of 28 days” because it is in the best interest of the nation."
"According to Masisi, all individuals across the country will be expected to adhere to a more severe form of social distancing and movement out of the home is only for those performing essential services and transporting essential goods during this period of extreme lockdown."
Sure - scare tactics.
https://uk.reuters.com/article/uk-health-coronavirus-botswana/botswana-records-first-three-cases-of-coronavirus-health-minister-idUKKBN21H32B
https://eu.usatoday.com/story/news/world/2020/03/27/coronavirus-africa-preparedness-rising-covid-19-infections/5076620002/
The above is an interesting article about the state of some of the African countries regarding their ability to deal with Covid-19. I certainly expect countries such as Botswana announcing a lock down or severe restrictions on what people can do. That will likely hit the share price again, and cause further delays to funding, PPA and power line/power station construction.
So part of me wants the price to trend down, so that after April 6th I can buy more shares under next tax years' ISA allowance. But there is always the worry, as Chukkers said, about Tlou being on it's last legs. My gut feeling is that they will be a successful company but with limited information there is always that element of doubt.
I agree with that completely. A few months ago I thought that flow rates was the critical factor. Now I'm of the view that it's finance and nothing else. Finance extends their 'runway' and allows them to build generator/power line whilst dewartering, maybe with a few additional wells. No finance, they go under, with finance they can get decent flow rates, sort out the PPA in slow time and concurrently build their power infrastructure.
Chuckers, that was me. It came from the recent Proactive-TG interview. It makes sense that if Tlou know they can get funding, to delay until last safe moment to see if they can get a better rate. If they know they are/will be solvent, then the short term share price should not be part of their decision making process. Provided they know they have funding if they want it.