Rainbow Rare Earths Phalaborwa project shaping up to be one of the lowest cost producers globally. Watch the video here.
Agreed SeisNav, and if our speculation that this is all linked to a potential surprise launch at the Indaba holds any water, then you can see why we wouldn't have got a mention today... would spoil the surprise. Whether or not we are right, I have been quite surprised by the weight of selling (a relative term admittedly) that seems to be happening most mornings; with everything NvS said on the investor call, and we haven't planned our own drilling campaign, I don't know why anyone would want to risk missing the upside unless they know something we don't know... and while there has always been an outside risk things don't complete, I can't think what else that's negative could come out in the next few weeks, so I'm not too worried!
Thanks for doing the hard yards on that... great to hear. I've just listened to some of it, don't you think he comes across as very believable and impressive?
Apropos1, if its any help I have pencilled in profits of USD20m this year based on revenue of USD65m, FCF USD8-12m, but I don't think we should be valued on this year's PE or FCF, and also these are back-of-the-envelope numbers because I am all at sea when it comes to costs - I simply don't know what to put in given the variables. StrummerJones and FreetheCaterham7 made the important points; the market needs to see profitability. The question is how do we get visibility on that? If we get any cost guidance next week, that will be hugely helpful, but I suspect we won't. Without it, at best we may only be given info on profitability for the first time in the commentary around the H1 figures, which presumably is end August. For what its worth, I would be unpleasantly surprised if we ever see the SP here again after April production numbers next week (assuming they are where Cornishknocker sees them as) backed by new interest from investors at the Indaba and PDAC, then hopefully SP pushes up a bit more with May, June and Q2 total figures. But H1 figures won't really mean much because of Q1, so the H1 results (in August) will be about what's the cash on the balance sheet to show that we have actually generated some; guidance on costs (and a new mine plane?). Personally, what I am desperate for the new mine plan (I know we are doing a 43-101 but that won't be out for a long time). Net net, while I would love the SP to rocket up now, I would okay to be only 40p+ by the end of June, because I think we need 2 x full Qtrs of strong production and rising grades to get the motor under it. My guess is the big rerate comes in Q4, when we have proof of concept and are all talking about 2023 numbers. Next year (and assuming the ore sorter comes online) I have pencilled in USD50m profit and USD40m of FCF. While my hopes are far too optimistic, I wouldn't be completely unhappy with (all things being equal) a share price of 60-100p by the end of this year and 140-200p by the end of 2023. Of course I may be wrong on every single assumption and this is not to taken as investment advice - DYOR... But I am very positive LT, though I suspect we may have to deal with other teething problems short-term, which is part and parcel of ramping up production. ATB.
Thanks.
Hi CornishKnocker, thanks, that's extremely helpful; I believe they should be profitable at those production numbers, but I can't work out if they will also be cashflow positive. I don't have a handle on up-to-date costs and would be very interested to hear your expert thoughts. No problem if not.
Assuming you mean the Cape Tow Indaba, it kicks off at 8.45am local time (LT)Monday 9th May (that's 7:45 UK time). President H.E. Hakainde Hichilema speaking "A New Dawn for Zambia’s Mining Sector" at 9:20am LT and AAL CEO Duncan Wanblad talking on "The Power of Mining: An Industry at the Heart of Enabling a New and Inclusive Economy" at 10:30am LT.
Hi MB, since we didn't get the March production figures until the 5th April (which admittedly also included Q1), my suggestion is that we shouldn't be too worried if we have to wait until half way through next week for the April numbers.
Agreed! Maybe that tells us that the info wasn't price sensitive; on the upside anyway. I wanted to say that I feel very sorry for anyone who bought the shares on the back of that article by Danny Fortson in the Sunday Times saying Bluejay are already drilling at Disko. The journalist quite obviously didn't even bother to read the latest company press release, which is appalling, but my empathy is tempered by the thought that investors should have to. I still think and hope that this will be a ten bagger, I just have no idea whether its next year or five years time; but now we know there is nothing special to come from Enonkoski in the short-term, I expect three bounces in the SP over the next 12 months. 1. When they start work at Disko, 2. When they reveal some results from Disko - whatever they may be, and 3. When they release the FS at Dundas and announce funding. It's not much to hang onto in the short-term, and based on past performance, BoD will snatch try to defeat from the jaws of victory, or maybe there will be news from one of the other properties, but we are where we are. You may be surprised to hear that my biggest fear (other than the shortage of cash later this year) is that someone spots the amazing potential value in the exploration properties and realises that the market doesn't trust the current management and takes us out at far too low a price. If the metal is in the gorund, LTHs deserve big rewards.
Interesting! Thanks!
Hi Cattleman, while I am hoping, based on what the company has publicly said, and some logical deductions from an idea from KB, that something happens very soon, you are right to say that suggesting action soonest is just speculation, because it is. I hope the major difference is that unlike 12 months ago, NvS said very clearly on the investor call almost 8 weeks ago, that we had a very attractive offer on the table, and maybe he meant what you say below; that we are only in "discussions over a transaction" but that's not how I understood it and I also recall that he also said that if we hadn't had the legal problems, there is no reason that this deal wouldn't have also been closed already. But the SP, while up from its lows of just over 2p, certainly seems to be supporting your summary of where we are, not my speculation of where we will soon be, but different opinions is what makes a market. My money is on something happening before or at the Indaba, but come the 10th May (day 2 of the Indaba), I will either have made a small amount of money, or be pretending I don't exist! This is not investment advice. DYOR. GLA!
what does that mean?
Agreed JB999, but this BB is becoming so poisonous that I look at it only occasionally now. Its one of the largest holdings in my small pension, and as long as I see around 30-50 units go out the door in H2 I will be happy and an acceleration in Q1 next year. I was caught out by the lack of sales after everything that has been said, but to me that's what happens if you develop and build an entirely new and much better product. as to predicting the SP even with some sales... as I quoted on another BB recently (mining), as Clem Sunter, the well-known (in mining and South African circles) head of the Anglo American Gold and Uranium Division at the beginning of the 1990's, used to say whenever he was asked for his forecast of the future gold price... "Its going to go up, down and sideways, but not necessarily in that order". GLA, DYOR! all the best and please... less poison.
Thanks Fulmar, very interesting, and the mining unions publicly pointing out at this Zambian Indaba the lack of investment and poor returns from mining in the recent past, certainly plays to the narrative of the President then making big announcements soon afterwards about the majors making big financial commitments and returning to Zambia. Thinking about it, NvS of course visited the Mining (?) Minister when he flew out there a few weeks ago. At the time I thought it was probably related to the court settlement, but maybe there's a bigger picture here, which everything is tying into, including your comment a coupe of days ago that you have believed for a couple of years, any deal would have a political aspect (if I repeat your words correctly) ... ATB and only time will tell! DYOR
Agreed IvRoche. Since they haven't told us any of the assay results which I understood we were waiting for, it sounds like so far they definitely haven't found a dripping roast, but its not yet proven whether or not there might still be something there. I suspect that for Rio, who have spent their money to achieve an earn-in, but to whom this additional expenditure is next to irrelevant, they just want to keep their foot in the door in case something turns up. Well at least its not a release saying Rio walked away but we still think its worth continuing. Onwards and upwards... no sorry, this is Bluejay... lets continue muddling along!.
Hi Ella, you have the right to say what you think, like everyone; but while mentioning me was a nice attempt at a deflection (and I would be more than very surprised if any of my siblings had even heard of this BB), but please don't mention my BB name, even by the initials. I have a reputation to protect and don't want to be associated, even by mistake, with your negativity. There are some great comments and often well informed comments from people here, and the sum of the knowledge shared is far greater then the individual parts, and hopefully we will all make some money.
But while sometimes a point you make may very well have merit, I (and I suspect almost everyone else) ignore it because everything you write is tainted by what appears to be a personal hatred/jealousy of everything to do with ARC, and you are even more negative when they do something right. Unlike you, I know I am not always right - but I am expecting that when Arc deliver what we all want them to deliver, you will take yourself down to your local patisserie, where you will (on video) purchase and then eat, huge dollops of Humble Pie. I wish you well, whoever you are.
Just checked the Indaba itinerary online, and President HH is speaking at 9:20am on Monday the 9th May, and Duncan Wanblad, the new AAL CEO is speaking on "The Power of Mining – An Industry at the Heart of Enabling a New and Inclusive Economy" at 10:20 that same day. So while I accept that it is nothing more than an educated guess, and we don't yet know if AAL are the partner (though if there is a JV, it seems most likely to be them), if there is some kind of deal between Arc and Anglo, the logical place to make a big song and dance about it is then, so I would guess that the story will be in the Sunday papers the day before they speak (which of course it shouldn't be unless an RNS has been published,, but that doesn't seem to bother big companies) and announced by RNS either after market close on Friday 6th May, or better guess... before market opening on the Monday.... noting that AAL has a secondary listing on the JSE which opens at 8am our time... so if nothing happens by market opening on the 9th, I am going to have to accept I am completely wrong, apologise for talking rubbish and that we are going to get into bed with someone else!!! Until the 9th, though, I will live in hope, and I would argue that at least there is a good logicality to it! This is not investment advice. DYOR!
Many thanks... have now seen it. It proves that old adage that when you red something in the media about a subject you are knowledgeable on, your first reaction is often, "what a load of b*llocks", but when you red something you don't know mc about, the reaction is often "that's really interesting!". The big challenge is that with the huge amount of information on social media, newspapers find it very difficult to fund/resource in-depth quality journalism. The result is an increasing amount of very low calibre of news reporting.
I looked at the Sunday Times and didn't see it, so apologies for being blind, but where exactly is the mention?
KB, That's really interesting... you're suggesting that the timing of an announcement of a JV deal could be, for PR and political purposes, held back until the Indaba when the Zambian President and AAL new CEO are there together... media headlines "Anglo commits to business friendly Zambia"! Everything we've heard from the company pointed to a very attractive deal already on the table; and we know from past comments that NvS will only do a deal that also rewards Arc shareholders, so if and when this happens, its going to be a good, or maybe even very good, deal... and we know from Seisnav's info how good the potential of the property is, and a major like AAL wouldn't care about what's happened in the past with Arc, good or bad... only in the geotechnical data they have been looking at for a long time (including I assume the aeromag survey), nothing else.. Worth noting that in any other scenario I would guess we would be planning our own drilling campaign now (booking rigs...etc), because while they only started in July last year, I seem to recall they said it had been delayed by Covid, and from talking to people who know Zambia, some companies will already have started this year's drilling, and the latest drilling should start for anyone would be in early June, even in inaccessible areas. But in the event of a JV with a major who already has the drilling capacity, it simply doesn't matter! So here's to hoping you are exactly right KB (and if it happens earlier, I'm not complaining!). The SP shows the market doesn't (yet) totally believe it, but it all makes logical sense. Good luck all and have a good weekend!
PopeUrbanII, very good advice from IvRoche. I got in at nearer 11p over a year ago and given the early newsflow expected financing for Dundas during last year and building of plant this year (or at least the start of it), and we are now in April 2022 and all we are now doing is redoing the FS for by the end of this year! No idea why we haven't heard anything about the assay results for Enonkoski, even if its just to be told why they are delayed. On the downside, the Communication is about as bad as you can get, and that is really saying something on Aim, but on the upside the locations are superb and the potential for the JV with Kubold is simply huge, underpinned by Dundas being funded, built and providing cashflow sometime this century! Other than Enonkoski, and news that Kobold have started work in June, not sure what newsflow will drive the SP over the next 6 months, but give the L-T potential, I am just going to sit it out, but its a very frustrating company so if you buy, be very prepared to be consistently let down.