Member Info for DowntoEarth

Brad,
If the SP doesn't interest you, you're investing in the wrong company. Assuming the company turns out to be a success, you won't see dividends from Tlou, it will be sold off.

'Your fraud' or 'You're a fraud'? The journo was quoting the minister so I can't really see it makes any difference, the minister said it, end of.
Interesting that you didn't address the scenarios I put out with regards to immanent funding and how it may impact the share price. After all that's all investors are interested in. I don't think it's decent of you to put 'Strong Buy' on every post you make, encouraging people to buy, when I have given reasons why I don't think the price will rise significantly until the two issues I mentioned previously have been resolved. Hardly a fraud!
I'll be honest, up until the last RNS I had 1 million of these shares, sold the lot on the day largely due to the following statement:
'The Company is operating in a region where commercial CBM had not been produced before so there is no comparable data from this operating environment regarding how long it may take, or if it is even possible, for a commercial gas flow to be achieved.'
It was the first time that the company contemplated if it's even possible and showed a change of mindset. That is the official company line, not a positive nod and wink, a random tweet or some little chat from the receptionist at IR.
My strategy is that I reckon I have plenty of time to buy my 1 million (maybe more!) shares back again without worrying about my investment, unlike you, who's constant links to any tenuous pieces of news and constant 'strong buy' recommendations show that you're seriously underwater.

You forgot to add 'Strong Buy'

What I don't understand why anyone would buy Tlou shares right now. Assuming they get the $30m in the next 5 to 6 weeks, that funding will not come from 100% borrowings, but a decent chunk (maybe 20%) will be by the way of equity. The price of that dilution will be at best around today's SP, so there is potentially 200 million additional shares valued at 3p. If they don't secure their long term borrowings by the end of March, it is highly likely there will be a short term fund raise at this level to appease ASX.
I suppose if they released an RNS in the next few weeks stating that gas flows are commercial, the SP should go up significantly, but convincing investors to purchase equity on or straight after a spike will be highly unlikely. They are going to want 'mates rates' and buy in at this level before any news of commercial gas flows are released.
For me this could be a great investment once the two elephants in room have been addressed, funding and commercial gas flows, until that time it's a gamble not an investment.

MM,
In your haste to cut and paste selective text from the Lefoko Moagi interview, you chose not to include:

Worldwide, major project funders such as the World Bank, International Monetary Fund, African Development Bank as well as numerous large commercial banks have cut back or stopped financing new coal projects in line with global commitments on reducing carbon emissions.

AND

He said 'the country was also making strides with the development and adoption of renewable energy such as solar and coal bed methane, BUT THESE WOULD NOT REPLACE COAL ANYTIME SOON.'

This was posted on ADVFN by 'financethoughts' and I think it summarises where the company is in reality:

I did some calculations yesterday (happy to share more detailed explanation if required) but essentially I think TLOU need to raise cash by around 26th March, as that is the point when they will dip below $2m AUD, which is when they raised money last year around the same time in fact. Those that say they are funded for the year are incapable of maths - they will hit zero on 28th August assuming they continue at the same daily burn rate that this quarter (averaged to a daily burn) estimates. However, no company will allow their working capital to go so low that they risk a liquidity crisis, and the ASX rules prevent them having <2 quarters cashflow without explanation, without risking suspension. What is interesting is the cash burn now vs this time last year. Today, just over $11,000 AUD per day (around 40% is staff costs) vs just under $37,000 last year. That's a huge reduction in spend, which is fine if its efficiency, but doesn't bode well for a Co otherwise, as simply suggests they are having to mothball operations. I'm highly suspicious that the gas flows are inadequate as we've heard less and less detail over time, but even if they were incredible, and even if the Gov were to begin 'fast-tracking' this project (doubtful in my view), I honest think TLOU may run out of funds and be unable to raise funds externally to stay afloat. They raised $4.1m AUD last year in April, at around 5.5p - these ppl are closer to seeing half their money currently. Not a great experience to entice others to back the project, so a discount looks likely (either privately or via shareholders). Therefore, I think they need significant news soon otherwise they have little chance of convincing anyone to part with fresh capital of ~$4m AUD. The upside - Tony may have funds to capitalise the Co himself (or rich friends) if he wanted to buy a little more time. Or if they honestly thought things were desperate perhaps we'd see a cut on salary from the BoD. Either this suggests they aren't concerned, or perhaps they are a 'lifestyle BoD'and will milk it until dry. Some ppl have been ever so loyal, and it is a shame for them, but they need to look at facts, not continue to be overly optimistic to what has been promised for so long.

It reads like a last desperate attempt to stop the SP going below 3p. The problem is that shareholders have now become too cynical about being strung along with nods and winks from the BOD regarding any pending worthwhile news.

Have you read the comments? Nobody seems to know what to believe anymore.

To summarise:
Tlou Energy expectations as of the last RNS 2 weeks ago -
1Q20
Power purchase Agreement (PPA)
· Generation Licence Award
· Finalise Project Finance
4Q20
· Target first electricity sales
· SAPP membership approved

Botswana Government Expectations-
Moagi said:
“The project is at an advanced stage because what we needed to do is to make sure the power purchase agreements are finalised and we hope that this year it will be finalised,”
He said the government expected the coal bed methane project to come onstream by 2022.

No funding until there is a PPA, the government 'Hope' to issue the PPA within the next 11 months and production of electricity to commence in the next 2 years. Clearly there is a significant disparity between the government's expectations of timing and what we are told by Tlou. We have been strung along by this BOD for the last 2 years promising that great times are just around the corner, why publish that table in the last RNS when clearly it's unrealistic?

MinorMiner,
You forgot to add 'Strong Buy' to your last post.

JS,
100,000 cubic feet of gas per day, therefore hourly 4166 cubic feet of gas converts to 1.22 MW/h of electrical power. However, as the generators will only be about 40% efficient = 0.488 MW/h. Therefore both pods combined would produce about 1MW when assuming those gas production numbers are maximum.

Tlou want to negotiate a temporary PPA until the final one is agreed, presumably this just a technicality to enable them to secure the finance package on offer, otherwise what's the point? I don't buy into their concerns about wasting gas. Even if they are awarded a temporary PPA, they still need to obtain approval from land owners, install power lines, complete generator engineering works and connect to the grid before they generate any income. We are talking end of the year at best.
Also as the Company is aiming for a minimum sustained gas flow rate in the region of 80-100 Mscfd from each production pod, if these rates are eventually achieved, these two pods combined would produce approximately 1 MW of electrical power generating revenue of $1 million per year. Is it commercial? That's a lot of investment to generate a modest 1 million USD per year. They only recently started to refer to 10MW instead of 2 MW, I suspect the company's intention was always 1 pod = 1 MW of electrical power, hence why 2 pods were built with the intention to provide 2 MW of power. It seems to me that they've lowered their expectations regarding the productivity of each pod.
Maybe Solar will play a bigger part in the overall viability of the project.

You say no fund raise is necessary until H2, but ASX are pretty strict over this, remember 12 months ago when the company was drilling and they had to explain their financial situation? On ADVFN a poster has stated that ASX requires at least two quarters of working capital or risk suspension, if that is the case then expect a raise in this quarter. Tony does like to get them in early, he certainly is not going to leave it to the last minute.

Down again! At this rate this will be below 3p by the end of this week, I wonder what the Bots pension fund think of their investment?
I thought the point of Tlou's #2 GG was to circumnavigate all the red tape and to use his experience and contacts inside government to get things done? Way to go GG, it's only taken 3 years from the original request for 100MW to get this (not very) farther along with the government. It also bothers me as to why the man heading up our negotiations with the government owns so few shares.

Agreed, I think It would be comforting if they explained their results to date in a bit more detail, minimum and maximum gas flow rates over a given time frames. The fact that they haven't done this makes people suspicious that all is not great.

Yes, but the two previous placings with the pension fund have brought them no value at all, in fact they have lost on paper about 60% of their original investment, clearly they are going to be cautious if they are asked to 'invest' again. Those commercial gas flow rates will unlock the investment potential of the this company, but failure to do so will send it down the drain. This has almost become a binary bet.

Sentiment is on the floor. Until there is clarity from the company on the gas volumes being produced are commercial (fundamental for this company's future) and the very real prospect of a near term cash raise being kicked into touch, this will steadily go down. Why would you hold now when it is more likely you could buy the same shareholding cheaper in a month or two? Even on the back of good news there's a good chance you will have time to buy back in cheaper or at roughly today's price and not have to burden yourself with the risk.

So GG has been assigned with the task to sort out the vital PPA with the BG, how many shares does he presently own? Well looking at the share register he has 330,000 shares. Now, as a well paid member of the board, why hasn't he stuck his hand in his pocket? I used to own 3x the number of shares he has!
It's going to be months before this PPA is sorted (assuming it will be), come on GG, stump some of your 'hard earned' cash and make a significant Director purchase, otherwise people might start thinking that for you this is just a lifestyle company that just pays you a big salary.

It was interesting watching Tony Gilby's expressions on his face as GG was speaking, they clearly rehearsed most of it before and you could see the releif on Tony's face when GG mentioned those significant points that he was supposed to highlight.

Company has enough funds for H1 2020, one thing I have noticed historically about TG, he likes to raise money nice and early well before things start getting a bit tight and therefore I can see a raise happening in the next 3 months, especially if the PPA is not signed off soon. What will the price be? my guess 2.5p

I first 'invested' nearly 4 years ago at 12p, where's the shareholder value and am I even going to get my money back? Tthe last RNS had a very different tone to it, questioning if obtaining minimum gas flows are even possible!!!!

Remember it well, it was between the two submitted tenders. I think it was dressed up as some sort of pilot scheme of only 2MW not a full scheme, in the end they were only asking for 2 MW in their second tender.

Rates have reduced from when? from the beginning? If they are continuing to reduce month on month that would be encouraging. But I suspect they are struggling because they can't increase the amount of water being pumped through fear of damaging the well, yet the two wells working together are not removing enough water to lower the aquifer and give the results we need.
Water will always find a natural level, if permeability is not good, it's very easy to lower a water locally around a well as the water movement is restrained by the material in the ground. However, we are told that permeability of the coal in these wells is very good. Great for gas production if you can get rid of the water.