Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
When I said a risk factor was the single mill, I didn't mean just the mechanics of the mill, I meant they were what some people would call unkindly ' a one trick pony' . A failure of supply or a country (political, security) failure would be critical because, at the moment, they have high reliance on the one operation. I agree that supply of fruit bunches is an issue and we don't know enough about our competition for the supply of bunches- it went somewhere before DKL arrived on the scene after all. I agree they have had 3 bad quarters, one due to equipment. I was thinking of the reaction to the bad Q1 following a good Q4, this could be the start of terrible supply concerns due to climate or supplier relations or competition, or a combination, but until there are two or three quarters in a row it is too soon to call it a trend. Just erratic, which is why I wanted to look at a rolling 12 months. Yes they did over-promise and a black mark for them is their continuing relationship with Optiva who, I'm afraid, I do not trust. This does have the potential to be hugely cash generative, the elements are in place, so I am happy to average down at these prices as a tick up would quickly eat into my losses. Of course if I'm wrong....!
Yes an average down, and I aim to make money on these to off-set the higher prices I've paid, so I am still well under-water at the moment. I've been around this company since the placing in 2013 and take the longer view, they have achieved a lot although have had one or two hiccups along the way. But how many projects are flawless and have no issues over a 5 year period? The main risk factors for me going forward are the reliance on a single mill operation, and the Norpalm project is still unclear, will they over-pay etc?
Just made a top up, I think the reaction to one bad quarter has been over-done. Putting the good Q4 and the bad Q1 volume together there is little variance to the previous year. As any gardener knows, timing and yields vary, crops are not like making cars, it may be better to look at the yields on a rolling 12 month basis. If the peaks are being smoothed out, as Lincoln suggested, then that may actually be more efficient for the mill, to have more level production across the year. Just my thoughts, we could have a terrible Q2 and see another fall! but personally I will look at longer term production trends.
Rev, Please put me down for 31 August 2018 The Cinnamon Trust Thank you! dropside
Yep I like it! Lot of detail here.
Its good to see some life returning to this board! I am still 7K under water but am quite happy this will recover and more, once the mine is proven as profitable and not, worse case, a Weatherby (WTI) type disaster. We may not have long to wait and, beyond this, the DMS will be exciting upside to volumes and profit. Mowana was a good deal, New mines will always carry a price discount for risk but far more is known about the geology and mining of this formerly producing site than, say, Weatherly's new Tschudi mine. So we should be on track, and if operating profitability is confirmed then we should re-rate substantially as a producing mine with the risk discount coming out. Its been a long wait but I agree a 'healthy jump' coming.
Yes, Mowana was also sold as the key that unlocked the funding for Matala, by giving the asset base on which funds could be borrowed. Maybe Mark Jones was over-optimistic about this and the funding still din't come. Maybe the new management just were not as interested in Matala. Maybe Mowana is so good they want to focus completely on that and just get some quick cash out of Matala. Who knows, but Matala was one of the attractions for me in Alecto so this is a disappointing end to that saga.It looks as if the parts of the old Alecto are being dropped one by one.
Align tweet: Interesting point from a market ptcpnt re Beaufort -may explain weakness in a lot of small cap stocks of late - they likely been selling stock that they received for placings etc.
I read Align's tweet as suggesting Beaufort were dumping stock, not themselves.
BB2, I hope your other dogs did OK despite the market falling again! We are getting those 2 footed tackles here regularly from a few large sells to offset quite a lot of small and medium buys. I do feel we are in special offer territory now and bought more on Friday. Goldman Sachs are very bullish on commodities in general and gold specifically (relevant Mowana and Matala), this from Kitco on Friday: Goldman Sachs is upbeat on commodities despite recent weakness, looking for gold to be among the markets that rise. Following financial markets, commodity prices sold off sharply over the past week, with the S&P GSCI down 5.6% from the Jan. 26 peak. �This sell-off, however, was less than the 10.2% decline in the S&P 500,� Goldman says. �Ironically, the catalyst for the equity move was rising inflation concerns in the face of strong economic activity indicators, which further reinforces our view that commodity markets are set to outperform other asset classes once the current liquidation flows subside. As is the case for equities, we view this move as primarily positioning, technical and USD [U.S. dollar] driven, with the magnitude of the declines well correlated to both the strength of the prior price trend and the level of speculative length. Despite the sell-off, we find that recent fundamental data is still supportive of our constructive view on the asset class.� On Thursday, Goldman upped its one-year gold forecast to $1,450 an ounce. Goldman analysts cited expectations for recovering demand in emerging-market nations.
I don't think they are using VWAP. The terms are: "During the first ten trading days following the date of Re-Admission, the Noteholders can convert the principal amount of the Notes at a conversion price equal to the lower of (a) the closing price per Ordinary Share on the trading day immediately after Re-Admission and (b) 80 per cent. of the closing mid-price per Ordinary Share as quoted on AIM on the trading day immediately prior to the date of receipt by the Company of the conversion notice in question (the "Floating Price"). Following that initial ten trading day period, the conversion price will be the Floating Price." The trading looks like a lot of small buys, and the damage seems to have been done by the late reported �12.75K sale, which is probably from yesterday. Whoever sold would have done so at a heavy loss, doubt they will come on here and tell us why! If they are done then we could see a sharp move upwards..I hope! Personally I think we must be at or pretty close to the bottom and any newcomers have my complete envy :-)
GS- thanks. I'm not going to harp on about it but we don't know how much of a priority existing shareholders were, given that however many shares they issued, the concert party were guaranteed to receive their 60% or so. Maybe as you say 10p was the very best they could do, we don't know. Anyway we are where we are. The assets are very good, Mowana and Matala. Everyones objectives are all aligned now, Penmin have every incentive to ensure Mowana is a great success, as a consulting company they can hardly afford for their own mine to be anything other. As a comparator company I look at Weatherly (WTI) , similar mine in production, though they own 100% but are heavily indebted to Orion and cannot afford the repayments, they are negotiating to reschedule. We have much smaller, and manageable debt and also have Matala as a "low risk" (Mark Jones) gold project. Market caps are �34m WTI, �19m CRA. Ragdoll2 talked about watching a seed grow, that is a good analogy. The route map for growth, from building Mowana and financing and developing Matala, looks quite robust and should not need more placings (my opinion).
I think most of the trades today around 9p were buys - mine certainly was. Things could start to turn around from tomorrow. I could be wrong but the 'special offer' of 80% of the closing price for the convertible loan note holders ended today. This was valid for the first 10 days after the date of listing. So if there was any incentive to push down the price, as if anyone would do such a thing, then it is not so pressing after today. BB2 you mention that holders are unhappy. I've been in ALO for a few years and have lost over half what I put in. I do think the Mowana mine is excellent and Matala will also be facilitated by it, it is a very good story. I liked Mark Jones and he did his best for us. It was notable though, that as soon as Mark lost control, the placing was done at 10p not the 20p or more we (and Mark) were talking about. The new controlling directors are an unknown and we can give them the benefit of the doubt but it will take time to fully build trust. They can't therefore be surprised at the slow start but as they get on with the DMS and update us on production and costs then the trust will grow.
I've tried to link to the broker analysis before but LSE corrupts the address (competitor I suppose). If you go to their website and click on Research, then Company Research Notes, Cradle Arc are on the second page. Beaufort give a forecast breakdown of the shares at re-admission. As far as I can tell, part of the deal is that however many shares are issued prior to admission, the vendors/concert party have to end up with 60%. I'm not sure whether that will include the shares PIs are enabled to buy, I suspect that offer will be after the listing- just based on time- in that case the 60% rule may no longer apply. But just my opinion, we will know soon enough.
Hi Spec, I don't know anything outside of what Cradle Arc have told us. I was looking at the communication of 22 December which showed 202m shares at re-listing with a capital raise of £2.4m, I'll attach the link and hope LSE don't chew the address up! I was trying to reconcile this with Beaufort Securities' 8 November analysis of the number of shares. As the joint house broker, I would expect them to be well informed. Things have changed a bit but we will know soon enough what the offer to shareholders is, and there should be more clarification. https://www.investegate.co.uk/aim/rns/schedule-one---cradle-arc-plc/201712220845011926A/
GS- I agree. Allowing existing shareholders to buy at the same price as the placees is the right thing to do although too many companies would avoid this. Once this is done we should see a good 2018 for this copper producer and it should open the door for Matala.
*** is **********************
I guess they are forecasting the 20m market cap because they had to do the last placing at 10p. Of course that is not what they think it should be - they wanted a premium to the 20p in fact but said the broker guided no more than the suspension price- and they would hope the market takes it higher from 10 Jan. Where will it go in the first few days? If they do offer investors the same terms (10p), then I can't see much buying in the market above 10p as this will be available anyway. Also PIs will sell above 10p to buy back at 10p. It depends how open the offer is - freely available or a restricted ratio? The sooner the offer is out of the way the better to allow the sp to move. Some of the 12 months locked in investors will sell anyway so it could drift below 10p, in which case they may scrap the offer. If it doesn't get back above 20p then none of this will have been worth the trip. However Mark Jones is no fool and the mine is very good, with the DMS upgrade giving 20-25 kt per annum as per Beaufort: https://www.**********************/shp/research.php?vid=471
It is not being explained very clearly where all these shares are coming from. Beaufort worked on 23m post consolidation, then 112m post admission then this grew to 132m in their final research paper on 8 November. Now this figure is 202m, why all the extras? The stated market cap at admission of £20.25m is probably more technical, based on the placing price, so suggests they did not get the 20p, more like 10p? This would account for some of the extra shares if so. Fortunately the mine looks good and so does the market for copper so we should see good progress. I am just glad this is re-listing at long last, the last year has been frustrating to say the least and I have feared the worst at times. Good news in time for Christmas for shareholders - we are all long termers now whether we planned that or not!
I agree gazshot, and write to St Brides too. I already have.