Monkeydluffy, the only dilution mentioned, that would be relatively immaterial and unconcerning relates to the outstanding warrants. The choice to exercise them is with the warrant holders not the company. I agree with you that I think the probability of the company choosing to issue more shares themselves is low. I’ll go and buy my t-shirt now.
Thanks. Based on the warrants issued and exercised since the share restructuring announced on Nov 13th last year by my calculations the unexercised warrants stand at 1.1 billion. I can’t imagine any warrants issued prior to the restructuring would still be exercisable either due to time limits or because of a likely much higher exercisable price. Therefore, the numbers and points I raised before all stand. I.e. when all the warrants are exercised they could result in net dilution of between 5 and 10% but for medium and long term holders that dilution should be set against a targeted increase in value of the company of 100 to 300% (a Mcap of £100M to £200M). If the copper price rises as predicted by many sector experts and the targeted production rate increase is achieved, even a Mcap of £200M could look very low in a few years’ time (see Cornish’s excellent calculations, from Friday I think). The potential upside is huge based on the equity and funding in place (there could be more funding required for exploration but only because the upside there looks enormous too and I would hope that would be funded from free cash flow over the next couple of years). So now we just need a competent management and staff optimising the use of an updated, fully operational mine (I’m sure there are significant opportunities to improve the efficiency of operations and bring the cost of production down too)and in my opinion I believe we are getting close to having that now.
Ps. If the no. of outstanding warrants is 1bn (based on your assertion that the company would receive £2M and I guess the least they would be exercisable at would be 0.2p) then that would result in a share dilution of c. 9.3% for a cash receipt the equivalent of c.4% of the market cap. So logically, with a dilution greater than the value it would generate then, it would be better for us shareholders for the warrants to not be exercised. However, they will of course be exercised and I actually think the company is in such a strong position now to create very good added value from using that £2M that I would conclude that I don’t mind when they are exercised because I absolutely plan to be a long term holder. I think the company over the long term could use the £2M to generate more value than 9.3% of the Mcap (c. £4.6M) so I’d prefer them to be exercised sooner. Day traders may have a different view. However, as the company is so clearly undervalued, I also think the warrants, even at a billion, are not a concern. I think the company should be valued, by the end of this year, between £100M to £150M. At an average of £125M the SP would be 1.17p. If all warrants are exercised the SP would fall to 1.07p. I’d be very happy with either!!
Exactly right OfficeManager and the rampers/derampers cannot determine the copper price, the production figures, the resource upgrades and the profit margins that should be reported in the coming quarters and years and once they have been proven the SP will be multiples of today's price whatever nonsense is written on this BB and whatever the MMs do.
RE: Goldman's upgrade copper to $15,00014 Apr 2021 08:21
Cornish, yes the potential is enormous isn’t it and we sit at 0.42p (market cap of £45M! Once the positive production results start being announced the first stop must be a Mcap between £100M and £200M and if the copper price does reach the heights being forecast the sky is the limit!
Tony Bradbury is clearly a man of action and few words but so importantly is delivering to his plan and as a shareholder that is exactly what I'm looking for. Once this plan is delivered we will own a share of a very profitable company worth multiples of today's SP.
Exactly Oiltap - Investors with very different objectives , targeted returns and timescales to achieve them. I for one am very happy to wait until the quarterly profits are reported - do you think the SP will be higher than now when that happens?
RE: 14mill sell cleared, now for a tasty afternoon09 Apr 2021 17:58
I'd guess there was fairly inevitable profit taking by short-term traders at the end of the week. Still a very good week with a very healthy 15% rise. I would hope we see similar next week as we edge closer to news - the company is still massively undervalued.
Good week so far as the SP looks to be breaking out to start its inevitable rise to reflect the true value of this business (£100M at the very least). Will we see 0.4p today or have to wait until next week?
MrExec, I don’t but I also don’t think the historical position of this company will be a good measure of the future possibility. I’m pretty sure that it’s highest Mcap is yet to come. Once the transformational works are well under way and the daily production targets are being met with the higher grades that are available, it just needs the copper price to not fall below about 30% from where it currently is and significant profits will be generated.