Member Info for Edgein

Nige,

They've mentioned transformational in both RNS releases and interviews so you never know. Could they also avoid the RTO issue regardless of their microcap due to the large scale of Wowo gap reserves (currently 100% owned before jv completes). Maybe. So yes could be a company maker for sure, lots of potential in Brazilian onshore assets. The likes of Shell and Petrobras likely has some mature assets that would be lucrative to a small cap and barely breakeven for the majors. Lets see, exciting times, also edge of the seat stuff with the potential of Mt Weld, drilling campaign imminent.

Regards,
Ed.

Tiburn,

A placing last January after he announced the major discovery in the Frontier. Share price spiked to around 40p, would have been the perfect time to place at circa 25p. Would have likely avoided all these going concern issues since and a lot of the bond financing. 50-100m shares then would have resulted in far fewer shares now. But hindsight and all that, water under the bridge now. At least AM can now rectify things as the BFU and Fed Deeps are very material assets to a £20m company and should have enough cash to put the company on a firm footing now that the liquidity issues have been resolved.

Regards,
Ed.

From the 14th March update:

"The Company has restored normal operating conditions at Barron Flats (Shannon) miscible flood, following recent storms. A full operating update will be published at the end of March along with the publication of the Company's Annual Financial Statements and Management Discussion and Analysis and Annual Information Form."

Regards,
Ed.

Duster,

Yes its encouraging that the creditor took shares at a premium as COPL likely have plans for that $2.2m that can be put to better use than paying off a creditor such as CCU completions and gas gathering infrastructure.

You asked when are we likely to get another production update, that's likely to come with the year end accounts and MD&A as there will be a section in that about outlook and post period events like the bond cash etc. That all should be released within days.

Regards,
Ed.

Duster,

They were arm's length creditors. therefore not immediately necessary, not short term creditors, that makes it look like a tidying up of the balance sheet, perhaps at the request of a possible new senior lender. Recent announcements from the company suggested a drawdown of new RBL before 31st March. Perhaps timetables have changed as a result of the bonds, lets wait and see.

Regards,
Ed.

"Further to the announcement of March 20, 2023, the Company has also issued 26,842,036 common shares (the "Shares") settling $2.2 million of payables to arm's length creditors of the Company. The price at which the Shares were issued was at a premium to the LSE share price."

Looks to me like a company tidying up its balance sheet ahead of debt restructure.

Regards,
Ed.

Nige yes, if they were listed at £10m then theoretically that asset alone would be worth twice our current market cap. Of course the whole point in listing IBM was to give those large cathode manufacturers access to Ni ore. So I could see them getting to work quite quickly on Wowo gap as its already at indicated reserve and some more drilling there should get some of that to measured, therefore heading towards scoping study or DFS and eventual development. Going forward the ability of those large companies to develop Wowo and Mambare would be invaluable to CRCL, dilution for CRCL would have been much greater without them. Timing will be interesting here, will this jv complete before Mt Weld drilling or Brazilian acquisition(s), according to the recent interview JV is very close, it may even play part in the rebrand.

Regards,
Ed.

Nige,

Yes, its planned at listing that CRCL will have 50% of the shares in the new JV company, plus they're carried by the new large partners for $1.5m and also get a 1.5% revenue royalty on Wowo gap (the most advanced of the two massive Ni assets). Ironically that 50% of IBM is likely to be worth much more than 100% of Wowo gap and 41% of Mambare. But at the same time those large companies will bring with them a lot of development potential. Much easier for them to get Wowo and Mambare through the development process compared to CRCL. Also completion of the JV and demerger means no more dilution at the CRCL level for those very large assets. Hopefully CRCL will have its hands full soon with some Brazilian production anyway.

Regards,
Ed.

Not only does the chart look poised for a return to the 1.4p area but as Nige suggests plenty of options to get us back in that direction such as Mt Weld, Canegrass completion or acquisitions/rebrand. Folks need to keep this in mind too:

"Restructuring its PNG nickel assets, positioning them in a broader portfolio, on a fully carried basis, ready for a standalone listing which we expect to be at a highly attractive valuation"

Market remains oblivious to the fact that CRCL are completing a jv with multiple $bn companies (Chinese and Korean cathode makers and a fund). Lots of upside on these Ni assets alone.

Regards,
Ed.

Nige,

Agreed. JP likely want to get things moving and the direction of the push into Brazilian oil and gas is certainly coming from him imo. SK alluded to that in the recent interview too, they're seen as not doing anything by just waiting for the JV to complete, that's been changing with the addition of Mt Weld and Canegrass with more to come. JP will want another shot at the big time like he had at SOU, hopefully we'll all benefit from that. But if SK gets us into some good mining assets like Mt Weld i don't think anyone will complain about that either.

Regards,
Ed.

Nige,

Yeah agreed, SOU was a market favourite for many years, perhaps JP will inject some life into our daily traded volumes through the right acquisitions. We both know how fickle AIM is, overlooked one day, market favourite next.

Regards,
Ed.

Nige,

Absolutely, oil and gas has many uses beyond just fuel, textiles, pharmaceuticals, fertilizer etc etc so it'll be around for decades to come. In fact exploration and development has been neglected in recent years as countries relied on Russia, big mistake. Clearly Brazil has big plans for its onshore oil and gas assets over the next 10-15 years, we'll find out soon if CRCL will be part of that. Bring on that rebrand.

Regards,
Ed.

Nige,

Yes acquisitions indeed, obviously looking at multiple projects over in Brazil. I3E went from 0-18,000boepd in the space of 12 months through 3 acquisitions, Toscana, Gain and finally mature assets from Cenovus. Not saying he Corcel will be on the same scale but multiple production acquisitions could follow, using the cashflow from one to buy into additional assets etc. I3E certainly managed a transformational change, Sirius Petroleum seems to be following suit as is Afentra etc. These companies have all done or are doing a 0bopd to thousands of bopd (SRSP and AET still need to close in Angola). But the potential is there in Brazil, lets see what the company can do. Exciting times as the Ni assets aren't even priced in.

Regards,
Ed.

Nige by all accounts Brazil is just opening up its oil and gas industry which has been dominated by the majors such as Petrobras, Shell and Repsol.

Added Bandeira, “We will see a significant shift in Brazil’s production makeup. In 2015, Petrobras held 84% of all production. That level will drop to 61% by 2030, as the Majors and the independent operators’ output grows.”

This article shows what the new independents have the potential to do in Brazil:

https://www.bnamericas.com/en/news/new-mid-caps-in-brazil-aim-to-increase-mature-asset-reserves-almost-1-billion-boe-by-2035

None on that list are LSE listed.

The majors are mainly offshore

https://www.bnamericas.com/en/features/who-are-brazils-top-five-oil-producers--

I can think a number other AIM listed companies with assets in Colombia, Ecuador, Peru, Argentina, Suriname, Uruguay, bot not Brazil. From the sounds of it Petrobras dominated the assets for years and sounds as if they're just opening up to mid caps and independents in recent years.

James Parsons:

"He started his career with the Royal Dutch Shell Group where he spent 12 years with Shell working in Brazil."

He'll have a few contacts over there I'm sure.

Regards,
Ed.

CPFC,

Its not just words though, those financings with the Chinese were done at 0.4p when the share price was as low as 0.22p, that's cash in the bank and allow restructuring so more than just words. I guess the Chinese see the IBM JV as worth much more than 0.4p to CRCL, coincidentally so do I.

Mt Weld looks like a masterstroke, got the asset for low cost and farmed it out almost immediately for a free carry putting the risk onto Riversgold. That asset alone, if it comes in, could be the biggest transformation of them all, even though Wowo gap takes some beating. There are other little miners with much lower potential from their assets trading at much higher. But lets see what happens after the drilling and the assays. Hopefully you'll find out in due course if Mt Weld is just words or a world class REE discovery, either way the exposure is now free to CRCL.

Will they start getting some credit for their assets in due course, lets see.

Nige, yeah there's a lot of fields onshore Brazil to choose from, it could be company making potential. Even if its small production it would help them fund their share of exploration costs on the mining assets (Canegrass etc). Brazil have big plans for their onshore production so exciting that this tiddler could get involved in that. Its a case of keeping eyes peeled for these news releases as they land. Riversgold might lead the way before we see the first Brazilian acquisition. The current weakness in oil price will help, someone posted a link on the ADVFN I3E tread suggesting $140/bbl by year end. Could be an amazing time to land some production.

Regards,
Ed.

CPFC,

It has been pretty transformational so far. Before Q1 they just had the jv on the go for the massive Ni assets, This Q they've refinanced the company at a premium several times, acquired an option on Canegrass and acquired and farmed out one of the highest upside REE projects in Australia with very interesting magnetic response. They're just waiting for Riversgold to get the rig on there and they expect to start drilling that this Q. For a company valued at £2-2.5m that looked like it was just sitting on its hands that's pretty transformational activity wise, look at the number of news releases since the start of the year.

Price wise most of this has been ignored and the market is oblivious to the current assets and future direction of the company, but for how long? Lets see how the Asians value IBM, my guess is more than £2m! But I agree though with the imminent rebrand ahead there could be much more transformational news to come.

Regards,
Ed.

Nige,

I hope so! As long as its accretive then that's the main thing. I've been investing in O&G companies for around 30 years, and some mining companies too, most are done on debt and equity. Sirius petroleum are apparently picking up their new Angolan assets purely with debt. I3E on the other hand picked up their last acquisition with equity only, the share price tripled soon after that completed. JP has plenty of experience so he should know a bargain when he sees one, I did hold SOU for a while too, it went from 0.6p to 6p+, that was way before it hit £1. Most acquisitions that involve reserves and production can be done with at least part Reserve based lending, but lets see. I'm assuming that there will also be an equity element, hopefully from a cornerstone investor or perhaps the Chinese again. There's enough going on with this company at the moment that a little dilution doesn't bother me if it happens.

Regards,
Ed.

Nige agreed,

Its interesting too when reading today's release how its structured. Mt Weld and the mining assets are all clumped together when they mention their legacy assets. And the section about the future is about the oil and gas and the macro tailwinds. We know from the global energy supply and demand that oil and gas will be around for decades to come as they do way more than fuel vehicles. Its interesting to read the comments of our chairman, James Parsons, as that guy will know a good oil and gas asset when he sees one. He did wonders for SOU when he ran it. Also interesting to hear that SK didn't rule out the possibility of an RTO in that stock box market musings interview, said maybe etc. It makes it sound like the new focus is on O&G with the mining as non-operated.

"This reflects the significant onshore opportunity set in the oil and gas sector at attractive valuations and the Company's Executive experience and connectivity in this space."

The article I put up recently suggested that Brazil were looking to double their onshore production between 2020-2030 it'll be interesting to see what JP means by significant opportunity.

Regards,
Ed.

Austin,

I cannot see how group level funding for the BFU has any part in the NDA. A large recognised company won't be interested in a field with a potential 50mmbbls recoverable. They came in for the large discovery at CCU and BFFDU, not BFU. Today's bonds of $13.6-14.8m will be used primarily for the BFU upgrades in combination with the surging production. That should then allow COPL to fully implement the MF and long term production at BFU. While a company maker for COPL and its tiny cap this would be of little interest to a large company. But what this cash mountain does is put COPL in a great position to achieve what its aims are of getting BFU to 5000bopd+ over the longer term and removes the going concern. It also puts the company in a strong position to get the optimal result from the RBL and JV, hopefully hear about those near term.

The NDA should cover the area of the CCU and western BFFDU where COPL has confirmed oil flows from the Frontier 1, Frontier 2 and Dakota. Now over a fairly extensive area of CCU. The bond funding has put them in a strong position to complete these talks on the future of the large discovery but should not be in any way linked to the separate asset of BFU. No more buying the asset on the cheap etc. As if COPL's plan works and they see material uplift in the BFU production the hedge becomes irrelevant and COPL should be able to go it alone on the CCU and BFFDU wells if necessary. But lets see how the JV talks go, hopefully end up as positive as the outcome of this latest round of bond funding.

Regards,
Ed.

Tonlin

I know everyone is sick hearing about them, but the reason imo for this significant news not shifting the price materially today is that we're still clearing the bond converters. Once cleared though we should see that huge rise from the large derisk we've received today and backing of the main BH and new institution. Its all that oil what does it.

Regards,
Ed.