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On face value correct, but a similar scenario is GGP where newcrest have earned a 70% ownership of havieron by spending $65m - has worked out okay for GGP shareholders. If DOID can unlock the value and demonstrate to the market that the odds of mining are significantly increased then we will do well out of this.
Matt briefly touches on this from 47:20 in the following presentation:
https://youtu.be/_W4uUEUFzFA
Sealed / gravel roads to the train at Ifakara. Given the other projects in play locally, I can only see the infrastructure further improving. I think Blackrock will also be using the train and in one of their presentations talked about what upgrades had been done.
Looking back I think you are exaggerating slightly to say you got ‘stoned’ - one person responded with some incorrect information ?? At that point we *hoped* it would be quicker, and still do, but alas it hasn’t been the case yet. Patience, as ever, is a virtue. At least the SP has shown some life over the last few weeks to help with the boredom!
Blackrock's timeline was:
- initial submission - 5 February 2018
- approved - 5 September 2018
That is 212 calendar days.
ACP's ESIA was submitted on 8 September 2020, so the same timeline would see us into April 2021.
On that scale we are still within Blackrock's approval period; but we want to be alot quicker. Armadale have said they used the same company to prepare the ESIA that did Blackrock's so we had a big head start on knowing where the previous sticking points had been and how to avoid those. So this 'delay' is actually not unrealistic, plus we need to take into account the elections that took place as well as the holiday period we have just had.
Fingers crossed it will be soon, but this isn't an indication that there are problems based on what Blackrock went through. If it gets beyond April I will start becoming more concerned!
I think it comes down to how near the market believes each company is to monetisation of the asset.
With EUA there appears to be a decent chance of a transaction. If that doesn't happen then the SP might fall but you would expect all of the in-house steps to production to then kick off. EUA is open pit and therefore lower CAPEX to get up and running (£150m is the initial estimate for a smaller part of the resource, of which they already have an EPFC deal in place to fund).
As and when HZM gets the funding sorted I would fully expect the mcap to increase because the market would have a much greater confidence that the asset will be monetised.
I think and hope both are worth multi billion given I am still in both :) If EUA completes near term then I will shift more funds here.
I can't see 50% on licence alone, maybe 20-25% (I'd like to be wrong!). Ultimately it is a combination of factors which will drive a re-rate and just depends on the order that they fall into place. Licence + finance + date to commence construction are the key elements IMO.
Hard to do a direct comparison to others e.g. blackrock got the licence alot earlier in their process, they still need to secure funding although POSCO is a big de-risker for them.
At the moment they has focussed the valuation on this 25%. The other 75%, if proven up, could either be used to increase annual throughput or increase the mine life (currently 15 years).
They have taken the current approach so that they can size the mine at a sensible level of initial capex and then build from there - bigger throughput means bigger plant etc - so that it is easier to fund initially, with future expansion out of free cash flow from operations once up and running. And because they have based the valuation on a discounted cash flow model (NPV10 = the net present value of cash flows using a 10% discount rate), extending the life of the mine beyond the 15 years add peanuts to the valuation *at this time*. Once up and running, they can start proving up the remaining resources as they work through the initial 25%.
There seems to be alot of noise on this board at the moment. I appreciate a balanced argument but there is a level of hysteria from certain quarters. The negative press around AE is possibly a reason why the SP is subdued, who knows.
You can find positive and negative press around many companies, but in this instance we just don't know the full story based on the information in the public domain. I'm taking the position of innocent until proven guilty, others on this board are shouting loudly from the rooftops with the opposite viewpoint. I welcome the information (but it is becoming tedious with the constant repeat messages).
A key stage will be the outcome of the IPO underwiter discussion and whether they take a prospectus to market. This gives an independent, hopefully underwritten, IPO price that they will use to take to institutional investors. The valuation will be based on alot more information that we currently have at our disposal, particularly because we are dealing with a private entity here.
Patience over the next month will give greater clarity one way or the other. If you are nervous / uncertain then exit your position. But also please can we stop repeating old messages based on google searches? I personally get the message and don't need it constantly rammed down my throat.
Tardis - hard to say whether project financing will need that detail. I don't think we will get binding offtakes until the further testing is completed because it will potentially determine pricing, at least not all of the offtakes. However, I could see a situation where the debt/equity financing has enough information (and confidence) to proceed without the detail.
I've had a bit of correspondence with the company this week - nothing new to report that they haven't already said in RNS, discussion around ESIA continues to be positive with good feedback. They still hope for the permit to come through shortly but they are in the hands of officials re timings. Approval of the ESIA should flow straight through to mining licence.
My sense is that they can't finalise any project finance details until they have the licence (and maybe can't sign off binding offtakes either?), so we should hopefully see a range of news flow once / if the licence is approved.
Xinhai are going to be the contractor who will build the mine, construction can't start until the rainy season has ended - late May or June I reckon - and they will want to kick that off as soon as they can.
If you decide to exit a position then fair enough, I understand why you might regret the decision now, but if you want to post something negative then at least base your opinion on some research. Two examples that easily counter your view: Eua - in which both you and I are invested - secured a non dilutive EPFC contract which was many multiples of the market cap at the time, and HZM announced $325m of bank lending when their market cap was about £50m. I’m not saying there won’t be dilution, but lending criteria will looks at the prospects of the mine and whether it can generate secure cash flow to pay back the loan rather than an arguably arbitrary point in time market cap.
I've been in this for a few years - the company aren't quick but up to this point they have delivered what they have committed to (always delayed though!).
Getting out now on the cusp of it all coming together would be foolish in my view, all it involves is waiting a month or 3, and I've terrible at timing the market. I'll only sell once we have the right news flow (not sure whether to hold on until production and beyond) or if the facts fundamentally change e.g. licence issues or economics fall through.
Fully agree BigBiteNow - ML should be one of the next bits of news through but is dependent on government processes.
I also agree with views of tones and others. The PR and comms could / should be clearer on timelines and steps required as we move to construction and beyond. However, I have accepted that we have a 'low cost' Board which doesn't incur lots of administration costs (and therefore reduces the likelihood of placings) and for that reason I cut them some slack. But the SP suffers in the short term which isn't what us retail investors like to see.
Hi Rahee, I don’t think this is the company’s intended timeline given they have stated they want to be in production by the end of Q1 2022; with a production timeline of 9-12 months they would want to get construction started after wet season/ May 2021. The main licence application actually was submitted in June 2020.
I ‘hope’ the ML will be granted in 2020 but even if that doesn’t happen it will have to be signed off in Q1 if they want to get construction kicked off.
Latest reports from the BBC indicate it has been peaceful today which is great to hear (not just from our investment perspective). Some allegations of foul play from the main opposition candidate which isn't surprising, although sad to hear. We might infer that if the opposition are crying foul play right off the bat then they can't be feeling too confident.
Results in about a week....
That was the hope - as expressed in an informal discussion that Matt Bull had with some investors - but to be fair to management they never put that in writing within an RNS. We are dealing with African politics after all.
That has clearly put a dent in short term confidence with some people not willing to wait.
I already have a very overweight position with an average of 2.4p otherwise I'd be adding more here.
Went 150 to 1 back in June 2015: https://www.lse.co.uk/rns/ACP/result-of-annual-general-meeting-jul32rknvspc04q.html
So no punching required :)