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That has been the consensus view since Simon took over Howard and is one of the reasons for the SP softness since Rio's management change. However, I would note that Rio have restarted the Zulti South / Richards Bay Minerals ilmenite project in South Africa, which doesn't necessarily align with that view, so we shall see. In order of likelihood, I'd say JV with non-Rio partner is most likely, followed by takeover by someone other than Rio, then full takeover by Rio, followed by Rio operating and taking a majority stake. But I still think there is a decent possibly of all of these outcomes, so they are worth discussing imo.

IBABFO, fair point. But I would say that given that Rio know this project inside out and fully understand its strategic value (which is global), if they decide to buy us out normal valuation dynamics may not apply to the same extent. I can't see the management team and shareholders letting this go on the cheap. We all understand what we have here.

Americans have woken up, clear pattern developing. Back to the days of a boost from the other side of the pond, as we had during the run up last year, as opposed to the opposite, which we had earlier this year. Rare earth sentiment returning big time, Americans buying, Berenberg bidding, quick recovery from low 30's placing, all feels very familiar, but this time we won't stop in the low 70's!

Yeh, I think a majority stake is definitely a possibility, just can't see them operating and still only owning c.20%.

After your first post I was thinking about what them owning a majority would look like for us. Let's have a look at 60% Rio ownership. Current market cap is £252m. Fair value for 40% of the company at this stage? Based on my post DFS analysis I am getting a value of $1.98bn post tax NPV using DCF methodology, or $3.33bn using an EBITDA multiple (midpoint of range) methodology. Given that we are post DFS stage take 30% of these values to get $594m or $738m respectively for current project valuation.

If Rio were to buy 40%, in order to increase their holding to 60%, this would translate to a value of $238m, or $400m depending on methodology. I'd say a 20% premium would be fair given the heavy rare earths and the fact they would gain majority control. Applying this you get $285m using discounted cashflow methodology or $479m using EBTIDA multiple methodology. That's a potential pay out to shareholders (via special dividend) of equivalent to either 32p or 54p a share respectively, with non Rio shareholders still owning a 40% effective interest in the project.

If it was full takeover of 100% of the company, I think you'd have to up that premium from 20% to about 50%, which would mean a buyout SP of £1.01 using DCF or £1.69 using EBIDTA multiple. I'd prefer the former personally, effectively getting my initial investment back (or a bit more) as a special dividend and retaining significant exposure to the project.

I'm no expert, but most of the experts I've listened to have suggested that if Rio operate, they will want to own it in full. Whether the change in management and focus at Rio would have changed this view, I'm not sure, but large companies like to have control of their businesses, so I see less chance of them choosing to operate without at least having majority control.

Another couple of top ups from me this morning at 38p. This investment is going in the long term draw, and I'm expecting multiples of the current SP within the next 2-3 years, if we haven't already been taken out by then.

Berenberg have been consistently driving the bid this week for the first time in a long time. The last time being when we had a big run up in the SP. Encouraging.

I think you’re right about the driver for Siemens here velcro, much maligned EU regulations actually doing us Mkango shareholders a favour for once!

There is no doubt that we are partnering / collaborating with Siemens in some form, it’s just unclear presently what the extent of this partnership is. I don’t think we are necessarily limited to Siemens plants that are near to Pforzheim. That location has clearly been chosen by us for the links to the automotive industry and university, but transporting magnets to any factory in Germany, or the EU for that matter, will be no problem at all.

If you were going to pick one partner in Europe it would almost certainly be Siemens given their breadth as a conglomerate that use rare earth magnets right across their product set. The big auto manufacturers would also be great but they have smaller market shares, are being challenged by Chinese EV manufacturers and have a more limited product range. I assume they’ll be at the factory opening next week, I would like that included in the RNS headline…

Great find Floyd! JLR and Siemens, not bad partners to have eh!? Would be nice for them to announce that they are to be offtakers for our Pforzheim plant, that would give the SP a lift for sure. Hopefully we're now entering one of those phases where the news comes thick and fast and the SP re-rates accordingly. I think we all deserve it given our patience here and the rather ill executed raise.

How about 300k at 44.35p bonker, even better! Massive volume today, 5.7m reported so far (with likely more to follow post close). Re-rate appears to be well and truly on.

Buying has picked up again strongly since US markets opened.

1.025m trade post close on Friday at mid price. Perhaps that was the of clearing of the last of the big placing related share transactions and allowed us to move up this morning.

A lot of momentum building this morning and the SP is racing ahead. Is this just a catch up, with big sellers gone? Is it a reaction to neodymium prices (we didn't get the same reaction last week when they were up)? Or do we think an RNS may be inbound? They're not traditionally leaky at Mkango, so perhaps less likely to be the latter, but very encouraging SP action so far this morning.

Morning, nice to see us motoring here, particularly after they dropped her on open. Another run up in Neodymium prices like we had from December to February would do us nicely and be perfectly timed for our SPAC listing in the next 6 or so weeks.

Yes, that’s certainly the way that Jimzi explains it and I agree that we are very unlikely to be staying still in terms of IP protection. I’d expect that we (Hypromag) will also be developing some of our own IP around the rest of the process, so it will be interesting to see how the relationship and licensing arrangements evolve.

Anyway, I think the perpetuity comment from JT is a positive one, which suggests that there will still be plenty of protected IP for Hypromag to license beyond the initial patent protection period.

I’m not in front of my computer now so can’t check, but from memory of the Feasibility Study, the UoB license fee was around [1.5%] of total revenue. So that was always how UoB would be rewarded for all their IP investment.

Given that Hypromag itself is presumably further building on UoB IP / creating its own IP around the HPMS process, there might need to be a a license between Hypromag and Hypromag USA and potentially a license fee covering this aspect too, as Hypromag USA will be separately listed.

I’d imagine all this stuff will be set out in the Hypromag USA listing documents.

Agree, I think management band with for both Mkango and Cotec is insufficient to deliver everything they’ve got on their plate in a timely fashion, which is probably one of the reasons for the slippages.

The interviewer is hilarious, but I think he is right to be excited, the company has amazing growth prospects.

That being said, JT (like Will and Alex) does need to start delivering on his milestones. The FID for Hypromag USA first plant was originally slated for last middle of last year, then Q1 this year, now he’s saying by the end of Q2, but only thinks it will take 12 months to be operational. I find that hard to believe given the experience with Tyseley and Pforzheim.

He has talked about being on the cusp of announcing offtakers and feedstock suppliers for over a year now and all we have actually got so far is the ILS announcement that was already expected given our existing relationship with them. He does say in this interview that they now have enough feed stock for the first plant and plan to make announcements on new partners in the next two months (though we have heard that particular promise before).

He also mentions several different lines of discussion with various parts of US government, and one initiative where they are trying to pair the likes of Hypromag with major US magnet customers. They have also figured out where they want to put plants 4-7 and he talks about supplying 25% of US magnet needs, which is up from the 10% he used to refer to.

So, a lot to be excited about and I do think this will end well, but I want to start seeing some actual concrete execution, and less jam tomorrow. We had a jump on the competition, and I want to make sure we actually make use of our first mover advantage.

Great, thanks Drantley! Haven’t listened to the whole thing yet but was interesting to note JT’s comment that they had the perpetual license to the Hypromag tech in the US. Not sure if he just misspoke, whether I have misinterpreted what he said, or if this is a new development, because I’ve never heard to it referred to as a perpetual license and I would have thought that it would run out once the patent protection ends? Anyone else pick this up?

I'd also argue that it's not divestment of an asset as we will still maintain majority ownership post the listing.

Jbanzi, yeh I'm not sure given that it is a subsidiary of a subsidiary. I'm leaning towards no, as we didn't get a vote on any of the Hypromag business JV's or takeovers. If we were going to get a vote, from what I have read we would need to be given 30 calendar days between the documents being published online and the vote at the Annual General and Special Meeting (slated for the 5th June). So if this were to be the case we would need to be getting SEC approval in two weeks time at the latest.

Fair, but this is AIM, and pretty much anyone on AIM is a speculator in one form or another. Having been invested in Mkango for 10 years and Sovereign for over a year now, I'm very familiar with African mining risk, and with Malawi in particular.

The thing is, this is a world class Tier 1a deposit, for three critical metals / mineral groups, all of which it is (at least according to the preliminary HREE results) in the top two for globally. It's supported by Rio, IDFC, Japan, the US and industry leading offtakers. It's going to get built. By who I don't know, and it is probably unlikely to be Sovereign. But I do expect, with a relative degree of certainty, that I will get paid one way or the other.

I had a majority of my portfolio in Mkango when it was a minnow, so maybe I'm not the best example for the average punter, but that stake is nearly 8x my average buy in price today (after a recent pull back). So I'm very comfortable with 10% of my portfolio in Sovereign.