Member Info for esduk

I can understand when NT may need to be used very temporarily i.e. when news has just landed, when we have unprecedented volume or when we’re in auction. But it really shouldn’t be allowed to be used the way it is today, for prolonged periods where trading volume isn’t unusual. It just smacks of manipulation and SP suppression and prevents a normal functioning market without any justification.

SG, I think AI has got that one wrong, as it’s talking about Mkango moving its listing from AIM/TSX to NASDAQ which we know isn’t the case.

Market makers use no trade (NT) to make it difficult to day trade and to fill orders for clients at a lower SP. When they’ve dropped the SP to attract sellers so that they can fill their buy orders, but want to prevent other punters from taking advantage, they make it NT to buy in any volume. They don’t have the stock to fulfill other people’s buy orders, but don’t want to increase the ask as they are trying to manage/suppress the share price.

Indeed, and it really annoys me when they put in a UT for a few hundred or a few thousand shares and use that to imply a drop on opening the next morning. But in this case, the UT came as a result of someone wanting to bag £76k worth of shares (250k shares) at a 7% premium to the SP. They couldn’t get these from the MM’s in normal business due to MM’s use of NT and the volume available on the ask being misrepresented. All bodes well imo.

Correction, take advantage of these games to buy more shares at these discount levels and then let it take its course! ; )

His/her remaining 21k is still sitting there on the bid on L2.

And there we go, someone he got 229k at 30.5p, but not the full 250k. We close with a UT at 30.5p.

Unsurprisingly someone has placed 250k on the bid at 4.30pm for the end of day auction. Games, games and more games, but that shows someone is willing to pay 30.5p for 250k shares despite the MM's sitting on an ask of 29p. In other words the MM's are not allowing you to buy in any volume so the 250k buyer needs to go direct to market.

Someone is certainly trying to take this down with sustained selling pre close.

Yes certainly, nothing is a dead cert in this game, but anyone who has been closely following the Mkango story will see how significant this RNS could be for us.

I don't think this means we've missed out, rather I think it shows the strength of the US Govt's intent in securing domestic rare earth supply, which is extremely positive for us. As expertly summarised by Myles, recycling is the missing link, which can deliver heavy rare earths (MP cannot in any volume) and which can be up in running in early 2027, well in advance of MP's new production line. The US Govt don't care that Cotec are Canadian, they just care about domestic jobs and secure domestic supply chains. We can provide both, and in a way that is socially and environmentally acceptable for surrounding communities in Red States.

Exactly, they picked Texas, South Carolina and Nevada for more than one reason...

Fevertreeman, Alex (and Will for that matter) is frequently on the phone or in face to face meetings with the US Gov't and DoD. Our Board have seen this coming for a while and have been positioning themselves to take advantage. I have full faith in WD, AL and JT to get us a big slice of the pie. Imagine what would happen if we got an RNS that was anywhere near this good. We'd open in the £'s for starters... Maybe Bonker and I (and I assume Myles and velcro) won't be the only Mkango millionaires.

And remember, Alex has been over in Washington having conversations with the DoD and JT has been talking up conversations with the US government in general. EXIM has already shown they are interested. I reckon there's a good chance we sign an agreement too.

Wow that's big!

Agree velcro, from my experience a senior loan (from the likes of EXIM) would place certain sub-debt repayment restrictions or operational gearing requirements which would potentially reduce the speed at which sub-debt could be paid off. If this is the case with EXIM, I think it would result in distributions of dividends earlier on in the project, so positive for us.

Sorry, not sure if I was completely clear with the previous post. There are three scenarios for speed of distributions to equity through dividends.

1) They are only made after all senior debt (EXIM) and subordinated debt (Cotec and perhaps third party investor) has been repaid. Worst case scenario which I think is unlikely as I reckon EXIM will likely provide a long term project finance loan with a fixed repayment schedule, rather than a cash sweep loan facility.

2) They are made once all subordinated debt has been repaid, with any cash flow available after scheduled debt service (i.e. from a 10 year amortising loan from EXIM) in subsequent periods flows completely to dividends i.e. we don't need to wait for senior debt to be repaid in full before we distribute dividends. Perhaps the most likely scenario, but likely to still result in equity distributions through dividends fairly early on in the project

3) They are made as soon as there are distributable reserves and if there is cash flow available after scheduled senior and subordinated debt service in the period. This scenario would have the earliest distributions of dividends to equity.

Looks like three 100k buys to me Tricky if you look at the contemporary trades, mates rates indeed...

Good analysis Myles. I would add that Cotec have mentioned federal, state and also municipal grant funding. Like you, I expect that we will get at least one form of grant funding, after all we have secured over 50% of the funding for our UK and German projects through grants.

On the project financing, Cotec have suggested that their share is likely to come in the form of subordinated debt (a debt like equity instrument which receives a coupon). To the extent that they fund the equity portion through subordinated debt, in my experience of structuring project finance, the Cash Flow Available for Debt Service (CFADS) in the semi annual or annual period (depending on regularity of debt payments) will first go to debt interest and principal, then to subordinated debt interest and principal and then distributions to equity.

In the UK the senior debt and subordinated debt are normally structured to last long term, and often for most of the life of the project, in order to provide a tax shield, as the interest on both senior debt and subordinated debt is tax deductible (at least they were when I worked in the space). All to say that the distributions to equity may begin earlier on if this structure is used, as they won't want to fully repay sub-debt early on and there will be more cashflow available for equity distributions earlier in the project.

Even if they take the approach that the subordinated debt needs to be repaid in full before distributions to equity, I expect that the EXIM loan will have a relatively long term e.g. 10 years. With the FCF that Hypromag will be pumping out, the $40m in subordinated debt (maximum it can be, but likely to be a lot lower due to grants) will not take long to pay back (2-3 years?), so equity distributions will likely come early on in the project anyway.

Yeh exactly, so transparent. Who do they think they are kidding...

Yep have taken advantage again this morning in the 27’s Jimzi. Getting predictable…