Member Info for esduk

One of my posts from late August. It includes the discounted cashflow calcs I did on Tyseley and Germany by adapting Hypromag USA data. Obviously RE prices are higher now so these calcs could be seen as conservative.

"Yes STN, the numbers can get pretty enormous, pretty quickly. Without getting ahead of ourselves I think a solid base case could assume three hubs in the US, Tyseley and German plants at full nameplate capacity of 350tpa, one hub in Japan, one in South Korea and one in Canada. I'm going to assume that we have the same plant size and equity share for Japan, South Korea and Canada of 40% (although we are in a better negotiating position now so it could be higher), and Mkango's exposure is 80% of the UK plant and 72% of Germany (we own 80% of Maginito who own 90% of the German project).

So we have 6 ex-UK/Europe plants (3 US, 3 ROW) x $650m x 40% share = $1.56bn +

Tyseley at $217m x 80% = $174m +

German plant at $217m x 72% = $157m

= $1.89bn

Add in $400m for our stake in MKAR and we are at $2.29bn.

You can easily see them doubling or tripling nameplate capacity in the UK and Germany, which would be extra icing on top. Will post my Tyseley and German plant NPV calcs next (have used some assumptions from Hypromag USA feasibility study for these so treat them as high level estimates)."

Bonker, I think once Tyseley and Germany are operating full gas, with the production and sale of finished magnets, that £2 probably increases to £3. This is definitely one of the things the market is waiting for in order to give Hypromag a much higher valuation.

Have done that analysis before, will try and find it, but it very much depends on what discount we apply to future project execution i.e. I'd probably apply a factor of 0.7 to the current $650m NPV for our Fort Worth plant. What factor should we be including for US plants two and three, 0.5?

I think £2 would be a low-ball offer and not guaranteed to be accepted by Vitol, but for me, with an average of c.6p I would be on a 33+ bagger and completely life changing. A guarantee of lifechanging money probably wins out for me over an expectation of an even greater sum. A bird in the hand is probably worth two in the bush for me, but that's just my perspective. Agree velcro, I would definitely want an all cash offer.

Good post biffa. The question is would our main investor support such a move, and if so, at what valuation? They are insiders, so will know how much progress is being made on various fronts, including US gov talks. They will compare this progress with the current paltry valuation and therefore, in my view, are highly unlikely to be accepting any offers that start below £2.

I also think that the structure of any takeover would be a factor. I think most people would agree that USAR are highly overvalued / overhyped right now, so if it was an all shares offer for Mkango from USAR, this may not be that attractive, or it would require Mkango to have an even higher valuation than £2 in comparison to USAR's current share price.

If someone offers me £2 tomorrow for my shares I would be minded to take it. I know the potential is far higher, but that valuation would make me/my wife a millionaire a few times over (if we count both SIPP as well as ISA holdings). That would be more than enough for an early retirement and a comfortable life, I'm not a fancy car kind of guy. Of course, if no takeover comes, I will still be holding a decent chunk after we pass £2 and probably until some other end game, and life could be even sweeter. But I wouldn't complain with either outcome.

Interesting to know that you took 13% of the placing Myles, thanks for sharing that info. What I mean to say is that those that weren't planning on holding their placing shares long term like you, would likely have forward sold their shares / sold existing shares knowing they would be replaced by placing shares, to bank the profit.

There must have been at least a bit of this given all the selling we had from 41p down to 33p prior to the placing, unless all that action is explained by insiders trading off their knowledge of the placing, which I hope it wasn't. Good to know that plenty of the placing shares are in sticky hands. Personally, I don't think there is currently any drip feeding of placing shares onto the market now and agree that we won't stay at these levels for long.

100k buy reported from just after open this morning. Personally, I don't think any of the placing shares are being drip fed SG. I think most, or more likely all, were forward sold. Certainly that was what the price action and large sells before the placing was announced would indicate. It could be the warrants, but I think that unlikely given they are only 5p in the money. I haven't noticed much big selling at this level that would indicate this either, think it's more likely to be a mix of profit taking at a big round number from LTH and traders from low 30's selling out at a big profit.

Think some large buys have just gone through in the background based on L2 action. Good to see us consolidating above 50p and letting the RSI cool off a bit before the next move higher.

I expect at least one big RNS this month. Even an update on potential date for SPAC listing / or progress towards this could be considered as such and cause a big jump in the SP. I expect at least two minor RNS updates this month. Think we have a good chance of closing out the month in the 60's/70's, if not higher.

Cotec up over 8% so far today. We need to catch up.

Some more massive delayed reported buys from Friday (2x100k and 1x200k), to go with all those reported post close Friday.

Just to be clear, by day trading, I meant using some spare cash to buy in the morning and then sell in the afternoon, rather than sell any of my existing holding. I wouldn't risk doing this with my current holding for the reasons you guys mention.

Indeed. My $4,000 call just five weeks ago when we broke above the crucial $3,430 resistance has played out even faster than I had imagined, though I did say it would be fast. The fact that Gold was still so strong last week when the Chinese were offline on holiday is incredibly bullish, and likely indicates that American institutions and retail investors have started to join the party. What a time to be a GGP/gold investor.

Yeh I reckon a close today in the mid 50's would be appropriate. 60p this week could definitely be in sight. If the pattern continues of the MM's dropping her on open and then rising into close on US interest then I'm going to have to start day trading!

True SG, the yanks are the driver of the SP here at the moment.

On that note, and given you used what I understand to be the correct term, does anyone ever notice how the yanks all say "I could care less" instead of "I couldn't care less". It really confuses me, and not sure whether one of them just started saying it incorrectly and the term took off... It may just be me but saying I could care less, surely means you care more more about the thing you are trying to say you don't care about?

4p spread, the MM’s are trying to recover from their error this morning which clearly left them short of shares…

52p*

Yeh but there was no chance to get any at that level. We’ll be above 520 mid in no time. They didn’t fool anyone.

Unsurprisingly it’s NT to buy

Looks like they are going to take the p!ss. Shows you they either have no clue what they are doing or that they very much have a clue and are trying to take advantage. Need to sell some other shares first thing to take advantage if it stays this way.

Based on how they are set up on L2 the MM’s may try and take advantage of this, even though this is just an announcement confirming something that has already happened and been priced in. Remember that we should be opening today at 52p, with a 51p bid and a 53p ask. If they do try any funny business it’s time to take advantage and buy.