Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
So don’t just moan, what is the answer? How does the value get realised? We probably have enough votes. I don’t think it’s the right time personally though. I think it’s best to wait for licensing and a deal on Amapa maybe even DFS and to see what Ganfeng/LitioMx do with Sonora.
I don't think things are as bleak as the "bears" would have you believe, a big name getting involved (e.g Glencore) as a cornerstone investor for Dev would give the market a true value and the confidence in the project being successful and we should see more of the NPV attributed in our SP.
Yes in theory it should, but short term it is mostly supply/demand driven so if holders are willing to sell far below NAV then that will be what determines the price.
EMH stake is worth 40% of our market Cap and Evergreen + Hastings another 30%.
The thesis here relies on management being able to unlock value at Amapa so it will be interesting to see what kind of deal will be struck for the stake in Dev and how that values it.
Getting closer....
June 13, 2023
HERMOSILLO, Sonora.- The LitioMx company has begun its installation in the city of Hermosillo , from where it will provide its services, as announced by Governor Alfonso Durazo Montaño.
During the weekly press conference, the head of the state Executive informed that progress has been made in the installation of these offices and that, once they are ready, the media will be invited to provide more details in this regard.
Durazo highlighted the importance of the LitioMx facility in the state , comparing it to the relevance of Pemex in the oil industry.
https://www.elimparcial.com/sonora/hermosillo/La-empresa-LitioMx-inicio-su-instalacion-en-Hermosillo-20230613-0022.html
See also....
23/05/2023
Silver Valley Metals Corp. announced advances in the negotiations with LitioMx to form a partnership that will allow the exploitation of lithium and potassium deposits in Zacatecas and San Luis Potosi.
https://mexicobusiness.news/mining/news/silver-valley-metals-advances-partnership-talks-litiomx
There is certainly value to be unlocked here, will a "Glencore" for example get involved at Amapa and how much of a boost will that provide. Why wouldn't they just offer to buy out KDNC instead of going in at the project level if that works out more cost effective. Will an activist fund get involved and push for it?
Which is why they got negative control over Amapa and Kiran is running the show over there. They have obviously decided Amapa has the biggest potential for gain compared to any other investment they had available.
Just one example and perhaps not too likely, Amapa could IPO via reverse takeover via KDNC become an operating company (which renames to the Amapa Iron Ore co.) and other shares could be distributed to KDNC shareholders or sold and the cash distributed (once lock up period expires).
I think you missed the point but (it's not a magic bullet to be 100% owner and if I'm not mistaken we do actually have "negative control" at Amapa) if we only own public companies we would trade below NAV I think that's a fair point, at which point then things can be done to change that situation. Better to have 30% of a viable project than 100% of a dud.
You can't generalise
HAS - master of own destiny -60% YTD
EG1 - master of own destiny +15% YTD (more because investment was at 20c)
EMH - JV partnered +16% YTD
IMO there is significant value to be unlocked, if Amapa was to IPO and Sonora comes to conclusion and there are no private projects remaining things get more interesting, there is room for argument that if below NAV at that point then there are some interesting options that need exploring to ensure shareholders get a return.
Amapa has huge upside IMO and the companies fortunes will be decided upon the success of realising it's fair value.
Sentiment being rock bottom is usually the best time to buy.
Posted a few weeks ago:
If you want a comparison on AIM look at Zanaga (ZIOC) market cap £50m (100% of the project £16m for 33%) which is in a very high risk jurisdiction (Republic of Congo)..
Zanaga Capital Cost Estimate from 2014:
for 12Mtpa initial operation -Total Stage One capital expenditures are estimated to be $2.2 billion, with $1.2 billion of direct costs and $1 billion of indirect costs and contingency.
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Amapa Capex is under $400m (just 18% of ZIOC's 2014 estimate) for roughly half the production rate so a much higher IRR for Amapa.
p.s according to Michigan State University:
Republic of the Congo scores an E (Very High Risk) and Brazil scores an A4
https://globaledge.msu.edu/countries/brazil/risk
https://globaledge.msu.edu/countries/republic-of-congo/risk
On Sonora - can't really help that AMLO got in to power and started nationalising it
On Amapa clearly behind the original schedule but a significant NPV and a third-party investor will help a lot
On the market in general, not exactly KM's fault that HAS dropped a lot and EMH too and that sentiment in the sector is in the toilet which have all been reflected in our SP
Evergreen was clearly a good move and could pay off (see Core)
My opinion is that it is best to see how Amapa plays out before pushing for any changes, if it generates a significant windfall then that should be returned to shareholders in some way e.g (buybacks or dividends) if we remain so far below NAV.
In the event that we are perpetually below nav then winding up the company and distributing the proceeds makes sense - this requires some activist holders but I feel now is not the time for that.
Sonora is the wild card now I personally feel there is a deal to be done there.