The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
The October timeframe would fit in nicely to be able to sell down some EMH for repayment of the loan instead of diluting, I’d imagine that is the plan but would be good for management to confirm plan A / plan B.
Https://corporateconnect.com.au/project/european-metals-holdings/
TLDR; This makes our stake worth more: "The net proceeds from Loan Facility will be used to continue the development of the Amapá Project, including optimisation studies on the processing route and environmental licensing."
"Price" is what you pay and "value" is what you get for your money. In my opinion there is a massive disconnect between the two. Our stake in Amapa is worth more than the entire market cap to a rational buyer and our 30% being worth $33m based on book value. The PFS cap-ex reduction improves the value proposition further the "bet" here is that the market will eventually agree, or management will be able to unlock the value for shareholders, that is what Kiran needs to be clear on for investors. Either an IPO or selling part of the stake, clearly it's going to be far more valuable to do this once the environmental licenses are in place and the DFS is complete as it de-risks the project further. This should then be worth far more to shareholders in the long run. If we can realise the value of Sonora or EMH to repay the loan facility then that is again best for shareholders, hopefully management can come out and be clear about the strategy and explain the strategy (incl loan repayment options). However if you are a buyer then at these prices the risk/reward looks good.
Https://ukinvestormagazine.co.uk/uk-housebuilders-greatland-gold-and-a-cadence-minerals-lithium-update-with-alan-green/ discussion from 17:10
Https://announcements.asx.com.au/asxpdf/20230601/pdf/05q7spyyz5vftb.pdf
Significant lithium anomalies up to several kilometres long
ANT being analysed news due very soon
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
I fail to see that a 33% share in a $949m+ NPV 10 mine and 30% of a huge lithium deposit can be worth as little as the share price implies which is circa £5m happy to hold and be proven right or wrong by the outcome when transactions are concluded. Sometimes the market gets things wrong and that is where the opportunities are.
Spend $2m getting the environmental license sorted and increase the FE grade and you could add 50% or more value to the project the ROI is huge in that scenario making our 30+% worth $20m more for example is a 10x ROI which is why I see this as a positive, and 6 month of headroom for that to occur and any potential Dev investors to get involved, then should we wish to, enough to fund the DFS should bring another increase the value to the project to a potential investor as it will be shovel ready by that point.