The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
sj74 - totally agree, this isn't the time to sell. Value will be unlocked as it becomes clear exactly how the iron is going to be brought out of the ground. I still think LKAB buying the resource (but not BEM because of Finland and Kosovo) is the most likely outcome. If that happens the capital will be returned to shareholders by some kind of share buy-back or special dividend.
Suzy, also I said years to build a mine, not many years. Your estimation is 4 to 5 years? Personally I think it will take closer to ten to have it in production, but either way that's years rather than many years.
Suzy, not much aside from the resource is what I said. Ie no significant amounts of capital, no road and rail building teams, no actual mining machinery, no teams of engineers who plan mines etc. That doesn't mean the resource isn't valuable, it means that BEM doesn't have any what it takes to exploit it.
According to the last shareholding RNS there are 630m SDRs (shares held in Sweden). Of those almost 158m were traded today. Perhaps some shares changed hands more than once, but that's a phenomenal proportion of the total shareholding. Given the panic we saw in Sweden when the news article came out a few days ago I'm thinking that the average private investor in Sweden really didn't have much idea about what to expect following the grant of the concession. It looks like they thought that the granting of the concession was the end of things rather than just the beginning and they got disappointed when it didn't hit the dizzy heights they expected in the blink of an eye. By contrast, in the UK only around 7m of the 200m+ shares still traded on AIM changed hands. Anyone who's been on this BB for a while will have been aware of the environmental hoops to be jumped through next and the need to build road, rail and port infrastructure. The big question now is how much will BEM try to do before a partner or purchaser gets involved. I'd be amazed if Kurt hasn't spent the last couple of years having conversations with all the potential buyers/JV partners to establish levels of interest assuming the concession is granted. He may even have outline terms agreed. Today the door to the future swung open and BEM can see the route it has to follow. It's going to take years for a mine to be built and start producing. If the ore at Kallack N is worth $5bn, the value has to be extracted over the course of its 40 year life, value returned to shareholders in the ultimate mine owner over that kind of period. I can't see any major miner wanting to allow BEM much say in future operations if they are going to commit the finance to build the mine and the infrastructure. We can talk about JVs, but there are many types and if BEM gets into one it will be more like a royalties/commission deal than as an operational or equal partner; we have very little to bring to the party aside from the resource itself and some local knowledge. More likely a sale to LKAB or Rio or similar. Bottom line, we need institutional investors to replace PIs and the concession means that's now possible. Over the course of 2022 I expect to see a steady rise in the SP as the exploitation comes nearer and the method of funding it becomes clearer. GLA, today was a big step forward.
Wotitsworth - I'm down the same line of thinking as you, but Swedes.... the two things that have changed recently are the scurrilous news coverage and the announcement of the question in parliament on Friday. So, it's either that K-P was always going to ignore the idea of announcing while the market was closed or he's wanting to address one or other of those two recent events. Perhaps he's just going to say he saw the article but doesn't think it's correct, or he wants to pre-empt some aspect of Friday's proceedings. Or something else altogether! I'm babbling now.... ha, will go and do something other than watch this BB for half an hour. GLA!!
I always thought Scandinavians were cool, calm, collected, logical…. Turns out Swedes are very excitable! Up 6 or 7% over there today on top of yesterday’s rise. Anyone aware of anything other than the news of K-P’s questioning on Friday?
It’s a nice two pronged question from Helena Lindahl. After setting out a lot of background about iron ore mining in Sweden, environmental protections and how long the process has been going she effectively asks two questions. 1) When will the decision be made and 2) Is there anything that stops the decision being made immediately. She’s moving the debate away from “imminent” to “immediate”. I’ve watched the Swedish Parliament do these debates and although I don’t speak Swedish you can tell it’s a very different style of debate to the UK Parliament. Helena and K-P come to the front, each has a podium, she asks the question directly to him, he replies, she has a follow up opportunity and there’s no braying, childish pantomime in the background. A grown up debate where it’s harder to bat away questions with some old nonsense a la Rees Mogg. Will be interesting to watch and likely to move things along at least in our expectations. Seems clear Lindahl is in favour so it’s an open goal for K-P and his party; make a decision supported by the opposition, why not?
Greentea - write that article and send it to Aftonbladet to publish! Their angle is small Swedish investors being ripped off. They like to pretend it's BEM that's the culprit, but really it's the Swedish Government's appalling application (or not) of the process. They have failed 75% of the company's shareholders who were fully entitled to expect their investment to have been rewarded. Instead they've seen the money they put into the company see-saw up and down, but mostly down, due to the political chicanery and delay. The papers should print that, but of course they won't; it's easier to take a pop at a British company as the anti-Swedish villain.
Selling newspapers (sic), it's a dirty business. Sometimes you just have to make stuff up to hook the readers. It's why sportspeople and celebrities don't bother reading them - imagine having to put up with baseless ****e being published about you day in day out. By next week today's Aftonbladet would be fish and chip paper if it satisfied health and safety rules. For the poor PIs who take this stuff as gospel or who have stop losses in place it's a financial nightmare. For the less gullible it could even be an opportunity to profit from their misfortune. Dirty business.
Seems that Aftonbladet means the evening paper. A tabloid renown for juicy headlines (and with past notoriety for supporting Hitler vs the USSR!). The story focussed on BEM having inadequate resources to develop the mine it has applied for (and not responding to Aftonbladet’s questions about that) and also having links to a company in Kosovo that mad a mailbox address in the BVI. Also allegations that BEM has provided £1.6m to the said Kosovan company. Nothing untrue about any of that, but it’s presented as though it’s a scandal rather than the normal kind of stuff a mining exploration company does. The only true and in context thing in the article is the news that the Swedish govt will make a decision on Kallak soon. Panicking PIs in Sweden. I think this could be a good day to buy some more BEM shares.
Completely agree with Far End, IMO we were never going to hear before mid March anyway and without doubt ministers in all countries have been diverted from routine business by emergency cabinet discussions. Harsh to be sending abuse towards K-PT before he’s even gone beyond a realistic view of the timetable, deluded given current disastrous state of affairs (I mean globally and especially for the poor souls in Ukraine, not with regard to iron ore investors)