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Probably but in the scheme of things that’s nothing. Assuming you take them on face value, it’s a good reason for the delay too, they keep finding more mineralisation than they expected so the feasibility is bigger in scope and taking longer as a result.

It’s also the first mention of the government potentially holding onto their stake too. Again that could be looked at two ways but personally I’d much rather own 5% of a mine that has government vested interest than 20% of one that doesn’t.

Deal origination up, arrears down all bodes very well for next year’s profits.

Always have to be careful with adjusted profit measures but in this instance I think it’s all above board. Certainly 1m non cash goodwill impairment can be added back. 0.3m loss in a discontinued operation and 0.7m redundancies from that division, although genuine cash costs, are not going to repeat.

Future looks steady, price looks cheap.

So it now looks certain that we will end this year with 2m of listed equities and 2.5m of cash (assuming no more investments are made).

So even if you believe that Portuguese Zince mines, Canadian space x-rays and Costa Rican gold mines are the stuff of fairytales… You’re still being offered a 50% discount to tangible equity right now.

Yet again I’m stunned by the price/value anomaly here. If you’d have told me when we were at 18p that in three weeks time Ascendant are gonna pay up 1m bucks a month early and then five weeks later we’ll be back to 8.8p…. I would have thought you were a very silly sausage indeed.

Braemar look very cheap to me. If you take the guidance from their latest trading update that operating profit will be 12m for FY23, you only have to take off finance costs to get pretax profits, these will be significantly reduced due to Cory brothers sale and subsequent debt repayment. That gives you a pre tax profit of maybe 11.5m minus exceptional items.

That’s a 7x pre tax p/e for a low debt company with a recently strengthened balance sheet.

That’s the bull case, who’s got the bear?

The proposed Tern holding and loan book (assuming no defaults since September 29 report) are worth about 8.6m right now.

Is the cash generated from the interest on those loans worth anything? Is the Smartech or Pluto holding worth anything?

If so RGO is very undervalued right now.

Haha. I don’t agree with Wizard. I was saying that I used to agree but not since JV clarified the position in note 6 of the FY results. The key sentence being….

'M&FI has granted Ascendant conditional options that would enable Ascendant to have a net 80% interest in the Project if the company is unsuccessful in re-acquiring EDM's interest'

JV is saying here that no matter what, Ascendant will own 80% of the LS project. That means we end up with 5% if we are unsuccessful in negotiating the EDM stake and 20% if we are successful.

It is now that simple.

But it didn’t used to be.

Hi Wizard,

This is what I had thought to be the case for a while too. In my opinion the confusion came about as the earn in agreement has been stated many times using 'the project' and 'redcorp' interchangeably.

This was cleared up in note 6 of the most recent FY results which read…

'Redcorp currently owns 85% of the Lagoa Salgada project and signed an agreement in June 2017 with Empresa Desenvolvimento Mineiro SA (EDM), a Portuguese State-owned company to re-purchase the remaining 15% of the project resulting in a 100% ownership of the project. The 2017 agreement was subject to the Portuguese Secretary of State's approval which has not yet been received. Redcorp and Mineral & Financial continue to explore ways and means to complete the purchase. M&FI has granted Ascendant conditional options that would enable Ascendant to have a net 80% interest in the Project if the company is unsuccessful in re-acquiring EDM's interest within a still to be determined period after the completion of the Feasibility Study.'

This clears up any confusion definitively. JV has stated that whatever happens with the government stake, Ascendant will own 80% of the LS project. The government’s stake is our problem to resolve and not a shared one.

This may be disappointing to some but our market cap is cheap without any residual ownership of LS. We will either own 5% or 20% of LS. At these prices, I’d be delighted with either.

Ha, yes, quite happy indeed!

Looks good to me.

They were more or less breakeven last year if you ignore the derivative contracts. So revenue and margin improvements in the first four months this year should mean that they are profitable at the very least. To what degree, im not sure. The elimination of a large portion of their competition recently bodes well too.

I don’t mean to alarm anyone but Mark Brennan, Executive Chairman of Ascendant Resources, just said 'We’re hoping to be able to announce project funding in the near term’

Up to this point my entire investment case has been that I have no idea if a mine will happen or not but at sub 4m market cap we have an easy 50% profit just by way of the earn in agreement completing. I have stubbornly refused to get my hopes up about anything beyond that.

Can I get my hopes up now!?!?!?!?!

So there’s our million bucks https://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2022/Ascendant-Closes-First-Tranche-of-C3.5-Million-Non-Brokered-Private-Placement/default.aspx

I feel like the market may be overlooking the significance of the forward guidance in today’s update. 12m of underlying operating profit for FY23, combined with the Cory brother’s sale and subsequent debt reduction will result in finance costs being reduced to almost nil over the coming years.

That will mean 12m operating profit is equal to PBT. That would represent a 7.5x PBT P/E ratio at today’s 90m market cap for a company that is committed to paying down its remaining debt.

The only caveat is that in the last two years Braemar have had tail winds that are unlikely to be repeated. Still, with today’s update, profits can drop significantly and it’s still good value.

I think that's a really good set of results under the circumstances.

A 10x PBT multiple combined with that kind of balance sheet seems like very good value to me.

The negative is that margins are likely to get worse in FY23 due to general market pressures and less favourable sales mix going forward as the weighting returns to stores from online. However, the balance sheet is easily strong enough to weather this storm as long as it lasts.

Whether we make a killing or not investing at these prices will be determined by how the European distribution centre performs in the coming years.

It definitely feels as though the risk reward is investors favour at this price.

Sher-lock.

I think that’s a reasonable position to take. In some instances, early investors do have the option to sell to incoming investors at each subsequent funding round. So it may well be that we do receive a legitimate offer for our stake in the series a round at the valuation alluded to in the proactive interview. Whether we take it or not is a different matter. So we might be about to get the `exit possibility’ you rightly mention.

A little more to it than listed vs unlisted but, admittedly, not much.

Agreed that non-brokered heavily implies that it’s a done deal.

If so that’s now 2.2m shares, 700k cash and an increased likelihood of another 1.8m in December.

Puts in a tangible floor of 2.9m without the December payment and 4.7m inclusive of that payment.

If you believe what JV said about the Ideon series a funding in September then you can add 1m to both of those numbers. As I’ve said before, the Ideon stake sits somewhere between tangible and intangible in my opinion but that’s up to interpretation.

For those that do consider it tangible, you will have a tangible floor of 3.9m-5.7m.

I ask myself what can go wrong investing at these prices before I ask what can go right. I keep seeing the chances for things to go wrong getting smaller and smaller.

That depends on whether you are talking about price or value.

If it’s improved the value but not the price, that’s opportunity.

Orchard announced a 0.81m post tax profit for the last 6 month financial period. Assuming nothing has changed then they are making 1.6m annually.

That’s a 15% return at today’s price.

That’s a great return whether interest rates are at 0% or 4%.

An absolute gift at today’s price.

I’ve just had a quick look at the earn in agreement summary that you’ll find at the bottom of multiple ascendant and MAFL news releases to try and add up how much money Ascendant need to raise to fulfil their obligations.

JV agreed that the $9m of project work (drilling etc) has all but been completed now. Just quibbling over a few invoices here and there.

They’ve also made $2.5m of direct payments to MAFL owned subsidiaries. So total spent so far is $11.5m.

That leaves the $3.5m of payments due by year end plus the cost of a definitive feasibility study.

Wikipedia suggests that a DFS usually comes in between 0.5% and 1.5% of the project.

If we use 1% then that’s $1.3m of the initial capital cost of the project of $130m. It could be $2.3m if you include the 100m of sustaining capital costs.

So in order to complete all their remaining obligations, we can reasonably estimate that the total amount required is between $4.8m and $5.8m.

That doesn’t sound like a huge amount to me.

To be fair to management their salaries are peanuts. They really do run it on a shoe string. JV has 20% of the company as well so there is no question his interests are aligned with shareholders.

I don’t see the wide discount as a negative to someone that is yet to buy in. Therein lies the opportunity. Illiquidity is frustrating, I agree. Hopefully that corrects as/when/if the market cap increases.

Also agree that there is some risk of Ascendant struggling with capital but it seems much more likely than not that they will be able to. They’ve committed the majority of their obligations to the product already, I think the last push should be fine but there are no guarantees.

The key point is how much do you lose even if they can’t?

The share portfolio is 2.2m, Ideon may well be worth 1.2m so if golden sun is worth 0.8m that’s today’s entire market cap.