Member Info for Florence141414

different RGO. That's PCC not PLC. An easy mistake to make, happens a fair bit if you look through the chat.

Even if JV is unable to negotiate the purchase of the EDM stake and we are dealing with the worst case residual LS ownership of only 5% the value on offer here is still incredibly good.

If we assume that the plan is to sell the project once the feasibility study has been completed then a 5% stake of a post tax $246m NPV discounted by a further 50% is £4.5m (I expect a potential buyer will want some money off for the rigmarole of actually building a mine)

Add that to the £4.8m of cash and shares they will have at the conclusion of the earn in agreement and things are still looking pretty rosy here.

As has been the case here for a long time, everything is underpinned by the earn ins, as long as you believe that they will be paid then everything else is a bonus.

Looks like we passed Russ!

…. Is the key takeaway IMO

Order book is clearly growing and that is unlikely to change as government support and likelihood of further lockdowns subside.

Barring any mishaps, increased lending means increased profits.

3-4m of PBT seems very likely in the next 12 months.

Should have a Quarterly NAV update Monday morning if they follow the same schedule as last year.

Wow. Someone selling 9.50 which is a representative market cap of 3.34m.

That’s only just above 0.8m current cash + 0.75m June cash receipt + 1.7m listed securities

That even puts the December payment of 1.7m in the price for free. Let alone Lagoa Salgada residual ownership, Cap Energy, Ideon and Golden Sun.

I am shocked that we’ve seen that price trade this morning. Great buy for whomever was lucky enough to be on the other side of that transaction.

haha

Just checking that my (quoted investments + cash + remaining earn ins to Dec 22 - 18 months operating expenses) number still exceeds current market cap so that everything else including Lagoa Salgada upside is still in the price for free....... good news it is!

$3.5m to MAFL in 2022 which is still pretty good!

Has the market missed the implications of these numbers maybe? Increased cash by 2.9m and paid down £5m of debt since the end of July. So that’s 7.9m of cash generated in a 4.5 month period. Obviously we won’t know until results how much of that is movement of working capital and how much is profits but with 3.5m PBT in H1 we could easily be looking at 10m PBT for the full year and possibly more.

Because the next one due is as a part of the full year results which take longer to collate than a standard NAV update.

on profitability i would say that it is appropriate to strip out fx fluctuations. Our job as investors is to be forward looking, fx movements are impossible to predict and as such i assume that the future net effects will even out over the duration of an investment or at least an investment career.

Also they are selling gas at a much higher price in the current quarter than the previous 3. So assuming neutral fx they are definitely profitable in the current quarter even if they weren't quite in the last 3.

I’m pretty happy with what I saw this morning. Looks like they’ll be making enough money to cover exploration for the next 2/3 of years with maybe a small profit to boot.

Whether or not we make money here will come down to if they are able to find and flow some gas in Romania in that time before they turn cash flow negative again from current operations.

They may or may not do so but I reckon the risk/reward is favourable at this price.

This is copy and pasted from the investor presentation released April 21 but I think the contents are as of December 31st 20:

Ascendant Resources (Polymetalic: Portugal)
Zuercher Gold ETF
Zuercher Silver ETF
Barclays Bank – Link to S&P 500 (Global Financial)
S&P 500 Linked Certificate
Barrick Gold (Global: Gold)
Draegerwerk AG (Global Medical & Safety)
IamGold Corp. (Gold: Africa, South America, Canada)
Nutrien Ltd. (Global Fertilizer)
UBS Gold ETF
Rathdowney Resources (Zinc/Lead: Poland)
Resolute Mining (Australia; West Africa: Gold)
Van Eeck Vectors Gold Miners (ETF)

Stated at the time as 19% of £5.6m NAV which is just shy of £1.1m. Personally I also include the Cerrado shareholding here so as to separate listed and non listed assets. As of today that adds £0.6m so assuming the rest of the tactical portfolio has risen in line with the broader market since December 20, I reckon listed assets at about £1.9m today. Add the $1m of cash received and $3.5m due from earn in payments and the current market cap begins to look very silly indeed.

Can't disagree with any of that. Discount should reduce when NAV turns from intangible to tangible as earn in cash is received. Also the more positive news flow we see from LS, the more likely those juicy cash flows are to materializing and therefore the more likely we are to seeing a premium to NAV being paid in the market. Hopefully a significant one at that!

Hi OaW,

My guess is that it's included in the financial assets at a heavily discounted rate so the majority, but not quire all, of the payments will arrive as additional NAV. Worth mentioning that Timmit disagrees, I believe his contention is that they would have appeared as debtors/receivables had they been carried on the balance sheet. Therefore they are not accounted for at all in the NAV as yet.

So it's unclear for now but it's likely that they will come in as new NAV either mostly or totally.

Agree with everything you say which is why I’m invested here as opposed to elsewhere. As you say, the market cap is underpinned by the strategic portfolio, Cerrado shares as well as the future earn in payments.

I.E we can just enjoy the hope of the NPV valuation without being dependent upon it.

Hard to say what they carry it at on their books as it’s lumped together with other investments.

What we do know is that 20% of the $248.6m after tax NPV is $49.2m which will be MAFLs share after the earn in is completed and the re-purchase of the government stake is negotiated.

It’s up to each investor to determine for themselves if they agree with the calculations of an NPV but even if you believe it’s half that number it’s still incredibly undervalued. Also worth noting that current metals prices are significantly higher than those used to calculate the NPV. So there’s already some conservatism baked in.

So you are unhappy about the price of MAFL but do you have an opinion about the value of MAFL?

I am also disappointed that the price isn’t higher but I’m delighted by the value on offer.

Haha I’d be very happy to be wrong on this one!

Either way it’s much better to have the cash in the bank than a discounted receivable and we have plenty more of it to come if Ascendant’s recent raise is anything to go by.

Hi Timmit,

It’s because the Ascendant payments are partially carried in the NAV before they are made, so although $1m would add 2p, some of that 2p is already included in the 17.1p. We just don’t know how much. You would be correct, however, if they received a hypothetical unexpected payment of $1m that wasn’t already carried on their balance sheet.

Don’t get me wrong I think the value here is astonishing when you consider that cash, future earn ins and listed shares are greater than current market cap, LS is looking more likely to materialise than ever before and Cerrado/Golden Sun/Ideon all have the potential to pay off in the millions by themselves.