Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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.
Yes I believe that’s correct. My understanding is that Ascendant will fund MAFLs share of the development costs on the agreement that it will be paid back from MAFLs portion of the initial cash flows.
I think that is more of a maximum term as Ascendant go on to state that they expect the phase 1 feasibility study to be ready in 2022 and that phase 2 (the nine year thing) can theoretically happen simultaneously as well i.e. it is not pre-determined to happen after a fixed term of nine years.
I think two huge question marks have been answered in the last week or so.
Are Ascendant capable of raising the money to fulfil their earn-in/development obligations? YES!
Do we have a co-operative government? YES!
The risk at this market cap was already low and continues to get lower.
‘The Tender Offer would have a basic entitlement (subject to possible reduction to ensure the Tender Offer does not exceed 40,096,476 Ordinary Shares) per Qualifying Shareholder of 500,000 Ordinary Shares. The basic entitlement is intended to ensure that Shareholders with interests in Ordinary Shares equal to or smaller than this basic entitlement are able to tender their interests for cash in full should they so choose.’
This entire paragraph is stating that anyone that has up to 500,000 shares or £210k will get fully filled in the tender at 42p if they so wish, is that correct?
So, assuming your holding is below that threshold, anyone that wants to sell 100% in the tender can sell 100% in the tender. I think.
Oldholder,
Would that not mean that either:
These funds are in cahoots with JKX on this and as such won’t be competing with us in the tender offer.
Or,
They will vote against the resolution and JKX won’t get anywhere near the 75% they need to pass this anyway?
21.9% free float, 23.3% being bought back
I think that means that anyone who wants 42p a share can get 42p a share, right?
Brel,
Congratulations on your 1000th post! And one quite befitting of the milestone at that. Couldn't agree more.
that should be cash at December 31 not March 31