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Hi Silver,
That's correct except that you have left out the $1m received in June of this year. I probably also should have mentioned that I was including the Cerrado, Ascendant and other shareholdings\etfs that currently total about £1.8m in my £5m figure so there is a small 'all things being equal' assumption in there.
So cash at March 31 of £578k + $1m in June this year + $1m June next year + $2.5m Dec next year + £1.8m shareholding\etfs - £450k running costs over that period = £5m or thereabouts.
Totally agree regarding Ideon, I think it was in proactive investors interview in June that JV mentioned they already have a $35m orderbook. If that really is the revolutionary technology we're all hoping, who knows what our 2% stake could be worth!?
https://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2021/Ascendant-Resources-Closes-C3.16-Million-Non-Brokered-Private-Placement/default.aspx
Capital raised and a 50% over subscription to boot.
I've bought some more here this morning. Ascendant have proved their ability to raise capital and have also proved their commitment to completing the earn in agreement. That means that in just over a year's time, barring something extraordinary, MAFL will have cash and equivalents of £5m or thereabouts.
Right now the market is offering you the chance to buy £5m in a year's time for £4m today. On top of that you're getting three or four investments that if any one of them were to work out would double that figure and of course the big one that we're all hoping for that would likely 10x that number. The risk reward here is skewed so heavily in our favour as investors.
I'd be genuinely interested to hear from anyone that disagrees. I don't actually think I've seen anything negative on here yet that specifically refers to the value proposition only the illiquidity and lack of movement of the share price.
GLA
Only just spotted the 10% rise on Friday. Did some rough calculations and they are currently worth approx £240k more than they would have been carried at in the last reported NAV of March 31
Yes, I’d be happy to do so.
Redcorp owns 85% the Lagoa Salgada Project, the government owns the other 15%. After the completion of the earn in agreement Ascendant will own 80% of Redcorp. This means that Ascendant and MAFL will be 80/20 in Redcorp which itself will be 85/15 with the government in the Lagoa Salgada project. MAFL will own 20% of Redcorp which is equal to 17% of the Lagoa Salgada project (20% of 85%).
At this stage the Lagoa Salgada project would be 68/17/15 between Ascendant l/MAFL/Government.
If the government do relinquish their stake to Redcorp then Redcorp and the LS project are one and the same and as such 80/20 in Redcorp is equal to 80/20 in the project. If they don’t then the 68/17/15 ownership structure will remain.
The government have a free carry to the feasibility study so there is no reason for them to relinquish their stake before then.
It’s 17% or 20%.
Shaz,
If you read the wording of the latest PEA RNS carefully it is quite clear. Ascendant are earning into 80% Redcorp NOT the project, therefore MAFL will retain a 20% ownership of LS or 17% if the government maintain their holding.
The key point being that there is no scenario in which MAFLs holding is only 5%.
https://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2021/Ascendant-Resources-Announces-Non-Brokered-Private-Placement/default.aspx
Ascendant raising more money to send our way
Awesome thank you
Hi Nom,
I think some confusion had been caused by MAFL referring to the project and redcorp interchangeably in some of the RNS’s. You could tell that they made an effort to clear this up in the recent PEA announcement.
The free carry to feasibility is also interesting as it suggests that the government have no reason to give up their 15% until post feasibility, at which point they will be asked to stump up cash which they may be unwilling to do. But no reason to cross that bridge until they come to it. As I say though, it makes a difference of 3% maximum to us so it’s not very important. If Lagoa Salgada ever happens or even looks like happening, those of us that have bought in at these prices will multibag whether MAFL are carrying 20% or 17%.
Whoops, 5m of cash and listed securities by December 22 not 4.8m
From piecing together various bits of information my best guess is that as of right now listed shareholdings (including cerrado and ascendant) and etfs are about £2m with cash of £0.8m. Seeing as Ascendant show no signs of slowing down I'm very confident that we will be able to add the remaining earn ins of £2.6m to that cash figure by December 22, albeit minus about £0.4m running costs between now and then.
So we have 4.8m of cash and publicly listed securities as of 15 months time subject to Ascendant remaining solvent and zero/equal movement in shareholdings.
Add to that whatever valuation the market deems fit to give the unlisted assets at that point being Golden Sun, Ideon Technologies and Cap Energy.
Then we have either a 20% or 17% share of a mine that has just had a PEA that stated an NPV of $246 million.
I know some people believe that the retained % of Lagoa Salgada is only 5% but I'm almost certain this is not the case as Ascendant's earn in agreement pertains to ownership of redcorp and not 'the project'. MAFL have mentioned that they are trying to negotiate with the Portuguese government for redcorp to take ownership of the governments 15% stake in 'the project', this either will or will not happen.
If it does then redcorp which will be owned 80/20 Ascendant/MAFL will own 100% of 'the project',simple.
If not then redcorp will own 85% of 'the project' with the government retaining the other 15%, as MAFL will own 20% of redcorp that would mean that they will own 20% of 85% and Ascendant will own 80% of 85%. The resulting situation would be a 68%/17%/15% split between Ascendant/MAFL/The Government.
If anybody thinks I've missed any glaring risk factors then I'm all ears but as far as I can make out we are sitting on major upside that admittedly may or may not materialize but with the luxury of extremely limited downside risk.
It was funny to see that their netback computations only accounted for a price up to $10 per mcf and we’re now at $18! If you carry on adding the 0.36 cents netback per extra $1 price increase, at $18 we should be generating $7 netback per mcf. I think H1 has production was 9,200 mcf/d.
Yeah I definitely think that at least the 7.4m dollars of current de-commissioning liability should be considered debt, however this is more or less offset by the 5.8m of cash at 30th June plus the cash they will have accrued since period end. Which is why I left the cash out of my calculations and went with straight market cap of 20m instead of a reduced EV number.
GL
A lot of the focus here seems to be on sancrai and other potential production increases and rightly so but I think it’s worth pointing out just how impressive current trading could be even if we assume (amongst some other assumptions/guesses) that production remains stable from the first six month period of the year.
If we take the 13 figure for gas mentioned in the interim investor presentation vs the 6.59 realised price in the report then gas revenue will double and oil revenue is also up but not as much. Most of the revenue comes from gas so a decent guess is an 80% increase in revenue, that’s 28.6m.
The royalties tax should go up in line with revenue however the windfall tax jumps significantly as the realised price goes up therefore I’ve calculated them at higher rates of plus 80% and 200% respectively but I admit this is guesswork so if anyone has worked this out precisely, I’m happy to be corrected.
Royalty tax 2.9m
Windfall tax 5.1m
I’ve assumed production expenses and admin expenses remain stable.
Production 4.6m
Admin 2.2m
I’ve assumed that depletion and
depreciation will increase due to the higher price realised and perceived increases in capex but again this is pretty much just a guess.
D&D 8m
Zero finance expenses as we are now debt free.
That gives a pre tax profit of 5.8m dollars. That’s 4.25m GBP for the 6 months or 8.5m GBP in a year.
I know that these prices are exceptional and it’s anyone’s guess how long they are sustainable but at that rate and without any production increase, SENX would make the entire market cap of 20m GBP in under 2.5 years.
They usually RNS investment updates at 1230 so there is still time.
You will only see the Cerrado holding in the NAV update at it's carrying value as of 30th June which was 1.32, about 475k gbp once you convert the currency, the value today is more like 580k gbp.
Got to reckon we’ll see an RNS this morning to report that Cerrado PEA. Hopefully we see the Lagoa Salgada PEA soon after that too.
Hi mate,
The Argus broker coverage released at the beginning of the month seems to suggest August so im assuming they've spoken to someone at MAFL or Ascendant that has steered them. I doubt it's important but we might have to be a little more patient.
https://www.argusresearch.com/PDFDownloader3.aspx?id=MDAwMDAwOTk0MQ==aAB0AHQAcAA6AC8ALwByAGUAcwBvAHUAcgBjAGUAcwAuAGEAcgBnAHUAcwByAGUAcwBlAGEAcgBjAGgALgBjAG8AbQAvAHIAZQBwAG8AcgB0AHMALwAwADAALwAwADAALwA2ADAALwAyADUALwA3ADAALQA2ADkAQwBEADEARQAyADYALQA1AEYANQBGAC0ANAA2ADgAMgAtADgAMgAzAEQALQBEAEQAMABBADMARgA2AEEAOAA0ADUAQQAuAHAAZABmAA==
This is good for those of us that believe in the story here. Nothing has changed. Market cap completely underpinned by a combination of cash, liquid securities and future earn ins, promising non-listed assets in the price for free right now, millions in net present value at lagoa salgada etc. If you believed there was value in that story at 13p a share then you should really believe it at 10.30p a share. I certainly do.
Trading at about 5x cash adjusted pre tax profit. With liquidity of 8m on hand ready to deploy to increase those profits substantially.
Sherlock,
I think we’re pulling in the same direction here.
I’m referring to the 1m usd received in June 21, the 1m usd due in June 22 and the 2.5m dollars due to complete the arrangement in December 22.
Total 4.5m usd, approx 3.27m gbp
GL
Yes the addition of that cash to the stated 6m NAV is unknown as we don’t know the discount rate applied to future payments. However, I’m not talking about what these payments will add to NAV, I’m saying that the actual cash received in an 18 month period will be 3.27m gbp, which is almost all of the market cap at this price.