At 370 million (if we're going with the ARCM) 20% I'm calculating total of 1.85 billion, rather than 2.25 billion. However I think the calcs don't really matter at this stage. I'm sure we can slice and dice it a hundred different ways 😂.
We'll both agree the main thing is the JV gets signed and then we need drill plan, commencement and outcomes.
Plus any other additional news around the JV in terms of licence areas etc.
The values can be impacted by many things such as any changes with the minority stakes in the JV, any possible dilutionary events e.g. how they reorganise the option surrenders owed and short term payables due H2 next year etc.
I'm hoping for some news very very soon.
Atb
370 million. 🤦🏻♂️ phat phingers
Fulmar, I think what's being said is arcm at 30p would be about 330m with 1.225 billion shares in issue.
However for ARCM to be valued at that then they are saying the assets within the JV would need to be valued at 1.1 billion. I've not done the maths on that and can't be bothered right now. Depends if you use the 51% by AA or the full 70%, plus then taking into account the the 67% of Unico to ARCM.
It's always possible the 67% becomes more to ARCM in time and depends what % you attribute too AA etc.
Atb
Not sure it was the tweet or not, but defo wouldn't have harmed. That's the thing. Like I was saying yesterday on the drop. Little change in volume on low liquidity stocks exacerbate the share price moves (either way).
Then as it moves people on the sides start to take or add positions. Sentiment is a fickle thing. Easy to get fear when people are negative and excited when the tide turns. That's why it's always best to try and avoid emotional trades and if something worries you engage with the company or research a bit more into it. Helps remain objective.
Nice to see the rise today. I really believe we will hear very soon.
Atb
Whether he has real knowledge or not. I'm certainly of the opinion the deal is very very close now. I expect an RNS at any time in the not too distant.
Atb
Fulmar, I was waiting to be able to share exactly that so you've saved me needing to.
Atb
No one will really know, can only be speculation.
You're guess is as good as any. In my view the trade values aren't particularly staggering but with limited liquidity any change in volumes can make disproportionate swings.
It could be a number of things though. The prospect of drilling with the seasons changing, impatience and/or confidence in the deal due to ongoing delays. Certainly the cash position in the interims can be a factor as we've dropped since then. However the volumes don't worry me.
Whilst the swings are a nuisance and a frustration I just take it as part and parcel of this kind of investment.
For me personally I think the deal will complete and so I'll hold. The cash position isn't ideal, that's undeniable, but the fact they haven't raised already is IMO a sign of confidence in the deal completing sooner than later. If it doesn't then yes they may need to raise.
At the end of the day people invest and sell for a whole variety of motivations.
Atb
Bit harsh Subush, I'm listening.
I'm writing it all down except the 'copywrite protected' comments and I'm using all the nuggets of knowledge for a book.
I'm calling it 'how not to invest for dummies.'
The tag line with be. 'Gain a complete lack of any fundamental stock market knowledge'.
I'll credit 121 & 131 obviously. We can discuss royalties. They'll probably require them in the future.
Atb
It'll stop when AA are at the helm.
So it's just a last ditch attempt for them, especially given their legal woes.
Atb
Yep I've felt obliged to add here today.
Atb
Nope you're absolutely right O2O, EPS is a great metric to use when evaluating the relative merits of taking a position in non earning companies who use share placements to raise capital.
What was I thinking. 😂
Atb, good luck to you. P.S you must remember to post from the same one of your multiple accounts 👍🏻
Of course they supply all the tools, but it's down to the investor to determine their suitability.
How on earth can you use EPS as a metric on an early stage pharma, or a junior explorer etc. It's not just about blue chip Vs small cap, it's about the stage of the company.
If company A is earning £0 and has 1 million shares in issue Vs company b who his earning £0 and has 1 billion shares in issue, what does the EPS formula tell you (other than its probably the wrong tool for the job).
I can ask you to chop some wood for the fire, you could go to b&q to buy one of the tools they offer, and come back with a Phillips screwdriver. Just because the tool is available, it doesn't mean the screwdriver is an appropriate tool to chop wood. Even though the screwdriver is a useful tool to have.
One2one - your seriously telling me you use EPS as a measure on a stock like HEMO. It's like me using EPS on an junior gold exploration company.
Wrong market if that's a tool your selecting these stocks on 😂
If you fancied using it to compare a basket of blue chips your point may make sense. However for me personally I'm not a big fan of EPS for many reasons, and certainly not in isolation as it can be manipulated and impacted by a whole number of things.
For the purposes of HEMO though EPS isn't an applicable tool.
Lol pumpy, is that a serious comment or are you pulling people's chain?
You don't buy a company because it's got an attractive value in its shares in circulation lol...
If the market value HEMO at 20 million, they value it at 20 million. So if for example HEMO still only had 400 million shares in issue it would now be trading at 5p. Hence why existing investors dislike placings as while it brings in much needed cash, those extra shares dilute the value of each price per share for the equivalent mcap.
Also when you 'say less shares;less volatility' that's not the case either. Think of it as supply and demand. If, for example, you have less shares available be it through a low free float, low trade volume etc, but demand to buy (or sell) is high, then the share price is more volatile. The lower the liquidity the higher the volatility, as MMs have to push the price further both ways to make the market.
If I had one banana in circulation; and demand for bananas was high I would have to increase the price of the banana significantly to get the banana owner to want to sell it. Compared to if I had 200 bananas available but the same demand. The price volatility is greater with less circulation.
Atb
Ella "Another year of wrangles or do Anglo cut their losses?"
Are these the only two options you've allowed yourself to envisage? Can you think of any more....
One2one. Random analogy of the year award but its also incorrect. What makes them different is that they have different ingredients.
Cottage pie is beef mince, shepherds pie is lamb mince.
😂😂
Yeah okay Noresco..
But as you said 'All that matters is share price and what you sell at.' Or possibly in some cases it doesn't matter as the share price doesn't matter because they have no position to sell, but have much better opinions anyway.
I'm comfortable to trust my opinion, I haven't sold yet. If it's wrong I'm sure I'll recover x
Takenorisk,
Only just saw your follow up abuse post. So when you say...
( 'And as for your previous post about "opinions", can you tell me which part of my post was opinion and not fact??' )
I think I just answered that in my last reply. You less than factual numbers and some meaningful exclusions from your 'factual' unopinionated post. That and the 3 years to find something as unless you've got a crystal ball then that's opinion too.
When you say..
'Do you honestly think that to a Company like AA with a Mcap of £30billion with the last stated quarters revenue of £6.5billion that "IF" the drilling proves successful that £70 or £80million is a "massive amount"???'
Again, you're twisting the point here. If you don't think that's a significant amount of cash then well done to you. However most people do and it's all relative. You're comparing the value of the investment against AA mcap. Surely the value of the investment, especially when we're on an ARCM bulletin board, should be against the ARCM MCAP.
So yes I think 2-3 times the current mcap of ARCM is a 'significant investment'. More so if I were to use your method of mcap calculation @ 1/10th as then it would be an investment of 20-30 times the mcap being invested. Lol
Last point, when you said...
'Sensible debate is one thing but some of the stuff posted on this forum, even by LSE and AIM standards of an absolute joke.'
You're not wrong here. Honestly you're starting to show some real inexperience and naivety with your posts.
Atb
Takenorisk,
Just around your point. You said...
'the ABSOLUTE MAX income that ARCM will have within 3 years of commencement of drilling is around the £3.6million mark.'
I'm not sure how you determined this figure.
The cash element of the AA deal alone is 14,500,000 usd. So the 66% (currently) attributable to ARCM is 9.57 million USD. Using a conversion rate of 1usd being equal to 0.82p then it's £7.847 million due to arcm by the end of phase 1 which is over 3 years.
These significant cash payments also exclude any value to ARCM of the drilling capex. You can't discount this value just because it's not cash. The capex for phase 1 alone is 24 million, phase 2 is 20 million and phase 3 is 30 million (USD). So the best part of 75 million dollars.
Think of the dilution and timescales if ARCM had tried to match that sort of exploration. So partnering at a project level means ARCM get an exploration carry, retaining a significant stake in the outcome, and the exploration is taken over by a major.
Going it alone, ARCM would have sunk considerably less into the ground, still had their opex / debt costs and had no cash payments. If they had raised this in the market the dilutionary effect would have been much worse to shareholders.
There is also a strong value element to being partnered with AA, and the deal terms themselves (which I think you'd struggle to find better elsewhere for a junior exploration play) is evidence of their faith in the quality and prospectivity of the assets.
In terms of timescales to make a discovery it won't be overnight but I can say if it's there then AA will find it much quicker and with much less cost to Joe public shareholders than if ARCM went alone.
Ultimately, you can't value the mcap of a junior explorer based on its cash. Like I said earlier the market has valued ARCM in this mcap range for a long time (even before this deal was announced).
As for the debt this is very much in the control of ARCM and connected parties to reorganise if required. Yes this could be through an element of share issuance.
So if ARCM do need to raise money, so be it. Im afraid its part of the journey for this type of investment. It's not for everyone.
I'm not anticipating your acceptance of my view, or seeking to persuade you. It's simply a clarification rather than a gloss over of your comments which don't mention any of this.
I've shared openly my views both positive and negative about ARCM. I don't see the above as shortsighted like you suggest, but I'm comfortable if you view my opinions in that way.
Atb
Atb Major Tom.
Got to do what feels right in your own mind. Good luck to you 👍🏻