Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
The royalty isn't but the equity is
They have been getting bad deals for many years, so its about time Malawi got a good deal even if the terms are less favourable for the miners
Then again at what price is the option to acquire another 10%? I did not see that part
I doubt the government will pay 10% of the costs?
At our current market cap it would do wonders on the same terms as GBE but we can't discount the project just because we 'really, really want the cash to fund HyProMag' :-P
10% of the project and an option to acquire another 10% plus a 5% royalty is awful, and I can understand why the MDA has taken so long to agree for Lotus and Mkango
However, ultimately it would still give us tremendous value, as Bonker points out below and I agree, I would discount valuations by around 20-25% should these terms be agreed, we could still sell the project for a very nice sum and get things moving with the recycling tech
At least Malawi has had to show its hand, should be incredibly helpful for future negotiations now, we have a base case to move forward with, although reading some articles the hold up appears to be around international banks and external bank accounts so hard to tell which way it will go short term
I thought it was AIM, you are correct
In that case my posts are accurate, £200K+ PA minimum then for listing fees
https://www.proactiveinvestors.co.uk/companies/news/218776/as-costs-squeeze-small-caps-off-aim-other-ways-of-obtaining-a-listing-are-having-their-day-in-the-sun-218776.html
Quote 'while core running costs clock in at a minimum of £200,000 per year'
As for RTO, RNS dated 27th March
The Company is now an AIM Rule 15 cash shell, with no operating business. As the Company does not intend to enter into a Rule 14 Transaction, the Company's Ordinary Shares will be suspended from trading on AIM six months after Completion
RNS 7th March
AIM Rule 15 and use of proceeds
AIM Rule 15
Following Completion, the Company will become a cash shell for the purposes of Rule 15 of the AIM Rules and as such would be required to make an acquisition or acquisitions which constitutes a reverse takeover under Rule 14 of the AIM Rules (including seeking re-admission as an investing company (as defined in the AIM Rules)) on or before the date falling six months from Completion or be re-admitted to trading on AIM as an investing company under the AIM Rules (which requires the raising of at least £6 million) (a "Rule 14 Transaction") failing which, the Company's Ordinary Shares would then be suspended from trading on AIM pursuant to Rule 40 of the AIM Rules. Admission to trading on AIM would be cancelled six months from the date of suspension should the reason for the suspension not have been rectified.
Use of proceeds
The net proceeds of the Sale receivable by the Company are expected to be approximately £500,000 (the "Net Proceeds").
The Company does not intend to enter into a Rule 14 Transaction but instead to seek to return the Net Proceeds to Shareholders, net of expenses, in the most cost-effective and efficient manner as soon as practicable. Accordingly, the Company will be seeking the approval of Shareholders for the Cancellation at the General Meeting (the "Cancellation Resolution" and together with the Sale Resolution, the "Resolutions"), further details of which are set out below. The Cancellation Resolution will be conditional upon the passing of the Sale Resolution and Completion.
Key quote: The Company does not intend to enter into a Rule 14 Transaction but instead to seek to return the Net Proceeds to Shareholders, net of expenses, in the most cost-effective and efficient manner as soon as practicable
So they have said twice they do not intend to enter into a rule 14 transaction, but as I said before some people like a gamble and a punt based on hope that the remaining bod change their mind
No worries from me Silver but 100% understand anyone's frustration
We have two plants fully funded and three more in the pipeline, all in NA with Cotec on a 50/50 deal (how do I know that? I watched the last two presentations)
Should know more on the above in 3-6 months or less
As for Songwe, it is what is it, the country needs it lets not pretend that this will just sit there idle, we are at the final stages but as we know when you are doing any deal of significance, the final stages are always the longest and hardest
As for delays, this has really taken the biscuit, the miniters said they wanted it by the end of June, then July, then the end of the year, then January 23 and now, even in our own RNS dated early feb, we stated 'the coming weeks'
We have spent an almighty amount of money on this project, £14m from Talaxis alone plus millions of our own capital on the early exploration, and now all of the costs in getting the EISHA (which at least we have that one out of the way)
So, even if it takes another 6 months, the wait will be worth it, 10% of the NPV of the project alone is $59m USD give or take, thats almost double our current market cap, meanwhile we keep progressing with HyProMag, proving the tech, getting more grants as more legislation is passed, and expand globally, the revenue from that alone will be unprecedented
This will be £1+ in a few years and people on this BB will be buying in saying I think its cheap, this tech can scale from 10 plants to 100 plants and it could be worth £10+ (I doubt that happens, £10+ is a stretch) but its all set up for that, I am happy I am able to add around 11p even though my average is now higher, as I know eventually this will come good, the country needs it, the world needs it, the country wants it, the BoD are top class and we have brilliant partners, delays are frustrating but it will get done and when it does we will all be very happy and the SP will be many multiples from here I am sure of that
Nothing , there is no business left, they've sold the business for £500K it is a cash shell which has no investment case unless management were looking for an RTO but I suspect that would cost a lot more and they have specifically said they are not doing that
The proceeds of that £500K now need to be spent on the next six months operating as a listed business, unsure if that means salaries for the remaining BoD it probably does, but you also need a broker etc. listing fees etc. etc.
Estimations are wild from £150KPA to £300K PA, this is main market so I am unsure, probably £300K or less balance when all is said and done but that is a wild guess and it could be a lot less so the upside really is limited whereas the downside could be zero if they spend all the cash / most of it
As said on here an RTO would give it some value but the last 2 RNS specifically state that that company will not look to allow a takeover / RTO so again have to go whats said in the RNS, to me looks like absolute downside but I know everyone loves a gamble if an RTO for whatever reason did come you might do well, just be careful especially if you are putting a lot in here because once it gets illiquid it can be NT to sell for days and if you've got £5K in it etc. good luck, you can get stuck and trust me that is very frustrating
The bid will have forced any potential onlookers to show their hand, if there are any of course
Key
The Possible Offer remains subject to customary pre-conditions in respect of diligence access and other matters. Even in the event that these pre-conditions are satisfied or waived, there can be no certainty that any firm offer will be made. Accordingly, it is emphasised that there can be no certainty that any offer will ultimately be made for the Company.
In accordance with Rule 2.6(a) of the Code, by not later than 5.00 pm on 25 April 2023, WoolOvers Group must either announce a firm intention to make an offer for Unbound in accordance with Rule 2.7 of the Code or announce that it does not intend to make an offer for Unbound, in which case the announcement will be treated as a statement to which Rule 2.8 of the Code applies. This deadline will only be extended with the consent of the Takeover Panel in accordance with Rule 2.6(c) of the Code
So they have until the 25th April to make a firm offer, should a firm offer come in, then the SP will move straight to 10.5p or thereabouts, should they reduce the offer or decide not to proceed, the SP will fall back to where it was
The fact they have specified a price and some terms, sounds to me like they are very serious, usually you dont see a price just a rumour
A bidding war would be great but I doubt that happens as its rare
Still, buying under 9p gives you a nice 1.5p upside plus a free bonus share against the CVL should that ever come to fruition
Start getting worried in 3 weeks if no offer has been made :-)
Ah good call Steve
That makes sense, would have been a huge hurdle to overcome
OK with that being agreed I think they can make huge progress now
I am in a few miners that are having difficulties arranging finance, not so much getting the finance, people have the cash ready to lend, just the terms and market uncertainties, the fact they've got someone ready to lend the requested amount bodes well in this market IMHO
'The Directors remain confident the Bonds will be placed'
So right now they have a $2m loan to see them through to closing the bond
RF will receive 4% plus warrants at 42p for the 3 month loan, so in the short term there really isn't any concern, but IF the loan is extended beyond the 3 months, that's when it gets nasty? Correct me if wrong?
So, in theory, a lot of good can and should come from this in the next 3 months, but the risk ofc if it doesn't has now increased considerably
Suppose the Q is do you trust management and I've always thought they are a good bunch, so ill back them to get this closed in 3 months and propel the SP towards those warrant prices
Yep he is one of the best, Cotec will be his biggest success yet and his swan song
The rest of the team are pretty big hitters as well, Braam, Geno and Tom, all served at the highest level in the billion dollar market cap regions (Rio, Anglo etc.)
Dont worry guys it is what it is, we have bear markets and bull markets, sure I would love to sell the top of a bull market an d buy the bottom of the bear market every time but its never going to happen, we will all (hopefully) be thanking the market for these prices in due course, I still recall the days when we dropped to 2.75p ask, if only I added more back then (100K shares for £2750 anyone!)
We know we have something special here, we have two plants fully funded with a total funding value in excess of £12m GBP, we own 49% and 66% of that
We have great team / partner in Cotec, we are fully funded thanks to the raise and closure of the cotec deal (£3.5m and £1.5m) and we have an asset with a NPV of $559m give or take, even if we sold that for 5% of NPV it would cover our current market cap (and that would be absurd) as we have spoken about on here, once the MDA lands then we will likely look to cash in hopefully for 20% of NPV or thereabouts (~$100m USD) but even half of that is a 2x on todays SP, with no value attributed to Maginito
The future is good here, even if the short term valuation is a bit depressing
Completely agree
Malawi govt stalled for 9 months so we ran out of cash waiting, had to raise at 12.5p but not for working capital but to fully fund the German plant and access the 3.7m euro grant
hands were tied so to speak, do you keep waiting for the MDA which never lands, or make sure your technology is funded and out there whilst competition is minimal (and we are likely one of the current market leaders)
Plus the dilution was only 10% of the group, a small price to pay in the longer term, albeit still frustrating
Our cornerstone project is Songwe hill, at todays cap valued maybe at 1-3% of NPV when you discount all our other assets, including Maginito
So, as frustrating as the placing was, and the current valuation given to us by market, the truth of the matter is we are in a much better position technology wise than we have ever been, and we have incredible partners with a vast amount of top level elite experience
Songwe at todays valuation is a bonus, hopefully the MDA lands in due course, and we can sell the asset for a good price (10% of NPV minimum) then we can look at funding more projects around the world, whether that is HPMS, taking 100% of HyProMag, or alternate ventures in the US
The future is truly fantastic here, the market will realise all this in the next 12 months
Even a broken clock is right twice a day
Lets hope its this month and they don't stall further
After this I am completing avoiding investing in anything of any operation certain territories, which is a real shame as I always had Malawi down as a great place to operate, but this has completely tarnished my once very positive view
In the Cotec presentation, JT said he would be in Tokyo Japan 'Next Week' to discuss potential for a RE recycling plant, so I decided to do some digging to see what the market was like in Japan
Only two days ago this article was posted
https://asia.nikkei.com/Business/Materials/G-7-eyes-joint-effort-to-turn-e-waste-into-rare-earths-other-metals
'To mitigate potential risks to economic security, the G-7 is looking to work together on collecting e-waste and turning it into a source of rare metals. G-7 members are estimated to produce 20 kilograms of e-waste per capita per year.'
And take a look at this piece of legislation I knew nothing about
A framework for smoother cross-border transfer of waste is also in the works. In 2025, an updated Basel Convention concerning electronic waste will enter into force. The provisions will place restrictions on the transfer of hazardous e-waste, such as those containing lead or ****nic, as well as potentially explosive waste.
In summary, in 2025 these RE plants can turn a huge liability into an asset - ewaste
'During a trip to Washington in January, Yasutoshi Nishimura, Japan's minister for economy, trade and industry, called for a new "network" for recycling rare metals with U.S. and Europe'
Might be an RNS today or Monday
https://www.accesswire.com/743045/CoTec-Holdings-Corp-Announces-Closing-of-Non-Brokered-Private-Placement
Pursuant to the Closing, the Corporation issued 7,153,210 Units for gross proceeds of $3,576,605. The Corporation will use the gross proceeds of the Private Placement to fund investment commitments and for general working capital purposes.
In regards to
£1,500,000 Maginito Investment
CoTec has agreed to subscribe for shares in Maginito ("Maginito Shares"), equivalent to a post-issuance 10% equity stake, for an investment of £1.5 million (C$2,466,900) with a closing date not later than 15th March 2023.
Been reviewing this over the weekend and really impressed
It's quite a conservative stock IMHO so I dont expect huge overnight SP increases, but a steady move north to 30p+ in the next 3-6 months seems very likely (80% COS)
The company has a very exciting drill campaign each which could add 3-500+ bopd, should all hit in the high range then the SP would have to at least double from here in the short term, 20% decline rate was the quote? Either way payback of 6-7 months per well, that's huge FCF and they appear to have lots of avenues for further revenue streams maybe acquiring older or smaller plays from larger operators, CEO appears top notch to me and they appear to have a great team in place, will continue to add should it trade sub 20p in the coming weeks/months
Got it, just watched the interview but all the info is in the 1st Feb RNS
Gutted I never got some here earlier, management look top class
Wouldn't worry about the warrants yes they are a short term drag but they add cash in the bank and all good companies go through a warrant conversion period, in my experience this is something that should be viewed as a success
Has to be one of the worst deramps of all time that, simple check on the RNS feed would have clearly shown that a placing has already taken place, it's also pre-revenue lol
in other news cotec have raised a bit more dosh
https://www.digitaljournal.com/pr/news/cotec-holdings-corp-announces-non-brokered-private-placement