Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Certainly looks good from here out HD2U
2023 they can get back on track from this extremely low market cap, they had a decent business pre covid that was worth more than £5m, so just a case of resetting, going back to old ways and steady consistent growth as before
HD2U agree but how is that possible?
Here is the statement in the November update
· Cash as at 30 June 2022: £2.4m (2021: £5.0m) and as at 31 October 2022 of £4.4m
Today they state £4.3m at Y/E
Did they include the £1.5m that was held up in the £4.4m at the end of October, I believe they did because that should have been released almost immediately after the RNS on the 10th? I may have missed a statement somewhere, would be good to have that confirmed because if the cash has truly only dropped by 100K by Y/E then that is truly something
Long time no post
Just thought id check in and say great update from Chris
This almost certainly feels like the bottom outside of a black swan event
Key positive is clearly on the cash burn
"We are also reassured by our cash levels of £4.4m as at 19 December 2022, in line with the cash position as at the end of October 2022 and expect to have circa £4.3m cash at the end of December"
Buying at cash give or take today, finally a pretty solid update from ABDX where the market valuation does finally seem to be discounted to the true value at the company, the last few updates have saw the SP tank but a real difference this morning
Can see some have posted today with little knowledge of the company or the current transactions being discussed
From the last update with Cotec
The parties are currently finalising documentation and, in order to accommodate delayed timelines, CoTec has agreed to advance a further £222,500 (US$250,000) to Mkango by way of a convertible advance note (the "Advance") and Mkango has agreed to extend the exclusivity period to 23rd December 2022
Cotec are finalising a 10% position in Maginito aka HyProMag which is due to be closed by 23rd December 2022, once completed MKA will receive £1.5m / $1.8m USD, which as per todays report, showing cash burn of $1m USD per three months, with existing cash would be sufficient until H2 2023 minimum
Cotec are also providing 'INTERIM FINANCING' to MKA, you can read about it at their latest press release, dated 31/10 where they state 'Mkango Resources Ltd. ("Mkango")
CoTec has entered into a non-binding term sheet for an investment in Mkango and provided interim financing to them. Mkango has two main assets - a rare earth development project in Malawi which, according to a feasibility study that Mkango published in August[1], has a post-tax NPV10% of US$559M and more interestingly to CoTec, an interest in a green process utilizing hydrogen to recycle rare earth magnets and extract the rare earth elements from them. During the quarter, a pilot plant was commissioned in the United Kingdom to scale up the technology. In connection with its investment in Mkango, CoTec and Mkango will enter into a co-operation agreement regarding future investment in rare earth processing technologies in the US. CoTec believes that the Mkango recycling technology will align well with the desire of the US to be strategically independent of China' Link below
https://finance.yahoo.com/news/cotec-holdings-corp-provides-business-214500663.html?guccounter=1&guce_referrer=aHR0cHM6Ly93d3cuZ29vZ2xlLmNvbS8&guce_referrer_sig=AQAAANszg5XAenPJH7THH4YBCk7TZzuzJ4h6DVWW-GydqBbU-KKfJ6Ey7s0ZSCa70Yud3rHwytAExjLIDa214RBlPCFZG8nVx3VAkBB3W4bQWMzoB67_2SJaD1xmFqgyu9HNy_kxhfnIosNUwuHoOTmadggKSvTJXtTzNNc_L08yXaR0
If you are still worried about the cash position then sell up and move on, my concern at the moment is only the MDA and that is backed by the valuation of HyProMag
Risk if Cotec don't provide funding? I would state why are they currently financing us at 27p, they have given us £1.225m to date at 27p (CLN) yet cant finalise the one thing they wanted which is a £1.5m investment in HyProMag, you are talking about the ex CEO of Rio Tinto and Anglo Pacific
Worst case they dont fund us and we keep the 10% interest in Maginito / HyProMag, and keep the £1.225m at 27p already invested
Alternate scenario if they cant pay, they give us another £500K and extend exclusivity a bit further into 2023, but either way we get financing at previous favourable rates
Superb Update last night from Cotec, explains the volume and rise over the pond
Mkango Resources Ltd. ("Mkango")
CoTec has entered into a non-binding term sheet for an investment in Mkango and provided interim financing to them. Mkango has two main assets - a rare earth development project in Malawi which, according to a feasibility study that Mkango published in August[1], has a post-tax NPV10% of US$559M and more interestingly to CoTec, an interest in a green process utilizing hydrogen to recycle rare earth magnets and extract the rare earth elements from them. During the quarter, a pilot plant was commissioned in the United Kingdom to scale up the technology. In connection with its investment in Mkango, CoTec and Mkango will enter into a co-operation agreement regarding future investment in rare earth processing technologies in the US. CoTec believes that the Mkango recycling technology will align well with the desire of the US to be strategically independent of China.
in summary
- Cotec providing interim funding as we know, we still have £2.25m I believe to come
- Agreement to look at RE investments with Cotec in the US
- Cotec believes HyProMag will allow the US to reduce its dependence on China
(These guys are heavy hitters remember, not just some tin pot investment fund, check out who is on the board, Chairman of FXPO, ex Rio Tinto, Ex Ceo of Anglo, I mean these are some serious people in the mining space - https://cotec.ca/about-us/board-of-directors/)
I think we are looking truly great here, HyProMag gives us a real get out clause if anything goes wrong in Malawi (which I dont suspect it will but you never know how long these things take with the MDA) and with its true blue sky, strategic, scalable technology we can really sit back and relax that the value of HyProMag could very easily outweigh the entire current market cap of this company in relatively short order
Just taken a look
Great deal
Is current cash likely to still be around $1.4m (as they are profitable?)
So with this sale, cash maybe ~$3m USD and they have other interests on the books
Any idea what they are looking to do with the other investments since they have now sold off this one? Be interesting if they were looking to offload and then either distribute the cash as a special divi or RTO/acquire a new company, either way the value would be easily 100%+ from here (Arguably 200%+ since the recorded NAV is £6m+)
ABDX spent £9m on equipment in 2021
They have £6m in the bank
At £15m (50%+ premium to todays market cap) you are buying raw materials
Yes they are losing money but that was only due to massive DHSC expansion, cash burn will likely be very low now, they are not going to pay 80+ staff to sit there producing nothing at £500k costs per month
Like I said should be a good 6-12 months here at ABDX
Cashed up *(£6m+ if not more)
Partner in AVCT now looking very serious
Not expecting a huge spike up unless we get a deal, but certainly lots of positive movements lately not priced in
Boom
Launch do not manufacture tests, they are a distributor and supplier
AVCT now has a distribution network for 'manufactured tests' that they own
They can use us to manufacture any upcoming tests (which they are now obviously very serious about) and distribute these via Launch DX
Things just got interesting...
Was expecting the SP to be up 200% this morning after my optimism but appears not
Regardless, was being overly optimistic however there is truth to my post, they have a chance here with ~£6-7m in the bank to really lay a foundation for future growth, they can either
A - let it burn and likely need a cash call late 2023, at which point if they haven't made progress with the £7m they will get taken to the cleaners because who on earth would put another £5-7m in when they have done little with £27m to date
B - make some bold moves, have a look for some cheap acquisitions, the market is pants and they say cash is king during a recession, take advantage - id argue they could expand to new territories where they are getting some traction, but this is pricy and in this environment a little dangerous IMHO, go and acquire some companies and solidify growth for future years!
Huge week next week
Cant see them sitting on £7m letting it burn
Cash significantly reduced
May we see an acquisition or development outside of the UK (US base maybe)
I doubt management will just let it whittle away, they will have had huge plans in the pipeline for this money IF it came in, which it now has... would expect an RNS in the next couple of weeks outlining their plans
Sunday Ramp
Yes but they have a lot of cash
£7.6m at the end of July
Lets assume cash burn is £500K, even though it may not be, they will start 2023 with ~£5m in cash, which is more than 50% of the current market cap, that more than justifies the current valuation, so you can really sit back and relax for the rest of the year (and another covid season even though I do think all that is over with now)
Too cheap vs cash, should really be 10p+ and even at that price (£12-3m MCAP) the RvR isn't too great
Lets say they are still burning 500K a month, Aug/Sep £1m so you probably have around £6.2m in cash, although I very much doubt they are even burning £500K a month, we will see
So really you are getting another free shot at this company at this level, risk free in many ways for 6-12 months, and when the market is as bad as it is, having money in something that has £6m+ on the books isnt a terrible idea, think the market is slow waking up to the opportunity here at ABDX even if that opportunity is to simply protect capital and see if the business can grow sustainably over the next 6-12 months
I said the same thing about GILD when that was 1.2p in May, even though I didn't buy, they had enough cash to realistically give investors a good six month window of risk free investing to see if the company could grow, they signed deals with Sky and Coca Coal and did over 100% at one stage, would expect the same thing to happen here from 7p if the company can get some deals over the line in the next six months
That's very good news
I didn't read much into it and wasn't 100% on whether them stopping production meant the JV was on ice, although I suppose it would make sense, you dont want your JV partner to be in financial difficulty so this is very welcome news
I doubt they still burn £800K a month
At least 33% less now they reduced the headcount by said amount, so maybe £500K or less as the last updated stated most of the costs and burn were down to the DHSC and ABC test
Not putting much hope on Vatic, I think they are all talk, they haven't achieved anything to date in terms of commercials
Taiwan order could be a good one, EUA is taking a long time though
Regardless, at this price, I dont think they really need a huge order, just a change of direction, onboarding reliable customers even if they only pay £100-£500K PA, all about growing the business sustainably, id like to see them achieve that over the next 6-12 months
Bought back in after a long absence
Surely cash must be pretty close to the market cap now?
I wonder if they are still interested in expanding to the USA, they did originally plan to do this with the DHSC money, probably a much healthier market than the UK (at least they wont have to sidestep bankrupt partners and court cases)
Unsure on the cash burn here but they did reduce costs recently, so I think this is the turning point, they've probably got a good £6-7m to have a go at it, maybe more
MKA
Mine = Songwe
Huge RE resource, DFS competed, economics lined up just need to finish the MDA and financing
Recycle = HyProMag
Patented technology currently undergoing various fully funded pilot programmes, looking for first plant next year in 2023, Cotec 10% / £1.5m investment in the holding company Maginito suggests current fair value of ~£15m - Cotec have also signed up for £2m of CLNS at 27p (£1m already acquired)
Refine = Poland Processing Plant
DFS underway with JV partner to look at constructing a processing plant in Poland, would improve Songwe economics by 30% and regardless, if commissioned will produce a quality secure supply of RE's for Europe from any source
Funding concerns
As per above, another £500K advanced from Cotec
£1m more to come from Cotec between now and October 15th
Cotec to close investment in Maginto of £1.5m before Y/E
Total Cash £3-3.5m (In other words more than enough, max cash burn was £500K and that was during the DFS which was very expensive ~£7.5m)
Who knows how high the SP could go