Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Could still be a counter from SQZ, after all KIST have great assets that are now producing healthy daily profits
The problem I have with the whole situation is both are doing perfectly well on their own, daily profits are huge and the forecast (be it European or UK) again is incredibly healthy for these two companies
It's two great companies going after each other, if anything for QZ it has shown the wider market how undervalued it is that we are rejecting offers over £4 a share
Personally I think it would be better for SQZ to just buy KIST, and who knows AA may be trying to set that up - we will see that cash position soon enough, I think id be happy buying KIST at current market value, even if it has considerably increased of late they are making around 1.4-1.5m euro per day and have a decent cash pile (£127m was it, be quite a bit more now) so current value would be about £300m EV, I think that's a good buy for SQZ - problem is how much of the value of KIST is in the BoD, I am not sure there is that much now compared to obviously when it first listed
Great post
Interesting one that as the GOVT already owns 15% of the mine and CT is 30%
Probably some of it lost in translation, but does appear that the govt are playing hardball (and potentially unfairly)
Hopefully our MDA is concluded this month, although no rush if they are after anything like those terms
Good post MunchBox
I think if we do need more funds in future, we could probably sell another 10% to Cotec on the same terms
If you go on their website, they have a lot more capital than what was invested in HyProMag but I would assume we didn't want to give up too much, so 10% was enough for both parties to be happy for now
At 18p this is very cheap as evidenced by recent TR1's, investment from Talaxis and Cotec (24/27p) we have also improved since then with the release of the DFS, lots of coverage and backing in Malawi - but the market is interested elsewhere for now
I am 100% confident this does well over the short and medium term, I also think the ERMA will fund the Pulawy plant once that DFS is completed
Anyone got rough estimates of SQZ FCF this year?
Lots of variables from 2021, e.g. 100% cashflows now vs 60%
I've been trying to research it but difficult when you are new to the gas market, my guesswork below
production 2022 high end 30K boepd low end 26k boepd
Levy 25% on profits
average therm in 2021 was 113p, current is around 175p but ive noticed day ahead figures way north of 200p therm lately, but lets base it at 175p
so revs could be anywhere between 1.6-1.9bn USD
OPEX say 16-18$
GP at 100% should be a lot better than last year 60% we made 386m GP last year, so you would have to estimate around £800m GP this year or am I way off as that just sounds too good to be true?
Then we have the levy but we also have North Eigg so we can offset some of the profit tax there?
Anyway after all said and done I have gross profit around £750m but that is without any upside in current gas prices and going by the current average
Truly incredible value if I am on the right lines, esp. with cash position
After looking in greater deal think the KIST offer is very low
Took some shares
Looks oversold, management have been banging on about H2 all year saying it is all about H2 so to get in at a 30-40% discount on the last results release, isn't too bad, cash around $5m USD market cap £11m/$13m USD so EV of about $8m USD made a $1m profit but that should increase in H2
Macro looks good as well, europe on the brink of a catastrophe as will/wont russia turn back on the gas, mcf up to about $50 USD vs $30 USD average in the last update, although quite volatile
Think this will do well but as always all depends on management, can they deliver - good management would do very well with this company so will be a good test for them, if they cannot deliver good shareholder returns in this environment (euro gas through the roof) then they never will - should in theory be a very good six months
I think next RNS will be MDA
Then followed by EMRA securing funding for both the Pulawy plant and Songwe
Not sure how fast that second RNS will come, whether it will be pre/post DFS
Either that or someone swoops in very quickly and makes a bid for the lot
If they are interested they dont have much time
reminds me of the 5-6p days
We all said at the time this is crazy, but people thought we would run out of cash, have to dilute massively etc.
Its always been the case with MKA, fears of delays, cash position etc. followed by incredible game changing news and then over a coupe of months we go up 200% (3p to 10p, back to 3p to 38p, back to 19p to...)
I am absolutely baffled by the reaction
The COTEC news advanced us $800K at 27p
We have £1.5m GBP for the investment in Maginito AKA hypromag which values that alone at £13.5m (15m minus 10%)
We are working and one of the select 14 projects with the ERMA
They are currently raising around $2bn dollars to fund these projects
Once the DFS Is out for Pulawy this will be funded I am 99% certain with little to zero dilition
Then the joint DFS pending MDA (which should be arranged soon)
Very very very likely ERMA just takes the lot and secures critical minerals and supply for Europe
The US Has done it recently with Lynas ($120m USD plant project fully funded no dilution or cash from Lynas)
The risk ofc is the amount of time it will take to access these funds in this bad environment, but then again thats why the SP is 19p and not double/treble
In short, eventually all of the above will happen, Songwe will go into production with or without us and the Poland plant will get built and process rare earths
The chance of success is extremely high IMHO and looks more and more attractive with each sell
Forgot the link page 18 and 33
https://eit.europa.eu/sites/default/files/2021_09-24_ree_cluster_report2.pdf
We already have funding secured to a certain degree, it is just a irrational market
Page 18 and 33
Mkango Polska
1.7bn Euro fundraise from the EMRA - they are working on getting funding for 14 projects, which includes of Pulawy plant - if that is fully funded, it adds 27% to the economics of Mkangos Songwe project, which will then surely achieve funding of that project (I mean what a bargain) which is why we are doing a joint DFS for both Pulawy and Songwe, I think the whole thing will be funded and secured by the ERMA
https://www.mkango.ca/news/diversifying-the-rare-earth-value-chain-for-europes-green-transition-erma-supports-mkango-in-development-of-pulawy-separation/
Crazy market, just got to remain calm and clear, everything is in place
We do need an MDA but I cannot see that being too much of an issue when everything else is lined up and ready to go, give it a few months and we will be very happy
Agree this is a pretty good update and outline of the future strategy / potential for V production
Key points
- The Studies were undertaken to determine the next phase of the Company's growth plans beyond the sustainable production run rate of between 5,000-5,400 mtVp.a., which is expected to be achieved by the end of 2022.
- - The option to implement the expansion in stages substantially reduces Bushveld's upfront capital requirements and allows incremental production to be attained from each stage in order to generate additional cash flows, which can be leveraged for the next stage
- Thus, whilst our commitment to growth remains, we have the liberty to pursue the new growth plans only once we have achieved our production performance targets on delivering sustainable cash generating production at the production rate of 5,000 - 5,400 mtVp.a. and improved our balance sheet capacity to invest in such when funding has been secured
Decent note on costs
- As a result of higher volumes and operational efficiencies, the Company has estimated that at full operational production of 8,000 mtVp.a., C1 costs per Kg/V produced at Vametco and Vanchem would fall by at least 20% at each operation, compared to 2021.
Sell at 35p?
It was 38p not too long back, the current situation now is do we A. fund the mine ourselves with debt/equity/financing etc. or do we sell the project for many multiples of the current SP and then move to realise the value in the remaining assets like HyProMag etc.
Very true CS
Still bodes well when we are looking for funding, that the US is accelerating and increasing funding in the sector, dont forget the DoD visited Malawi back in 2019
Combine that with the most recent article of a potential MDA In as little as three weeks, we may not struggle to find project financing at all, especially if the BFS is appealing - could be a really great summer here at MKA
Wow massive news
Ministry of Mining says it expects to finish some mining development agreements negotiations with three mining firms by June this year to resume major mining activities.
The resumption of mining activities is expected to create jobs and enhance the sector’s contribution to the gross domestic product (GDP), which is currently at less than one percent, according to Malawi Government Annual Economic Report 2022.
The ministry’s Principal Secretary Joseph Mkandawire said government is negotiating agreements with three firms that have finalised their exploration works.
He identified the firms as Mkango Resources, a dual-listed mineral exploration firm, which has been engaged in exploration of rare earths at Songwe Hills in Phalombe, Globe Metals Limited, which will be mining niobium in Mzimba and Lotus Resources Limited, which acquired Kayerekera Uranium Mine in Karonga recently.
Mkandawire said discussions on the agreements are at an advanced stage and will be concluded soon.
He said: “From the ministry’s point of view, we look at technical aspects, usually how the mining will be done, waste disposal, value of the minerals, and the quality of the deposits.
“On another hand, the Ministry of Justice has to look at the legal aspects to question whether the agreement is in favour of Malawi. Then there are fiscal issues to be looked at by the Ministry of Finance, the Reserve Bank of Malawi and the Malawi Revenue Authority.”
For Mkango Resources, Mkandawire said the legal aspect is right in frame, while for Global Metals and Lotus Resources, the fiscal matters are currently prominent, saying all things being constant, discussions should be concluded by June.
Very good to see
I think this confirms the Russian has been selling completely out
To drop to 19p with a 1% buyer, there has to have been a huge seller in the background
Very good to see the strategic investors taking advantage down here
Gives me great confidence so close to the BFS/MDA etc.
Hmm... not sure I am reading this right, or at least not reading it how some others here have posted - FCF is cash flow taking into account CAPEX which according to the results 'liquidity and financial resources' section cash outflow after tax was £251m (as also can be seen in the net cash position)
Operating cash flow was only £10.8m so I am not sure even with greatly reduced CAPEX how they post a healthy profit in the FY 2023 - unless they spend almost zero on CAPEX - appears to me they will need to eat a big chunk of that new RCF (£325m)
Obv in 2024 they may return to healthy profits - but the EBITDA margins are also very low (4-7%) which is incredibly risky if supply chain issues and inflation remains high, not to mention a move into a recession
Tough one, huge company with massive revenues and a decent profit in terms of EBITDA but when you look closer there are real problem that need to adjusted, any worsening of the current climate and the RCF is toast - difficult times but the market cap is reflecting that
Each to their own and DYOR - a tough call for me, for now on the side-lines but put it on the watchlist
Was here for a while from 6 down to 3, averaged down a bit got out at 4 but still took a decent loss
Can't believe it is now 1.45p, well you can when you look back at the IPO document but still I think with cash and sponsors it's a good price, problem is it was a good price at 2p+ the big issue is a lot of seed investors have stock and warrants at 1p, so explains the selling at any price (above 1p)
In hindsight, should have known it was inevitable this would fall to 1p (or thereabouts)
Good news in the IPO doc is the mention the Becks payments for year 2 and 3 have been put in Escrow, and realised as losses for the first 12 months therefore this years £2.5m payment is covered and secondly next years £3m payment is covered
A raise is likely to come I think at the end of 2022, certainly dont need funds right now (£11m as per last update, even if thats down to £7-8m still healthy) of course every growth stock needs to raise and they will definitely raise in the next 12 months, key Q is at what price, if they get more sponsors in next 6 months then it could be much higher than the current 1.5p price
Becks deal now looks extremely bad to new investors, so they would get tore apart if they tried to raise today, would likely be 1p or less (why would you put money in when there are millions of warrants at 1p coming online in October 2022?) so a raise today would be at 1p or below IMHO, not saying that will happen just saying I would expect a price around that valuation if a raise where to happen today
So in summary, I dont have any cash concerns as I dont think they will need to raise until at worst Q4 2022
That gives investors 6 moths to find more sponsors and get the yearly revenue up to the healthier £5m range
Bad news if they do need to raise without more sponsorships
- Becks payments in Y4 and Y5 are £3.5m and £4m, so would likely have to raise that + working capital (Massive dilution and discount)
- Becks takes 15% of all sponsorship, considering that is the main revenue generator, id rather have that deal than own 5% of the stock which he also owns
So in summary
Extremely high risk the closer we get to Q4, but for now I think investors have 3-6 months where they can sign new sponsors and get the SP back up and over 2p+
I may retake a position here but no progress it will likely head to 1p (warrant and IPO seed stock / 33% drop from here) and secondly a raise in Q4 that will be pretty bad for everyone holding
Seller seem to have eased off a bit today
Unsure if that 80K is a sell, if its a buy we may see some delayed sells later as a lot of buys being published but not much stock against so wondering where it is all coming from
Seller surely has to be low on shares now, if it is the Russian then he wasn't on the updated SH list on the website so would assume under 3% whoever it is
Id usually think the same but have been here many times before
Covid crash was the worst, 9p right down to 2.75p offer - different situation but all the same really surrounding one thing, cash fears
I think the sell off here could be down to a few things
1. global market sell off
Interesting because commodities have done quite well but not all , so I give some weight to this but not a lot
2. Russia invasion and war
I give a lot of weight to this as we do have a TR1 russian investor, or at least we did, the website is now updated (22/04) and he is no longer on there but could still hold under 3% (or just completely gone AWOL)
3. Cash position
I give a bit of weight to this aswell, $4.6m as per 31st Dec last RNS, depending how much is left (cant recall if we have any warrants etc.) then a cash raise will likely be needed in the next few Q's but how that raise will come is what could be the difference between a discount (which would be very detrmimental to the BoD and 32% holder Talaxis) or through asset sales, royalty payments etc. which is obv more beneficial - think HZM royalty agreement with Orion
A good way to raise cash and realise more value could be to list HyproMag, we hold 42%, take our option to increase to 49%, list the company, post listing we may reduce out holding but we could then sell some of that holding on the open market, not sure this is the best idea yet but certainly something for the future, I dont think any of the true value of HPM is priced into the SP today
Or the big one, asset purchase for Songwe in which case we all sail off into the sunset on a nice big yacht (or dinghy depending how much you have here)
FLX is much better than OSI - FLX should have cash very close to the current market cap
With the business now streamlined, the next set of results should be very positive
BoD have done a bit of buying in the last couple of months
Maybe Amati will not sell out, but its a huge chunk to shift if they are and evidence suggests they are as of now... positive side is the market cap is only £4.5m so the value of their holding is only around £500K which could shift pretty quickly if FLX got an OSI style rise etc.