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Why hold if you can get lower in a few days?
Surely it would be better to sell now at 8p and buy them back, which going by your suggestion, is going to be sub 6p?
You told everyone yesterday who had the chance to buy at 7p to hold off and wait for sub 6p, the ask is now above 8p so hopefully for your sake it is sub 6p or you've cost people a lot of equity.
Maybe it would be better to hold off the price predictions for now and simply state that it might be better to just wait for whatever the placing price is before investing?
Agree CB 19 months delay now... which is beyond ridiculous
Malawi for me take a lot of the blame, if we were the only MDA outstanding I would think the blame lied more on our BoD but since there are four MDA's outstanding and the only one that did get signed was on terrible terms (10% royalty and a huge tax) I can see why the countries mining sector is almost non-existent
Hopefully we get some good news regarding the recycling plants and can focus on something else
Quite the sell off YTD, could be one of three things
- Placing (forward sold)
- Large seller had enough, taking us down a few pence before buyers get attracted
- Both
The buying today between 7-8p suggests to me if there is a placing, it wont be much lower than where we are currently positioned. As MKA is pre revenue, it's clear we will need to raise funds before we start making revs/profits from the recycling plants, as much as 20tp/a could bring in even at todays supressed NdPr pricing (although healthy relative to 2019) around $60K a tonne (So about $1.2m at current production) it wont be enough as of yet to get us through to Q3/Q4 2024, and that's if we just want to plod along, id rather we keep raising as long as its for projects that can add significant future value
If we do raise, it would be the method of the raise and the participants that would be key. I know its tough right now for anyone, and WD did add £100K at 12.9p so I suspect he may struggle this time around to add another 6 figure amount (I am not aware of his finances and don't care) DL added £700K at one stage, a huge endorsement for the company (24-27p) so we do have directors who can fund the day to day operations (Upon checking the Malawi delays, it doesn't appear to be that costly outside of obvious delayed future revenues, by my calcs it was around £250K per Q give or take when you strip out General Expenses / Admin)
So if we are to raise, bring it on. I trust the BoD to find and create more value. In the last year alone, they have bought 100% of the prized asset HyProMag, they've raised funds to deploy our technology in Germany, allowed us to take part and fund partially a crucial wind turbine project and more importantly, successfully begun commercial production in Birmingham (Proven the Tech) - they've also established a solid relationship with Cotec who you can be sure will hit the ground running with this in the US (they've already paid for equipment out of their own pockets)
The market has been extremely difficult, our basket price for Songwe has reduced considerably and the territory is dire (used to be good but not anymore) with inflation raging at 30% and international banks debating whether or not they should have any exposure there. hence raising money for both the company and our asset in this market is difficult.
Of course, post revenue a company may still want to raise with share capital, lets say we do scale up to 100t/pa by H1/Q3 2024, then that $1.2m becomes $6m per annum - large institutions may want a slice of the action and put double digit investments into MKA (Or more likely, its subsidiary Maginito) skyrocketing the valuation of the company and its technology
In summary, did Mkango have a good year outside of its share price? Mkango had an absolutely fantastic year in 2023 and there's no reason to believe it wont continue that progress in 2024. Bargain!
Good post TT
Unfortunately, we cannot walk away from Songwe, the economics and future value are too great.
We can in the meantime, focus our efforts elsewhere (thankfully, we have established a superb technology that now likely eclipses our current market cap regardless)
The predicted EBITDA for Songwe was £200m PA and it feeds directly into the Pulawy plant, giving both projects enhanced economics. If we walk away from Songwe we lose a hugely valuable asset for Pulawy and strategic importance for the EU
I can understand both parties interests, Malawi needs FX on home soil but large lends don't want to put their balances there (Looks at the IMF loans for example) especially since inflation is not yet under control in the country. The year on year inflation rate for November 2023 stands at 33.1 percent, an increase from the 26.9 percent recorded in October 2023 - Malawi is also undergoing severe fuel shortages, not ideal for building a project. In fact, I believe if we did get funding 12 moths ago, we would be looking at tremendous difficult today vs our original economics (similar to HZM) which could have crippled the company.
The best thing for us to do regarding Songwe, is establish our other projects and certainly don't show our cards. We are in a great position with HyProMag / Cotec, the market has crushed our SP down to a level where Songwe doesnt factor into any of our valuation. Remember Malawi needs this much more than Mkango do, OEMS and GOVTS need the product much more than Mkango do, it would be foolish for us to lose any ground just because it has been dragged on for so long.
Agree crumbs
They've got SH to look after as well, although their SP has performed much better than ours over the last 12 months (2/4 of their investments have already multibagged, one by 25 fold)
I am sure they will do the same with ours
Shocked to see #MKA back under 10p, really should be at least double
Another fantastic opportunity for those who are not currently invested, or those who are and have spare cash
The US project is storming ahead, with three reactors already purchased by Cotec
As for the UK project, in ~6 months we could be looking at scaling to 100t/pa and in 12 months potentially on the road to 1000/tpa (with multiple offtakes)
For those who like a spike in share price, what would happen to the valuation here if we signed an offtake with say Apple for example?
https://www.apple.com/uk/newsroom/2023/04/apple-will-use-100-percent-recycled-cobalt-in-batteries-by-2025/#:~:text=By%202025%2C%20all%20Apple%2Ddesigned%20batteries%20will%20be%20made%20with,percent%20recycled%20rare%20earth%20elements.
Well we end the year at £26m CAP
-18% return on investment
Still no MDA and another missed deadline / promise by Malawi Ministers, but we all have come to expect that now hence no real drop in share price or rise in anticipation (now 18 months on from DFS)
With the negatives out the way, positive developments have been made!
- Bought 100% of HyProMag
- Set up a new US sub with COTEC
- Selected as part of the MSP
- Selected for a new wind turbine project
- COMMISIONED UK FIRST RE RECYCLING PLANT (first production)
- Completed funding for German Pilot Plant
- EU made legislative changes in regards to recycling and processing (no action yet but all on paper)
So 2024 is set up to be a really good year
- first revenues
- start of German pilot plant
- scale up or production to 100t/pa from UK plant
- hopefully an MDA but not counting on it (yes would not be shocked if it doesn't get signed in 2024)
- Roll out of tech in USA / funding for pilot plant x3
- hopefully some movement on the Pulawy plant
- Magnet production and offtake agreements
All of which could again, easily eclipse our current cap - a strong 2024 awaits!
Agree Bonker good to see you here
I bought this last year at 10p and sold for 20p soon after, before it hit 40p (gutted)
Back then I was super impressed with the rental business growth and high margins, I thought if they can focus on increasing the revenues in that sector, then gross margin will follow suit and it was a real diamond in the balance sheet
They've improved their GM slightly over the last 12 months, and one could argue for retail this has been the most difficult 12 months arguably since 2016 or even the GFC. GM for me is the number one figure to look for in the results.
So today I am very impressed, also shocked to see gross debt down by about half a million, that's truly incredible to be able to pay debt off in this high interest, low spending and just awfully turbulent environment.
15p is ~£16m cap, which is absurdly cheap when you compare it to peers and other companies in the same sector/market.
This really should be trading north of £40m and I suspect it will as the environment gets healthier, and they continue to increase margins and revenues.
Will slowly rise to 30p+ now over the coming 6-12 months
Technology proven, commercial scale production incoming mid 2024
20tpa ~ $1.4m USD
100t/pa - $7m USD
1000/tpa - $70m USD
(no including tax breaks, or premiums for recycled magnets)
(using current Yuan pricing https://tradingeconomics.com/commodity/neodymium)
EU CRMA to pass this week: https://ec.europa.eu/commission/presscorner/detail/en/ip_23_5733
Highlights
- 15-25% of all domestic production of RE's must come from Recycling
- All electronics must be labelled within 2 years to clearly show what critical minerals they include (feedstock)
Valued at £17.5m post Cotec investment (20%)
Post Period Highlights
- Added value of 3x US plants funded by Cotec holdings corp or external financiers ($30-50m USD)
- 1x fully funded pilot plant in Germany (ownership increased to 65%)
- Full Acquisition of HyProMag UK
- Wind Turbine Project (£1.4m)
- MSP selected Partner
- UK first NDFeB magnet production in 20 years commissioned
- Initial 20t/pa revenues to commence immediately
- OEM interest (Tesla? Apple?)
So its safe to say its worth more than the £17.5m valuation Cotec put on it last year, they recently 25 bagged one of their other 4 investments https://www.cotec.ca/_resources/presentations/corporate-presentation.pdf?v=0.909?v=0.294?v=0.923
Songwe MDA supposed to land this month, we will see (I cant be bothered worrying about that tbh, it will come when it does)
Mkango Current cap of £29m - upside is really astronomical vs the starting price. Id say theres a lot of hurdles to pass but weve already jumped them now, just sit back relax and let the investment community take notice as we start increasing revenues, sign major partnerships and scale globally. Simple.
So much to look forward to, however ofc the government and ministry comments about signing our MDA in the next 6 weeks has given us a nice boost
What value does the MDA bring?
- unlocks financing
- gives value to the project as it then becomes construction ready (can be sold also)
NPV before the price crash was $559m, even if we halve that and give 10% to MKA that's the current market cap (11p per share give or take) so then the recycling tech and Pulawy + other assets + cash behind the sofa becomes free
Huge value increase for Maginito potentially around the corner
MKA owns 80% of Hypromag, via cotects investment for 20.6% would imply group value of £17.7
That was before
- selected by MSP
- US JV DFS
- £1.4m wind turbine project
- German Plant Funding
Upcoming major milestone
- Commissioning of the plant and scale up
- 100t/pa of NdFeB magnets currently valued at around £7m PA give or take (hard to value as priced in Yuan and dominated by China so volatile)
Should commissioning take place and production start in the next few weeks, id expected our investment in HyProMag to at least double from the face value it was given by the Cotec investment - so should be looking at ~£26-£30m+ of value to MKA there maybe a lot more (Cotec will let us know I am sure)
So MDA lands and recycling plant gets commissioned, id expect our market cap to comfortable sit above £55-60m and then increase as financing for both the tech, the mine and revenues come in. Current market cap £28m, would be happy with around 22-24p per share by Y/E - then with scale and revenues, mine financing double/treble that in early 2024. Very possible and I've probably undercut us there as I like to remain very balanced.
Well, all the ducks are finally lined up for a big finish to the year. If we dont re-rate in the next 3 months, we probably never will.
Mining License Songwe Hill
https://www.businessmalawi.com/mining-minister-engages-miner-on-prospects-the-times-group/
CRMA act almost passed (huge for recycling, and I mean HUGE)
https://www.consilium.europa.eu/en/press/press-releases/2023/11/13/council-and-parliament-strike-provisional-deal-to-reinforce-the-supply-of-critical-raw-materials/
SUSMAGPRO project completes this month
https://cordis.europa.eu/article/id/442156-gearing-up-for-high-performance-magnet-recycling-in-europe
update: raw material week starts tomorrow
https://single-market-economy.ec.europa.eu/events/raw-materials-week-2023-2023-11-13_en
16 November 2023
Sustainable raw materials value chains in the EU CRM Act
Analysis In Support of Strategic Value Chains - Co-organised with DG JRC
Developing permanent magnets value chain - Co-organised with SUSMAGPRO project, ERMA and REIA
Cotec rolling out three plants in the US in 2024
https://www.cotec.ca/investors/presentation/
All yours for £22m CAP!
Its probably Sky
- Rebrand to Sky Guild + Naming Rights via Commercial Agreement
- Add Sky Bet to the CS2 squad (extremely valuable in itself)
- Sky Glass already onboarded
- Sky HQ already onboarded and primary sponsorship
- Takeover Bitstamp current £1.5m PA deal
- 25% stake official Sky E-sports organisation to go with their market leading e-sports betting via Sky Bet (where CS2 is the main plaform for e-sports betting)
I could be wrong it could be someone else but Sky makes a whole lot of sense
What Id like to see is whoever takes this 25% stake, they need to protect the future of their investment so it would be foolish to take 25% but also not back that with a long term commercial deal, win win scenario then, else why would you take 25% and a commercial agreement, you would simply just sign a sponsor agreement.. shows whoever it is wants to protect both the platform for their advertising, and their investment. Very solid!
I have to second that, as much as I am frustrated with the MDA / Songwe at 8p we are currently undervalued simply on the HyProMag venture so, the as I said before the investment case is still strong
I think MGMT are putting the asset up for sale, hence why there is no rush or sacrifice to hurry up and get to 'production', and personally I think that is that is the best route as I don't believe constructing in Malawi would be a smooth process, both political and financial (inflation and debt issues)
Lets hope we do, but that article suggests both sides are WAY off
They also said the MDA would be concluded by June 2022, Dec 2022, January 2023, MKA said in Feb 23 'in the coming weeks' IMHO nobody knows when this is going to be signed within the state, company or else.
That's the end of the MDA for me
Scratching it from the investment case
As long as the value and potential of the recycling technology continues to outweighs the current market cap, which it does, then this remains as it always has, a viable and solid investment.
As for the MDA if it is agreed on any form of favourable terms then I will be pleasantly surprised but moving forward I am now completely discounting it, and according to the share price at 8p, the market has already discounted it so no harm done to the current valuation, just a shame for future value creation.
At least we are not adhering to these terms, many a company would have met in the middle or given up too much like Lotus, 5% gate 10-15% interest and 30% tax.
Maybe the Govt would be better just making an offer for the entire project?
Pretty good RNS
200m shares at 0.5p per share, a slight premium albeit a discount to the previous raise of 0.6p from the Dutch fund who took 5%
Dilution is largely irrelevant at this market cap, with 600m shares in issue the enlarged capital only increases by 33% to 800m or thereabouts, so the market cap isn't impacted too much (which it would be if they raised £3-6m for example)
Only half of the raise allocated for now until a 'commercial agreement' is reached, so that should add some substantial value to the market cap, one could argue equal or greater value than the dilution incurred.
People forget this is a microcap, at this end of the market you are not going to get solid gold balance sheets and its rare you even get great management teams. I think they've done a pretty good job to date but it really is time now to start delivering that value. They've teed a few decent things up like the CS2 men's team which could attract a top sponsor, they've done some good deals with Sky, lets see if they can really push the company forward now leasing up to the major world cup next year etc.