Member Info for GLR1990

Hi MyIPA

Cotec have a 60.3% interest in the newly established US subsidiary 'HyPromag US'

'60.3% based on the 50-50 JV right (CoTec-Maginito) for US roll-out, and 20.6% equity ownership of Maginito, leading to an effective interest of 60.3% in the USA'

It says this on the Cotec Presentation slide also

https://www.cotec.ca/_resources/presentations/corporate-presentation.pdf?v=0.193?v=0.049

Good RNS

We finally get visibility on the economics

35% EBITDA or thereabouts vs $10m revs per plant per annum

CAPEX at least $30m (lets say $45m) however for the financer, it could be half of this as it may be backed partially or in full by government grants, so very attractive

$30m capex

govt funds 50% (hopefully)

EBITDA of 35%

$10.5m EBITDA per annum

Payback without funding = just under 3 years

Payback with govt funding = just under 1.5 years (now that's fast!)

What I liked about this RNS is the figures are realistic, we all know the songwe DFS is very much out of date in terms of pricing and economics, this is much more realistic and almost negative in some ways. Ofc should RE prices drop I suspect a lot of our material costs / input costs will drop too as it will likely be an overall market impact vs just one product. There are also proposed tax breaks etc unsure if these have been taken into account

An RNS with Tesla would make this do multiples

I don't expect that until likely 2025/26, but it was good to hear that they would be an interested party, along with the department of defence and general motors.

In the current, real world. I was happy to hear that we are still on track for revenues this year, after being slightly concerned by the lead times on the equipment needed for the large pilot plant. The revenues were predicted to be tiny this year, remember Cotec only get 20% of the UK revs so it could be a significant to us but just going from pre-producer to producer and generating cashflow of any size, is a huge achievement. Julian was confident revenues in 2024 would be significant, if we can get the German Plant running early (q1 24) we could be looking at 150t in 2024 at the current price of around $70KG, who knows what legislation and tax advantages will be passed also. Once we start producing and OEMS / GOVTS are happy with our product, the scale will then be off the charts, that's the moment we should see a monumental re-rate.

Agree, still on track for revenues this year by the sound of it as well, mentioned it about 3 times

He did also name drop Tesla but save that for a later date when the market is better!

Will id guess $150m USD

Even if the 35% need clarifying, the initial CAPEX was around $350m, 35% of that is more than the current cap and ~3-4x the allowed cost overun

In cases like this, assume the worst, so likely 35% of CAPEX to date which was nearer $550, therefore likely another $150m USD to finance it, and there's no guarantee because this will be the second time costs have increased.

Right now thats over 2x market cap

Just look at other companies that needed to raise cash 2x their market cap, it never ends well for SH.

There's a reason Glencore and Orion are who they are, they will be looking after number 1, especially since without them none of this is possible. Its a real shame, HZM I always held in real high regard. This is a huge lesson in the dangers of constructing an asset in a high inflationary environment. You can ofc blame this and that, but the Marco situation has really not helped and likely pushed a lot of this over the edge. I have no idea how bad it is locally either.

Hope my post earlier was informative

If you are trading this be very careful, this isn't a microcap, its mid cap with massive insitiuational banks holding stock who can do whatever they want with the price

no matter what you post here or on social media, it will have zero impact on a stock like this

best of luck, as before IMO this is insolvent and will be very fortunate to negotiate favourable terms for SH on any grounds close to the current valuation without massive dilution

Nope Parker, that's exactly how we all feel

Also, just a further note

the CLN terms were proposed before the following add on values

- placing to fund a 6m EURO german pilot plant

- 1.5m funding for wind turbine project

- 50/50 JV with Cotec for US operations, which didn't previously exist

So one could argue the HyProMag holding now comfortably eclipses the current cap, regardless of Songwe

The worrying part is HZM cap is £100m and they require likely £150m (or thereabouts)

So equity is off the cards, unless its massive dilution

If the backers don't stump up further cash (and who is to say they wont need more next year, they must be furious with management) then HZM is obligated to start paying back the debt in march 2025, the mine should be in production by then but if it was not, then in theory HZM would not be able to pay its debts.

Those debt payments are now going to be significantly higher, regardless if the mine is in operation or not (some at 15%)

The backers/banks will be fully aware of this, and will take all of the above into account when they negotiate new terms and funding.

I cannot see the mine being left 'as is' I think it will go into production, but the risk here is as HZM has been hammered down, it cant use its equity to fund the requirements (like it could have at 130p)

Ultimately, I dont see how in the short term this ends well for SH, anyone coming onboard post financing at least will be on new terms, but right now its very likely that HZM could be taken to the cleaners here by the backers, because they simply (as far as I am aware, but please correct if wrong) have very little to no options other than hope the backers quickly start financing the mine, so they can make their march 2025 payments, and carry on with construction.

Again the backers know this, if they play hard ball (not saying they will) they could likely come up with a strategy to take all of the mine / asset due to HZM having to meet that March 2025 deadline and/or not having enough equity to finance it elsewhere.

A very, very tough situation and if management do negotiate a good deal here for SH then I will be giving them tremendous credit, good luck.

Apologies if any of this post isn't factual it is all in my option based on what I read in the financial accounts.

What do you mean there isn't much left, the market cap is £108m, what do you value it at?

Partnership goes live Monday est. £1m over 3 years

Just to provide some balance (not invested)

I actually like the update, the total comprehensive loss is massively down, just under £300K

Cash the major issue however, the ghana money might come in but I think they will run out before it does

so Q is can they attract favourable financing or not... thats the risk investing today

As for operations, to lose a contract and post those figs is pretty good, they are close to being profitable at the very bottom line unless costs are weighted to the second half... their main airport now has a major new terminal, it is getting huge upgrades including 5 star hotels which will attract larger airlines to the region, so I think PAX and revs from the airport improve considerably over the next 12 months making them profitable next H1

Again, risk herei is what type of funding comes?

Ghana and the SP doubles

Discounted placing and it probably halves

Some sort of overdraft or credit facility, and again it probably rises

RvR on the attractive side IMO but not without NT risk, proceed with caution! not advice!

Good find, didn't realise a large scale mining license is so cheap! ~£2K when you convert

Id expect the new 10% investment clause is the big issue here, among FX reserves, and local issues like inflation, fuel shortages, food shortages, and a transition to a new mining government over the last 12 months

Not to mention a serious debt pile, almost $1bn USD In debt now Malawi, and just got a bail out from the IMF

China and India also providing finance, and investing in the country, so may have a say who gets first 'dibs' on certain projects, especially strategic ones like rare earths

Plenty of local issues and hurdles in Malawi standing in the way of our MDA, however it has been 14 months so hopefully resolved soon

Note 5a seems to be the writing on the wall sadly

May have a spike in it before then however

Agree incredibly unprofessional, Israel isn't an excuse they are listed in the UK - lots of companies on LSE/AIM are based all over the world

Probably an RNS tomorrow announcing the new drivers, where to watch and a sponsor

Rumor also counter strike 2 releases tomorrow, which could bring in a major betting sponsor (much more exciting)

See official counter strike twitter

So could be a huge day tomorrow for guild (it never is, but one can hope!)

Truly stunning read this

https://ig.ft.com/rare-earths/

I have sent to management, if we can position our presentation to something like the link above, I can't see anyone not being highly interested in investing

We are right on the money! 2024 should be glorious

Finton I think you are spot on

10% seems to be the going rate now, which is a lot more than I expected earlier in the year (5%)

I also feel the govt is torn, half want it over the line and generating revenue, and the other are playing hard ball due to signing terrible deals in the past and an issue with corruption, IMHO they need to get over the past and realise that just because you signed poor deals, you cannot make up for this now, ever deal is still a negotiation and a partnership, you cannot take 'extra' from new projects and businesses because you got burnt by old projects and parties. We will find a middle ground, but I am happy we haven't offloaded the asset for buttons as I suspect many other BoD's would have buckled by now. So credit to the team if this is the case and we are standing firm.

Agree on both webinar and director buys

WD picked up £100K at 13p so he is OK but the rest need to add some volume

If you can't get directors to buy when the valuation, according to myself and everyone at the company (including those at Cotec) is absurdly cheap, then they will never buy. We also release results every 3 months due to TSX rules so the window should be open at the end of this month for director dealings

Webinar needed for what to expect in Q4

Its sat there for over a year now, post DFS

Really is borderline criminal to have such a valuable and strategic asset, just sat there

As much as I would be tempted to just sell the asset and move on, thankfully we are now far from a one trick pony

So I am happy to stay the course (with Songwe) and let it play out, whether that takes another year or even more - the asset is strategically important to the UK, US and EU, you would think regardless of how long Malawi takes, the asset should carry a value north of our current cap 'at some point' in the future

It now appears the costs of controlling the asset are quite low, so I think we are good to keep it on the books for at least another 12 months

Yep so we currently have two planes in the UK

A small scale ‘pilot’ plant which works 100% as expected

A currently being built larger plant that will produce a minimum of 100t/pa est. for Q423

I thought the pilot plant was the larger plant, but not the case, that is being built now and should hopefully be commissioned

Everything works so I don’t see much risk here with the tech, that must be hugely valuable, JT said any investor who wants to equity fund the US JV can go to the UK and see for themselves

And yes, he was super excited :-)