Member Info for GLR1990

This is the best news I could have hoped for, in terms of this investment

I cannot believe we own 90-100% of HyProMag for ~£5m

What this does for the company

Cotec have agreed to fully fund projects in the USA on a 50/50 JV Basis

So Mkango have agreed to buy the entirety of HyProMag and list it under Maginito, which means Cotec current holding (lets say 20% as they will certainly opt for it) is now a 20% holding of 100% vs a 20% holding of 42%, so Cotec are very happy today as well

The board clearly see unbelievably value ahead for RE recycling (WD added £100K at 12.9p) and wanted to get this deal done before they accelerate the US rollout and begin producing the NdPrFe powder

The next steps

We will find out in the interview tomorrow but my guess would be the following

- Create a US subsidiary on a 50/50 JV Basis

- Fund part of three feasibility projects (like UK and Germany have done)

- Partner with automanufactuers and/or the US government

- Plan to produce and scale NdPrFe Production in late 2024/2025 from the US plants

Each plant at 100tpa would produce around $5-10m in revenue (the reason that is so broad as six months ago it was much higher than $10m but NDPR has come down considerably in that time)

All of my previous estimates were based on a 49% holding, the face we now will own all of the revenue and profit is just beyond anything I could have expected at this stage

Songwe is arguably worth the current cap, when the MDA lands all the pieces of the puzzle will be in place and there will be no stopping this stock

Once we prediction and revenue, we can then list on the NSDQ at X rev or X PE, which with five plants globally and a 100% interest, will be considerable (likely way north of $100m USD)

This is the investment of a lifetime, if I weren't 100% convinced yesterday, I am today

Sadly have been here a few times before, and each time I have to admit it doesn't get any easier and every concern starts to manifest as if it were a reality
My approach it to simply remain focussed, we have done our research on this stock and the current valuation for me is highly attractive
We know the following
- we have a valuable asset in Songwe, albeit no MDA means we cannot realise the true value of the asset, but that doesn't make it worthless, it has had £14m+ spent on it
- We have a 33% partner in Talaxis (aka global commodity trader noble group) they paid 24p
- The CEO paid 12.75p only recently (£100K)
- We are fully cashed up so no funding concerns, placing done 30% higher at 12.5p
- We have two/three fully funded plants, both cost ~£6m each
- We have three or more plants in the pipeline with our US partners Cotec 'who will be funding the operations for two years' they are currently up about 20% since announcement
- We have sold 20% of Maginito for around £3.5m giving our remaining holding a ~£15m valuation (before German plant ownership increase) so arguably £17-18m+

We have blue sky tech and an asset currently being valued at around £2-3m (minus cash and HyProMag)
Dont let the market fool you into thinking we have no value here
Songwe could easily be worth double our current market cap if not treble, once the MDA lands which it will eventually, this isn't going to drag on forever even if it feels like it, we have seen the reports in Malawi, they have had a tough year with the typhoon and secondly the minister changes, plus a crack down on corruption, but I suspect it gets done

Songwe £25/£50m+
HyProMag £20m+

May possibly be an update tomorrow (Y/E MD and A)

Just my two cents, yes there are negatives (delayed MDA, NDPR pricing dropping) but it doesn't warrant this extremely supressed valuation

Personally holding strong and adding more, but this isn't a ST trade (been here since 2017) its a long term hold until we sell the assets (HyProMag and Songwe) which I still truly believe will be for £100m+ in due course, and we have a feasible plan in place for that and more importantly the right partners on board

I wouldn't worry about funding too much but more dilution of the second prized asset, Maginito

Cotec updated the market earlier this week (we will be updating I believe on Friday) and they had this to say:
The feasibility work for the roll-out of the Hypromag Technology and other REE technologies owned by
Maginito into the US in collaboration with CoTec will commence in the first half of 2023. The roll-out will
be in the form of a 50:50 joint venture between Maginito and CoTec in which, broadly, CoTec will provide
the funding for the first two years, whilst Maginito will provide the technology.
https://www.cotec.ca/investors/financial-reports/ (Management Discussion)

So if we need further funding, for working capital or US based operations then it clearly states it will come from Cotec - and they are happy to fund us, the issue would be diluting Maginito (or the US subsidiary) so we hold less than 50% of that newly created asset, which although no dilution takes place at group level, would still be 'giving away' the valuable technology due to issues in Malawi etc.

So as frustrating as it may be, there is a plan in place to 10x this stock in the next 18-24 months

It says in the RNS the company would likely be able to return 0.2p per share

In accordance with Rule 41 of the AIM Rules, the Company has notied the London Stock Exchange of the proposed Cancellation.

· Assuming the passing of the resolution to approve the Cancellation in general meeting, it is expected that the Cancellation will take place on or around 26 May 2023.

· If the Company is able to be wound up on a solvent basis, which is subject to a number of commercial matters being satisfactorily resolved ahead of the MVL, a distribution to Shareholders is anticipated but this is unlikely to exceed 0.2 pence per Ordinary Share. There is unlikely to be any distribution to Shareholders if the Company is wound up on an insolvent basis.

Key statements
- which is subject to a number of commercial matters being satisfactorily resolved ahead of the MVL
- a distribution to Shareholders is anticipated but this is unlikely to exceed 0.2 pence per Ordinary Share

No idea how it is all worked out, guessing they have a load of obligations not mentioned, so they are saying its zero or something (but 50% less than current SP by the look of it)

Interesting

Ascend elements are primarily a lithium carbonate recycler, I wasn't aware they were also recycling rare earths outside of the heavy RE Manganese (which the article is likely referring to)

MKA/Maginito technology recycles NdFeB (or better yet Neodymium Iron Boron (NdFeB) magnets) so a similar market under the rare earth umbrella and electric vehicle / ev / green umbrella, but a different part of the electric motor(s)

Looks like Cannacord selling out to me (13.5%)
A placing could be on the horizon but my guess is this isn't it, I think they needed liquidity and after Cannacord put a huge sell order in, MM's drop the price to whatever CC were comfortable with and create the liquidity frenzy, probably be a TR1 later, risks are if they have more to sell then it's going lower, if its a placing then its going lower, but if not and they are out then probably a bounce back to 55+

Really good to see a huge BoD subscription here, I dont know much about the company but will be researching it today, on the face of it appears to be in the right sectors (Gold and Lithium) but can't ignore a huge £195K buy for a company trading sub £5m market cap, that is quite some commitment

Also just looking at previous project level funding, I wouldn't be shocked if there is more BoD involvement with the share price so low, also removes any concern regarding dilutive funding (at least at group level) as what is the point in taking 5% if you are going to discount that in due course

Hope LTH are excited here as this should really attract the wider market, it has certainly got my attention

Just on that Hannover Messe Post
Mkango are also an official partner of REEsilience as well as projects with SUSMAGPRO

The bill has been passed today
https://twitter.com/Times360Malawi/status/1646480085162110978

Good find crumbs
Cant hurt our investment case, the current agreement has been delayed since June 2022 so any change or shake up should be a positive one

Of course being on of a few RE recycling companies, partnered with top auto manufactures, to get to 100t/pa of ndfe3 I am not too concerned, we likely have the stockpiles as per Blades post

The key will be scaling this up to 200t/pa etc. in 2-3 years when all of the labelled e-waste comes into play, then we could be looking at astronomical figures

"its going to be many years before there is noticeable quantity of material available to recycle."

To be fair may be right there if many years is 2-3

EU proposed legislation states that all electronics / appliances that contain critical minerals must be labelled for recycling, to meet the 15% per member state quota

A huge amount of e-waste etc. will be made available in the coming years, since completion for magnet recycling is relatively low and we already have two plants in pilot stage, I suspect just as this legislation comes into age we will have proven our plants technology and commercial viability, which will then light a rocket under the valuation of the company

Todays price is just a dip in the wider market, give this 12-24 months and id expect many multiples, the legislation is all there (passed in the US) if the EU bill gets passed, then we are right on the money and who knows by the time it does get passed we may have proven the tech in the UK

Im happy to be on board with the cotec guys (self made billionaires putting in their own cash) a rarity on AIM, our BoD have always done well identifying HyProMag at a lowly price of £500K to where it is today, and doing a fantastic deal with Talaxis who own 33% of the group dont forget

To be fair if 10% goes into the pension fund which I suspect that is exactly where it goes, then at least you are aligned with the country more in terms of creating SH value
I still think 10% with option to acquire a further 10% is a lot but the royalty is right where I expected it to be fair
Maybe I am coming round to this deal after all

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'