Member Info for HarChris

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Will THX be seeing their profits balloon because of this?

No it isn’t

This might just be the beginning of the end for Argo. We don't know when the next debt maturity date is or exactly how long the recent placing funds will last but besides BTC at something like $110k in the next couple of months the investor interest might no longer be there to raise their way out of trouble once again.

It's very easy to sit here with the share price stable at 43p and to start thinking 'will winning the case even make much difference?' - let's be clear about this, it will.

And it's at the very most four months away now.

And Andii's response to the 'explosive allegations' is also worth digesting too:

'Was it TSG that helped with some of the technology to build 30ktpa plant for $17m? Or was it another company? Some graphite miners are having 17ktpa plants built for $50m don't forget so whatever you think you've found, there is also incredibly cheap capex to consider. Outsourcing is not a new phenomena and the figures you are suggesting aren't huge. The TGR total admin costs is around £2m a year which again for a company on track to make over £10m revenue is pretty competitive when considering competitors.'

The pension fund announcing it was to divest will have placed additional pressure on the company. We had the share price falling because investors *thought* the fund was selling out when in reality they weren't, so now you're back at 2p and there's still tens of millions still to offload.

Biting the bullet and killing two birds with one stone may just have been the best option at this point, and executing it as swiftly as possible.

Will it leave a sour taste in the mouth of those that were told in no uncertain terms 'No Placing' - for sure.

Will it be hard to trust the current board? Definitely although now their interests are more aligned with shareholders (subscription shares + warrants) I suspect they'll start acting in shareholders' interest.

Well i'm certainly glad it's institutions only, forces PIs to buy on the open market at open and not wait for 1.8p.

Would have preferred warrants a bit higher though (3.5p/4p) or not at all so the sky was the limit following a positive discovery.

'Ps . I’m quite sure it was a few more than 25m shares that hit the market in January'

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Apologies it was 38m shares issued. For context though 220m shares were traded in February alone and we're midway through March now so it's tough to conclude that placing shares hitting the market is the reason for the current share price action.

Rich, for now TGR is only operating in Madagascar and producing mainly large and jumbo flake, these are not typically used in EV batteries and have seen no oversupply. Prices have held up well and in fact appear to be modestly rising (see Flake Graphite +195 and Flake Graphite +895 in the link below

https://www.asianmetal.com/Graphite/

Then there's TGRs yet to be developed Mozambique assets which are weighted towards EV battery suited small flake. Despite what you posted EVs are no longer a niche market, that's factually incorrect. Global sales have risen from just a few hundred thousand in 2013 to 14 million ten years later in 2023. For 2024 it's expected to rise to 17 million meaning more than 1 in 5 new cars sold globally will be electric powered. Therefore they certainly were a niche market in 2013, all the way up to 2017 but growth has been explosive since. Note* 17m will be made up of ~12m battery and ~5m hybrid, each of those battery only require on average ~65kg of graphite... there's also many different electrical applications that use lithium ion batteries in large quantities (think long duration energy storage) that will cause graphite demand to surge.

Whilst demand for small flake graphite has increased dramatically it was also well signposted so production raced ahead too which largely explains the weak pricing of late. It's now that we might see demand start to catch up and even overtake supply, as producers struggle with the currently low prices amidst the energy transition continuing at pace.

And if it doesn't? Well the Mozambique assets bought off Battery Minerals would stay on the back-burner, instead focusing on developing the Madagascan operations further. A modestly sized profitable operation would still bring substantial returns from this lowly market cap of just £6.5m

First the Swedish pension fund announces their divestment plans and in response we start to see a sell off. As the share price falls investors assume that this is the fund selling out, and possibly some of it was, but more likely what actually was happening was those with the heads up on the placing started selling out.

So as the price falls further investors assume the Swedish pension fund is getting closer and closer to closing out when in reality this was just those in the know selling down to placing price (which it hit last week).

So now they need to raise a little extra to actually clear the fund off market.

Are we absolutely certain the Swedes actually sold? Is it possible that the panic over the Swedes selling crashed the share price rather than them actually selling and now this placing will be partly used to just buy them out at 1.8p a share / £1.1m?

'I was under the assumption arb has fallen out of sinc with bitcoin because there are still millions of new shares hitting the market from the last fund raise'

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Well your assumption is very wrong. Argo issued ~ 25m shares over two months ago and Argo averages about 45m shares a week volume.

The difference with gold is that there is no halving, so as gold edges higher profits increase further, with many small caps now generating record profits. With bitcoin miners you have to think in terms of halves so $60k will be equivalent of $30k before, $80k what $40k was.

Now when it comes to actual HODL that's different so any miner holding large amounts of bitcoin will see a big upgrade in their fundamentals but Argo with barely a dozen? No benefit whatsoever.

It's just proof that Argo was massively overvalued. As the likes of Hexam have pointed out from April onwards with the halving Argo will need BTC to be around $100k to be profitable and even so it will be very modestly profitable against an outsized debt to cash position and with fast becoming knackered machines.

So actually what we are seeing is a merging of fair value as BTC rises and Argo sp falls. If it keeps going I might actually be saying for the first time ever that Argo is undervalued! ...Although we're a long way off that still.

A reminder from the most recent going concern:

"(TGR) is engaged in ramping up production so as to reach a level of breakeven monthly production and sale that is estimated to be about 1000 to 1200 tons per month as against current levels of 700-800 tons per month and is engaged in raising funds for meeting its working capital needs as also for further developments."

And then this from the most recent update:

"We have overcome significant operational challenges. We are now working to secure the modest amount of working capital required to ramp-up production with the target of becoming the first profitable junior graphite company outside China."

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A lot can change before expansionary financing is required.

You’re slightly missing the point because we aren’t talking 30000t production just yet.

The vast majority of funding to get to the next level has already been raised. What we need to see now is successful execution of near term strategy, all the things we’ve recently been promised, none of which require significant capital.

So no not much investment will be forthcoming on good terms right now but they’ve already raised 50% of the £2m they claim to need and also are due $2m so go out there and deliver 1500+t in the immediate term, sell it at the market rate, go ahead and show us that you’re listening on the corporate governance front, lay out a clear thought through path to 54000t and investment will return.

The whole logic to investing in relatively high risk miners (vs gold) and in particular the higher end of the risk spectrum (small caps) is to receive outsized gains if it all comes together in your favour. Right now that's exactly what's happening here, operations are improving, the regulatory framework in which Serabi operates is improving and the gold price is highly supportive... and yet those outsized gains are yet to materialise.

Still think we could have a blink and you miss it move soon though.

And this is one of the main reasosn it's good to have directors with such large holdings.

Let's say you get into this position and directors don't hold any shares at all... what do dodgy corrupt management teams do? They raise as much as they can and ensure at least a couple more years of juicy wages for them and their friends.

It's not a long term solution but it's the short-medium term that matters.

Management need to achieve a number of things to win back confidence and trust and none of that requires huge amounts of funding, hence the solutions outlined are enough. If they achieve steady and solid production figures, the governance changes they've promised, consistent and better communication etc then the share price will be multiples of the 5p it's at today and equity will once again be an option in which to grow the business.

There is no point diluting to oblivion here for tiny sums of cash and much larger funding is not an option at such a low market cap.

Institutions held a significant amount of shares in Yourgene before the acquisition so there's every reason to expect interest once (if) the dispute is positively behind us and YG is in far better health than it's ever been as part of this new wider group.