Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
https://issuu.com/andersonmurraymedia/docs/rgnv7i1?fr=sMzJmMTg2ODI1Mg
Skip to page 100 for an interesting highlight on arc minerals - the last paragraph concerning the 4 NDA’s with majors is particularly interesting - “watch this space”
What was the verdict of the case?
Who holds wins
Our new motto?
Peggycilla this is a long term game and mr market rarely makes sense. What I can tell you is that the long term share price will be a reflection of the true value of this company and not the short term price. This is an environment with many traders and as such the price will never reflect an accurate level until we see future catalysts e.g proving up the enlarged system, majors involvement and to a lesser extent production from the CSD plant. Don’t allow yourself to be weak of mind in this period - it is testing you and the weak holders will and have been progressively ousted. The traders relish on this weakness and that’s why they do what they do as they are literally powered on this cycle of emotions that retail investors exhibit time and time again.
What we know is Arc have $4m - double that of last years raise to assault the two licenses with a significantly more aggressive drilling campaign. Assuming Baba drilling again agree to a similar/identical drill for equity deal, that $4m considering that the cash expenditure is only 16% will go unimaginably far in proving the license. Investors are not here for modest returns, investors are here waiting patiently to see what arc are actually sitting on here and the price will only reflect that once we know. So there is zero point selling or getting upset when the share price doesn’t go up on results that are not yet sufficient to delineate what arc is truly sitting on. The patient who wait until that point without letting emotions or mr market or traders get the better of them will be rewarded if and when we gather sufficient data to prove the license. This as NvS has stated will take a minimum of 12-18 months so don’t expect the share price to act rationally AT ALL until this period has elapsed. This period offers every investor with the proper emotional resilience required for this kind of share, the realistic knowledge of this industry and the patience the opportunity to buy at a great price for the underlying assets and potential upside. Never forget this is high risk but also never forget that investors are in this for 10, 20 or 30 baggers and certainly not 20-30%.
Arc has 13 target projects, Arc only need one of them to be significant to multi bag. The drillers are taking shares, the drilling is costing arc in an extremely cost efficient way to make cash go farther than any other junior miner can do and arc have a plant with the optionality of production. You can be sure that arc will be negotiating from a position of strength when the majors want in on one of those 13 targets - what other junior minors can negotiate from that position?
Don’t let emotions rule your investment decisions, unless of course you like to help traders make money.
Hi RockTapper
Now that they have supplied drilling locations, what do you think - has this made it any clearer to you and what can you tell us from your analysis?
Again much appreciated, great to have someone clearly very knowledgeable contributing valuably to the BB!
Does anyone recall what the market cap of SOLG was at its early stages of exploration? Roughly around the stage we are now - I’m struggling to find the volume of shares before the dilution when the majors got on board.
Also fulmar thank you for sharing your insights on the AGM, you mentioned that the CASA/STUREK sales where discussed, along with finances. Was there anything interesting you could share on those discussions?
Also thank you RockTapper for such an excellent synopsis.
Cheers!
H
You all probably remember some of the previous high quality analysis from RockTapper - I’m sure all of you greatly appreciated his clearly very knowledgable and resourceful insights.
I’d just like to ask if you are reading this RockTapper, what are your current takings from the recent drilling? What are we looking at here and what (fag packet) estimates can you provide?
Always appreciated and thanks in advance Rock.
H
And my experience on these BB’s tells me your a trader who thinks that your words have influence on the share price and are completely lying about your experience of this company. If you felt that way you wouldn’t be here or spending your time posting so you must have some agenda! Don’t be stupid it might work on aim stocks with a mcap of 1m but splurging rubbish on a BB on a 1.5bn ftse 250 company isn’t going to scratch the sides.
I remember Don Bailey who was brought into arc to oversee the development of the CSD plant once mentioned upgrading the production rate from 10kt per month to 40kt per month can anyone find me the link to this information?
Also would I be right in saying that after the 15t recently produced we still have 9985t of 2% copper in storage ready for production? That’s some serious money just waiting to be realised.
Let me just drop this here for you all to come up with your own conclusions in respect to recent announcements.
https://uk.finance.yahoo.com/news/hsbc-josh-bottomley-ai-banking-unbelievable-opportunities-135642666.html
Imagine if he’s referring to rinocloud.
I also read that on this sum of parts somebody has made all credit to whoever that is
Source: https://drive.google.com/file/d/1DamI63zMhN2hnstK4qSsZ55EOH1Ffhp1/view
That the inherited decommisioning liability from marathon is a total of $873.3m comprised of $622.8m from Marathon Oil UK and $250.5m from marathon oil west of shetland. Is this figure to be added to the £41.1 per share liability from the prior source i posted?
Just need some solid information as the circumstances here are not clear to me.
Found some information:
Source: https://gallery.mailchimp.com/110d0aa5f5d9bf9478796664e/files/fb31b02e-6809-407f-95e1-00f185807fe8/RRE_2_20191029.pdf
"Our risked NAV of £36/sh implies ~100% upside from the current share price.
Using a 10% discount rate, we value 2P reserves ~£44/sh. Other positive
contributors to risked NAV include unrestricted cash of £17/sh, restricted cash
of £5.5/sh, the value of tariff income of £7.5/sh and risked 2C resources of
£3/sh. The negative offsets associated with decommissioning, pensions and
G&A amount to a ~£41/sh drag on our valuation. However, we see downside to
the decommissioning liability by reducing the actual cost, or from a higher
discount rate than the 2% we have used (e.g. lowering decommissioning costs
by 10% and using a 5% discount rate would add >£10/sh to our NAV).
Adjusting for long-term liabilities in our EV calculation, we see RRE trading on
a 2.1x EV/EBITDA multiple in 2020E (pro forma H1’19 EBITDA was
US$116mm). We also estimate FCF of ~US$50mm and an FCF yield of 15% in
2020E."
So we have long term liabilities regarding decommisioning, pensions ect of -£41.1 per share on a 2% discount rate. Multiply that by the total shares and we have a total long term decommisioning liability of 13m x £41.1 = £534.4m. Any confirmation on that?
Im extremely confused why this company is so cheap, can anyone tell me if this is due to the decomissioning liability? What is the current cost of decomissioning (including marathon assets as the interim results omit this)?
Any other developments or fears justifiying this price, or is this just terribly undervalued?
The directors of each individual portfolio company along with the board own significant shares of the company, I wager it would be highly unlikely they would succeed ownership to a hostile takeover bid at any point even at a substantial premium. They know the compounding value of this long term strategic asset and I think the market with time will do too. Put simply the current senior management built each portfolio company and became absorbed by the group on the condition they would hold their directorships and for a slice of the enlarged SWG shares; that puts a thick emotional skin that will likely be very resistive to a takeover.