Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hi M
You’re absolutely right - there IS a possibility that the whole thing goes south. That’s why the SP is still around 0.3, and although it MIGHT break out at any time, I’m not expecting a major re-rate until Atomic is signed, sealed and delivered.
We are in a strong position though. I think it’s more likely than not that the deal will go through.
Hey Charlie.
I’m inclined to trust your figures.
And, (as I might have said once or twice already) I’m kinda hoping the news doesn’t drop this week so that I can top up on 21st when my Christmas overtime pay heck comes through....LOL.
Good luck all, and, as always, DO YOUR OWN RESEARCH!!!!
Ok I get that.
But whether there is more dilution or not (and we KNOW that there’s going to be AT LEAST a 15% dilution on completion (4 mil USD to the current owner of atomic divided by 21 mil sterling MCAP) does it matter?
I’m not too bothered to get a smaller % slice of the pie if the pie is 10x bigger....
Ok, bear with me, cawcaw. Apologies if I’m being dim.
Is your point that the guy that we are buying from wants the SP as low as possible, for as long as possible so that he gets as MANY shares as possible for his 4 million USD... which will then explode in value when the deal is completed?
And in the interests of getting the deal done, Art is playing along for all he’s worth (in terms of timing the release of information)?
Hi Wookie.
Your first impressions are probably correct.
This is a loss-making penny stock that has been funding its running costs for a lot of years by either borrowing money or issuing more shares at a discount to the current market rate.
Until last summer It had a single prospect - a joint venture with Essar through its subsidiary shorecan, with a license to drill offshore in Nigeria where there is probably a lot of oil. They resolved a squabble with the JV partner in august (by handing over a decent chunk of the profits) and were awaiting news that the Nigerian government was going to confirm extension of the license no later than Sep 30. This was supposed to be a formality, but confirmation still hasn’t come. SP was about 0.3 at that point.
No news for 3 months, then before Xmas out of the blue the CEO announced that he was in talks to acquire a majority stake in Atomic, a Midwestern oiler currently producing around 3000 barrels of oil per day.
He raised about $8 million in new share issues to his mates, with the remainder ($40 mil plus) to be raised by a credit facility (debt). An RNS last week announced that all the conditions required by the lender had been met. A previous RNS identified this week as the expected time that the credit facility would be inked in, clearing the way for the acquisition to be completed. Atomic had been pretty much killed off by last years fall in oil prices then COVID, but is otherwise a very good company, we are told.
If the acquisition goes through, then COPL will be worth a lot more than it is now. If it doesn’t, things will not look good for long term holders.
Hawkes has been around here long enuff to know that, mate.
My take on it is: MUCH higher than it is now.
Shaa, cawcaw and Palmer have posted some really well-estimated calculations of what the assets are worth once completed.
What nobody can estimate is investor sentiment. Especially with so many PIs betting a couple of grand on a quick buck.
Honestly, it could be a 100 bagger.
More likely 5-10
I don’t think it will. I’d love to be proved wrong, but we are expecting news that the finance is available (some time) this week. That would be encouraging news, but I’m not expecting a major re-rate until the purchase is completed. And not just because im hoping to top up on payday end of next week... LOL.
Good luck all
That’s really helpful.
guess the main differences then (at least as regards COPL) are that liquidity is a lot lower (so you need a BIG movement in investor sentiment to shift the price), and that the whole process is a lot more transparent - there’s no MMs buying and selling with an eye to what might by going to happen next week.. or the week after..?
I don’t see any reason why the completion of credit agreement would be announced at same time as completion of purchase.
Art is obliged to announce completion of credit agreement as soon as it is inked in. At that point, completion of purchase is an odds-on favourite, but a delay of a few weeks before legal transfer of assets would not be surprising. Remember the reference in the RNS to auditing atomic’s accounts? I’m sure the BOD has already seen (in detail) atomic’s financial statements, but ironing out the legalese could easily take a couple of weeks.
I’m confident that a big re-rate is coming; but I don’t expect it this month. And I don’t see institutional investors pouring in until the ink is dry. They don’t need to - it doesn’t matter to them if they get in at 0.3p, 0.6 or 0.9 if the SP ends up at 10p in 6 months.
Am I making sense here? Please jump in if you know more than I do.