Firering Strategic Minerals: From explorer to producer. Watch the video here.
Daz, you’re getting desperate now. More Power Towers are in production for interested clients and will serve a different purpose from the fuel cell power generator going forward. In my view AFC has navigated well the journey from the basic idea of diesel genset replacement to first prototype then second and third (etc) ongoing tweaks/developments to reach the “sweet spot” that meets Acciona’s needs at least. None of this was going to happen overnight. It feels like a tipping point has now been reached and more and more clients will quickly adopt the enhanced products. As for those saying AlkaMem and Vard etc are gone, say what? AlkaMem has just been deprioritised given more immediate opportunities, which is perfectly sensible. And maritime is clearly stated to be one of the industries next in line.
Did I miss an open invitation to that Zoom meeting, Basil, was it open to anyone? Can it be accessed now? Sept. for first patient treatment would be terrific - three months earlier than I expected. And surely that milestone would unlock funding from various new sources if the company can just get there. Just five months at say £2m = £10m required (ignoring loan refinancing).
What are peoples’ expectations for Q1? Q4 last year was exceptional from a revenue POV (c$250m) - I’m not sure how seasonal the business is - presumably more purchases at Xmas so less ad revenue in Q1 than other quarters? So one quarter of the analysts’ annual revenue expectations (c$190-220m) would be a very good result?
The problem is, Sagi is now perilously close to the 70% he apparently needs for the offer to become unconditional.
Kenj, yes I know all that, I think we’re violently agreeing. The point about reducing the nominal price is that it would allow equity to be raised at below the current 25p nominal. We’re clear on that.
My point is that the company wants to minimise any dilution to existing shareholders, whether institutional or retail. Reducing the nominal below 25p and issuing equity at say 15p would cause more dilution than necessary, in my opinion. The Board refuses to do that. Quite right in my opinion. I don’t want to be diluted more than absolutely necessary. Odey etc. will say the same. If the company can get debt financing then it may not need to issue equity at sub-25p. If it can form a JV with a NASDAQ-listed entity then the JV may be able to raise capital at a sensible price. Let’s hope.
Kenj, I completely agree with you that a placing at a low price would be advantageous if it keeps the company afloat. My take is that the company has refused to do so to date simply because existing shareholders would be diluted to hell. This may be the price to pay as a last resort but the Board clearly believe they’re not yet at that point.
I don’t agree the Board has “put up the for sale sign”. On re-reading the RNS many times yesterday I’ve convinced myself that it relates to one strand of the strategic review only, that related to the best way of obtaining a NASDAQ listing. The Takeover Panel has deemed that to require treating discussions as being under a formal sale process, facilitating confidentiality. And yes, the full sale of the company might be one outcome, but the Board is explicit that they’re looking for partners, not buyers.
Excellent news. Well done HUM. Each quarter this year has its own challenges and that’s a great start to the year.
The continuing earnings in Q2 will offset the extra $15m they plan to drawdown from Coris so I expect net debt will remain c$105m during this quarter. I imagine H2 will look less good in terms of financials, given Kor guidance is still 80-90k ozs even after an expected 50-55k ozs H1. Similarly, AISCs in H2 must increase substantially if the FY expectation is closer to $1500 - due to KE coming to an end and KEUG not yet on line? Or perhaps revised guidance will be more bullish? Anyway, that’s for the future.
I imagine H2 will be
I agree, Curious. The wording of the RNS is hardly doom laden. I find it hard to believe that the Board is only now starting a strategic review if they literally run out of money in six weeks. I think the Board has always had shareholders’ interests at heart - hence the focus on debt, and the refusal so far to reduce the nominal price to allow equity raises at sub-25p. I think they (and the investors in the CLN) are playing things month by month until the right solution emerges. Of course this is not a possibility long or even medium term but I doubt the likes of Seamus Mulligan (£10m loan to the company drawn down and holding >30m shares) will just let the company fold without a fight.
That 100k share transaction at 10:21 was mine - a buy at 2.735p, not a sale as reported. I’m thinking that only one outcome - not a single lender nor quoted NASDAQ company being interested, nor any other investor - leads to a buy at these levels leading to a wipeout. Every other outcome leads to sizeable gains.
I suppose the bottom line is whether there’s anyone out there - anyone! - who’s willing to invest in this amazing technology. If there is - whether a strategic investor or all- out buyer - the current sp remains a steal. Surely there is. And the company has clearly signalled it will move to NASDAQ if required. And I’m still not ruling out a lender coming to the rescue - perhaps their DD is taking a long time.
Not sure how I feel about the RNS today. The potential NASDAQ listing would certainly help raise capital - though it feels rather late in the day to be starting that process. I like the idea that it’s a wide-ranging review, of which a full sale is just one option. A well-resourced strategic partner would be great. The prospect of being funded through to end-May is comforting and gives them another month in which to secure debt funding - though now this option would be set alongside others arising from the review. Hmm.....
Back in the autumn the sp was a steady 13p - the equivalent of say 10p in these post dilution days. That’s when Kor was nine months away and fears that the company may run out of cash began to circulate. Clearly we’re now a little above 10p, but so we should - there are no cash issues (we think); Kor will be commissioned this quarter (we think); and the POG is much stronger. Dugbe is no longer potentially subject to a fire sale. So IMO the current sp is perfectly supportable and mostly reflects de-risking. It had clearly gone too low. On a discounted cash flow basis much higher levels can be supported, even after discounting for the risk that remains.
DB has been clear that Dugbe is too big for HUM alone but could be perfectly ok with a 49% partner. £400m initial capex would be split, and HUM’s share would typically be 2/3rds debt funded. So that’d be just £66m cash from HUM, spread over two years or so. I think that could be covered from cash flow in the next two years, even as the Kor debt is paid down at c$25m pa plus interest. Having said that, it may be more be beneficial to sell and reinvest in a 100% owned third mine elsewhere - another Kor (if one were available).
Right, got you. The CLN will provide funds towards those objectives but will not be sufficient to do so. More funding is needed by the end of this month - maybe several weeks longer if they’ve managed to cut their cost base.
Meldrew, what do you mean by “final validation” - first patient treatment? The recent CLN has only provided funds to the end of April - that is, unless they can get more investors to come on board. The c£5m raised to date provides cash through to the end of this month only. However the terms of the CLN provide for another c£10m to be raised if anyone else wants to invest. We’re eagerly waiting for news on that. I’m guessing an extra £10m would provide cash through to end-August or thereabouts, at £5m per two months. I suspect we’d all prefer a loan to be secured rather than a convertible loan that isn’t sufficient to get us to first patient treatment, but beggars can’t be choosers.
Some bigger buys today totalling about 700k shares, with an almost matching 650k sell right at close. Evidence of DNCA selling out in an orderly fashion or am I reaching.... ?
GRQ - 230MeV target reached, LIGHT system now fully functional though final refinement of patient positioning chair etc ongoing. Much of this year is about working with UHB Trust towards first patient treatment in Q4. Sales pipeline /expressions of interest growing rapidly. No focus yet on manufacturing. Regulatory certification in UK and US ongoing. So all good there.
Biggest issue is funding - £75-85m needed over two years. Company is working on debt solutions but it’s taking time and in the meantime they’re having to entice equity investors with warrants and generous CLNs. Share price drop is mostly due to fear of not getting funding (IMO).
Rev - you can buy AVO in your ISA.
I don’t find it particularly strange that DNCA Finance are selling much, probably all, of their holding. They will have regular reviews of the holdings that form the portfolios they construct for their institutional and retail clients, and it’s quite possible that AVO no longer passes their screening tests. This shareholding would have formed only a small part of their funds so they can afford to let it go now. Other AVO institutional shareholders will have different motivations.
The typical daily volume for trading in AVO is about 1m shares, so it may take the rest of April to clear the overhang - if indeed they are still selling the rest (there were 700k shares sold on Friday that looked like they might form a pattern). This could give a tremendous opportunity for us investors if in the meantime the company comes out with news that they’ve secured a loan....
Kenj, fair enough, we both have our ideas on how this will pan out, we all want the same thing in the end. Let’s see how it goes. Good to see a slight uptick today.
It seems that many investors here are still unhappy at the lack of sales, the level of director remuneration and the cash burn while the S+ Series, ammonia cracker technology, power towers, multi-fuel cells etc are developed. I’m slightly incredulous that they are still thinking in terms of short development cycles that would see fully commercial systems signed off, given regulatory certification and on the market within a short timeframe. Surely it’s obvious to everyone how embryonic the hydrogen fuel cell industry still is, and how it needs long-term partnerships to get off the ground?
Nevertheless, it feels like AFC is getting closer and closer to finalising product solutions developed jointly with industry partners (ABB) or participants (Acciona, Mace etc), and therefore being ready to commercialise in short order. I’m very happy with progress. It’s just a shame that the market doesn’t reward this kind of progress right now; only sales and positive cash flow will drive the share price. But it’ll come soon enough.