Member Info for iWantThatOne

A comforting RNS today, I thought. It was pretty clear early on that the membrane needed a lot more testing / development (AB said so at the Dunsfold EV charger demo) throughout 2020 before it would be truly commercial. It sounds like this is going well, and I particularly like the comment that it looks to be price competitive. I was also taken by the number of references to academia starting to look at it - who are these people? And since the membrane was (quote) "sold" to these parties, does that mean we have our first proper revenue?! So, good progress, just frustrating that we continue to wait for the EV charger contracts.

Good news indeed to get this funding commitment. We can debate the terms ($11m is effectively equity at an average 20% or so discount, which is more than half) but still very encouraging. The requirements of the arrangement (6 year LOM etc) are easily met - Bert has already expressed much confidence on that score. What does this mean for a potential agreement with HUM to process the ore (concentrated or otherwise) - is that gone now?

It seems Seamus Mulligan is a serial pharma entrepreneur from Waterford, Ireland, with a net worth in excess of 400m Euros.

Hi Meldrew, no I only started investing here about two-three years ago. Sounds awful, I can see why confidence was shattered. Looking forward now, things look much more promising but that's a good cautionary tale.

The share price dropped a third with the combination of Covid-19 and the first patient treatment being pushed back to Q1 2020. Agreed the newsflow is pitiful but I wouldn't have thought anything has really changed . The Chinese connection is a red herring, IMO - they are simply a distribution agent for that part of the world. PER were pushing a price target of c225p before all this and is there any reason not to think this is still the case? (the most recent fund-raising may have tweaked things downward a little but then PER hadn't incorporated the new profit-sharing agreements that seem to be the norm now). I'm still heavily invested and have been taking the opportunity to switch my holdings into my ISA in anticipation.

Robin, just reading that news item about the mine. What I like is where it goes onto say "If successful, the long-term target is to convert the entire fleet of haul trucks at the mine to hydrogen, as well as at Anglo American's other mining operations around the world." Angle American is massive, that could prove to be a wonderful partnership there! I looked at McPhy too, I've not paid them much attention before but I now see they're valued at only £125m mcap and that a broker note from May regards them as seriously under-valued compared to peers like NEL and ITM.

JTS, agree with you on the use of HUM’s cash, which is so large it’s quite problematic to distribute to shareholders in the traditional ways. (Regular divi, fine, but that will use very little of the cash pile). In my mind, free cash flow can be used to a) pay an annual divi of (say) 2p at a cost of $10m b) fund the Kouroussa BFS later this year at a cost of (?) $10m and c) part-fund the Kouroussa build to the tune of, say, $20m for each of 2021-22. That’d leave c50-70m of debt for Kouroussa, approx same as Yanfolila. And that’d still leave a significant cash pile to part-fund the Dugbe build IF that’s the chosen way forward. If not, earnings-enhancing investments in other gold producers (a la Cora) would be beneficial. Just playing around with numbers really but there’s plenty of cash to fund activities many years into the future, and a 2p sustainable divi (8% yield at today’s SP) would help boost the price.

The fact that HUM explicitly mentioned the benefit of diversification today (in buying its new project in Guinea) suggests to me that another mine just up the road in Mali is not what they're looking for. They'd get very little spreading of risk, not political /regulatory nor weather-related. They referred to Cora in a recent RNS as an "investment" - hard to read too much into this but perhaps they're just looking for a decent return on some of their excess cash as a minority shareholder. An ore-processing deal would certainly extend their Yanfolila LOM and benefit Cora too so I hope that's the way it goes.

What I’d like to see ASAP is a) the funding strategy for the new mine and b) the strategy for managing the Yanf cash. The sooner the market can have clarity over any likely fund raises the better. At the same time I don’t see why Yanf cash can’t be deployed in paying divis. I don’t mind some cash resources being used to support the new mine but not to the extent that divis are constrained. Actually I’m more concerned what IIs think, but these are my thoughts at the mo.

Excellent news. Diversification, good IRRs, plays to HUM's strengths. No doubt the usual will find something to moan about.

Thanks for your comments on NEL vs. ITM, RobinH. FWIW I feel NEL is better value at the moment even with the big rise in the last week - stronger revenues and more geographically spread, and just feels a bit ahead of ITM. The infrastructure they're building, up to 1GW pa of electrolyzers, shows the scope here. Gross margins on that part of the business (c1/3rd) look decent. Plenty of cash.

In-Long, Thordon, I and I'm sure many others would appreciate it if you found another way to discuss your respective share tips and left this board for TLY discussions. Thanks.

But nobody will buy Dugbe in its current state, Dropinmonkey. It needs an updated DFS at least, either by HUM themselves or via another route such as this one. HUM can sell Dugbe in two years' time, post-DFS and hopefully for a lot more than it can today. That potential reward is worth any reputational risk arising from the process itself.

Very pleased with the news today. We need to bear in mind that the updated DFS will see a vastly increased value for Dugbe - both from additional ounces from the exploration and from refreshed (renewable) power costs that are way lower now than 6 or 7 years ago when the first DFS was done. Whilst HUM may have had the money to do this, it would have taken a year to even get started (we're still net debt at the moment), and there's also a clear inference that the amount of management time required was more than could be handled. So 51% of a substantially increased value is OK for me. And comments about Dan etc having 39% of ARX - yes but as the RNS says, there will be massive dilution over the next few years as ARX raises the funds for the works and indeed when the project comes to fruition. That 39% will end up as diddly squat.

RobinH, how would you compare NEL to ITM?

I find the comment that "commercially, AFC are behind ITM" a really interesting one. At the end of their H1 in Oct 2019 ITM had sales revenue of just £2.6m and a pipeline (of not entirely concluded contracts) of about £40m. I think AFC could make good inroads into that size of pipeline with just a modest number of EV charger contracts this year. Admittedly ITM has a much stronger balance sheet after its large cash-raise, and it has a broader network around the world. So yes the statement is true but things could change very quickly.

I think HUM’s holding in CORA is overplayed, personally. As an investment, even a £100m valuation would only add 3.5p for each HUM share. Clearly, increasing the % at an attractive price would improve this. Better/additional value may well be had by processing the ore for CORA, but I assume this will need an increase to HUMs plant capacity.

Excellent news today. Acciona really are big boys - the 24th largest Spanish company by market cap and a member of the IBEX35 list of largest companies there. As well as the construction side I think their renewable energy business could be exciting for us - they own and operate more than 10,000 MW around the world, using solar, wind, hydro and biomass. I don't see why fuel cells couldn't be added to that mix.

That’d certainly be nice, Haggis, and possibly not beyond the realms of possibility if the membrane proves to be better than the main competitor out there (>$1bn market). Not very likely at this stage though, and if it’s that competitive why not manufacture rather than sell the rights? The margins are said to be impressive.

I think a significant fund raising in conjunction with news (for example, sufficient to manufacture the first x dozen units) would give an extra fillip to the share price. Remember ITM jumped when it raised £40 or £50m and has been on a run ever since. The security of an extra £50m of capital would do wonders, I feel, provided its to support a sizeable contract and visible pipeline.