Member Info for iWantThatOne

Very smart, AFC, very smart. Construction companies can now say to their investors that they have a compelling plan to move to net zero, whilst simultaneously not having to write down their existing assets. The move would be incremental so as not to risk the business while they test the fuel cell solution, and it should also bring cost savings. He’s wise like an old owl, that AB. Very pleased today. I wasn’t expecting anything on diesel gensets for a long time.

This must be good news, surely? The London Clinic will have done their due diligence and must be happy with where things are headed. I'm not sure we can read from this RNS anything about the pace of progress.

I don't! You normally get far less from licensing than direct manufacturing. Terms for new orders would be for a significant amount of cash paid in advance, so capital required would be reduced. And there may be other routes for financing other than equity raises.

I couldn't believe what I heard on the Radio 5 live show. Two environmental lobbyists answering questions, to which one of their answers was "No we don't need any new power stations, we've had a consultancy look at this and we'll be fine". (I assume they were thinking wind and solar could provide what's needed - their comment was that there'd be no new coal-fired or nuclear power stations). And when it came to having sufficient charging stations, they waxed lyrical about how it was in everyone's interest to build them (employers, local authorities etc) so don't worry, they'll be available. No mention of the practical issues to resolve like the local power grids. It came across to me as very naive with a lot of wishful thinking.

The question is, how does management realize the most value given where we are? Extend LOM significantly? Work up the revised Dugbe BFS? Sell?? One positive is that with such a short LOM the value increases reasonably each year as the cash is banked (no discount) and the discount rate that applies to future years’ cash flows is unwound. By my calcs that’s worth an additional 5p by the end of 2021, as an example, even if nothing else changes. So value will out, but it would mean hanging in there. That’s why I don’t like this five year rolling LOM - in my view it needs to be seriously extended as fast as possible - another four years+, please.

" with the vast array of enquiries we are now in discussions to advance......"

I get 37p based on a 10% discount rate and trying to allow for cash, net current liabilities and tax, so I guess we can all put together basic spreadsheets! With extended LOM (above 5 years), Dugbe and CORA all on top.

So growth of say 115% indicates revenue of about £23m, and EBITDA margin of 30-35% indicates EBITDA of about £7.5m. That implies EV/EBITDA of comfortably less than 20. I think that’s a terrific result - better than I was expecting, which was EBITDA of maybe £5-6m. Extra sports revenue of £12m in 2020 (which might be a bit high?) should see an extra £7.5m drop to the bottom line, double the EBITDA and halve the EV/EBITDA ratio. Sounds good to me!

If acquiring some or all of CORA were earnings enhancing then it could be a good purchase but it doesn’t provide all the diversification you’d want from a second mine (I think) - same government, laws, climate etc.

MPO818, there has clearly been demand for £1m of shares, twice, but is there demand for, say, £20m? From a strategic partner who won’t immediately sell them for a few quid, as some think the others have? I think not, because for a big investor there is still very little certainty that AFC can make the sales. I’d love to see it though.

So many conspiracy theories about the fund raising, get a grip everyone. IIs don’t spend their time doing mere £1m transactions to make a quick turn. Nor do they advertise who they are. The simplest and most likely explanation is that they’re genuine investors who see potential and have invested a trivial amount (for them). For us, this is excellent news - a growing II share register with another potential source of future funds. The discount is completely normal. All in all this is a vote of confidence in the company. As for a bigger fund raise, AB may want this too but there isn’t quite enough demand - yet.

Useful call and great to see management keeping shareholders updated. 2020 focus is drilling and extending LOM (at least doubling was mentioned; 2021 will be the Feasibility Studies. Multiple permits being drilled, not just Sanankoro though that’s the focus. Capex doesn’t vary much if the plant size is increased (unless jump to CIL if results justify). Too early for funding discussions but capex typically funded 70-75% debt (and at least 50%). All v positive. .

HUM have introduced a rolling drilling strategy to increase LOM but does it say anywhere that it’s 5 years? They could increase it by two years this year, for eg, based on drill results, and then leave further drilling until next year. In any event, DB’s accountable to his shareholders, and holding back on the LOM is not. I don’t care about his empire, I’d like him to justify why he isn’t seeking to increase the LOM much further in order to significantly boost the sp.

Ten-bagging seems extremely fanciful to me, but i've just done the calcs and, at POG $2000, one year of HUM production is worth almost 20p per share after allowing for tax and the Mali Government's share.

MP0, haven’t you got it the wrong way round? No leaks, AFC have simply taken advantage of a temporary strengthening of the SP to raise cash. Same before Xmas. Good to hear today that there’s demand for the 160kW units. At £800k-£1.6m each, just a couple of dozen of these is pretty significant revenue.

Great to see the company hosting a shareholder Q&A on Weds, a great opportunity to clarify a few things. I’ve put in a few q’s on next steps, LOM, size of plant etc. Let’s see.....

The LOM is only three years because they've only done a limited amount of drilling, with plenty more to come. To that extent they are still an "explorer" but the company has regularly talked of getting started quickly to generate cashflow in order to then fund the project along its development path. The LOM will thus increase substantially later. The news put out today seems to support that strategy. Anyway, let's see where they go and good luck to all, whenever they invest.

Hazbeen - those timescales are ridiculously long. Don’t believe them. Of course gold explorers can try to drill the entire prospect and bring that into the BFS or they can take a pragmatic view and get cracking with starter pits. I believe CORA have been thinking along the latter lines.

I've updated my numbers to assume half the $20m capex is raised as debt, rather than all as equity. On that basis I reckon the scenario that's been announced today is worth c10p per share, post-tax. However this increases to 19p and 27p if the 45k ozs pa is extended to a) 6 years and b) 10 years respectively. That doesn't allow for capital raising for further exploration or to keep the lights on, so a little over-stated. But a modest plant with a 6-10 year LOM looks extremely interesting to me. And of course the above only covers a small part of the total expected resource.

Excellent news today. According to my calcs, raising $20m for the plant at 5p would lead to a pre-tax NPV of c8p per share, and c14.5p if they can double the LOM from 3 to 6 years - which will be a cinch. That'd still be just 270k ozs. Will be interesting now to see how the resource develops during the pre-FS and whether they would seek to build a bigger plant. Plenty of upside to come from optimization too.