Member Info for iWantThatOne

I agree with the sentiment that, having asked for an Autumn meeting, we need to proactively ask for one. I take the point that different investors are undecided on the course of action and how furious they actually feel, but I think we’d lose credibility as a group by not asking to engage. Regarding the format, we could always put that back to AFC to give them a sense of control?

All four SCDTLs were due to be delivered to Daresbury by 30/9 (per RNS 25/7). The half year report now says one is due to be delivered by mid-October. That’s a delayed component in my book too. I’m not overly concerned though, can’t wait to see it all come together.

I'm not sure AFC will be producing a diesel generator replacement ":prototype" in the traditional sense. These can take so many forms that I'd have thought they'll be looking for an OEM/regional distributor to co-develop the final products. They may demonstrate something very basic, as they did with CH2ARGE, just as a proof of concept before signing up with the Rolecs of the diesel generator world to move this forward.

I’m willing (not happy!) to wait until later in Q4 for the newsflow we all expect, but I’m still somewhat mystified as to why a company with IP that looks so promising is still only worth £21m. Perhaps the fact that the company is still far from secure is preventing closer interest (ie it may be able to be snapped up for a song if they can’t raise capital). Or the financial environment means that a safe haven for investors’ cash is top priority. A strategic investment from a big partner would make me deliriously happy - stronger balance sheet, no need for Thalion, cash for initial product manufacture, etc etc.

Let’s not forget that BGO has flagged the announcement of a BIG partner very soon, with Disney being mentioned in some circles. That could well give a boost to the sp.

But Bumble, AFC were supposedly ready to do the deal a year ago. I don’t remember any caveats about “we just need another 12m testing first, lads”.

Just looked on here for the first time in a few months and nothing’s changed - OS still being hammered! But I do agree with you on one thing OS - the licensing / royalty model is not bringing in enough money on its own. A lot more direct sales needed. We must absolutely defend our IP, btw.

Let’s not forget the company is still open to an acquisition, which would typically come at a 30%+ premium to market value. Though I doubt the Board would accept that level of bid right now!

Billy, hard to say but H2 guidance suggests they'll produce at least another 55k oz or so, with a POG at around $1500 and AISC of (?) $1000 or less. So a margin there of say $27.5m. However, as you say, and aside from other costs to come off, the amortisation/depreciation cost is significant. The full 2018 report & accounts explains that property plant and equipment (PPE) is depreciated over the useful life of the asset on an ounces under production basis. So with a mine life of perhaps just 4-5 years before LOM extension, the $140m of PPE will perhaps be depreciated at $30m-35m p.a. The LOM extension will help here, presumably. Of course these don't affect the cash profits.

I'm getting rather exasperated with the LOM delay and the refusal of the share price to shift. Even just two years added to the current LOM could produce additional revenue of c$390m (130k oz p.a., $1500POG) and cash of $156m (at $900 AISC). Knock off G&A and that's still close to 40 cents (32p) net cash per share just for those two years before tax (very simplistically). When added to the next three years' production, and eliminating all debt and net current liabilities, I reckon over 50p is reasonable. CORA and Dugbe on top. Come on HUM, this is taking too long. The LOM extension is key to getting the share price moving.

Ridiculous drop in share price. Even at 60p EV/EBITDA is about 3.3x. So remains a value play. Does the company think it remains substantially undervalued compared to peers? I suspect so. Wonder if we'll have another tender offer.

Yes thanks Jimmy, good stuff. In other news, the BBC is reporting huge new offshore wind projects “without a subsidy” where the wholesale electricity price is expected to be between £48.95 and £52.36 per MWh, with the cheapest operator at about £40. So that’s what - 6c per kWh?

Another patent fee of £3m in the offing? More excellent news, its almost on a daily basis at the moment! In terms of potential future valuation, GAN used EV/EBITDA in a recent investor presentation. Its current EV is about £66m, so EBITDA of £6.6m would put it on a multiple of 10 (I think they showed 10 and 12 in the prez.?). Personally I doubt that's likely in 2019 even with the rapid growth in PA - EBITDA of £3m in H1 benefited from a £3m patent license fee that may not be repeated in H2. But in 2020 I can easily see EBITDA that justifies a much higher share price. And of course different investors will look for different EV/EBITDA multiples. If multiples tend to be higher with a US listing, that certainly helps.

EUS run rate now $1bn pa, per the video.

EBITDA positive, so that's a milestone! Margin on EUS lower than expected, possibly due to deferral of revenue into next period due to accounting treatment? We need to bottom that out. No further cash needed - tick. Data business growing nicely but slowly. Confirmation that EUS doubling expected to continue. IMO, the expected H2 will result in a half year that is just about break even net income, after ITDA etc., so that'd be another milestone (though the whole year will still be slightly negative). And then next year will be the real catalyst for a major re-rate. So it's virtually all as expected for me, I just want to know more about that EUS margin.

Excellent news indeed. I’d been expecting maybe £8m revenue and £1m EBITDA based on Q1 figures but the actual figures are wonderful - looks like an additional £3m revenue came from licensing the patent. I’m not surprised at the outcome of the strategic review - it’s very difficult to place a value on a business that’s growing so quickly in a rapidly growing market. The US listing should see enhanced multiples compared to the UK, so we’re led to believe. What’s not to like?

My first reaction is that the deliveries mentioned as coming in the next 12m+ are those I was expecting in the next few months - 4 year longevity confirmed for large-scale electrodes and a mass manufacturing capability. I thought this new JDA would be about perhaps 6 year longevity and reduced costs - the next generation. Instead it sounds like completion of “phase 1”. What if we get a large order for EV chargers in the next 3-4m - could it actually be fulfilled?

SavvySwede, as a shareholder in BGO I urge you not to be put off from posting your thoughts here! You clearly have relevant knowledge and I for one welcome contributions from (almost) as many posters as possible. Not obvious de-rampers , of course, but I don’t think you’re one of those.

BB, you seem to be saying that they’ve hit the four year longevity target. They haven’t. This is just an interim milestone. Extrapolations are pointing towards four years by the sound of it but the tests need to keep running.

My reading of it is that the testing continues. “First anniversary”, they say. Not “the end of the trial”. “At this time...”, they state, not “the final results are ...”. The wording is not consistent with unambiguous delivery of four year longevity. So best guess for me is that the tests will continue until de Nora have enough to sign the warranty, at which point the new enhanced electrodes under the new JDA will start their extended trials.