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I don’t post often but occasionally I feel it’s worthwhile to take a step back and see where we have come from and where we might be going.
I hold approx 1.3 billion prem shares and I have rarely traded in prem opting to generally accumulate over the years. There are many traders and I can see the merits in that but I don’t want to be out when the main event comes. I think we can look at Prem in 3 stages. The 1st stage was when we were wondering if prems Zulu had a meaningful resource and was it viable. 2nd stage was EPO and 3rd stage has been the investment of £12 mil at 0.40 p per share by Suzhou. The fact they are a 50% offtaker at commercial rates! The fact they are connected to one of the biggest lithium hydroxide producers in the world. The fact that they are connected to CATL one of the biggest battery manufacturers in the world and supplying Tesla. The fact they are a multi billion market cap co connected to other giants in the industry gives me comfort. I have no doubt they will support prem into production much sooner than the market expects, they are desperate for the Spodumene that prems Zulu can provide. I even think they will do an interest free finance deal repayable in offtake (Listen to GR interview) this is massive and means no more dilution for prem. Once into production the numbers are mind blowing o with current SC6 prices. I’ll let snowking and co confirm the numbers. Now let’s compare the size of Zulu v others mines and their values or what they sold for starting with Arcadia in Zim sold for $422 mil in Dec 21 negotiated off a much lower SC6 price
Holding firm here with 1.3 billion shares.
Most people like the lithium story and I think for good reason. As per snowkings posts spodumene contract prices are climbing and based on current prices, when Zulu gets into production it can be enormously profitable for prem.
Some negative posters said GR would sell Prem to Dattels for £1, prem was going bust. We won’t get EPO etc etc. We now seem to be in a new phase, we won’t do a JV, where are the drill results, prem won’t get into production etc etc. I ignore all this negativity that is dreamed up by armchair ceos on these bulletin boards. Suzhou are a £6 bil market cap company connected to one of the largest lithium hydroxide producers in the world and connected to CATL one of the biggest battery manufacturers in the world, servicing Tesla! Suzhou premium subscription at 0.4 for £12 mil was a great day for prem. With their expertise and the funds in the bank we can really process Zulu to a producing mine. If you listen to recent stock box interview it seems to me that Suzhou will fund mine build interest free and repayable in offtake. THIS IS MASSIVE NEWS. SP TARGET MANY PENCE PER SHARE and sooner than market expectations. AIMHO
Good news on Circum I think.
The recent move to collate minority interests into one vehicle is a precursor to having a bigger say in any future plans or pushing for a liquidity event.
Stephen Dattels and co will be pushing for a liquidity event and this could mean a dividend of 20-25% to prem based on our current market cap. Surge in Potash prices will certainly help the valuation. Main focus still remains Zulu lithium of course. Let’s not forget Arcadia sold for $422 mil around December. This is a lithium mine in Zim.
This would have been negotiated when Li price was much lower!
Zulu value should be multiples of this in my opinion.
That is where the idea of an sp of several pence per share becomes credible. Suzhou are unlikely to be fool's and throw £12 mil in at 0.4p a share unless they believe that the sp will be much higher and or they will get their offtake. They must believe prem will get into production! They will have done their DD.
I’m holding tight because I’m looking at what i perceive to be a platform for many multiples going forward. Big one for me is a JV , once that is completed on decent terms that we would expect based on similar companies recently ( Arcadia in zim sold for $400 + mil) then I’d expect prem to be worth 1.2 p a share at this point. I’ll be holding, some are out and some are trading. Good luck to all no matter how they want to play it.
I’ll try and get peel hunt data off Bloomberg to see daily volumes since start of the year and I think the last 6 or 7 trading sessions their volumes have gone ballistic and in particular they have been seen as best bid. A big co definitely buying in. Imagine 14 cos look at JV with prem for Zulu lithium. A selection of These cos then have access to everything they require for DD. Then Prems SP and volumes go flying up. I think we are going to receive a bid at some point but potentially JV partner(s) are stake building. A valuation similar to Pilbara Minerals would be 30p a share here in Prem. don’t let these big co’s have your shares on the cheap ! TR1 has to come soon!!! Watch this space
A new chapter beginning here imho.
I have never seen GR so relaxed and we should not forget that he has a huge holding circa 1.7 billion shares.I think a jv will be a direct investment into Zulu lithium and and not Prem and what the JV partner is really after is 100% of the offtake at commercial rates and only the lithium (SC6). I think that prem retain the upside from any non lithium resource within Zulu EPO, perhaps gold is a key consideration here. I fully expect us to get a great jv deal as so many interested parties. The resource is huge and the assays will show us that the grades are good and a RUS will come soon enough. Will it be Ganfeng or another multi billion dollar market cap company? I don’t suppose it really matters but when you consider Pilbara market cap now 10 bil A$ prem should look to emulate them and perhaps Ganfeng is the best option. Prem other assets might well surprise us when prem has funds to develop them but it’s a side show for me ( except the gold potential) I see pence per share on the horizon here and much more over the next 5 years. Yes we really can get into production with a lithium super power by our side. The LSE trolls on here told me that prem was going bust and GR would sell Zulu to his mates for £1. I’m glad I amassed 1.3 billion shares and I’m excited for the future here. The interview yesterday was first class. Some will say I’m mad but I think there is a very real prospect of a bidding war for JV or a takeover approach. If Prospect’s Arcadia lithium mine in Zim was sold for $400 + and those negotiations started last may ( I’m guessing) when lithium price was much lower. Well I’d say Zulu worth double that $800 mil / 20 bil shares. 2.95 p per share. £$@1.355 . But why sell unless we have to because once in production the profit potential is enormous then apply a PE ratio and we could be a Pilbara type market cap. 25-50 p a share 5 years time!
I like your post last night at approx 19:30.
I agree entirely with the content and timelines.
I also wonder if Circum is going to pay us back what it owes, but maybe Q2 better timeframe for that.
The big picture is still Zulu and a JV or buyout.
Based on recent M&A activity we should be looking at a share price of pence per share this year.
Lots of us long term holders have been very patient and I’m certain we will be rewarded handsomely.
I did get some help from friends and their input contributes to the content. I do hold a large number of shares so I am obviously a buyer rather than a seller on Prem. I hope you find it useful. We have a good group of shareholders here in Prem now and I think it’s going to get rather exciting. I can only offer my honest opinion and back that up by having a substantial holding. I’m no expert on mining but I do feel I know quite a lot about prem. Best regards James Goozee
Zulu will have many options going forward. I doubt very much a single mine having the metrics will be the end of it. Nowhere near in fact. I believe we could be looking at a lithium resource that could support the equivalent of six like mines if not more. Witha little vision I can see we may need to use road trains on a dedicated road at some point or even a rail link.
I’m not ruling out a Carbonate production unit either and although I’ve not focussed on it there’s Petalite and other minerals such as Tantalum to consider too.
Perhaps last but not least we would be naive to think that gold mining will not feature at some point. We’re in the Greenstone Belt which is known to have some of the highest near surface grades of Au on earth after all.
All in MHO as always and best wishes for 2022
So typically if we consider the first mine on Zulu having a ROM of say 2mt’s/annun of Spodumene bearing Pegmatite this is what the calculator looks like using an earrings metric method. 1.25% is the grade I’ve used and 85% is the Metallurgical Recovery.
2.0mt's X 1.25% gr X 85%mr = 0.20mts or 200kt's Li2O.
200kt's Li2O ÷ 6% = 333kt's/annum SC6
333kt's SC6 @ $2,500/t = $830m annual revenue and I would suggest $650m net profit after tax and royalties.
If we assume then that Zulu’s p/e ratio is going to be a miserly 8 that would give the mine a Market Cap of $5.2bn which would be $2.6bn net to Prem in a 50/50 jv. Let's not forget Pilbara's p/e ratio is over 40.
$2.6bn at today's exchange rate is £1.9bn or thereabouts and with no more than 25bn shares in issue the math tells us we’re looking at a SP of 7.5p when the mine is operating in an optimised as steady state sometime in 2025.
With fundamentals that strong I think it would be reasonable to anticipate a SP of 1.0 - 1.5p assuming we have a good DFS and with finance to build the mine in place even in a 50/50 jv agreement in Zimbabwe. All on a DCF ( Discounted Cash Flow) basis with a high ROI.
And if all that’s right it and we come full circle it follows that we are on the brink of a step change jv agreement which could easily see the SP run up to 0.50p if not more very quickly on its announcement.
By the time the exploration drilling had finished in 2017, a reasonable estimate of the Pegmatite resource was said to be between 80 million tonnes and 160 million tonnes. So 4x to 8x more than the Scoping Study but incredibly less than 2% of the whole of the new license area awarded! All very encouraging to say the least. .
Zulu is often benchmarked against Pilbara’s lithium mine in Australia given it’s similar grades. Its Pilbara's ore body is said to be one of the largest hard rock lithium deposits in the world. But I think there’s every chance that Zulu could surpass it.
Pilbara’s mine is about three years ahead of Zulu and in production now. It's current resource is 230mt's @ 1.20% Li2O or something like that. Its original mining plan was to produce over 320kt’s of SC6 (Spodumene Concentrate >6%) from a Run Of Mine (ROM) of 2mt's/annum of Spodumene bearing Pegmatite giving the mine a Life Of Mine (LOM) of over 20 years. Pilbara's well on with it now I believe.
All very interesting. As is the fact that Zulu’s Lithium is higher quality than Pilbara. Zulu’s has a very low iron content which sets it above Pilbara's and indeed most of its piers.
Pilbara’s mine is massive and highly profitable producing SC6 in those quantities at today's prices by any measure. It and other similar lithium mines are generating ROI’s (Return On Investments) never thought possible.
Pilbara's Market Cap is now a staggering A$9bn or $6bn generated from its production of 320kt’s/ annum of SC6 and its potential the markets are seeing. It’s p/e ratio by the way is over 40!
chess board or a postage stamp on an A4 envelope.
Look back to 2017 and consider the Scoping Study was out on just a small part of the original area back in 2017 and you get some sense of proportions. It was based on a short length of just one of many Pegmatite strikes there.
Nevertheless, the short length of strike was assessed to contain 20.1 million tonnes of Pegmatite containing Li2O at a grade 1.06% under the SAMREC code. Approximately two-thirds of which was Spodumene and one third was Petalite. It was Prems first and still is it’s only bankable position on Zulu albeit updated now.
After the necessary work for the Scoping Study was completed, the drilling campaign continued across the remaining area. But this time to do no more than delineate the extent of the Pegmatite. It was not SAMREC compliant by intention.
It was in this campaign that much higher grades were discovered in the so-called step out zones. Those zones together with farm fields that couldn't be accessed are now being incorporated in the DFS. One core was found to contain a high grade of over 4% Li2O which is truly exceptional if you recall.
All things considered guys I’m in little doubt we’re about to witness a step change in Prems fortune and hopefully its SP shortly.
I believe the step change will come as a result of entering into a jv agreement with a suitable partner on Zulu's lithium. There are a number of unmistakable indicators telling us it’s likely once DD has been completed.
To be clear I believe the agreement will be on just the old license area which is currently the subject of the DFS and not on other areas. Well not yet anyway, I’m sure GR will want to “keep his powder dry” on those pending further exploration and analysis. Viz;-
George Roach Prems CEO is quoted as reporting to the markets on 14th December 2021.
“I have made reference to a number of ongoing negotiations intended to secure funding for the balance of the DFS underway at Zulu, against a small disposal of a direct interest in the project and assurance of mine build and off-take finance. Due diligence is being undertaken by more than one capable potential off-take partner.
As much as Premier is under due diligence, so too are those seeking to conclude an off-take agreement with us. Although progress is good in my CV, there is no certainty of outcome until final agreements are concluded and that is not the case at this time."
Looking at similar agreements recently entered into in the space I'm taking from GR’s statement that we're going to be hearing about a jv not only to finance the rest of the DFS but also to build the follow-on mine all in exchange for a % of it.
I see the finance for the rest of the DFS as slightly irrelevant as it’s likely to be just a cash down payment of the overall deal. I can see an overall jv being done on a 50/50 basis.
Given the small placing and the likelihood that some payments may now be called for on Pro-forma is just one indication that Prem is on the cusp of entering into such an agreement.
If I’m right the agreement will be transformational for Prem. Not just in financial terms but more importantly in terms of leadership, experience and skills.
The market is sure to see there’s a very significant likelihood that a mine will be built and the jv having the skills and the wherewithal to build it! It will also be seen that it puts Prem in a position that it shouldn't need to keep coming to the market to raise cash anywhere near as often as it has if ever at all.
As I say, the DFS currently being carried out is confined to what was the original licensed area before the Exclusive Prospecting Order was granted. That area is 350 hectares.
By granting the EPO earlier this year Prem was awarded a much larger area under a new license. The new area encompasses the original. But it is over 57 times larger. It measures a staggering 20,200 hectares which is over 85 square miles. Or as previously pointed out the equivalent of 20,000 rugby pitches!
To my mind the original area compared to the new one is akin to just one square on a chess boar
Great post M_Night if you don’t mind me saying.
I’m really excited about the potential of one of these huge companies coming in for Prem. A JV and offtake or an outright bid for our Zulu lithium asset. should be very exciting 2022 imho
Merry Christmas and a happy new year to all prem holders. I strongly believe 2022 is going to be amazing for us.
I expect resource upgrades at Zulu lithium
I think prem will eventually prove to have the largest hard rock lithium resource in the world.
Existing Zulu area to top 80 MT imho and this is circa 2% of EPO area.
I expect a jv and offtake agreement on Zulu lithium to propel prem to follow in the footsteps of Pilbara minerals (now 9 bil Aussie dollar market cap)
Pilbara went to 1c and was talk of going bang before jv stepped in.
There are numerous other assets within prems portfolio but the focus must remain lithium and Zulu.
As a very large holder I obviously believe in the potential that prem has and my holding has only grown over time. Good luck to all us genuine holders
BN 12/08 10:29 *JOHNSON TO INTRODUCE NEW RESTRICTIONS TO CURB OMICRON SPREAD:FT
U.K. to Introduce New Restrictions to Curb Omicron Spread: FT
2021-12-08 10:39:49.481 GMT
By Deana Kjuka
(Bloomberg) -- U.K. Prime Minister Boris Johnson is set to
announce new Covid-19 restrictions in England, known as “Plan
B,” to stop the spread of the Omicron variant, the FT reports,
citing three senior Whitehall officials familiar with the
matter.
* Johnson’s Plan B includes vaccine passports for large venues
and an order to work from home
* Move to implement the Plan B much earlier than was expected is
in order to distract from a leaked video of a mock Downing
Street press conference, FT cites one person familiar with the
matter
** NOTE: New Video Embarrasses Boris Johnson on Alleged Illegal
Party
* Work from home order could come into practice as soon as
tonight, FT reports
* New restrictions could be announced at a press conference as
early as Nov. 8, FT says