Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hon is a client of Cornhill, His share transfers were arranged by them. When the Chinese were lapping up open market back in 2016 Hon clearly saw his escape having bought between 0.5 & 0.8p in the preceeding weeks. I recall a transfer around the 1.3p mark so he made a good profit. The authority to invest in Superdialectrics was sought in the RNS dated 12 September 2017, i.e.the diversification of their investing policy. The funds could've been used from December/Feb placings although this wasn't stated at the time of the raise.
Well I personally reckon Stefan couldn't get a raise away and needed to give potential investors a reason to buy. Remember he bought £100k at c.1p and that didn't come to much. The problem is his salary is probably at/above £300k now and small share purchases are just misleading. The board should've been supporting the share price with open market buys during 2018. it was a very illiquid stock so any buys would've preserved the share value. The company is cash hungry and there is no guidance on what is required until profitability. The market is therefore cautious. Until we have concrete information as to our mid-term financial condition, it's either hefty dilution to follow or bust I'm afraid.
030, My info is directly from Johnny and I have no reason to doubt it. He is not happy with Richard nor the company as both parties have not been responding to his messages. He is owed consultancy fees from a while back, not a huge amount and I doubt it will be his worthwhile to pursue a legal route to secure them. The current Chinese holders were brought in via Richard Carter and a chap called Geoff Morrow. Johnny has said that he does not know the investors personally and that it is absurd to assume such just because he is Chinese. He has not spoken to the company in a long time. They came here with a Granada link. One of the major holders is a Grenadan national too but we haven't heard anything on that front since 2016. The biggest concern here at the moment is the WC deficit and the lack of Chinese support in the past 2 fund raises which have been conducted at big discounts. What's also interesting is that the interims showed a loan on the books, the lender was not disclosed. After having spoken tot he company this was revealed to be the Chinese who are not happy to convert it into stock. The recent raise may have been used to partially pay this back
Johnny doesn't have direct contact with the Chinese. Apparently they came in on account of Granada related projects which I believe haven't turned out quite as expected. Johnny sold his MXO holding and doesn't intend to get involved again, he was initially sold the AJE story but that hasnt played out as promised. Johnny doesn't know why the Chinese have bought so much stock, the last placing added 1bn shares, another one like this and the Chinese will be diluted to smithereens. If they actually cared they would've coughed up the funds to preserve their stakes. I now consider the Chinese money suspect, I would write it off completely. Stefan hasn't been transparent with us regarding historical AJE payables...we've been calculating and expecting net profit. Had we known what the actually debt pile was I know I would've run a mile. The financials are in a mess, outgoings too high, mcap very low, it's no coincidence MXO is being priced to go bust. It should also be noted that they require approx £10m for the next phase of oil development, under current market conditions that is going to come under heavily dilutive terms for exiting holders imo and that's if they can get it at all.
By the way Johnny Hon has no involvement with MXO any longer. I've been in touch with him and he's pretty pi55ed off with the management. Apparently they owe him money for consultancy which hasn't been paid, he is considering legal action.
And very bullish forward guidance to go with it
Very strange action on the RSP. Being quoted 1p+ for £5k so no stock available. The live spread is very large so MMs not exactly encouraging a market here. Yesterday's news is not being priced into the SP so I am a buyer down here.
This is big news, look at the new partner:
"Indra is one of the leading global technology and consulting companies and the technological partner for core business operations of its customers world-wide. It is a world-leader in providing proprietary solutions in specific segments in Transport and Defence markets, and the leading firm in Digital Transformation Consultancy and Information Technologies in Spain and Latin America through its affiliate Minsait. Its business model is based on a comprehensive range of proprietary products, with a high-value focus and with a high innovation component. In the 2017 financial year, Indra achieved revenue of €3.011 billion, with 40,000 employees, a local presence in 46 countries and business operations in over 140 countries."
and that is if he bothers RNSing it at all
I believe it is based on the average vwap for brent in the 5 days preceding the lifting.
Some of the post placing enthusiasm we witnessed on this board seems to have dissipated. It was never going to be a bang on flip. Stefan Olivier really has hammered this one right down. He is going to really struggle getting any future raise away now, placees must be pretty pi55ed off with a share price over 30% below their buy in and that at a whopping discount too! Panoro have announced a lifting this month in their recent Q3 results, just our luck this coincides with a big fall in brent.
More downward pressure, i wonder who is selling. Are placees really that impatient? They buy a stock at all time lows following a huge discount and then bail as soon as shares hit the market, doesn't make sense to me. One would hope nothing more sinister is happening
We have a 1 bn share overhang at 0.1p folks. In my view the majority of the stock will be flippers as it was a typical cornhill raise. Would love to see the hard bounce but struggling to see how any significant move will materialise in the share price in the absence of material company changing news.
Unfortunately the nature of the CLN dictates that any spike will be sold into which is what we are seeing this morning. The lenders will use any liquidity to convert their loan. They have a long way to go with only £20k out of the way to date. The more they convert the more shares come into circulation thereby raising the current market cap. It's a death spiral funding arrangement which has a punitive effect on the share price
Unfortunately we can't get rid of him as the major shareholders don't seem to be that way inclined. If Align wanted to crank up the pressure they would but MX is hardly a big holding for them and to be honest there is very little they can do. Sentiment is in the gutters and that isn't likely to change. MX have invested a stupid amount of money into this project for their measly 165bopd and need to cough up many millions more to increase production. Prospects have changed drastically since the Chinese stopped supporting the company. We have had 2 big discounted placings this year and this one was vile. There is likely a trade for people coming in at these levels but be under no illusion the majority of the placing will be flipped and the overhang will keep us depressed until the next share issue. I am weighing up my options but have a firm view to sell the remainder of my holding over the coming months
also Align research's previous forecasts assumed a £10m raise at 1.25p which has now been downgraded to 0.25p. That is a serious amount of dilution IF they get it away at that price which I highly doubt they will. They went to the city via Cornhill for £1m at a silly discount, no one will cough up £10m at a premium. Stefan is running this company to satisfy his own pocket and that is clear for all and sundry to see. Until he is not pushed out and replaced by a proper oil and gas man there will be no shareholder alignment. They cash drain here is immense and last two financial reports don't lie. So much promise at the turn of the year and now we have this.
I agree the mcap is very low for the company at present but the concerns around cash which Diamond raises are very real. I have tried my best to communicate with the company regarding our creditor balance to the AJE project as it is the massive operational expenditure which keeps hitting the financials each time we get an update. I was under the impression we'd be churning out FCF at current oil price by now but the interims threw out more questions than answers. Whilst this has been going on the company took a c. £1m debt from somewhere, put £200k into an investment leaving us with pennies by the end of Q2. Why are they investing when our current liabilities are going through the roof? Salaries continue to rise despite the cash flow issues and are now at a ridiculous level. The chinese have 'allowed' themselves to be diluted massively, why? What happened to all the premium raises we had for £millions? I am still invested here but currently feel that this is a traders share until project finance is sorted. For us ailing LTHs we need the BoD to deliver and I'm not sure they will before issuing another bout of confetti.
If that were the case I wonder why the Chinese did not take the placing and opted to buy open market instead, doesn't make sense
Worst case scenario for the share price here is if Chinese are cheesed off that they were diluted to oblivion and are starting to offload. The placement was brokered by cornhill and city boys took it. That would be a disaster and the overhang relentless.