Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
I've updated the figures here based on today's RNS: https://twitter.com/JimPrice83/status/1008999924632047616
These are my estimated figures based upon the data we have been given. Following today's RNS these can be trebled minimally https://twitter.com/JimPrice83/status/994160665991532545
Major shareholder supporting with hard cash and 27% equity after years of share price decline. Could this be the year in which fortunes for shareholders turn? They will most certainly need to pull something out of the hat to get this SP at many multiples. There is no way they could get any meaningful fund raise away with the capitilsation and liquidity so depressed. The investment here is certainly not without risk but I'm banking on a liquidity event at some point in the next 6 months, the returns could be phenomenal from a �1m cap if we do see one. GLA
I should also add the �1.7m loan provided by Tinajero in November had an option to convert to equity but unlike typical loans of this nature it had no death spiral terms. The conversion price is fixed at 1.12p, a significant premium to the current SP. For him to convert and recoup this loan the SP will need to be much higher which I suspect will be the case later in the year. If I am correct the current liabilities are too high in my estimation to be met via revenues alone so either the repayment terms will need to be extended or the �1.7m will be converted to equity.
If it's any consolation the nominal share value is set at 1p which means there can be no equity raise sub 1p without first securing shareholder approval at an EGM. Tijanero is happily funding the company under non convertible terms so he must be confident that there is material upside from here for him to get his return.
Well hopefully his optimism will be reflected in an improved balanced sheet for starters. We need to see the SAAS revenues having a material impact on our cash flow followed by a reduction of the debt pile. They still need cash for WC which is evident from the RNS in March. Mr Tinajero has been and continues to be very supportive of the company; it would be good to know his end game since he has coughed up �4m+ in the past year coupled with a 27% share holding
I have been in touch with Jose who is very pleased with the progress behind the scenes. The commercial rollout for new customers remains on schedule and he continues to believe that 2018 will be "transformational". He is also confident that further deal news will follow should the negotiations they are currently in bear fruit.
at 3300 bopd with Opex $40, gross profit translates as $2.3m per annum so $3.75m is definitely too high. time to revise!
It is gross profit Phil. These are net proceeds. The agreement between the JV partners entails that Panoro will only repay outstanding cash calls through excess funds post OPEX. Having spoken with the company they are now kicking of free cash which is probably why Stefan is more open to engaging with the investor community now. I expect he will echo this in a podcast in the not so distant future. As for the oil lift it is based on 3300 bopd from Nov 2017 to March 2018. That's roughly 4 months of production (December was a planned shut in). MXO net proceeds are equivalent to c. $1.235 which scales up to $3.75m for the year, not bad at all. Oil price will only get better which means more and more cash, FPSO will flip up quicker and liftings should become more frequent too.
Make that almost $4m gross profit for 2018 and that is if the oil price flat lines here. Imagine a spike to $100?
From Panoro's Q1 report earlier today: "An Aje lifting was completed in early April 2018, which will provide net proceeds to Panoro in excess of USD 3 million; Panoro�s share of these proceeds will reduce Aje related payables (which includes operating costs) in the second quarter 2018." Panoro have a revenue interest of 12.19%. Based on this MXO have just banked a gross profit for c.$1.25m. This means our revenue from the April lift was in excess of $2m. Another two liftings this year at current oil price will have 2018 revenue sitting comfortably around the $6m mark of which almost $3m will be gross profit. The company has committed to no further CAPEX in 2018 so they are most certainly generating free cash now.
I was thinking Align too. They covered Mayan from sub 0.3p and that investment is working out nicely. Align hold MXO stock as they tweet about it occasionally. I hope the research note contains sufficient detail and proper figures with a clear plan laid out for the near term development of AJE. The research note should trigger further PR as alluded by Stefan in his email which in turn will reinvigorate the SP.
I believe flow rates have stabilised around 3300 bopd. There has been lots of speculation that they have risen but I doubt it. Based on panoro and mxo press releases 3300 is the figure to go by until they role out a drilling program to further increase the flows. The positive is that the groundwork to get AJE 6 running has been laid and the CAPEX covered. We need an update regarding this and with POO soaring the JV partners will inevitably be pushing the oil development as top priority.
My info came directly from stefan
There has been a lifting this past month. Neither panoro or MX have mentioned it. The company has confirmed this in comms
186k is his salary as documented in the last set of financials. He's milking it!
I think 2017 figures will be the last big hit on the expenses. September interims should be an attractive read and show that we are profitable.
The admin expenses should be 'light' on the balance sheet. 2016 got hit by AJE CAPEX and I reckon so will 2017 so fully bracing myself for c. �2m in expenses or thereabouts. This year however with crude booming and a lot of the capex for AJE 6 already expended we are in a much better place. �1m expense is a good figure to use phil. The FPSO is hired on a fixed cost basis which means any material increase to the flows will likely drive the OPEX breakeven into the $20s. At that point MXO becomes a cash cow and 1.5p an easy SP target. I believe the company and partners are currently focussing efforts to this end and we should be hearing about a work program in the not too distant future.
Kentan, I can't disagree however the difference this time is we are actually producing cash and with POO rising it looks like revenue and gross profit will continue to rise. Surely, even SO can't mess this up from here.
Results for 2017 will not show profit and this is all priced in imo with SP at all time lows. Once they come to pass the market will start looking forward. The company is profitable now. We have the $40 break even figure with brent touching $79, that equates to $2.3m gross PROFIT for the year. The big expense from the last 18 months will have been the cash injections into AJE 6 plus the costs incurred from the JV dispute in 2017. This is now behind us. 2018 sees the infrastructure for increasing flows already in place, brent flying, JV partners aligned. I can't see the SP staying below a penny or two by year end. All we require is a work program update to increase flows and we should be off.