Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Someone asked about date, this is the company timeline (dont know whether the company must update on each dateline, perhaps should have and has not, market hates uncertainty hence fall?):
Expected date for the directions hearing for the High Court to consider the Capital Reduction application
July 2023
Expected date for the hearing by the High Court to confirm the Capital Reduction
Late July / August 2023
Expected date that the Capital Reduction becomes effective
20 August 2023
Tony, years of being in aim co's has mostly shown not to accept face value, especially from insiders .
The delay/halt by the auditors was massive red flag coupled with the wholsale negative update, planning to flatline ops, cutting divis and moving to quarterly and the big facility and looking at new acquistions after saying we had acquired excellent assets which we should explore first imo.
But thank you for not being condscending, you come across a far better poster for it :)
Am waiting for action and lets park it there.
Given 75m cad drawn. Let's see how much additional cash build up has occurred..
I'd say that voting down ability to summarily issue equity is a strong hint, use facilities to grow organcially or show us a stonking deal prior to equity raise and let's see the cash build up too. We are way above $72.
Action speak louder than words. I want to see how much of the advance has been used for general working capital by BOTH UK entity ( which is loss making) and the canadian one (cash generative) and split of the usage for working capital. Then look at cost restructuring/tweeking in both but more in the UK...
Ask management what was the reason for the delat the? Come on Tony.
Correction:
delay then?
Tony:
75m (cad) out of a 100m facility drawn immediately, a very high 75%.
Then RNS of 31/5 states:
"The Company will utilize a portion of proceeds from the initial advance to redeem the outstanding Loan Notes. The balance of the proceeds will be available for general corporate purposes of the Company and of i3 Energy Canada Ltd., including working capital requirements, acceleration of organic growth (from i3's proven portfolio of development drilling locations) and to fund accretive acquisition opportunities".
Clearly there was an immediate need for working capital ( what portion, we dont know as it's smoked with the other good stuff). However, one would not draw down a whopping $75m, until there was a need for the acquistion purpose or organic growth (none of which have been clarified and radio silence atm (something they excel at i.e. keeping pi's in the dark as long as possible) A touch of smoke and mirrors by them imo.
You can accept at face value what they say, but I'm looking for action.
How you know what the current cash position is, I dont know. Unless you are speculating and trying to state it as factual.
Tony: the plan was always to replace the loan notes with a new facility - they have talked about it for several years.
Question: why not do it when the interest rates were rock bottom and not at peak? Is that good maanagement?
I believe their hands were forced to go the loan route due to insufficient cashflow generation to meet obligations. (They practically said so, in talking about balance sheet strengthening)
Auditors have signed off on the basis of the new loan facility to cover the immediate loans. Nothing more nothing less. Funny how the audited statements were signed off very soon after the debt facility lol. Ask management what was the reason for the delat the? Come on Tony.
Pleased to announce the successful settlement of the Company's outstanding £22 million Senior Secured Guaranteed Loan Notes (the "Loan Notes"), due May 31st, 2023, and the establishment of a CAD100 million loan facility.
So much bigger loan and drawn how much Tony?
Also you mean to say a mere £22m could not have been paid off from cashflow? Had to borrow and plug the gap, otherwise no Audit sign off. Quite dire imo.
Tony, see no evil, hear no evil eh?
1. When the oil/gas price started reversing and not reverting back and of course, consider gas would come down due to weather cycles. Also data points in I3E management system should allow you to check more accuratley (which I'm not privy to, maybe you are). How well do you know Graham Heath?
2. Clutching at straws arent you or deliberately ignoring, we needed a loan to plug the balance sheet. "Strengthening" was the word used.
Selective answering of my points not a good point. Note you do that a bit. Glossing over time frames not a good thing. I mean prices did not fall off a cliff overnight did they?
Tony:
I think they told you the time frame - "future".
Answer:
Future can be infinity, hardly a time frame?
Rest not even worth commenting on. Self evident, that they did not react intime. Until the audit showed a hole in the balance sheet..
Tony:
"Otherwise it's almost like an off the cuff statement".
Please read again. I USED ALMOST LIKE, didnt say it was??
Your quote:
after all you have been complaining about lack of growth in production - so should they not be focusing on this ?
Of course I agree. Is it wrong and unfair to think about time frame AND at what commodity price?
Tony:
- I thought you were all for aggressive Capex spend.
Answer:
Not suicidal levels and I'd be monitoring commodity and return on capital and reserves replacement, bearing in mind divis too.
Tony:
Firstly what higher prices are you talking about ?? When they eventually made the Q1 announcement - it was clearly based on lower pricing than forecast.
Answer:
Take them rose tinted glasses off. When they started drilling oil prices were far higher and we were getting a much higher return. At this point reserves should have been building up fast. You'd have internal management data monitoring reserves build up vs divis paid and expenditure. So you'd adjust accordingly to falling prices. You dont need to wait for a prolonged period.
You're glossing over the time frames.
Lets hope the next update is strong given, we're well above $72, any comment on this point?
I3 has prospects in the Clearwater F sand at Walrus and Cadotte however these areas are more exploratory in nature.
We do have plans to drill exploratory tests on these blocks in the future."
Leading on perhaps, they should give time frames. Is it in 2yrs, 5yrs, when? and at what commodity price levels would it be more appropriate. Otherwise it's almost like an off the cuff statement.
We need action, not talk. Many on the BB (including me) gave them plenty of credit when the deals were announced and the sp climbed (along with commodity prices). So only balanced they get some flak too. Lets see some real management when the chips are down. Let's start with a nice update on what we have done over and above the last disastrous update. WTI is well above their magic $72. Clearly even at higher prices retained reserves were not being replaced, thereby confirming less was being made then what we were led to believe.
Agree Panamapete, however emailing them will (hopefully) give them a sense of shareholder sentiment ( if they dont already have an idea that is). Still cant figure out reluctance to update us on drills and why they cannot "cherry pick" from the much vaunted vast acreage ( which btw was alluded that they will do, target the low hanging fruits?)
Email the company. No one on here has a clue.
Https://www.reuters.com/business/energy/oil-prices-set-sixth-weekly-gain-producers-pledge-output-cuts-2023-08-04/
Future looking positive. Need BoD to provide a nice surprise update and build on momentum. Follow the tweet up please. Surely makes sense to boost production.
WCSB, I understand what you're getting act, focusing on inflationery value of $79 back then to now is a bit of a 'red herring'.
In a simplistic example, sometimes value placed on a business using EBITDA x multiple of 2 or 3. Adjusted for specific browning points inherrent to the business model, quality of assets, cost structure and infrastructure etc where you might get a premium. However the over-riding principle is the same. 'Peak to peak' is already factored. Reason I quoted $79 as a guide comparator is if the oil was completely out of quilter and low and the business not viable, you' d get it for peanuts, as I3E did.
WCSB, not necessarily how the market will price a deal. In strict monetary terms due to inflationery rises yes $79 dollar will be $110 due to purchasing power, however a deal will factor in current oil prices and value reserves and the quality of the assets multiply by 'X' as agreed by the parties (to put it simplistically). So it will be a broadly similar factor irrespective of the years. You cannot say due to inflation it will be 'Y'.
Fairplay to you Stas, as oil prices in 2010 were $79 odd and there were also economic woes too. (Only didnt have a pandemic like covid prior to). So a very decent comparator.
August hols, thinner volumes. So sept/oct should be far better months for stocks generally. Hopefully, oil/gas can continue up (more oil up than gas likely). Meantime would be nice to get a production tick up. Let's not make it easier for low ball offers (if there are suitors lurking).
I think so too vernetles.
My preferred option is a bid.
Https://www.energyportal.eu/news/i3-energy-plcs-loni3e-fundamentals-look-pretty-strong-could-the-market-be-wrong-about-the-stock/119645/
Valuation conundrum:
To realise a higher value, would need more capital investment in unlocking existing acreage. In the ground values are far lower in general. Ironically at current prices would make sense to generate more revenues, a decent update would help.
45p in current scenario, maybe far fetched. Stake building at current prices means they may well take 25, closer to 30p will do it.
Let's see if management are bold enough to pump more and make suitors pay top dollar. I see people do have time suddenly.
Excellent, I await your snail pace response. So you do have time to read and reply!
I couldn't careless what inane response you give. Btw took literally 2mins tops for those average post calc. Of course at your pace maybe a lot longer.
Glad you had a laugh. PMSL.