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It's a squeeze. The company does have intrinsic value based on the JV announced with Valkor, but they won't be generating revenue for at least another couple of months while the upgrades on the POSP site are conducted. There's still a question of how and when that will be funded. (We like to think that Valkor will be stumping it up after their they just pooped the bed, but that's not set in stone or even suggested by the company).
Right now, it appears to be a squeeze on the shares that were forward sold, plus the market finally taking notice of the JV announcement and the fact that TOM finally has a path to revenue for the first time in as long as I can recall.
> As the placing was 136% the size of the outstading shares prior to the placing there won't be enough shares in the open market to cover the whole placing if it was forward sold
Total new shares from the placing was 325m
Total volume on Wednesday was just shy of 42m.
When they announced the placing, I was annoyed, but I did the maths for a top up anyway. Had I followed through with that top up a few days ago, I would be in the blue already. That said, I'm close enough to breakeven to smell it.
In half a mind to sell and buy back when it eventually pulls back.
First read of the new RNS:
1) 50% JV and TOM doesn't need to put the money in up front. Win.
2) If Valkor are stumping up on TOMs behalf, that's one heck of a new culpa.
3) This was a mess, but I'm glad it happened now and not later down the line when it could have been worse. Hopefully, all parties will have learned their lesson and will be exercising far more caution in the future
4) How's much did they raise in the last placing? And if they have 360k now, how much have they spent, and on what?
Joe, they're already singing off the same song sheet as you put it.
The prevailing issue that is sustaining the suspension is the placing.
If the information provided to TP's clients is the same as what we were told in the RNS (i.e. that Valkor has the rights to a license), that is a material error. Raising funds on a regulated market with incorrect information, in the best case scenario, negligence.
Coincidentally, there's an "Important message from the financial conduct authority" at the bottom of my screen as I type this.
"Posting inside information that is not public knowledge, or information that is false or misleading, may constitute market abuse. "
This is a mess. I wouldn't bank on a rapid resolution.
> so they cannot grant it to greenfield yet as technically they have a right to it but have not signed the agreement yet.
Not to be a downer first thing on a rainy morning, but I don't share your optimism.
QFI RNS reads to say that Valkor doesn't even have the rights to licenses. Further than that, QFI suggests it's from from a done deal since they seem to be inviting Valkor to the table for additional discussions to get a license.
Extract from QFI
The Company welcomes additional discussions in this regard which, if concluded successfully, could lead to the granting of a conditional licence on commercial terms to Valkor.
However, at this stage, no licences or rights to licences for the use of MSAR® technology have been granted to Valkor for hydrocarbons produced from oil sands in Utah, USA or for any other purpose and Quadrise has not had any direct discussion with TomCo or any of Valkor's partners in Utah to date.
Extract from Tomco
In addition, Valkor has granted to Greenfield a licence to the Quadrise MSAR® technology, for the processing of heavy sweet crude into heavy fuel oil for which it has a right to an exclusive licence, for the use on all future plants that are majority owned and operated by Greenfield in Utah.
Likely related to QFI rns
Quadrise Fuels International plc (AIM: QFI), notes the announcement released by TomCo Energy plc ("TomCo") this morning which included a reference to the purported existence of a right to an exclusive licence for the use of Quadrise's MSAR® technology in Utah, USA.
As previously noted in the Company's half-yearly report, Quadrise has been working with Valkor Technologies LLC ("Valkor") under a memorandum of understanding to investigate the potential deployment of MSAR® technology on sweet heavy and paraffinic oil deposits in Utah, USA.
The Company is pleased to confirm that its evaluations with Valkor in this regard are progressing well and that both parties continue to believe that the use of MSAR® technology can add significant value to the development of sweet heavy oil deposits in Utah. The Company welcomes additional discussions in this regard which, if concluded successfully, could lead to the granting of a conditional licence on commercial terms to Valkor.
However, at this stage, no licences or rights to licences for the use of MSAR® technology have been granted to Valkor for hydrocarbons produced from oil sands in Utah, USA or for any other purpose and Quadrise has not had any direct discussion with TomCo or any of Valkor's partners in Utah to date.
TEMPORARY SUSPENSION OF TRADING ON AIM
TOMCO ENERGY PLC
At the request of the Company trading on AIM for the under-mentioned securities has been temporarily suspended from 17/06/2020 2:50pm, pending an announcement.
The first 4 words are disgusting once you read the rest of the paragraph.
The Company is pleased to announce that it has raised £1,500,000 (gross) pursuant to the Placing, through the issue of 375,000,000 new ordinary shares of no par value in the Company ("Ordinary Shares") ("Placing Shares") at a price of 0.4 pence per Placing Share ("Placing Price") through Turner Pope Investments (TPI) Ltd ("TPI"), the Company's broker. The Placing Shares represent approximately 136% of the Company's current issued share capital.
Pingu, "It has to rocket somewhat."
In a normal world, yes.
But in a normal world, yesterday should have seen us hold well into the .30s. The market as a whole has a liquidity problem.
I like fast profits as much as the next guy, but I'm hoping that the next 6-8 weeks will be a slow but steady rise.
Terrier - "Lots of positives here and a very sweet entry SP. DYOR"
Bobat - "Lots of positives here and a very sweet entry SP. DYOR"
For a moment, I thought terrier had accidentally Google posted.
In other news, both fffishxx123 and positivevibes are now on the filter list.
As for TYM and the placing...
"The placing will be made by the Subscriber by way of prepayment for Company shares to be issued, at the Subscriber's request..."
= TYM will receive the money, and give PMC an IOU note for 600k worth of shares (equity only, there's no loan here).
= No immediate dilution unless PMC choose to take those shares right away. If they do, that's a massive vote of confidence. If they don't, they either expect the price to fall further and think they'll be able to secure a lower entry based on the five day VWAP, or they believe the price will go so high that they will make money even if they exercise their option at .42.
As for the formula..
"The number of shares to be issued as a result of the placing will be determined by dividing the subscription amount (or that part of the subscription amount in relation to which the shares are being issued) by 95% of the prevailing price, the latter being the average of the five daily volume-weighted average prices during a specified period immediately prior to the date of issuance of the shares."
My reading of it, which I'm happy to be corrected on, is as follows.
Subscription amount is 600k.
The price to divide by is 95% of the 5 day VWAP. I can't calculate that right now, but let's say for the sake of example, it's 0.25.
Therefore, the price would be 0.25*95% = 0.2375p
That means PMC would receive 600k worth of shares at 0.2375p each, roughly 252m shares.
For reference, we have 734m shares currently in issue.
On second reading, I'm looking for the exit asap.
Here's why
---
TomCo is pleased to announce that it is has now entered into the Exclusivity Agreement with Valkor, pursuant to which the Company and Valkor have agreed to:
· study the potential to deploy the Oil Sands Technology at a suitable location. The desktop study of the Group's Leases determined that, while oil sands were present at depth, more suitable sites with near surface oil sand were identified in the vicinity of the Leases and these will be the focus of the parties going forward;
· immediately fund a Pre-FEED study, to be undertaken by Valkor and verified by a third party, to demonstrate the economic viability of the Oil Sands Technology, with a gross budget of US$250,000 to be funded equally by the parties;
-----
First point - great, they're ignoring all the leases they currently have and are going to chase new ones. Fine, but how long is that going to take?
Second point which is most worrying - another $125k placing inbound. At what price now... 0.5p? Another 21m shares?