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You might be confusing copper output with Molulu's targeted ore output.
It's about drilling. Unfortunately, last Ann rep shows something like £140k exploration, £497k board wages. July Dec added similar exploration, but needs to be doubled, for phase 1 & 2, but that hasn't been the company's priority. Rewatch the last interview and compare to the RNSed 3% grades 15 months ago. Conclusion: it's all about the drilling
If you rerun the pit optimisation analysis on the open pit part only with the new data in the JORC, the haircut between NPV and current value has got even wider, no wonder buyers/partners are circling. To get a clearer picture, you'd have to be in the data room.
Nice work by the CEO and pathway to i) permitting and production can be set out and/or ii) additional drilling to move to indicated. Those would reduce the haircut and have a rather nice sp impact (all my calcs are for fully diluted). Easy hold at this stage.
You then think, wouldn't it be easier for a buyer to bid for the whole of EST? I'm only half joking, if a bidder called him and gave him an informal bid number, think of the sp level needed to even carry on that conversation
13.74 (50k) has been the ask all morning
MMs shutting up shop for buys, only 1,000 shares at 12.75 ask, but 12.30 bid, they are happy to take 150,000 plus off your hands.
Thanks, yeah I was wondering how you'd focussed it down to those, so a caveat, well hopefully they are on the map!
Thanks for the licence links yesterday, I highlighted them on the Norwegian Petroleum Directorate map and posted to twitter
Then into fantasy forecasting land. If you take a placement at 125p, that's 28m shares, plus 10m os, add 2m management incentive shares (I didnt check the number just PFA) but just to round it neatly up to 40m outstanding. And assuming no warrants etc. in the placing. You have 35m cash, 25m of drilling spend, that could support a 150p sp, but safer to say a 125p to 150p range, then drill success, future plans and other acquisitions, as well as sp based on valuation other than 1:1 cash/spend gives considerable upside potential and not really too much to the downside. Just will take a bit more time (drilling results) than if they'd gone straight for producing assets (higher cost) than exploration (lower costs due to divestment and the incredible tax rebate making it not far off free). Opportunism.
Hi Mozza,
"I'm not saying it works like this, because it doesn't, but pre suspension you were paying £8m for £7m in cash. Post deal then you're paying £35m for £35m raised + £7m in cash pre deal + £52m of debt access."
Perhaps that idea can be pushed a bit further, rather than paying 35m for 40m odd cash and 52m of debt access, it's paying 35m for 35m cash and 25m of drilling 'assets' or spend. Given the 78% rebate, the USD 35m spend, or roughly 25m, gets 20m back (ok slightly less but I'm rounding to keep it simple, but the tax rebate is essentially cash), so it costs 5m gbp net. Now instead of 1:1 placement to company cash ratio, we are looking at 1:1.5, and assuming the drilling returns more than 25m in value (otherwise why bother), HH has arguments to raise the placing price above 100p.
Then as investors, we know at some point in the future the company, once they start producing or on exploration success with a view to converting into production (handy that two year EFF), will no longer be valued at a cash, but some form of more classic o&g multiple based on earnings, future earnings, whatever, that would lift the sp much higher, but not perhaps at this stage, further derisking needed.
If you have a look at the second link that explains the rationale and what type of team is needed, then have a look at the end of March presentation again, it makes understanding some of it easier and fits things into place. You guys are so far ahead of me in terms of understanding the sector, it'll be interesting to see your thoughts
https://www.npd.no/en/facts/production-licences/pre-qualification/required-organisation-in-norway/
https://www.npd.no/en/facts/production-licences/pre-qualification/
New companies undergoing evaluation
The following companies have applied for pre-qualification either as a licensee or as an operator (Op) on the Norwegian shelf:
JAPEX
NCS E&P
RN Nordic Oil (op)
Edge Petroleum
Horisont Energi
Antares Norge
Longboat Energy Norge
M Vest Energy (op)
apologies for the stupid question, what is the amount of debt KIST have taken on to buy Tulip, not sure I've got the figure right from the docs
UAE programme
A partnership with iMass in UAE is helping to leverage the massive public sector interest (SWFs, govt) and support for fintech.
Next steps => Announcement of syme services being sharia compliant, initial programme, potential partnership with UAE entities and a major European bank with a sharia specialisation enabling much wider roll out of UAE hub for syme. Initial programme assumed at EUR 300m - £3 to 4m annual syme profit, volume guidance could be substantially higher once model is validated and proven.
U.S. programme
In development, no indication yet on initial potential volumes, but future steps include announcing partners and potentially developing new areas of activity.
UAE programme
A partnership with iMass in UAE is helping to leverage the massive public sector interest (SWFs, govt) and support for fintech.
Next steps => Announcement of syme services being sharia compliant, initial programme, potential partnership with UAE entities and a major European bank with a sharia specialisation enabling much wider roll out of UAE hub for syme. Initial programme assumed at EUR 300m - £3 to 4m annual syme profit, volume guidance could be substantially higher once model is validated and proven.
U.S. programme
In development, no indication yet on initial potential volumes, but future steps include announcing partners and potentially developing new areas of activity.
Storm Harbour Securities
First securitisation notes are expected to be completed before year end (!) with final terms set to be published as well as the notes placed with an investor. There are also likely to be further securitisation notes issued via this route in the near term. Volume not yet known, assumed as EUR 300m giving an initial £2.7m profit, but volumes could be much higher by Easter 2021.
Captive Bank
Quadrivio’s Industry 4.0 fund will invest and capitalise the captive bank to become the cornerstone investor in syme’s inventory monetisation programmes. Currently awaiting the banking authorisation approval by the central bank and local regulator, recapitalisation of the bank and the first issuance via the bank (Easter 2021?).
The captive bank will increase service fee net margin up from 2 to 3%, increase profit margins up to 50% (assumed profit up from 1% to 1.5%) and facilitate regional programmes (U.S., UK, UAE) => higher volume.
Next steps => Bank licence approval, bank capitalisation, issuance via bank. The captive bank enables a targeted volume of EUR 4bn by end 2021, EUR 8bn by end 2024 (syme business plan, 21 September RNS). Every EUR 1 bn volume gives GBP 13.6m profit, equivalent to 1.25p share price at P/E 30.
New investors in syme
5 investors have taken 12.2% of syme shares, >4bn shares, including buying out Domonic White’s holdings. Next steps => revealing the five investors (credibility/reputation boost for syme, strengthening partnersips), further buying by the investors on the open market (RNS 24/12)
UK Programme
Syme have (an as yet unrevealed) UK capital markets partner, working with syme on a pilot programme for UK client companies: “Heads of Terms (agreed) with a global asset manager for an Inventory funding facility with a potential value up to €500m”
Next steps => Identity of UK partner and global asset manager investor, moving to complete the pilot EUR 500m programme => Adds GBP 6.8m annual profits on completion, guidance on future volumes could increase, adds 0.62p/share value at P/E 30 plus expectation of future volumes could be much more.
Italy programme
Syme have partnerships with two leading Italian financial institutions and a third nearing completion, for a self-funding approach – the banks originate the client companies and act as the funder using syme’s service.
Next steps => formalisation and announcement of the self-funding agreements, first issuance through the model (initial client companies have been onboarding since the Autumn). Volume not yet known, assumed EUR 500m in 2021 would add GBP 4.5m annual profit for syme rising to GBP 6.8m (via captive bank). Future volume guidance could raise this figure substantially. Also, an insurance product in development => increase profit.
UAE programme
tbc...
27 July Trading Update RNS
“Discussions with a large UK financial institution relating to a UK inventory monetisation pilot programme are progressing. Target to start the pilot by the end of 2020.”
Supply@ME is working with a large, UK financial institution to arrange a first UK inventory monetisation pilot (up to 10 UK client companies) by the end of 2020, whereby a positive outcome may lead to a first Self-Funding agreement in the UK. In parallel, the Company is in discussions with several other potential UK commercial partners to commence origination of the first UK client companies.”
10 September RNS: UK Programme
“The funding due diligence provided by a leading UK capital markets organisation has been positively completed. The Company is negotiating a funding term sheet in order to commence delivery of the inventory monetisation service in respect of the first portfolio of UK Client companies.”
21 September bank RNS
- it will deliver additional inventory funding in the UK working together with its UK capital markets partner on the first portfolio of UK Client companies”
28 September RNS
“The first Client companies within the new operating regions of the UK, UAE and US are currently being analysed in partnership with local partners and inventory funders. Specific updates will be provided on each of these operating regions in due course.” (UAE RNS 3 November; U.S. RNS 22 October)
17 November Swiss Presentation
“New UK partners (up to EUR 500m for the first pilot)”
30 November Update RNS
“In relation to the Inventory Monetisation programme for UK companies, SYME has agreed a Heads of Terms with a global asset manager for an Inventory funding facility with a potential value up to €500m. In accordance with confidentiality agreements signed by the Parties, the identities of those involved cannot be announced until additional key milestones have been achieved.”
March, Prospectus
(The prospectus states that syme is working with a "significant banking group" as defined by the ECB and a challenger bank
The ECB list of significant Italian banks: (As of January 2020): Banca Carige, Monte Paschi, Banca Populare, BPM, BPER, Cassa Centrale Baking, Credito Emiliano, Iccrea, Intesa, Mediobanca, UniCredit, Unione di Banche Italiane
27 July, Trading Update
o Self-Funding: potential partnerships are progressing with two leading Italian banking institutions that intend to use the SYME platform to service their existing customers, whilst also providing the inventory funding capital.
4 September, EPIC SIM Alliance
Supply@ME Capital plc, … has signed a formal business alliance with Epic SIM ("Epic") for inventory funding and client company origination.
10 September, Inventory Funding Update
The Company has agreed the key terms of the partnership with 2 local Banks. With one of these, the Parties are studying a more extended relationship. Pursuant to banking regulation, the agreements with SYME will be approved by the relevant internal committees by the end of September.
Furthermore, the Company has been invited to a tender promoted by Finlombarda (the main Lombardy public bank) in relation to fintech services to be provided to local SMEs.
21 September, EUR 8 bn Funding Agreement
The impact of the Agreement on the current business plan of Supply@ME is transformational.
- it will enable improvements to the self-funding agreements being negotiated with two Italian banks, to create more synergies and integrations with SYME's new partner Bank
28 September, Business Update
- as announced on 27 July, the pool of 272 companies originated by one of the two Italian "Self-Funder" institutions that has resulted in the initial selection of 29 corporates upon which due diligence will commence. The thirty Italian Client companies that form the first Inventory Monetisation portfolio will be notified that their target completion date is the end of October.
October, Milan Finanza Week speech
(From the transcript posted by syme to Linked in, in the self-funding part of the talk) To date we have two agreements with banks agreed and under finalising, and a third that we are on the verge of closing, which is very important in Italy.
30 November Update RNS
The Company continues to work with two Italian Financial Institutions on self-funding transactions and anticipates further business synergies between them and the upcoming Captive Bank. More specifically, one of the two Institutions is developing an insurance product which could combine the future role of the Captive Bank and the unique market position of the Inventory Monetisation Platform.
EUR 8bn Funding Agreement with Bank acquisition, 21 September
transformational
adjective, uk, /?trænsf?'me???n?l/
able to produce a big change or improvement in a situation
• Agreement between a leading European Alternative Investment Firm (the "Financial Partner"), 1AF2 and The Avantgarde Group (“co-investors”) to acquire a bank in Europe.
• the Bank will provide up to €8bn of funding over five years
• Next steps:
Awaiting banking authorisation approval by the central bank and local regulator
Name of the Bank and Financial Partner announced
Recapitalisation of the bank by the financial partner upon approval
First issuance via the bank (by Easter 2021?)
Bank’s inventory funding targets: EUR 4 bn, end 2021; EUR 5.5bn end 2022; EUR 7bn, end 2023; EUR 8bn, end 2023, roughly double the previous plan.
• Service fee net margin up from 2 to 3%, increase profit margins up to 50% (assumed profit up from 1% to 1.5%)
• Additional to Storm Harbour
• Enables “UK capital markets partner” and UK client portfolio
• Improves situation with Italian self-funding partners
• Not in the RNS – will enable EU securitisation regulation compliant issuances, I’m assuming this partly drives the
increase in profit margin
27 July Trading Update RNS
“Discussions with a large UK financial institution relating to a UK inventory monetisation pilot programme are progressing. Target to start the pilot by the end of 2020.”
“Roll-out of the service into the UK and other new geographies
Supply@ME is working with a large, UK financial institution to arrange a first UK inventory monetisation pilot (up to 10 UK client companies) by the end of 2020, whereby a positive outcome may lead to a first Self-Funding agreement in the UK. In parallel, the Company is in discussions with several other potential UK commercial partners to commence origination of the first UK client companies.”
10 September RNS: UK Programme
“The funding due diligence provided by a leading UK capital markets organisation has been positively completed. The Company is negotiating a funding term sheet in order to commence delivery of the inventory monetisation service in respect of the first portfolio of UK Client companies.”
21 September bank RNS
“Following this significant upgrade to funding, through its "banking as a service" strategic partner, SYME will be able to accelerate the funding initiatives previously announced as follows:
- the Bank partnership will fast-forward the funding of inventory monetisation for those client companies which do not form part of the initial StormHarbour €300m portfolio
- it will deliver additional inventory funding in the UK working together with its UK capital markets partner on the first portfolio of UK Client companies”
28 September RNS
“The first Client companies within the new operating regions of the UK, UAE and US are currently being analysed in partnership with local partners and inventory funders. Specific updates will be provided on each of these operating regions in due course.”
(UAE RNS 3 November; U.S. RNS 22 October)
17 November Swiss Presentation
“New UK partners (up to EUR 500m for the first pilot)”