Our live Investing Matters Podcast Special which took place at the Master Investor Show discussing 'How undervalued is the UK stock market?', has just been released. Listen here.
Key Points from the BRR Video Media Release:
* COVID Products set us up for future
* £3.2 Q2 and around £8 for Q3
* Boots has been Game Changing - Making sure MHC provided them with extra service resulted in signing a contract with AAH Pharmacetucals as well (aka Lloyds)
* Dealing with two of the biggest Pharmaceutical companies
* COVID Uncertainty is not a worry and managing risk and working closely with parties concerned
* Confident there is still a PCR test market as not everyone is after price. Some people prefer to buy a test. Expecting continuuation of revenue. Expecting based on US announcement increase in Business Travel.
* Contiuuing to Develop products and excited. New testing products coming to market early next year.
* Looking around Vitamin Efficiencies, Food Tolerances, Being a Health Weight, Around having a health heart. Provide info to customerts they can really understand.
* Excited and pleased how things are progressing
* What we bring to the market next year will be a foundation to our future business. Will see new talent coming on board to the team next year. A team growing to around 22.
* Aim to get more commercial contracts in the future.
With restrictions removed this is potentially another source of revenue for MHC ... the more people travelling the more requirements for potentially having a test which is a good thing for MHC IMO ...
Less than 6 trading days left now before the interim and Q3 results are out.
MHC Tweet: https://twitter.com/MHCheckedPLC/status/1439873810010984451
''Following the recent Gov announcement on the removal of Day 2 testing, we remain confident that monthly testing volumes will remain a significant contributor to growth throughout the remainder of the financial year. Read our full statement here: https://bit.ly/39lJlB8 ''
#MHC
Interesting wording here ..
This trend has continued into Q3 with monthly testing volumes exceeding those seen in the final two months of H1
Quote 'Month testing volumes exceeding'
So to me that could imply that each MONTH in Q3 MHC EXCEEDED that which was made in 2 months of H1? (H1 made £3.2m)
Agree this was a good announcement ...
The market for PCR test is not gone. There is still the need for testing for both the unvaccinated and others.
From a recent neswpaper article ''More than a quarter of the population – some 28 per cent – is currently estimated to be unvaccinated. In numbers, that’s roughly 18.6 million people.'' and also holiday booking have said to surged by over 200% due to the announcement so there is more people travelling.
Even with less people travelling from May to End June MHC Made £3.27m and in Fridays RNS quote ''This trend has continued into Q3 with monthly testing volumes exceeding those seen in the final two months of H1.'' So we expect (as most anticipate) a Q3 trading update over £3m. Most likely double this as a minimum (IMO).
Then there is an update on the other projects which are due an update in the Investor presentation in a few weeks time.
The main thing for MHC for me is that it has managed to get a large cash injection from these PCR tests which are fully government accredited. Yes revenue is not the same as profit but a purchase order of £1m and revenues to start with of £3.2 up to 31st June is not to be frowned upon.
Also most AIM shares do not get to the point of revenue generation and are just carrot and stick. MHC is generating and has a relationship with one, if not the biggest Health and Beauty stores in the UK, Boots and also has its products being sold on one of the UKs largest Pharmacies, Lloyds Pharmacy. These should provide a platform hopefully for MHCs other projects once they come to the market.
We have to weigh up the current revenue injection and future potential and see if this is worth the £18MCAP it has already or is it worth more? Is MHC a one-trip poney or does it have more in its line to offer to the market? One thing I believe we can rely on is that soon it will be cash rich .. how it uses this cash will be important as to how the company proceeds in the future. Over Sold? Under Sold? The Market will decide.
Good Luck All and Have a Good Week ::)
Sources:
https://www.independent.co.uk/news/uk/home-news/covid-uk-unvaccinated-number-people-b1919742.html
https://www.theguardian.com/world/2021/sep/18/half-term-holiday-bookings-jump-200-per-cent-after-england-travel-rules-change
https://www.lse.co.uk/rns/MHC/statement-re-covid-19-testing-gbivezwm1lmgvtz.html
https://investors.myhealthchecked.com/investors/presentations
We know MHC is already Stage 2 Credited and has applied for Stage 3 (full) Creditation ....
As per the UKAS website: https://www.ukas.com/accreditation/covid-19-testing/
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''Stage Three
Once the UKAS appraisal stage has been completed, applicants will be able to progress to full UKAS accreditation for either ISO 15189 or ISO/IEC 17025 or, for point of care testing, ISO 15189 and ISO 22870.
A positive recommendation for UKAS accreditation must be achieved by June 2021, or four months after providers have completed Stage 2 UKAS appraisal.
Full UKAS accreditation must be achieved by 31st August 2021 or the date six months after the completion of Stage 2.''
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Also as per your shared link: https://www.ukas.com/wp-content/uploads/schedule_uploads/970466/22213-Medical-Single.pdf
********** MHC Was accredited yesterday (24th August) for ISO 15189:2012 ************
So this means MHC is Now Fully Accredited aka 100% UK Government Approved
At-Home Smear testing raised a few eyebrows when mentioned in the telegram chat. See if it can get the go ahead from the government. If so this would be very lucrative both in the UK and worldwide ...
A bit unconventional but ....https://www.boots.com/myhealthchecked-at-home-covid-19-pcr-swab-test-kit-(for-general-use-and-fit-to-fly)-10295700 has been showing 100+ Sold in last 24 hours for the past week ...
Also Holiday season around the corner the need for tests especially for amber countries is going to be needed. There is going to be strong demand for testing kits for the foreseeable future both in the UK and abroad. MHC Has secured boots for 12 months and could land news anytime for any other large contracts ... $1.4mln in produce is not small change. Big things are happening and this is not a one trip pony .. there are other products the company are working on too
https://twitter.com/krazyasif786/status/1387761345907634181
Could be a good few weeks here. I've been reading up on this company it is going places by the looks of things.
Key Points to me are that it is Government backed COVID testing and has a minimum of 12 months contract to supply Boots.
Looking at their website you can buy their testing kit online and they are clearly targeting the needs for a test when going abroad. Will be plenty of demand both in the UK and abroad.
On their website they stateL ''Government approved, family-friendly, 99.9% accurate, Day 2 & Day 8, Fit-to-Fly and Test-to-Release COVID-19 tests from £80.
Results within 24-48 hours of lab receipt.''
Also the RNS dated 6th April states 'The general testing and pre-travel service will be launched online at Boots shortly and will also be available at 507 Boots stores in England, Wales and Scotland from April.''
That would be good exposure for MHC kit. Do we know any details of how many kits or how much revenue is expected?
Key Points
* Baita Plai Profitable within 2 or 3 months of production
* Life of mine 15 to 25 years for Baita Plai
* Anything over $4300 is added value .. at $4300 Copper price the mine was attractive
* Finance will be Term Sheets end of month and Final Approval Dec and Hopefully Drawdown
* Finance is Refinance Package + Expansion for Romania
* DIamonds ongoing and confident will conclude
* Copper is in Demand and just with Baita Plai AP says 4 or 5 times undervalued
* Looking at now attracting IIs
* Rerate is coming soon - trigger could be the refinance package
How is the recent price changes in metals affect Vast?
We are a low cost producer for concentrates. Originally we did a feasibility study and even when copper went down to $4300 a tonne it was still economically viable (to pursue). Anything over $4300 a tonne is upside for us. It has accelerated out programme of wanting to increase volume. That is what the price of metals has done for the company. Now we have a high and EVs (Electric Vehicles) the primary driver for Copper Price and the European Directive to change to Electric Vehicles and we need the infrastructure to be able to power the electric Vehicles so we believe there will be a high demand for Copper moving forwards. So we are accelerating our expansion process in the country for Copper. So it has driven us ahead and because of the additional profits due to the increased prices it will allow us to achieve our goals a hell of a lot faster.
How do you see your operations expanding in Romania?
With Baita we are only mining 1 of 16 Skarns in the license area. I think about 5% of the licensed area is being mined, so there is enormous room for expansion possibility within this high grade copper skarn deposit which also comes with other mineralisations. We have Manaila which we mined for several years and have on care and maintenance temporarily. We have increase the JORC up to 5.6MT at 2.4% Copper Equivalent and a further exploration target of 15MT from historical data. Will look to reopen that in the next couple of years. Problem is the processing plant is 30km from the open pit and so 30% of production costs is transport and so became not cost effective. Will be reviewing this and re-looking at that. We also have another 2 prospecting sites which we are moving into exploration next year as well (Zagra?)
All this will be driven by the profitability of Baita which will allow us to move into these other mines which are potentially T1 assets. A lot on the plate in Romania but the main driver will be Baita.
Whats Happening in Zimbabwe? Does it take a backseat now Baita is open?
Not at all. We divested Gold assets in Zimbabwe last year due to arrangement with partners who were a minority shareholder. We couldn’t see any feasibility on taking dividend even though was a successful min because on the position of the structure that was inherited. Focus is on Diamonds which VAST originally discovered in 2006. Lost the diamond assets but with change within government we re-engaged with the government and local community as its a community driven project. We almost signed this last year but there was changes on the ground and internal community issues which have now been resolved and delays with COVID. We are still very confident and believe in starting that project relatively soon. We are focussed in Zimbabwe and its a separate management team on ground highly experienced in Diamonds sector. We will be pursuing this and strongly believe we will be continuing with that project.
Vast Resources sells first copper 26 November Transcript of IG Interview PART TWO OF TWO:
Link: https://www.youtube.com/watch?v=QGkx6g75_ak&feature=emb_logo
Looking at the share price at 0.17 approx £30m MCAP what do you see priced in at these levels?
Absolutely nothing. Is still believe just on the Baita asset alone we are close to 4 to 5 times undervalued. We have quite a few shares in issue and we have been criticised for that but that is what brought that asset into production. Getting debt is difficult we have had to prove concept which we have now done and is giving us the ability too refinance with a T1 banking institutions. I think this will be the driver the change in finance will help the share price. We have the mine in operation will be near term profitability, probably 2 or 3 months of production and we will be in profits. That is the base case in moving forward and we will have a re-rate. The issue is we have no Institutional investor and most are retail. We are planning at the moment to change our shareholder base and believe that will be the driver to discover the value of the assets.
What does 2021 look like for the CEO of VAST?
The company is the cleanest it has ever been. When we issued the last year results was first time in history no red flags on the accounts. We are reasonably low debt and will be a low cost producer of several commodities which are in high demand. I do believe we are due for a massive rerate shortly and are highly undervalued and are now a copper concentrate producer and hopefully a diamond producer within 2021.
ENDS
#AIM #DYOR
Vast Resources sells first copper 26 November Transcript of IG Interview PART ONE OF TWO:
Link: https://www.youtube.com/watch?v=QGkx6g75_ak&feature=emb_logo
Explain the significance of this milestone?
Only Producer in Romania that is not state owned.
This is the start up phase. Obtain license in 2018 and finance earlier this year. This is commencement of production. Will be growing production end of this years quarter and into first year quarter 1 2021. This will be and ongoing producer of copper concentrate and lead and zin concentrates with Gold and Silver Credits as well as Molybdenum and Tungsten in the future. ,Its a high value mine and will continue growing.
How did you get the mine so cheap?
We bought the mine when it was in bankruptcy and so we acquired it very cheap. Did spend quite a bit of money on care and maintenance. Mine was built and shafts sunk in 1960s and operating until 2014 so there is $60+ million of infrastructure in there… and prob over $100m if you was to replace it today. Realistically under $15m including the recent CAPEX. Brining a Copper mine with a resource of up to 5 million tonnes (of what we know) it is only the top of the iceberg on the exploration. It has 15 year + Life of mine and potentially 25 (years). For $15mln is quite an inexpensive cost. One of the lowest cost producers of Copper Concentrate in the world.
Whats happening with finance?
We started due diligence for refinance and Further funding for the expansion of the mine in March this year. We received first credit committee approval in October and waiting on the final term due which is due end of this month and then final committee approval during the course of December and plan to do the drawdown. That will be a milestone as its a Tier 1 bank and a great name to attach to the company. We are still confident of that proceeding.
Whats it like working in Romania?
My Family origin in Romanian and I was born and raised in Australia. I class myself as a bridge builder between cultures. Romania is an EU country and fifth largest economy in Europe pre WW2. Always been abundant in natural resources going back to Roman times and is a highly educated population. Overlooked for a number of years and not an easy jurisdiction to work in. We are the only private operator in the country other that the government. This is a milestone not only for vast but also for the country to get a foreign plc to invest in the country and get mines into operation. We do believe this is the first of many investments in the country.
PART TWO FOLLOWS
Great informative Interview ... good probing questions fired at AP today with some confident replies
https://www.youtube.com/watch?v=xdRUAuQoKjc&feature=youtu.be
What we do know from the Podcast and Cashflow projections 7th Sept is that FCF in 2021 is set to be around $9m just over ... and then 2022 onwards $14m+ FCF ....
Also no waiting 30 days or invoicing then waiting to be paid .. .Mercuria will pay Vast once the ore is on the vessel within 24 hours. Its a FOB Contract.
We also know the full JORC is not done with VAST. The Extra 600k Tonnes that the recent JORC has found is about 5% Of the total resource. 1 out of 16 Skarn Deposits.
Ore Has gone from 1.8MT To 3.6MT of Copper, Gold, Silver, Zinc and Molybdenum ...
Copper recoveries range between 88.2% – 93.8% into a copper concentrate - That's High Quality
Gold recoveries into the copper concentrate range between 72.7% – 78.2%
Silver recoveries to the copper concentrate range between 69.3% – 83.0%
Zinc recovery of 51.1% into a zinc concentrate with gold and silver credits
Molybedenum recovery of 65.3% into a molybdenum concentrate with gold and silver credits
Gravity recoverable gold potential as visible gold was seen on the shaking tables when attempting the de-leading of copper concentrates
It is stated in the podcast. Mercuria pays once the ore is on the vessel and payment is received to Vast within 24 hours.
Notes from the V OX Market Podcast PART TWO OF TWO
Final Committee Aproval in Dec - Bank waiting on Final reports coming Mid Nov and Term sheets end Nov and Drawdown sometime in Dec once final committe approval done by the bank.
Mark is welcome to come back to VAST once done. He is counterpart to our JV. His presence will speed up process of JV in Diamond space. No conflict of interest, His job is to get the JVs in Diamonds sped up.
Manaila and Carlibaba are the same mine. Manaila open pit is what we mined - put on care and maintenence - historically to put a plant but previous management did not do this ... we went deeper and cost increased. We looked at it and did not want to deplete the ore as there is profit with a new plant. Focus is on BP. Looking at finance equity for Maniala which is when that will re-open. Could potentially be either the current Tier 1 bank or another entity. Once finance is sorted (for plant etc) the mine will reopen. 5 years extended license which can be renewed every 5 years as long as can prove there is a resource there under Romania law. Still on hold no plan to re-open in near term. Probably some time next year or the year after.
Finance is to take out ATlas T1 and further expansion for Baita to accelerate production and increase production and potentially increase the resource (JORC funding). Options to extend the facility to things like Manaila and other projects in Romania. First part though is for Baita and Baita Alone with option to expand and borrow further money.
Currently focus is on Copper as this is highest yield for company. Currently stock piling other metals like zinc and in talks with several offtakers or may put out to tender. Same for Molybdenum.
AP believes with Mark at the reigns of ZCDC Things may now move relatively quickly. Still confident of proceeding with the JV.
Wow last 2 questions ... did you misjudge how much was required for funding? AP says due to covid and other delays was a 2 month delay but he has provided value to the shareholders and in grand scheme of things the asset is worth 10 times as much that has been invested (Around $10m) and the ROI is something to look for and once the market sees the quantom of income coming from the mine and the value of the asset in a whole I think and hope all will be forgiven.
Notes from the V OX Market Podcast PART ONE OF TWO
Mercuria will accept anything 200tonnes or more a month
600k tonnes on new deposit is what the JORC is ... (Plus 1.8MT Historic)
So theoretically gone from 1.8mt to 2.4MT of ore and identified another 1.2m tonnes so now 3.6m tonnes but JORC has strict guidelines and cant really include the 1.8MT but not to say it is not there are Russians also had a sophisticated method of measuring when this was done
BP Cashflow positive after 2nd month of Production
Full Production estimated May 2021 but if we can do it sooner we will. New Machinery to Arrive Early 2021.
7 Square KMs has been Jorced (1 Skarn out of 16 Skarns) Less than 5% of mining area is the area we talk about the 3.6MT of Ore ... the 600,000 of ore is minimal and upside potential is phenomenal.
To do a full jorc would cost millions of $$ - something we will do as we progress and do it (A jorc) 2-3 years at a time. Looking at doing the next 7 to 8 years of mining after the intial 3 to 4 years starting in Jan 2021 as cashflow generation will allow us to do so.
TO Jorc entire area 10s of Millions $$ which is why it was not done.
Done what was required to get into production and know what to mine for the nextg 3 years.
We have not downgraded the ore ... the 600k is additional grade to the 1.8MT.
Look at 7th Sept Cash Flow projection estimated $9m+ FCF in 2021moving to just over $12m for 10 months of 2022. Over say the 12 months about $14.5m (FCF 2022) This is without taking into account any higher grade ore. so at $14 with a PE of 10 for a European Jurisdiction. Shareholders DYOC ... SP angel will do an updated NPV soon.
Vasts NPV on what we have exceeds $100m on PE of 10 based on cashflow of $14m FCF. Shareholders can do their own math.
First sale early November. Analysis done before loading and once on vessel payment is received within 24hours. A matter of availability of vessels. Waiting on Mercuria to provide details of shipping and will be sold.
Interesting to see the website is being updated. ..
* Ramping up mining to target ~38,000-40,000t ore per quarter by the end of 2021
* Production targeted to reach 2,330t concentrate per quarter by the end of 2021 (comprising 1,463t Cu, 593t Zn and 273t Pb)
* Current forecasts suggest Baita Plai will deliver surplus cash (after development costs) of ~US$9,410,000 during 2021
You have to remember Baita Plai is not a small mine ... it is huge ...,
VAST has identified over $100m of ore waiting to be mine and processed for the next 3 to 4 years and on top of that. That is huge in itself.
There are several approaches to mining ... simply just mine and hope for the best. Smash rock .. see what comes out.
The way VAST is going about it is to JORC certain areas of interest ... JORC ... see what the area is built up of based on scientific means then mine the best / most economical areas .... $100m over 3 or 4 years is not to be sniffed at ... and remember VAST is producing and this is from 1 out of 16 identified Skarn deposits ... it is revenue and this is a low cost mine to operate.
With recent sampling data that has been independently verified we know there are areas within the rock formation that may have exponentially higher levels of ore ... some as show using top Nitron equipment show areas of 20%+ Copper ... Also the figures generated are based on $6650 price of Copper and most know that the market feels there is a bull run to come for Copper in the coming months and years with the demand for Electric vehicles on the rise ... Being one of the lowest cost Copper producers is going to be a big advantage.
Next stop is the first batch being sent across to Mercuria ... followed shortly by Binding Term Sheets and Finance ...