Member Info for LeValueInvestor

hi everyone. i want to make the point that SAV should be seen as a serious lithium player and investors should forget about Oman and just follow the amazing progress in portugal and keep an eye on PFS progress in Moz for the long term. The reason I make such a blunt point about Oman is that by talking to mining analysts, SAV executives and my own judgement (having been involved with SAV for over 4 years), I can tell you that Oman is not considered relevant anymore, mostly due to the disappointing performance of Government officials. This is not a SAV management black mark but a pure disaster of Government bureaucracy. And let me remind you that this is a small project so if one remains rationale and I believe SAV management is, just focus all your resources (financial and talent) on Portugal. If things progress well in Oman (basically PAM mining licence and good tax/royalty deal), then its a great positive surprise and we get going. And as mentioned by other posters before, it should be very easy to finance such a small capex with local Copper broker/traders and maybe local banks. But for now, please ignore Oman/PAM and focus on Portugal, this is a beast and the scoping study is only a few weeks away. This will be huge and will very quickly bring about an attractive offtake agreement. As per my previous comments, i believe this study could already show an NPV of USD 300mn with IRR around 50% by using conservative Spodumene long term prices of 650 dollars per tonne. (curently being offtaken around 900 dollar/t). And this is for only 15-17mt 1% resource. Their explo target is closer to 25mt by the end of this year. And the deposits have obvious extension potential.This is a big deal. like happened with Altura, as the company keeps drilling to upgrade the resources and fine tune the data for the DFS, they will keep increasing the JORC resource. I wouldnt be surprised if by end 2019, MIna Do Barroso proves to be a 30mt over 1% deposit which will likely take the project npv at DFS stage over USD 500mn. the whole SAV exec team is working full time on this project, they are so excited about it and have serious financial exposure to it (especially DA and Dale).

Thanks Trisse. I have very similar numbers. And I think they are conservative. Spodumene concentrate prices have remained stable around USD 900 for about a year now, despite prediction it would have already fallen by now. Long term price are likely to adjust lower over time unless it gets supported by better-than-expected EV and ESS demand or the Chinese keep on buying regardless of prices in oder to definitely impose their Monopoly on the EV industry, especially in the context of increasing trade tariff tensions with the US. I think your capex is very conservative. An open pit spodumene concentrate mine should cost no more than USD 100mn. Use comparable mine PFS from other projects in Western Australia. So this first phase scoping study is likely to show an NPV of GBP 200mn net to SAV with IRR over 50%. That's only for the jorc of 15-17mt we are about to publish next month. This portugal asset is a few multiples bigger than that. Let's savour the quiet times and use the opportunity to top up in the low 5s before the industry and the wider mkt wake up.

Hi all, apologie sif i missed extensive discussion abotu it previously but can I ask nontheless? Do we know why Dan Betts walked away from the African Gold Group deal? im pretty sure Dan must have had a good reason to cancel the LoI but i did liek the idea of acquiring satellite project on the cheap that could add years to the exisitng plant we have.

hi Dbentley... i believe they have liabilities of EUR 20mn and cash of EUR 2.5mn. so in GBP, thats 17.5mn - 2.2mn + mcap of 25mn = over GBP 40mn of enterprise value. i used the balance sheet as of end june 2017.

thks. so looks like we can trade the shares before June hopefully.

apols dbentley. you are riht. i misread that pragaraph in the annual update, i used 2016 financials. "2017 revenues, EBITDA and NPAT expected to exceed 2016�s full year reported figures of �26.6 million, �4.1 million, and �1.3 million respectively" but the numbers remain unappealing. Enterprise value is still GBP40mn so that 10x EV/Ebitda approx or 20x EV/earnings...

hi all... i have to admit i have sympathy for the criticisms regarding compensation (quite high for such consecutive dilution and no cashflow generation yet...at least DA put in quite a bit of personal cash in the company over time) and the slow timelines in Oman and Moz could have been better outlined even though it is out of SAV control (Oman Govt bureaucracy + Rio Corp bureaucracy). However i feel like all the shiitty news are now out and there is no more wishful thinking left in oman and moz. Can only be positive upside from now on presumably. Portugal is the focus. DA is very clear about it and it looks like this is going very well. We cannot fault DA and team for the timing in Portugal... it has been proper fast track so far. And if the scoping study and jorc come out above 15mt @1% and IRR above 40% before the end of q2, then this will give a massive credibility boost to SAV and management. So have we seen all the disappointment priced in the share now? is low 5s the trough before the big Lithium news??

typo... CPO prices... and by currency, it is really USD/GBP that matters of us..and usd has weakened vs GBP...

this is a very bad Q1. There is no denying that fact. Now, Lincoln needs to come out and explain what is behind this supply crunch and what he means by changes of to seasonality patterns. Q4 was stronger, q1 was weaker than seaso would normally suggest. Does it mean we can expect q2 onwards production to offset q1 and smooth out the year 2018 and hopefully produce more than 2017. Even if we produce same or a bit more than 2017, we are likely to generate less or same revenues as last year due to lower cpi prices and EUR currency vs GBP). That means we can at best hope for same EBITDA or GBP 3.5mn and net income of GBP 1.1mn. even at current price of 8.5p (mcap of GBP 25.5mn, enterprise value of GBP40mn), that gives you a multiple of EV/EBITDA of 11x and P/E of 23x .... thats not cheap....

Hi Iceberg, where do you read that SAV found a new mineralisation which they think is larger than even their current largest Jorc ? is that from this quote? "Grandao Extended is adding to this with a 300m extension to the southwest which suggests that much of the Exploration Target in this area has the potential to be converted to additional Mineral Resource." I see this comment as just meaning that this explo target is indeed gonna be turned into JORC resource to make a total of 17-21mt 1.0-1.2%. Either way, those numbers are amazing enough to make it a very valuable and strategic project.

yes thats worth looking into (ASX listing). however, it is expensive to list there (over 500k) and it takes a lot of admin/legal time to complete. Only a few weeks to go until we get increased JORC and study. So lets see what happens to SAV after those important releases and then weight the pros and cons of a dual ASX listing.

i tend to agree with Trisse on the jorc size for SAV ... same approach as Altura... 15-20mt FS became 35-40mt as they got closer to production... Re European Lithium, this is insane how generously valued this company is...their Scoping study is very unattractive with a lot of shortcuts too (very high Li price scenario, 0%cutoff !!, assuming no EIA required...). this reflects the fact that Aussie investors have had a great time investing in lithium stocks over the past 12-18months so a lot of spare cash looking desperately for the next lithium 5 bagger... If only they could invest in the UK and appreciate how SAV is the most undervalued lithium play out there... Look at Bacanora update today...good luck to them but their Feasibility study does not look attractive either... might be large size but 26% IRR, capex of approx USD 500mn... scary... and their supposedly in-default Asian investor NextView actually showed up with the money for another project in Canada...

Iceberg.. what jorc size do you think will be used in the scoping study?

My guess for the scoping study is that they will use 15-20mt jorc at 1.1% to achieve 50%+ IRR... That's the first phase. Can easily grow it to 30mt and maintain 50% irr shortly after.

World class drill results at Grandao. I think realistically, the scoping study will use a jorc of 15-20mt, as per their estimate. If current drills are better than expected by Dale and David,maybe focus on higher grade rather than size so that the scoping study has insane economics. Further down the line, it looks like the project can easily be 30mt + as per Muldoon suggestion. That's exactly what happened at altura...they did a Feasibility study on roughly 20mt back in 2016 with great IRR (despite lower spodumene prices then) and during the whole development phase, they actually managed to increase the jorc and study to 35mt +...which is why Altura market cap is worth over twice the NPV of their 2016 feasibility study. Similar play here for SAV I think...

Note that over the last few equity raises,no broker were involved or paid. This is very good. Most of the time, it costs 5% fees to pay the brokers and their job is to place as many shares as possible to flippers at heavy discounts so they can keep the game going. Credit to DA for having managed to maintain a good network of LTH who seem to support the company consistently.

Hi all I have a few kod shares...average entry 0.25 area. One concern I have with this company is that the CEO alluded to the fact he wasn't looking to publish Jorc statement which is important for the market to assess such early projects. The offtake signed last year was quite impressive in terms of premium paid for such early drill results. The results are good. Birimian could see synergies in buying kod deposits on the cheap. Do you know how much cash kod has left?

Hi guys... I think it's my first post on DKL. I bought a few over the past few months. Average entry around 10p. My guesstimate is, bar any machine shutdown, dkl should generate about EUR 40mn of revenues this year. That could take us to Europe 7mn EBITDA. Or about gbp 6mn. So at 27mn mcap with no dilution risk, this is pretty cheap. I really liked Lincoln interview a few weeks ago. He seems ambitious and quite shrewd financially. The selling pressure could come from many angles, not necessarily from negative inside info (I hope !). We are days away from tax year end so a lot of private investors will look at crystallising losses to offset other gains. Some long term holders might lose patience, some investors might bleed some cash on FANG stocks and reduce their equity portfolio.. it could be anything. I personally think it is the most attractive it's ever been. dividend yield could get close to 5% annually, the larger Asian plantation guys could make an offer to expand their footprint outside Asia, into Africa and reduce their negative ethical footprint (deforestation etc..), the management team could decide to initiate some buyback if price remains depressed despite good performance...etc etc...

before we await the scoping study in late Q2, lets have a go at estimating the value of Mina de Barroso. I think we are going to have a JORC of approx 15mn tonne at 1% for the scoping study. the best analogue to use for comparative analysis is the Mount Cattlin spodumene project of Galaxy Resources. They have 3 large projects so just looking at Galaxy mkt cap is misleading. Instead, go on their website and you will see a ton of research reports written by various banks and you can see how they value Mount Cattlin alone and how the share price has reflected the NPV of the project well. to summarize, their project is a 16mtonne at 1.1% spodumene project with a 1.6mt annual processing cpacity. I believe this is exactly what DA is planning to do at MdB. using long term spodumene prices of USD 600/tonne (with spikes around 800 at the beginnng), their NPV of the project was about GBP 300-350mn (650mn AUD). And true enough, the mcap of the company at the time was close to that as they started production (Mount catlin was their flagship project with a pipeline of 2 other projects - brine argentina and hardrock canada - still in explo/devlopment). So its fair to expect this portugal project to be worth very similar NPV... �300mn with high IRR. In share price terms, even assuming further dilution (say total shares of 800-900mn (from current 637mn) it is worth around 35p of SAV share price. and that with only 3 deposits (reservtorio, grandao, noa) out of 8 deposits within mina de barroso. and like i said a while back, Mina de barroso is 5km2 out of the 1,000 km2 of exploration leases we acquired in May 2017. some people call that blue sky potential.;-) please go check out galaxy resources website and their research reports. need to focus on their mount cattlin project. all the best. LVI

fyi i posted on hotcopper website in australia on the European Lithium board about SAV. ive looked at EUR inside out and I cannot find anything that justifies being twice SAV mkt cap except the fact that they are listed in Oz and seem to be worked by some pumping pros.