Member Info for lootgaloot

Podcast

https://open.spotify.com/episode/3wPlf5aY2Ex8ce1FKGXPdu?si=bZ28z7UGRQid3ru2-fIufQ&context=spotify%3Ashow%3A4bVlWsAy4mNGKsZula4tdA&nd=1&dlsi=438129f6debe479e

Repel-O-Tex Crystal NAT is a Solvay technology based on Guar Gum; so no, nothing to do with ITX.

The current management are quite active...

https://x.com/themarketbullau/status/1848132749493940376?s=46&t=TXMrMLUTA9oL0tbXP0cJuQ

But where is the money coming from to develop these licences? I assume they wouldn't have gone ahead with this deal if they didn't have a source of cash? Perhaps a sale of Zambian assets is due soon?

Anyway, good to see some activity and surface assays look good.

Sunday Roast clearly stated that a fund were selling. Leon didn't confirm or deny. I take that to mean that it is a fund selling but Leon needs to be careful not to upset institutional investors.

From 23p in early September to 17p today. I assume this is related to iodine commodity prices? Does anyone have a link to live Iodine price chart. I can only find historic charts on google images.

A bit worrying if it is HL ad there's another 200m to go.

There's something up with the bid/ask prices here. I've just bought £8000 at 4.5p.

Itaconix are an exhibitor and therefore have a stand in the exhibition hall (Booth: C401) and the opportunity to submit a paper for presentation to delegates. The presentation topic has to be accepted by the organisers to allow you to present. Its not a big deal, usually you should have your paper accepted.

If you want a one-to-one with JS and you happen to be in Berlin at the time, its only Euro 50 entry fee for retirees. Rock up to the Itaconix stand and meet the team then go to the presentation. Really its frowned upon if your not part of the industry but there are no real checks on your online application. Its very easy to attend. Not sure JS would be very happy to entertain investors at the stand while his main purpose is to meet customers/suppliers etc.

It looks like we have a buyer for Cangai...

https://wcsecure.weblink.com.au/pdf/CCZ/02861713.pdf

No cash but 40,000,000 ordinary shares in IMI and 20,000,000 options (exercisable at $0.07).

So, offloaded Broke Hill to RIM and Cangai to IMI, if my maths is correct...

40,000,000 shares in IMI (@1.6p = £640K) and 13,400,000 shares in RIM (@ 2p = £270K). Plus 20,000,000 IMI options.

Still very little in the way of hard cash needed to develop 'Big One' but we still have BHA East and Zambia to offload. Zambia could be worth £3.75 million (if the aborted Hyperion deal from a couple of years ago is a guide).

It's therefore not unreasonable to say Castillo could have £5m in shares to be used a collateral to finance 'Big One'. Hopefully copper can continue on its upward trend (helped by falling interest rates). Things don't look quite so bad but, as yet, the market hasn't responded.

Literally pennies. I've never heard a good explanation for these tiny trades. Doubt it had anything to do with today's annual report as there's nothing new there. More importantly, copper is on a bit of a rally +3.5% today and +13.5% since the beginning of the month.

Some mixed news regarding the company's shares in RIM, released from escrow on 20th so can be cashed in, but then RIM shares suspended because one of the directors accused of raising funds for that company inappropriately. Not sure of the details and the shares seem to be trading again but I believe there is an ongoing case. This may affect the value of Castillo's shares in RIM but dyor.

On launching the new website, JS correctly said that the company cannot rely on the sales team and trade shows alone to grow the business. Unfortunately, he is misguided if he believes a new website is the solution. There really is only one option for a specialty chemical manufacturer to gain market share and that is to establish global partnerships with distributors. ITX have signed a partnership with Brenntag but to my knowledge, nothing seems to have come from this. The question is, why?

ITX now boast average margins of around 35%, that's in line with industry peers; but a lot of their business is via their own sales team i.e. margins are achieved only by selling direct to the customer. For the business to be viable it needs to make these margins selling to distributors who can then make another >20% on top of that selling to their customers. In reality, the cost of the product is too high to accommodate a keen and competitive distribution model. This is a real problem in this industry and was made evident earlier this year when ITX had to jettison half its revenue as it could not sustain business with a 'merchandiser' who was selling on to other customers. This was the red flag that led me to selling up at 175p.

Much as I would like to see the company succeed, there are only two reasons that would tempt me back in. Firstly they need to demonstrate a working relationship with Brenntag or other regional distributors. This is imperative, but I fear unlikely as long as the cost of itaconic acid greatly exceeds fossil alternatives like methacrylic acid.

A second reason for investing is the hope that they can release a blockbuster application. Only superabsorbants fall into this category. Some progress appears to have been made but I'm afraid that I've heard many of these jam tomorrow stories before and it rarely ends well.

I have read other posters say that the company is run like a family business. Actually, I think this is the most likely destiny for this company. In this scenario, the internal sales team would be sufficient to grow the business at a steady pace while the R&D team could plug away on customer specific projects. A 'big idea' project like superabsorbants could then be nurtured away from the impatient demands of shareholders. Ideal for private equity or individual hoping to generate a positive cash flow business.

Two years ago the Zambia licences were being valued at £3.75 million (AUS$6.7 million).

https://www.globalminingreview.com/finance-business/23062022/castillo-copper-grants-option-to-sell-zambia-copper-projects/

As I understand it, Zambia licences are highly prized. The Chinese are investing heavily in road/rail infrastructure and the current government are seen as business friendly.

The problem at the moment is finding someone ready to pay cash for these assets. The Chinese economy is still struggling and copper inventories are still high. Goldman Sachs are not very confident on copper....

https://www.moneyweb.co.za/mineweb/goldman-slashes-copper-forecast-on-softening-chinese-demand/

"Goldman cut its estimate for the metal to $10 100 a ton for next year, and pushed back its previous end-2024 forecast of $12 000 to post-2025."

Who knows, whatever the future for copper, you can be sure these clowns will find a way of messing things up. The current focus on Big One is probably right but there's not much you can do with only 12 months cash for basic running expenses. If the Oz government are serious about the mining industry they should make loans available but I guess they take the view that the copper will still be there in the ground whether its Castillo or someone else who drills, who cares.

I don't think you'll find a watertight definition for a Merchandiser in this industry. My take is that it is what many in the UK industry would call a 'reseller' i.e. there is no formal distribution agreement and certainly no exclusivity to represent Itaconix in the market. It's most likely an informal nod to the company that they are free to buy Itaconix product and sell it on to others if they wish. This can get a little complicated once Itaconix agree a formal distribution contract with a 'proper' distributor. Normally a gentleman's agreement (yes, they do happen in this industry) can be reached whereby the incoming distributor accepts the lay of the land as it exists on the date the agreement is signed.

I'd be very cautious about reading too much into these 'high level' market reports. They are very good in terms of current figures and I can't argue with their predicted future volumes as probably the best guess you're going to get from anyone in the industry. They can on occasion be surprisingly insightful but then they can also come up with real clangers like " the increasing use of unsaturated polyester resins made from bio-based sources"; I guess we all need a good laugh every now and again.

I would keep your analysis 'company specific'; especially as this appears to be your strong point. A few bits of artwork on the wall behind john does not constitute an entry into the paints and coatings market. There are several bio-sustainable alternatives in the leather industry - I'm working on one at the moment which if I say so myself is a superior solution than Itaconix proposal.

That's not to say ITX can't pull something out of the hat. The super absorbents is not only a huge market but it also makes sense from a chemistry/technology perspective. It's not going to happen tomorrow or even in the next few years but it is a horse I'd be prepared to put money on once the froth is blown from the current share price.

The one thing I no longer believe is that this company can grow organically within its existing markets. At least not at a rate that can satisfy investors. On this point I could be wrong, the jury is out but I no longer believe.

The £10m cash raise was a surprisingly large sum at the time. What seemed like a vote of confidence back then may in fact have been an admission of how long it will take this company to achieve positive cashflow.

When you say it's gonna happen now

When exactly do you mean?

See I've already waited too long.

I'm convinced Morrissey was a JLP shareholder.

I agree with smartinvestment, revenue is at the forefront of investors minds at the moment. It is not a big ask for the company to include a single sentence on revenue for the period. The omission unusual, and given recent announcements, some might say suspicious.

The business has fundamentally changed unfortunately. From steady incremental growth backed by a promise of 'big impact' product lines in the future, we are now hawking our wares to individual (application specific) customers. ITX really needs to find a market for its product. I feel superabsorbent is the only viable target, I'm not convinced they have found a strong proposition in other markets (paint, leather, detergent etc.). The problem is, without knowing the details of R&D status of superabsorbant, investors are left to take a lot on faith. In other words, the promise of jam tomorrow.

"ITX didn’t lose the customer, they walked away because the customer thought it could hold a gun to ITX’s head. No company with ambition would countenance that a cheap tactic and this from a long-established customer - shame on them!"...

...I'm not sure whether to laugh or cry. This is so cringe, it's actually difficult to read. Its hard to believe there are people in the world who believe this is how the chemical industry operates.

I think you're right Smartinvestment. In fact, I'm a bit more pessimistic as I don't think ITX currently have a business model that works in the N. American market. Things may be slightly more favourable in Europe, but I'm not entirely convinced of that either.

Detergents are a low margin business, ITX lost their biggest customer because the customer wasn't a manufacturer, they were a reseller/distributor. This suggests there simply isn't sufficient margins to support a distributor led route to market. If true, this is incredibly worrying for anyone who knows anything about the chemicals industry.

ITX admit as much and its clear that they have pivoted towards selling direct to manufacturers i.e. the shoe leather coating seems to be for a specific customer. There's nothing wrong with that but it does mean a long slow slog of identifying potential opportunities and investing heavily in sales and R&D with no guarantee of success. That may work for Unilever, Proctor & Gamble etc. but not here and not on my dime.

The only possibility for success is if ITX hit a big market with a 'game changing' proposition. I believe that a successful development of the super-absorbent could be such a product. However, I've had my fill of jam tomorrow companies and I'd like to see something more concrete than 'we're still working on it'. I originally invested in ITX because they were growing revenue year-on-year. I'm now questioning how much of that growth is truly sustainable.