Member Info for lootgaloot

Nobody outside the company will know much about the status of Itaconate superabsorbants but, for what it’s worth, I’m going to speculate based on my professional experience.

First, when it comes to scientific research, I’ve seen nothing from ChatGPT to suggest it is anything other than a search engine tied to a language processor. When ChatGPT says "itaconate is likely to be less absorbent than acrylate polymers”; I’d take that with a pinch of salt. Only Dr Yvon Durant is qualified to make such a statement. Unless someone has heard otherwise from the company, I’m over 90% sure that ChatGPT is incorrect.

The real issue with itaconic acid is that it doesn’t polymerise as well as fossil based acrylic acid. In other words, Sodium Itaconate has shorter chain lengths than Sodium Acrylate. Chain length isn’t a problem when you are making chelating agents (for dish washer tablets) or pigment dispersants (for paint) but superabsorbant polymer needs to be crosslinked (sidechains that connect the longer polymer chains) and this requires the ability to grow the polymer (propagation) to very long chain lengths.

If John Shaw said they already have a benchtop process, it suggests Dr Durant has solved the ‘science’ but now needs to solve the ‘engineering’ required for scale-up. Unfortunately, this is not a trivial task and could take several years. I wouldn’t be too disheartened by that, scale-up is normally done in collaboration with industry partners and potential customers and that means updates and news which should hopefully reflect in the share price. Remember, if something is difficult to do and takes time, then it is also difficult for a competitor to replicate.

Elsol asked if Sodium Itaconate can be blended with Sodium Acrylate so that a customer can phase in a switch to Sodium Itaconate. The short answer is yes. Just cut open a baby’s nappy and you will find lots of tiny Sodium Acrylate beads. Put a teaspoon full of the beads into a large drinking glass then fill it with water and see what happens. There’s no reason why a blend of Acrylate and Itaconate beads could not be used. However, while technically possible, I doubt this would be implemented for commercial and marketing reasons.

"itaconate is likely to be less absorbent than acrylate polymers"

... and that's why you should never use ChatGPT to do your chemistry assignment kids.

While a relatively small equity percentage, the message the recent dilution sends is crystal clear. Leon will get his empire, bought and paid for by current shareholders, then swoop in with his 1p options. Nice work if you can get it.

I'm surprised the first two holes are still being referred to as 'disappointing'. The company has mentioned several times that these drills were intended to guide future drilling and were not in themselves intended to hit the highest mineralisation. If you believe this was said in hindsight, consider that the directors chose to buy more shares after, and not before, the results were released. That wasn't by chance, the directors knew the announcement date beforehand yet chose to hold back and buy a week later. Of course, none of this guarantees future results will be any better but to say the first two were disappointing is just wrong.

@NorthernShark Would you bet against another mishap within the next 6 weeks? I wouldn't. My money is on IRH deal falling through but I'm sure the Zambian power grid has a few more tricks up its sleeve. I'm also open to something coming completely out of left field. You just don't know what's next. Sumoskier is basing his view on experience. What do you base your view on? Hope?

Interesting to note that exactly one year ago today, the share price was pretty much the same as today (127.5p @ 12th Feb 24). In that respect the share price is anything but volatile. A month later, the share price had doubled (261p @ 13th Mar 24) on the back of a trading update and within a couple of weeks it came crashing down with the now infamous announcement to ditch the low margin business. So yes, a lot of volatility when you follow the share price daily/weekly but maybe not as volatile as has been debated on here.

Yes, its confusing. One thing beyond question is that ITX has delivered year on year sales growth for the best part of a decade. Sure, from a low base, but its not like the market cap is excessively high. Maybe some disappointment that breakeven has been anticipated for several years without materialising but that's not unusual on AIM and I don't think anyone seriously doubts that it will happen, hopefully next year. The company also has the ESG credentials to make it a 'buy and hold' for a fund in this area. I'd like to see more institutional holders but I'd be surprised if many of the current shareholders see this as a trading share. In short, everything about the company shouts out steady growth, a real bottom drawer share to buy and forget about.

And yet the share price seems to yoyo around trading updates. Perhaps the company has oversold some of its project pipeline. I've never been convinced about the paint market and the leather opportunity has a sense that this was a one off with an individual customer and unlikely to be replicated. Superabsorbancy would, for me, be the game changer but anyone who has worked in this industry knows these projects take years. I notice John has toned down the rhetoric a bit over the last few months, that's probably for the best. Let's focus on what the company are doing right, right now; sales growth, Europe, production, financials.

I am just as confused as you and without sounding like a broken record, I keep coming back to the same question. Is this the right company for public stock market ownership? It feels like it should be family run or owned by private equity. Perhaps management buyout or takeover by a larger company is the end game? Unfortunately the longer this up and down share price goes on, there is a risk that ITX is seen as a traders share and that just exaggerates the situation further.

How much damage can Trump do to the US economy over the next 4 years? Its OK to have a target price but its also advisable to ask why is the price so low. Trump doesn't seem to get manufacturing. The Chinese only make a tiny margin on itaconic acid, the real value add comes from the design of the polymer to suit customer's applications. This is where Itaconix make their margin, pay US tax and create US jobs. One hopes the penny will drop with Trump at some stage but he seems to have a real blind spot for anything that isn't real estate or crypto.

@Elsol, thank you very informative. I've not researched this company as closely since I've sold up but I'll look into the Harke Group partnership when I get time. Certainly this is the type of distributor I had in mind (GER/SWISS/AUT). You also raise a good point re SPARX, I think we all need to know a little more about this but on the face of it this is the kind of leftfield thinking that's needed to sell into the 'green' market. I think it demonstrates that the company are indeed thinking about their route to market.

@smartinvestment "I’m encouraged that there are investors like Loot still out there monitoring Itaconix as that must show a willingness to invest again if the tide changes."

This is a high growth company and I don't see a lot wrong with the business other than their route to market. Its certainly worth keeping on my watchlist. I'd be encouraged if I could see more activity from Brenntag. Even linkedin posts by the company barely muster one or two likes from Brenntag employees. I wonder how much sales come from business generated by Brenntag? Ideally I'd like to see ITX ditch Brenntag and partner with local distributors, that would make me rethink my investment. Unfortunately I fear there may not be sufficient margin to accommodate a bit of profit for a distributor.

I also agree that institutional buying means a sale to PE is unlikely in the near future. But like you I have tried to rationalise the roller coater share price and I have come to the same conclusion that it has more to do with the share holding structure than with the underlying business.

@AJP08, not sure what your point is. You have named three customers, please elaborate.

I sold my ITX following the termination of the 'low margin' customer last year. There are several reasons why I believe this is not an investment for me.

ITX sell specialty chemicals; in that line of business you are simply not in the game unless you are selling globally to customers with different languages, cultures, business sectors and technical requirements. In other words, you cannot expect your inhouse sales team to grow the business at the rate expected of a publicly quoted company. This can only be achieved by working with excellent local distributors all over the world.

It seems to me that ITX are content to use Brenntag as their only distributor. This is like expecting Walmart to behave like a local greengrocer. Brenntag are a commodity chemical distributor (regardless of any claims they make about specialty chemicals). ITX need to do the hard yards of building close working relationships with local distributors in many different markets.

When ITX jettisoned the 'low margin' customer they described them as a 'merchandiser' selling product on to a handful of other customers. Far from getting rid of this type of customer, this is exactly the kind of local player with close relationships to end users that you need to be incentivising. This 'merchandiser' could potentially grow their network to sell to more customers but ITX prefer to take the easy option and work with one-size-fits-all Brenntag.

The reason given for no longer working with this merchandiser is even more worrying. The margin was too low. In other words, the cost gap between what ITX can manufacture at and what the end user is prepared to pay is too narrow. ITX need to drive down the cost of manufacture to accommodate a 30% margin for themselves but also al least a 20% margin to motivate an excellent distributor. If they cannot build that 50% margin between cost and retail price then they will remain on the current trajectory, completely reliant on internal sales force to build the business.

Its a shame because this is actually a very well run and soon to be profitable business but AIM and any other publicly quoted market demands something a bit more racy. At the moment ITX share price has all the volatility of a tech stock without the 'rocket to the moon' storyline. I've said for a while now, this would be a great company to be owned by private equity, good year-on-year sales growth at 35% margin is not to be sniffed at. Also a PE owner could show the patience and love this team need while they slowly develop (or not) some of the more ambitious R&D. As long as the company remain publicly quoted, it will be the same massive rise to results day, followed by announcing excellent results, followed by a drop in share price because the market was expecting something sexier.

There are people sitting in prison for tweeting hurty words about the Southport massacre that beg to differ.

Glycine is a bio-derived amino acid so I assume the term bio-leaching is valid.

A human tragedy which also reflects badly on the professionalism of the operation. RIP.

Strap in, we could have lift off next week...

https://wcsecure.weblink.com.au/pdf/NFM/02902399.pdf

Additional rock chip samples returning the highest Niobium, Dysprosium and Terbium results to date have been sampled from the Cusp Prospect.

Elevated Yttrium levels up to 1022ppm Y₂O₃ were recorded at the Big Jay Prospect highlighting potential for Heavy Rare Earth (HRE) mineralisation

New copper discovery at Cusp North, circa 200m from the Cusp Prospect, with initial rock chip sampling returning up to 2.25% Cu.

These assays are exceptional and confirm the previous assay results which seemed almost too good to be true. The copper assays are an unexpected bonus. It looks like the company are wasting no time and the aerial survey is due to begin mid-January i.e. a matter of days.

The pegmatite dykes in the region are described as having "extreme enrichment in Uranium, Niobium and HREEs."

So I particularly like the following...

"There are almost certainly more pegmatites with a similar U-REE signature in the district. They are not always visible in airborne imagery. Several previously unmapped pegmatites were encountered fortuitously along tracks whilst driving around."

"don't you think it strange that 3 Funds are selling one after the other and there has been no TR1 about where the shares have gone"

Yes, I find it very strange and that's why I've sold all of my JLP shares.

"if these shares have been purchased by various veichles that make sure none hold more than 3% nothing needs to be said."

This is incorrect. The scenario you describe is one in which all parties are "acting in concert". The rules are very clear that this must be declared in a TR-1.

"I have seen it happen on a couple of occasions, side deals are done, other areas of making money are given"

Assuming institutions sold to IRH at an average 5p and an eventual takeover price of 15p, for 300 million shares that represents £30 million in lost revenue to the three institutions. It is just not realistic that that sum of money could be clawed back in side business without raising some seriously ethical and/or regulatory concerns.

" how if it is BINDING can he re negotiate unless there are terms in the Contract allowing it."

I'd imagine the deal is binding once IRH have completed due diligence and nothing untoward is discovered. The fact that Leon seems to be queering the pitch and touting renegotiations suggest to me that certain issues have arisen and I really would not like to be a shareholder once these issues come to light.

The difference between me and you is that I believe you are looking at this far too optimistically and you probably believe that I am being to pessimistic. That's fine, we are free to disagree but I do find your proposed scenario a bit "out there".

@edzi I think we should all applaud the generosity of Fidelity, Cannacord and Jupiter to sell their shares to IRH at below 5p and then sit back as IRH offer 16p to all the other shareholders. Truly, these fine ladies and gentlemen of the city have been much maligned and I for one would like to thank them for their unbounded kindness.

Well said KevH, you describe my thoughts perfectly, too many red flags at the moment. I don't buy the line we are being fed about institutional selling. I could agree if it was just one institution, but three? It adds to my nervousness about why IRH feel the need for additional due diligence and the very short tenure of Neal Reynolds as Chief Financial Officer. 35 years of investing has taught me to never dismiss a series of poor RNSs as purely coincidental.

I slowly built a holding at 8p average. Like you, I intended to add to that and never thought I'd see the opportunity to buy at 3.6p. But here we are and rather than adding, I've bit the bullet and glad to have sold out at 4.75p. I cannot see any compelling reason to jump back in at the moment. I don't expect to see any improvement in commodity prices in the near future and all the macro economic data points to a tough 2025 for international trade. I'm therefore content to sit on the side-lines. Let the skeletons fall out of the closets if they exist but there really is no compelling reason to be holding right now.

Reported, and I'd encourage others to report as well.

I have moved on. You seem overly concerned about posters who don't stick to the approved narrative.