The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
The big buyouts and bidding wars with valuations of hundreds of millions and up to billions of pounds; the global acquisition spree for early stage projects that are much further away from production; the billions of dollars of investment we're seeing from China alone; the increased focus on Africa and majors looking to snap up the mines; Tesla/Elon Musk desperate for what we have; securing a partner that is part of Tesla's supply; the record rising prices of lithium & spodumene; the vast amounts of industry analysis that predicts the demand will only increase year on year to 2030 and beyond; the switch to EVs still in its infancy and is now starting to blow up....
All that is occuring whilst PREM is on the eve of finally unlocking Zulu through the DFS, RUS and a large scale plant and alongside that working on the EPO.
PREM won't be valued for under $100mil for much longer this year and should be joining Atlantic Lithium around the $300-400mil region with just a couple of RNS events. Once in production or sold, it most definitely won't be valued under $500mil....
A 54% stake that sold for $300mil in that bidding war.
Very much looking forward to the first buyout offer here soon.
A very attractive prospect with a massive resource, DFS, large pilot plant in production and in a jurisdiction and government in place facilitating and encouraging foreign investment from Chinese companies.
Yes, which is why I expect the first buyout offer to come in Q3 which starts next month. At that point we'll have an upgraded resource with higher confidence and DFS all but satisfied, maybe 100% complete. Prospective buyers will get an early look in these.
A bidding war between a few Chinese majors would be ideal, like this.
One Mine Auction Draws 3,448 Bids Amid Scramble For Lithium
https://www.bloomberg.com/news/articles/2022-05-23/how-hot-is-lithium-now-a-chinese-mine-auction-draws-3-448-bids
The battle for lithium: A Chinese mine just sold for 596 times the opening price
https://supchina.com/2022/05/23/the-battle-for-lithium-a-chinese-mine-just-sold-for-596-times-the-opening-price/
Suzhou will pay handsomely too:
"AVZ is already set to sell a 24% stake in the project to Chinese battery maker SUZHOU CATH Energy Technologies at the end of this month for a $240 million investment. That’s about five times the value per share in the Cominiere-Jin Cheng agreement."
https://www.mining.com/web/chinese-australian-investors-battle-for-largest-lithium-deposit/
Gangfeng too are typically aggressive and many suspected they were one of the 13 parties looking to invest earlier in the year. Expecting $400-500mil first offer, which will be refused no doubt.
Ways a "large scale pilot plant" could be funded.
1. Finance, aka Suzhou or other prospective partner lending the money which will be repaid over time once in production
2. Full funding for the other 50% offtake
3. Minority slice of Zulu, lets say 5-10% depending on how much cash PREM fronts up
Some hints in the stockbox that strongly suggests it will be something akin to number 1. https://youtu.be/0y3nYLMCnWM?t=4358
Fav quote: "advance Zulu to a point where there is production, as quickly as is possible"
A good summary and yes the facts are we're likely very close to satisfying the DFS trill target of 20,000m maybe even this month with the 24 hour operation. George went on the record again in April to say most components of the DFS have already been satisfied and so by the end of Q2, this month in fact we'll be close. Then Q3 is just weeks away from now...
The resource upgrade statement is in the final stages, now 6 months in and I'm sure it'll be a good signal for institutions to invest, buyout offers to come in and further partners for the other 50%. 13-14 companies wanted a slice of PREM in December and more will want a slice with a DFS demonstrating the massive value, higher confidence and bigger resource and with the discoveries in the EPO coming in. They'll now have to pay more than they would have 6 months ago (0.4p and £12mil for just 50% offtake) with all those advancements, that's a given now. With Suzhou's backing now at a premium, we're in a sweetspot to take the SP towards 1p. Should be instant re-rate with just the announcement of funding and fast tracking of a pilot plant. 2-3p once producing through pilot in 2023. Without a pilot, the DFS, RUS and EPO will also get this to 1p and over this year.
Bring on the long anticipated Zulu RNS.
RNS for Zulu will be the next one. Perhaps not today, given markets close until Monday after today. But can envision it landing next week.
Can see great returns coming shortly from current SP and a new year high above 0.5p and somewhere above 0.6p.
Over 500 killed in Mali clashes as military junta loses grip
https://www.reuters.com/world/africa/over-500-killed-mali-clashes-military-junta-loses-grip-2022-05-30/
‘The Killings Didn’t Stop.’ In Mali, a Massacre With a Russian Footprint.
https://www.nytimes.com/2022/05/31/world/africa/mali-massacre-investigation.html
Islamic State group ‘trying to control’ Mali-Niger border with series of attacks
https://www.france24.com/en/africa/20220524-islamic-state-group-trying-to-control-mali-niger-border-with-series-of-attacks
UN report links Mali army to rise in rights abuses
https://www.aljazeera.com/news/2022/5/30/un-report-links-mali-army-to-rise-in-rights-abuses
With inflation spiralling, interest rates rising, the food crisis and war in Europe and now war in Mali, it's good to put your money more stable jurisdictions.
Good take ACKER. This is the game on AIM. It's painful at times, but the rewards are also spectacular.
CEO and Directors know where Suzhou will take this and know this can be sold for something far north of the present value, so they've lined themselves with some shares before Zulu is either fastracked into production next year, or before it's sold. They know what's coming as every week we're seeing the massive valuations being thrown around in this space.
They do deserve some credit for lifting this from 0.05p up to as high as 0.50p, with fairly minimal dilution recently and in that time delivering the EPO, commencing the DFS at Zulu and securing a hefty amount of funds for it whilst retaining 100% with a major backer on board. Now we're seemingly talking about production as early as Q1/Q2 next year which would give us a SP multiples of what it is now.
It doesn't seem like most of these options will be exercised until 2023 and 2024 and by that time I think we'd all say the SP will be well north of 2p.
Time to move on from this, glad it's out the way and time for the board to deliver some news to move the SP well above this range.
Options spread from point of DFS completion til the end 2024, so over 2 yyears, when Zulu will be well advanced and in production. SP in the 3-5p range at that point. So doubt we'll feel it too much given they'll be flipped over a period of years, rather than a traditional dilution that impacts the SP in that instant.
Must have issued this now as he expects the SP north of 0.5p quite soon and it's also good to clear what is typically considered a negative announcement now, before the Zulu Lithium news is dropped.
A sly move, but also very common in this game, so I'll take advantage of this dip and buy.
Current SP 0.35p.
0.4p Suzhou's premium subscription for £12mil funding. Approx 15% gain from current SP.
0.54p year share price high for DFS funding. Approx 50% gain from current SP.
1p target which could be met either or with a combination of pilot plant news, DFS completion, RUS, EPO news. Approx 200% gain from current SP.
2-3p sp estimates once pilot plant is in production. Approx 500-750% gain from current SP.
3-5p once production is scaled up. Approx 750-1300% gain from current SP.
*Other factors that can increase company value in the near-term: Scale of EPO finds, Circum share sale, Buyout offers, additional offtake for remaining 50%, Advancement of Li3 lithium claims with JV partner and more.
Going to be a monster re rate....
0.4p Suzhou's premium subscription...
0.54p year share price high...
1p initial target on RNS.
2p target in run up to production, DFS completition, RUS and EPO finds.
3-5p once producing and scaling up.
GLA
Here's to next week, when PREM can finally begin realising true value for it's upcoming monster lithium deposit.
True value of such assets:
https://www.mining.com/web/sigma-lithium-says-brazil-project-is-worth-5-1-billion/
"Canadian minerals explorer Sigma Lithium Corp. has valued its undeveloped project in Brazil at $5.1 billion, with the mining operations having the potential to deliver battery-grade lithium for 13 years once it’s built."
Given what's taking place, PREM seemingly being funded and fastracked into production, Zulu's resource about to be grown considerably with 20,000m of extra drilling that is now close to being completed with the extra rigs and 24/7 operation, along with DFS.... an mcap of £200-300mil is where this should be heading over the next few weeks and into summer.
Add on top of that the EPO and I can now see this going towards £300-400mil mcap towards the end of the year once the plant is about completed.
£500mil+ once production commences.
Meanwhile brainspark, there are juniors that produce $0 in revenues in a full year with no hope of ever getting the funds to build the full mining infastructure. Relying on raises to pay just for drilling. In fact that's most of the junior sector.
Renvenues at 2000oz will be $3.7mil per month assuming a gold sale price of $1850. Caracal will hold a valuation multiples of todays price post phase 3 this year.
What other Junior Miner can offer a full gold mining operation, complete with it's own staff, drill rigs, mine that's rapidly expanding for £12mil? None as far as I can see.
Soon:
2000oz gold produciton per month
2miloz gold resource in the ground
3miloz+ gold resource across the portfolio
Once the seller has finally cleared off, there's little chance all this is s valued for as little as this, it'll be multiples. The revenues will be in the tens of millions and the in ground value in the hundreds of millions.
I recall you were saying similar things at 0.18p, from which we then went to rise 200% from and hit 0.54p, as significant news did land.
I can envision much more than a 200% rise from 0.28p if a funded pilot plant, fastrack to production, RUS, EPO results and significant DFS progress is demonstrated in the next couple of RNS's. So somewhere over 0.84p and and an mcap over £200mil.