PYX Resources: Achieving volume and diversification milestones. Watch the video here.
Well, that last break out didn't hold - hard ask in the face of the persistent selling. ......
Once that's cleared though...!
Great opportunity to build the position at bargain prices in the meantime.
And looks like a great trip is being lined up for September! I'll be too far from Europe to make the journey, but will be interested to hear any feedback people are willing to share.
I've added another 500,000 shares here recently as well.
There's a lot to like about how things are shaking up, and perhaps most importantly, the credibility of management seems top notch.
Intend to continue to build a stake so long as it doesn't run away with itself too quick!
Thanks for getting back Ophidian.
It is certainly going to be very interesting to see how everything plays out with so many strong fundamentals, technicals and newsflow.......
I'm sure there will be more than one or two curve balls thrown into the mix to stir things up along the way!
@Ophidian, looks like your Elliot Waves are performing rather nicely!
@Daisan, nice annotated chart you found there!
Ophidian, I’m curious, a few days ago you mentioned a 34 / 43 / 81 target range. Does this relate to the top of the smaller wave 3, smaller wave 5, and then the overall top of the macro wave 5?
I have three potential near-term targets from the chart formations.
The cup and handle formation that seems to have formed suggests an initial target around 32.8 (pink line on chart below). These formations are often part of a long-term trend so this is by no means a point where the SP is expected to reverse.
The FIB recovery (based on the pullback from the top of wave 1 around 24p, “A” on the chart; and the bottom of the a,b,c pullback around 17p, “B” on the chart) suggests two potential near-term targets.
The first is close at hand, around 29p. The second is around 37p.
It will be interesting to see how and if the EW formation fits into these potential turning points and how news aligns with it all. Interested to hear if anyone has views on this. My friends describe it as the pangolin blood and rat entrails approach to investing..!
I enjoyed your description of TA describing the herd mentality. Spot on.
FWIW, my own model of the fundamentals gives a fair value for Vametco alone on todays production at 70 USD/ kg of around 54p, so I see all these TA targets as being near (ish) term targets.
Just have to wait for the herd to properly wake up ;)
Chart:
https://invst.ly/88l6h
Looks like the flames of a recovery may be upon us!
This has been way oversold - which I guess with the lead time on the build is to be expected with AIM - and this bounce may yet be a little early, but it’s coming!
The fundamentals we all know too well - it’s just a matter of time.
Turning to the charts though - sorry Vmax! ;) - I like them as an accompaniment to understand price movements in stocks whose fundamentals I am attracted to (note I don’t care for using them as a sole reason for an investment). And I would have to disagree with you that they aren’t useful for AIM stocks - so long as the liquidity is there, they can be a great aid to understand sentiment. It’s not about the charts telling you what will happen - they just provide signals to look out for where prices might turn.
Anyway, back to the tea leaves, pangolin blood, and bat bones - the chart looks blooming’ great!
Zoomed in, we have punched right through all the moving averages and held. String move. First time since early April this has happened. The difference between now and then, is that now the RSI is very strong, and the MACD oscillator is giving a bullish signal of positive change.
This bounce has also come off the long-term uptrend, and the 0.61 FIB (FIBs get a little wishy washy, I’ll grant you, but WRES’s recovery from the lows of 0.24 back in July last year have followed a FIB recovery sequence to a tea). This is often seen as a strong bounce location (if we hold, and that is not guaranteed of course).
Zoomed in chart - the breakout
https://invst.ly/85je1
Now, to consider where it might go…(!?)
Based on where we have bounced from (fingers crossed) the first FIB target is 0.9p. Nice.
In all honesty, that seems a little ahead of ourselves right now - I would think it would take a while to get there, but let’s just see. I’ll be holding until a multiples of that anyway, so this is all just for fun.
Zoomed out chat - where we’re going
https://invst.ly/85j5h
..... with $10 billion intent in mining and tourism.
https://www.arabianbusiness.com/politics-economics/400709-uae-follows-saudi-arabia-with-10bn-pledge-to-south-africa
And on the chart - just for fun - we bounced neatly of the 20 day EMA today.
Running with the Elliot Wave theory, the 20 day EMA was where the SP bounced on each of the prior legs up on the last 5-wave rise (see chart below).
Could this be the bounce for the next wave up?
Q2 production results could be next week. Let's see what happens ;)
Chart:
https://invst.ly/7-4zt
Some figures to roll around. One of the options that has been floated is to expand Vametco to 10k tpa - mining could presumably increase at Vametco itself, but better probably from either Brits or Mokopane. This expansion would cost about 100 million USD I believe - although that was from an online article, so prob best take it with a pinch of salt. Even at todays prices 30% dilution could almost cover that - 30% @ 23p = 99 million USD at todays exchange rate.
Pop that production into Vametco profit calcs and even if the company funded this expansion entirely through an equity raise the value add is huge.
To summarise (baseline figures just for illustrative purposes), assuming V prices of 80 USD /kg; a PE of 12; and all in production costs of 20.5 USD / kg, based on the targeted 265 ZAR/ kg figure from, I believe, the admission doc); post-tax earnings could give a SP of:
At 0% dilution (because BMN have / will achieve this already)
3,700 tpa - 79p
5,000 tpa - 107p
At 30% dilution (funded 5k tpa expansion)
10,000 tpa - 164p
So 30% dilution could drive an almost 50% increase in company value.
And that really is a worse case scenario, based on the company going all-in at todays share price (so unlikely as to be impossible I would argue) and that all funds are generated from an equity raise (again, I would think very unlikely since the company would have access to debt instruments without doubt if it wanted).
And this is just for a 5k tpa expansion at Vametco, which is just one of many options. If the funds supported a larger Mokopane-linked production facility in line with the 9k tpa envisioned in the original PFS, or purchased a brownfield, or brought online additional BE electrolyte / battery production capabilities, the leverage could be even greater.
There are too many permutations to tangle with. But it’s clear that even under a “worst-case” scenario, a 30% dilution could drive extraordinary value.
I always find charts quite interesting at times like these as the share price tests various resistance and support levels and the chart can provide some perspective on where trader sentiment lies (those folk who by their actions provide technical analysis some degree of credence). First up, support. Today we settled back down on the 20 day EMA. This is good, as holding above here implies sentiment remains bullish (or at the very least, is not turning bearish). Friday saw us firmly break out of the narrow downtrend we had been in since peaking out around 24.5p. It also built on the strong bounce from the RSI around 40/42 which has been excellent long term support for over a year now. Both good indicators we have found decent resistance. On the downside of things, volume is thin and declining. It seems the excitement that propelled the SP up is taking a breather. The MACD is also showing weakness, but to be honest, I find this indicator to be pretty useless - all charting analysis points to the past, but I find this indicator to be particularly backward looking and of little value for assessing current sentiment. I mention it only because many use it and it can therefore have value psychologically in theory at least. Overall, it certainly feels like we have found support at these levels, which is a superb place to take a breather. We all know the current status quo of the company should and will attract a much higher valuation in time, to say nothing of wha is coming down the pipeline. It might just need another spark to refocus investor attention, and there are a lot of sparks brewing right now. Must just comment on how incredible it would be if V prices have found a pivot at current levels. The story behind the V market right now just seems so good one has to pinch oneself! Oh, and I learnt a lot from the SIPP chat Nick and Capa - that cleared up quite a few things that I have been puzzling over! Thanks! Chart: https://invst.ly/7l1ml
Smack, bang off the long term RSI resistance level. Love it when a chart comes together https://invst.ly/7jqfj
Indeed Gambit! The fact that Vanadium is so abundant in the earths crust, and much less restricted geographically like other battery metals, should actually work in our favour long-term. The story really does just get better
The new black gold, the metals that will govern energy systems of the future. BMN not mentioned by name, but they talk about South Africa producing vanadium and electrolyte, and that can only be one company. For subscribers: https://www.ft.com/content/b2f1467e-e59f-11e7-97e2-916d4fbac0da Otherwise google, "Financial Times the geo politics of electric cars will be messy" And you should be able to access the article behind the paywall..
And there we go. Gunning for that 18.2p (ish) resistance and caught (for the moment) by the historic 40 (ish) RSI resistance See lines on chart below. It will be interesting to see where the SP closes and how it finished the week now. Might test a bit lower? Golden opportunity to top up? Chart: https://invst.ly/7j6tz
Oh, and a chart view. We seem to be in the low volume drift, that slow trading allows at the moment. The 20 day EMA held briefly, but that went conclusively today. Two support points are coming up. The 61.8 FIB line is around 18.2, and the 50 day EMA is at a similar level (although rising all the time) just over 18p. This should be pretty solid support if it goes there. More interestingly we are approaching the point on the daily RSI around 40 from where we have bounced numerous times. I wonder if this might be where the share price regains it�s spring? Either way, I would be surprised if the SP went much lower, and with such an incredible stable of news lined up, from Sojitz to Q2 / H1, to Mokopance, Eskom VRFB, Lemur BFS etc to name only a few, it feels 30p is more likely in a couple of months (weeks!?) than 15p. But never underestimate how illogical the market can be! Chart: https://invst.ly/7iwh2
Late to the party here, but great news today indeed! And with the feasibility study on course for May. That is going to be a very interesting read. I�ve always had slightly mixed feelings about the coal plant as many do I�m sure. That said, goodness knows that the people of Madagascar need access to cheap, reliable power urgently. And if this can reduce reliance on timber that is ravaging their natural resources, it could (and should) drive both economic and environmental improvements. In this case, the environmental disaster for the island would likely be failing to invest in modernising infrastructure such as this mine and power plant. Not sure I follow the valuations for the resource though. Presumably any offer would be made on the reserves, not the resources - i.e. the 30 MT, rather than the 130MT? Also, as I understood it, the coal mine itself held little prospect for being a competitive commercial mine on the global stage. The addition of the power plant was basically the best way to make it a viable operation, and turn it from a bit of a lame duck, into a much more exciting proposition, both economically and socially. Any buy-out price would therefore need to be based on the economics of the integrated power plant / mine operation, although I guess you could still distil that down to a USD / tonne figure. Just thoughts. Its great news, on what is now building into a exciting project. And the feasibility study is certainly going to make very interesting reading to see the prospects for this integrated operation spelt out in hard numbers.
.....was going to end by saying "..........those returns fell pretty well nailed on for starters".....
Hey Jaf, I don�t post often but do check in the board occasionally. It�s good to see you interrogate the numbers, as you rightly should. I think some of the issue taken with your approach is more about the tone than content, but I don�t wish to get involved in that debate. It�s the numbers that are interesting for me. While the numbers look excellent, there are inconsistencies as you point out. I don�t know why the EBITDA figures between slides 19 & 20 differ. Could this be because the higher figures in slide 20 include income from Regua? It doesn�t appear to be explained - maybe it was at the presentation? Not sure if someone who attended can clarify. The loan is not the cheapest loan around, and does come with the warrants of course (although I haven�t seen anything about the price they can be exercised at?). But the true value of the loan is avoided dilution, and the is significant. I do wish that these presentations could be clearer on the fact that WRES are not selling APT but a 66% concentrate that demands a markedly lower price (again, someone please correct me if I am wrong on this!). I would wholeheartedly agree with you that MM�s past record is not a shining example of time-keeping. Although one could argue that historic delays have actually played to WRES�s benefit since they are now entering a bullish W market, but that is being a little disingenuous. I�m optimistic looking forward in that the contractors doing the work seem to have excellent track records. Hopefully they keep the ship on the straight and narrow. One thing I disagree with you on is you say the stock market looks 6 months ahead to value a company. think the market is actually very poor at looking ahead, especially with early stage companies, who remain unproven, even more-so when that company operates in a sector that until recently was in one of the worst declines in memory. Indeed, it is the very fact that the market is so bad at valuing these small companies that gives us investors the chance to make serious money, if we have the patience. To me, it seems the market needs earnings to be it spelt out in big large letters in financial reports before it really sits up and takes notice. Hence, I don�t see the recovery here gaining full momentum until the profit is spelt out in the 2019 interims, and really until the 2020 interims once production ramps up in earnest. I�m personally looking at what WRES will be worth in 5 years. And I feel confident I�ll be looking at at least x4 my money. It could be x10 with a following wind if the mining sector goes into a super cycle and sentiment improves to support a PE ratio > 10 - 15. A 4 - 6 bagger in 3 -5 years is not the most exciting turn on AIM. But the important thing for me is that with initial funding now secured, mining sentiment and W prices improving, the risk here seems very low, and those re