Member Info for Markyess

Kind of, Chesh!

I don't think it's a water tight excuse, I'm sure Graham or Russell could find 5-10 minutes here and there to put *some* messaging out... however, all that is going to be of real importance to investor returns is growing sales, creating cash and satisfying sales and that information will come out in annual and half yearly results.

At this precise moment in time, I think I'd rather see all effort on growth and self sufficiency and actual results, than the odd soundbite. With a general nod to improving communications when the foundations of the company are sound.

I don't think it's necessarily a valid excuse, but I can assume that part of the issue is the organisation is running on such a tight, operationally focused cost model, that there is negligible slack (or expertise) to focus on shareholder relations or other value adding activity - outside of production, customer focused marketing and sales.

Hi panda,

Very long term, quite substantial holder checking in.

You're bang on the money re: Diamond Creek and phosphate, but hold your expectations in check on Togo. There's nothing to suggest that's imminent. In fact, the recent news about an industry wide mining review would be the third such event in the 10+ years we've been waiting for exploitation rights.

Not looking to put a dampener on, we remain substantially undervalued on Phosphate alone. Togo Manganese would be game changing, but questions need to be asked of Togo's true desires to commercially exploit their mineral reserves AND work with overseas investors. Talk is cheap, they're not walking the walk.

I am not using the same username on Twitter

I am on Twitter, but I only use my account to occasionally observe investment posts, I don't 'engage' with them any further or post any opinion on there.

Chesh

As Prop and Jim alluded yesterday - I don't think yesterday's spike was associated to any 'leaking' - the volumes weren't sufficient for starters.

I think it was a little ramped blip. There is one particularly noisy, spammy, ramper on ADVFN who has latched on to our price decline, and doesn't seem to be informed any further on the company profile - outside a hope that it recovers, so he can recoup losses he made elsewhere - hardly a reliable investor to follow into 'battle' - but it seems he piqued some interest sufficient for a little spike yesterday.

I don't anticipate any immediate newsflow to have a super material impact on price. I.e. forget anything on Togo if they're doing yet another industry wide review, and we broadly know already the newsflow from Diamond Creek.

4 months old. We're overdue some kind of info, Chesh

Thanks Jim, great investigation and find. Much appreciated.

It would be good to hear, diggit, I don't know for certain, but I assume based on the newsflow I've seen that the last raise has plugged the cash flow gap to facilitate operations, and there is now a reliance on sales revenue to support payment to Falcon Isle and enable the drill programme.

The drill programme *may* generate additional company value based on surety of mine life, but I would suggest short and medium term priorities remain servicing sales, and paying Falcon Isle.

Keras has already made a public declaration of giving the Togolese government a free carry of 10% (I believe that *someone* associated to Togo already owns 15% of SGM, the Togolese subsidiary) and also the reinvestment of a percentage of profits via a Keras owned ESG charitable association.

Also sounds like it is a part of a nationwide 'holding pattern' to address its entire mineral and mining portfolio. But yes, a bigger slice of the pie seems to be central to the issue if and when and if they ever get back around to seriously considering exploiting their country's mineral wealth.

We've been here before.

Manganese was my reason for sticking around post the Calidus divestiture. Phosphate doesn't float my boat, but I'm grateful for it keeping us alive and relevant. It at least gives us a fighting chance of not totally writing off our residual investments (those are long term).

I always hope we'll get a return, but I'm a little closer to Jim's line of thought, than my initial expectations of the project, in so much as I believe our Nayega return will come from an undervalued sale OR an ugly fight, rather than a nicely signed exploitation license. I'm not in the camp that we'll lose our shirts entirely and just gladly walk away. I don't even remotely see that as a realistic outcome. Especially now Togo is inside the Commonwealth and what that means in terms of international community.

Jim,

In that instance, I believe that given investments and commitments made by the company, we'd have reasonable international legal claim for compensation, which would amount to a higher payment than a sale value.

It'd also be a horrific piece of PR for Togo on the international scene when all other Comms is aimed at 'welcoming' foreign investment.

In short, stiffing Keras would carry a high price for Togo.

Hi Chesh,

I think there's more chance of Nayega being sold than Keras being the ultimate party to exploit it. Sadly.

Well if we don't sell it, we keep riding it until we either get the license or don't. No change from today.

In which case, it's still worth zero on our balance sheet. so no harm, no foul.

Pros:
100% owned Phosphate project is in production with growing sales. Cash generative.
Very high grade product
Current sales growth is ahead of revised schedule after buy out
Significant (believed up to 60 year) mine life, based on qualified geological observation, and uncertified drilling
Opportunity to move into Carbon Offset credits that could generate some serious coin
85% ownership of fully proven, turnkey (company defining) Manganese Project in Togo, solely pending Presidential exploitation license

Cons
Cash flow is tight - extraction plans are heavily linked to sales, i.e. growth could be slow
Tranches of cash to complete buy out of prior partner will take first priority over cash on hand
Project is behind sales and growth schedule, based on poor performance of partner, now bought out
Ore body has not been proven up against international mining code
Poor communications, with BoD updates less than quarterly (recent pledge to an investor to improve)
Manganese project is pending a license from Togolese president and the company will only pursue legal, and legitimate channels (have been waiting for near 4 years for this 'final' step in the approval - hence recognition of project in the current MCAP is zero value

In short, a £2m MCAP company owns an in production asset that pre-production was considered worth ~£4m, and in production, probably has a net worth of ~£20-25m - and a manganese project that could be worth multiples of that, which is likely to be sold off for a sub £5m, recoup of investment price, with the cash proceeds very usefully used to expedite and allay risk on the phosphate project.

I think the higher AISC is a direct function of reduced ounces, which is a function of head grade dilution, reducing the overburden and progressing to richer gravels. Still part of the aftershock of the COVID resource challenges. Persistent talk that grade aligns with resource model, so it's just about clearing overburden.

Watch this space on potentially reducing overall debt via a royalty agreement with Macquarie.

DR's on fairly sizable personal on market purchase is a solid indicator of no capital raise, otherwise he'd have held off and participated accordingly.

Emotion driven oversell. In part understandable, the timeline for solid returns has pushed out, some not prepared to wait.

You won't see Blue Spec resource entered into the mix until after further resource proofing and a feasibility study (separate from the existing, released, underground works FS), but it is looking promising for the medium term.

I think it's the sentiment vs the BFS year 1 claims of 90koz at an AISC of ~$1450 ($1650/oz after exceptional fuel etc) now panning out to a Year 1 actuals of around 70koz as an AISC of $2000-2250 and so significantly reduced margins against the hedged ounces.

At the lower end, the company is going to face a cash flow crunch (possibly) in meeting loan facility repayment without (potentially) a small capital raise, and without severely cutting back on extension projects. drilling, Lithium spin out - all of which can be kicked down the road a few months if needs be.

If the company delivers to the top end, it should be manageable - but there is naturally a risk factor, and probably rightful questions on the companies ability to hit the top end operational targets given the challenges to date.

IMO, it is a massive oversell against the fundamentals, but such is the rationality of market sentiment. The achievement of getting the plant built on time, on budget vs Covid is yesterdays chip wrappings - there is a perception that the company is not meeting its operational straps and promises.

I believe this will be a distant memory in 2-3 years, but it's an inconvenience for anyone that was hoping for a smooth transition to operator and was expecting to cash out on immediate production.

Personally, I'm happy to sit tight, but certainly not delighted at the level of challenges we've encountered and the comparative quietness from DR (who I still retain utmost respect for) who was only too keen to be visible in the market during the capital project.

@mil09 - I am unconvinced we'll see any fast movement at Togo. All the current Energy and Mines announcements seem to relate to further updates, modifications and changes to their Mining codes and conventions. This must be the 4th such cycle of activity, dating back almost 10 years. In that time, I think they've only permitted one exploitation license, and the web portal to monitor applications seems to have fallen by the wayside.

They seem to be full of talk about utilising the mining sector to grow wealth (in a responsible manner) but don't seem to back it up with any actual action. They need to sh*t or get off the pot, IMO.

You'd think that with the progress we've made to date, our ability to start immediately, our ESG commitments, and the Mining Decree, we're in the box seat for an exploitation permit, only needing that final stamp - but if they're not prepared to permit exploitation projects until they have completed 'modernising' their approach - how many more cycles of 'modernisation' are we expected to wait through?

I hope to be proved wrong, but if you can only make forecasts based on what's before, I think they'll be fannying around with controls, processes, regulations and covenants for another handful of years.

He had snuck out the door early in 2022. I can't remember where I saw or heard it (it was some form of corporate output early/mid year), but it was mentioned that he was still providing consultative services, but with the slow down of Togo and ramp up of Diamond Creek, priorities had changed, so I would be inclined to believe we're still on good terms with him.