Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
Dip - i agree SB looks to be in a tough spot! I reckon one of the best things available to him right now is good news on Havieron - a decent MRE upgrade for their 70% and a reasonable FMV price for 5% more. In my opinion any upside in silly actions with aim of ekking out a lower than FMV price for the 5%, more than offset by the downside in underplaying what they have.
I mean - for an NCM shareholder what do you want to heat...we saved x% on the actual value for the 5% or the 70% we have is going to transform the company + Telfer?
Chopper - why do you think we wouldn't have access to up to date results? I'm sure we do/will. Also remember FMV requires buyer AND seller to be knowledgeable of the asset, and that principle extends to market value definition in Valmin code, so any independent would also need to be/ be made equally knowledgeable...
Antigua - I agree on the current share price effect but I disagree on the 5% negotiations - GGP/NCM & and any independent (IF required), will have a clear understanding of where the resource growth is taking fair market value.
It seems clear GGP and NCM have knowledge of what would do into an updated MRE - I think, therefore, they would be obliged to share that knowledge with the independent (IF is comes to that). So I'm a bit confused as to why the MRE2 appears delayed - maybe SB wants some good news to release in the coming weeks?
The valmin code is a bit self-contradictory around what should and shouldn't be included - especially around reasonableness - but it's clear that the fair market valuation must assume both buyer and seller are knowledgeable.
Zoros - I can I agree with lots of what you say, including conclusion - but your first 2 paragraphs just, to me, are either illogical or demonstrate that what you are doing with your 'making the maths work' calculations are unhelpful - or at least need to come with a massive health warning before and after you get into them.
You say it yourself in your first sentence - but then have been going on in great detail about your numbers and making it out that if people don't agree with your valuation view they are stupid/fantasists.
Clearly there are lots of views out there about how share pricing works - but if it were as mechanical as you suggest no one would make lots of money going after high risk, aim type, opportunities, and the 'market' had it 'wrong' at every point except for when it was 13-15p?
My view - the downside risk from where we are is minimal - yes, we could go down based on trading activity in the short term. But I do not think, even if the MRE2 and 5% don't hit the high notes, that people won't look forward and I just can't see a scenario where there isn't upside into the future - the only big downside would be if we ran out of funds to keep the company going, I don't think that's real risk - so we are going to be riding the production and resource growth story for years to come.
Zoros - I tend to agree with those who disagree with your current views. You seem very fixated on current situation/the known knowns and making some strong statements along the lines of 'that's what it is' - surely investing in a growth stock (vs. a steady cash flow chugger) means taking an upside view if you believe it will grow i.e., not waiting until everyone know all the facts and it's fully priced in, but taking a view that it is underpriced because it's not - i.e., factoring in not only the known knowns, the known unknowns but also the unknown unknowns (but using view on mgmt team, market environment etc. etc.) to come up with a view on where you believe the SP should be/could be/will be? Saying the market place says this/or says that is fine in the present or in hindsight - but looking forward the market place is ultimately the decisions of lots of different entities (inc. individuals) and, if the price were to move sharply in either direction, it doesn't mean the market/market place was 'wrong', it just means sentiment has changed.
Just speculating and not sure if this is accurate, but I assume there will be some sort of tax liability on the back of the 5% (though it could be deferred, off set against loses/expenditures etc.). This might have one very positive implication - NCM could not deliberately low-ball their offer or have it accepted by the independent, without risking the wrath of the tax authorities - who could well see an underpayment for an asset as tax evasion (which could lead to prison for executives involved). Given all the positives NCM (and GGP) have said about Havieron I think the tax man (as well as shareholders) would expect the number to be, at minimum, in line with market (broker?) expectations i.e., 200+. It might also be an incentive for a commercial deal to be structured around NCM absorbing larger share of costs Vs. a simple cash payment?
I get the feeling JPM will close their short + go long GGP soon - I just can't see they will be working on the basis of any significant upside from holding their short. However, a quite deliberate deliberate strategy of encouraging the slide but timing the turn-around around upcoming news - with them knowing that the combined effect of closing short + buying a big slug more, could put a rocket under the SP, and make the trader who came up with the strategy look like a hero (though he/she is clearly a tool).
Dillion - I think so. To be honest, part of me would love to be surprised by stuff and see big surges in the SP - but we're just not an AIM minnow anymore so I think I'd prefer to see more day to day support to the story/SP from the mgmt team and then, if there happened to be some great upside shocks too that would obviously be great!
I think the 5% number will be ok and the new MRE will be ok too...how the market values 'ok', I think, does depend on how the team pitch the growth story and basically see we will get to 40p+ in a few years time and therefore, today, anything below 30 is a bargain...
Dillon - I'd have to have a search to see; I think GGP is quite unique in a good way. But I can't see why they wouldn't/ shouldn't and I can't readily think of many companies in a similar position with:
1./ A stake in a massive game changing asset
2./ A large proportion of shares held by small private/individual investors
3./ A lively private investor community who, even if as educated as possible, have wildly different pov's on value etc.
4./ A shareholder base who have funded the company to date (some of whom have seen capital appreciation), some waiting for it, most who have been diluted (a little bit) to pay the bills.
I just believe we are on to a great thing and the mgmt team should figure out a way to share the good news better.
Paddy - these are great, thank you!
Is there a reason you, or anyone else, might know of that GGP is not putting things like this out themselves? I appreciate there are regulatory requirements that prevent them from over-egging stuff, but surely factual images etc are within bounds?
Given Havieron is the heart of the business I'm just a bit perplexed why they don't market it a bit.
1. Put out a briefing note that explains what tip of the iceberg and fraction of a fraction could actually mean in value/future cashflow terms.
2. Brief the industry and general press on the above.
3. Sort out next incentive package fast, before share price responds to above.
Well - I will take the positive from that being they expect a big lump sum from the 5% sale to NCM. The negative, obviously, being we have all invested in a growth focussed company who feel they need to spend in order use a third party with better knowledge and experience than themselves + current circle (who I wonder?) to find them opportunities....who knows, maybe they can come up with a mysterious miner no-one as heard of and without a telephone number...
Stu - maybe, but if SD + the board + the rest of the team + the bankers we are talking to about funding + the brokers we have paid/are paying aren't capable enough to sniff out opportunities, and SD + board think we need to sign some entity up to help with that I'm just not impressed. If we come into a nine figure sum in near future and feel it/some of it should be spent on buying a small producer, fair enough - but if that happens I truly hope GGP tell/sell the investment story behind it and don't forget to cover the fact we are going to be a shareholder in a massive producing asset very soon anyway.
Joe - not questioning what you heard, and just my feel as someone hearing it second hand from you. If it was along the lines of them looking for opportunities to pitch to GGP then that seems more likely - it would just be strange (and poor in my view) for GGP to be spending the money from recent placement on having someone help them look for opportunities.