Member Info for Metalhead25

I’m in the same camp as Max19 - waiting for it to settle but may well add tomorrow. Nothing in the RNS casts any doubt whatsoever on the TVM sale or the progress with HMS, which means we are currently priced at about 2/3rds of net forward cash, with two businesses thrown in for free. I am interested in that proposition. But will see where we are tomorrow

Well the MMs have opened us way down to sell but NT to buy. Go figure. They want shares I guess

I think the difference is the last couple of years it has been permissible to blame delays on covid

The income and loss figures are from a period when the financial picture was very different. The current position is that we have sold one business for more than our Mcap and have two others either currently profitable or about to be

Irritating but not substantively significant

Good news flew coming up, by the sounds of it. A good update from First Quantum could put a rocket under this. Cobre went to an Mcap of £50m odd on a few good African copper belt drill results, that would be a short term 10-bagger here. Plus we have two massive partners already

I think it’s just the reversal of the spike up a few months ago - nothing mysterious about it. Having said that, this company’s comms are particularly poor - as far as I can tell it doesn’t even have a twitter account

I’m in two minds about this. On the one hand, it feels like a give away which shouldn’t be necessary in order to get people to do their job, and that is naturally irritating. On the other hand, human nature being what it is, there’s no denying that outcome-based awards like this make the outcomes in question more likely to be achieved and more likely to be achieved more quickly.

One nice thing about the disposal of TVM is that we now have profit guidance across the board (for TVM we had only ever been given revenue guidance). So, how is our forward PE looking?

Well, for the diamonds we were told $50k profit per month. That may improve now that we have a source of better quality diamonds. But let’s say $600k per annum.

For HMS we were told $300k “gross profit” per month. Not quite sure what the significance of “gross” is there but it may perhaps relate to the fact that we don’t own 100% of WHM. Let’s say net profit $200k per month. However, that’s for the raw product. We’ve been told that a separation facility would increase the profitability of the product by 5-6x. The plan previously was to have a third party provide the facility in return for a share of the uplift, leaving us with roughly 3x profitability. However, since we are now awash with cash, perhaps we will buy the facility ourselves, giving us net profit of about $1m per month. So $12m per year.

Now, let’s assume that of the $13m we are receiving for TVM, $6m (£5m) is used for a share buyback. That leaves us on a market cap of £5m, with cash of let’s say £4m (if the HMS separation facility costs a couple of million - admittedly a complete guess).

The above would suggest a forward PE of about 0.5 on a non-cash adjusted basis, and a cash adjusted forward PE of about 0.1.

Not bad…

The same info about Dec 2023 was in the original RNS, just a bit lower down

I think the fact is, running the TVM mine is hard and risky. That is evidenced by the long hard years sinking money into the asset in the past. There is a known water supply problem. Now of course we were hopefully that we were about to move into a more successful era running the mine but who knows what the next issues might have been. Also, even putting aside the difficulty of the operation, it is clear that this small mining operation in Namibia was not likely to be highly valued by the London market, hence our share price. I don’t see how anyone can quibble with converting less than the company’s full suite of assets into more than the company’s Mcap in cash, especially when it comes with an update confirming that the other main asset is progressing to cash flow really well

Since becoming CEO, Dennis has really turned this company around. Fantastic deal today, netting more cash than our current Mcap for our highest risk/highest cost asset, while retaining 2.5% of gross sales and setting us up to focus on the low risk cash cow that is HMS. Superb

Yep, fair point jdt: “anything about” was probably a slight overstatement. However, it’s unrealistic to talk about P1a as though it’s intended to determine whether it works. As I say, I think the signs look good. I just don’t buy the argument that you can read so much into arranging a conference. And do so with such utter emphaticness

I’m not saying it doesn’t work, only that this RNS doesn’t say it works! There have been many other and stronger indications in the past

I think this RNS is fine. I view it mainly as a PR-positive way of conveying that there will be no news this year. It is probably also true to say that it implies at least a degree of success from P1a to date, but I think we knew that anyone and I’m not sure this signals it in any clearer way than previously, nor is it possible to discern anything about the degree of success. What is certainly not possible is to discern anything about whether AVA6000 “works” overall, since that is not even being tested in P1a and certainly will not be announced prior to or at the February conference.

As I say, I think the update is fine.

Seems very promising to me. If we can nail down a method of identifying copper deposits (or areas likely to host copper deposits) from surface then we will quickly be racking up an array of hits with the drill. It would be nice to be further ahead before Xmas but I guess one big advantage of having raised so much money is we don’t have the usual worry of being in a race against the need for a placing - £3m odd in the bank so we’re all good

Earl: “ Rare Earth prospective License worth multiples of current market cap alone ”

No, the licence alone is worth £200,000. I know that because that is what it has just changed hands for, and nothing has happened since to increase its value. Whether its value increases next year is the big question

Some big news on Twitter yesterday, for anyone who didn’t see:
https://twitter.com/kazeraglobalinv/status/1602320753126408192?s=46&t=aBDCfkO56ecDXZTpemjmuw

He does seem confident. My slight worry is that we seemed to be getting very excited about using CSAMT in new ways, almost as though we were a geophysics or technology IP company; and that’s all well and good, but it’s not a substitute for finding a big load of copper. I suppose the point is that if we can make the tech work it’s only a matter of time before we find the copper on our masses of highly prospective territory. I can accept that. I just wish we could get our first proper mineralisation hit with the drill bit, and then I think we could all relax and share the excitement about the tech a bit more!

Good news from down under https://t.co/dNlTNGIWNv