Member Info for Metalhead25

Always going to get a bit of churn around this level for a few weeks after a placing. Good time to buy, awful time to sell in my opinion

In my opinion it is dropping due to a ProspectOre overhang and nothing else. These situations, where a share price separates from its fundamentals due to a collateral circumstance, are in my view the best opportunities in small cap investing

The dilution is priced in now, surely

Great price for a top up, for those able to do so

I see a relatively easy to route to 10p.

1. Progress Hanc0ck to production based on 10MT. Share price based on this alone 3p (easy enough to price because we can look at Fenix).

2. Work Hanc0ck up to 20MT. Share price say 4p.

3. Brockman proved up at 150MT. Alien has the cash flow and expertise from Hanc0ck to scale up its operation and ship many more tons per annum, revenue up, costs down, life of operation up. Share price 10p.

The above doesn’t look particularly ambitious to me!

Joe, agreed. I will shut up now!

Hi all

This morning LCM published a UK Gov-funded report on the future of the rare earth supply chain in the UK: https://online.flippingbook.com/view/775353858/8/

One of the main arguments is that the raw materials need to be cheaper than those produced by dedicated rare earth mining and that the best source is deriving rare earth by products from the mining of heavy mineral sands. Seems like very good news for KZG.

(The report does appear to be written in the author’s self-interest, which is prob worth bearing in mind)

I haven’t said it’s a disaster! All I said was that the report was a negative. When you woke up this morning, were you hoping to see a government-funded report on the future of the rare earth supply chain in the UK that looked like this? No you were not. Nor was I!

I’m not disagreeing about their motivation or about the consequent need to discount the reliance placed! I think that’s been clear in all my previous posts too.

The risk to Pensana here is that Gov may pay some attention to the central argument that government efforts / subsidy should be focused on the supply/production of materials well below the sorts of prices Pensana are hoping to sell at

I agree, the document is self-interested and open to a certain amount of ridicule for that. But it’s hardly a positive is it??

Charles, I agree. The LCM report reads somewhat like a pitch intended to promote the future business prospects of LCM, but nevertheless as a document which may influence government policy it is difficult to see it as anything other than negative for Pensana

Yes, when I said year 1 I meant year 1 of production, not from now!

New day, new era today.

- Billion dollars of iron ore at Hanc0ck
- Easy, quick and cheap to extract
- Massive profits in short order, capex repaid in year 1
- Hanc0ck likely to double in size in near future through drilling
- Brockman still to come: expected to be twenty times bigger (would be $20bn of iron ore)
- EH silver: xrf readings showed very high silver grades, assays due soon
EH / Munni Munni: indications that the silver deposit is just the centre of a poly metallic halo - strong potential for nickel, copper, PGMs
Placing behind us - no need to worry about that anymore

Such an exciting company!

Another appointment. They are clearly very confident of a future on a much bigger scale. I like it!

No shortage of critics of the board based on other companies, but we’re here for the projects, not the companies - flexible power projects larger than those supporting a much higher valuation elsewhere, nickel in quantities which when held by other companies supports an Mcap many times higher

Some thoughts on non-linear adjustments to past valuations:

1. Copper price. The value of a copper deposit is not proportional to the copper price but rather to the profit margin. If we’re comparing against a transaction which took place when copper was $3lb and we assume it’s now 4lb, it might be tempting to think we need to multiply the valuation by 4/3. But no, if we assume cost of production is $2.5lb, the margin has tripled and we need to multiply the valuation by 3.

2. Size of deposit. Total cost of production does not increase linearly with deposit size. Instead, the bigger the deposit, the lower the cost of production per pound. So if we’re comparing a historic 1MT transaction against a future 2.2MT one, we shouldn’t multiply by 2.2, but rather by a larger figure. Also, one would expect a deposit large enough to interest majors to command a premium.

3. Difficulty and cost of mining. Obviously some deposits are relatively cheaper and easier to mine than others. BR is open and economical near surface. Others may have been deeper or with more wasted mining.

These are just examples, but I do suspect that a valuation exercise which makes fuller allowance for the specific features of BR and the market conditions in which it will be sold will produce a much higher valuation

My understanding is:

1. The blue shape has nothing to do with the DHEM (or conductance generally). That represents an interpretation of magnetic data, and has just been overlaid.

2. The DHEM readings are represented by the horizontal disks.

3. The readings are basically horizontal. So a big disk indicates that a high conductance zone is close by in the horizontal plane (or, presumably, that a very high conductance zone is moderately close by).

4. The fact that the readings are getting stronger with increasing depth suggests that once the probe goes deeper we may get still stronger readings.

5. Subject to taking readings deeper down, the interpretation may be that there is a high conductance zone off to one side and deeper than 780m.

6. If any such zone as may be identified by DHEM also coincides with the high mag zone (shown blue), that would tend to reinforce the belief that there may be an ore body there.

The above is just my understanding - I may be wrong!

While all this is going on, has anyone noticed the silver price? Up 3.5% today.

And isn’t there a silver squeeze planned for tomorrow?

Wolfy, we probably WERE funded into 2022 in the sense that we could have kept going. But you either place at the last minute when there’s no alternative and you might be forced into an awful price (you also might not, but you have no control) or you place when the SP gives you a good opportunity. The latter is plainly more sensible and that’s what the board have done

Myavian, what you’re saying simply isn’t true. I had a very nice discussion with various other posters about the likelihood of a placing, a week or so ago. As I recall, most who participated thought a placing was likely at some point, accepted the likely need for one, and broadly didn’t mind as long as we continue to advance the DSO to production. Nobody got chased away with pitchforks. This is a nice board, let’s not rewrite history to claim it’s not.

Bound to be a few people disappointed this morning to see their holding go red. That’s just human nature, there’s no need to make a bigger deal of it than that