Member Info for moneyhawk

Gipps, you missed the main point being made, that the SP has to increase quite substantially for DW to meet the performance bonus criteria, and for that to happen soon. If it doesn't, then there's no bonus. Seems fair to me.

TT, it would appear so. £25m revenue is less than what we should be bringing in just from current operational projects, and kabwe should easily be in excess of those.

Brom, yes the exchange rates are working in our favour at the moment. (at least for this purpose!)

Could all be academic though, DW might not get any bonus at all this year even if we get a half decent rise now. The clock has already started ticking on the 60 days to take the vwap from. Just counted the days and I reckon its 44 trading days left to the testing date (maybe less if there are Australian bank holidays to factor in), and the SP has to increase by about 75% just to get to starting point of 3c. Not impossible, but DW does need to get some good news out soon to make it happen.

Brom, depends on exchange rates of course. But thanks to the fall in the value of the pound, it does look like DW's full bonus price now works out to 5p.

200% growth from 3 cents = 9 cents = 5p (on todays exchange rate)

Just saw that myself. That's the first time I remember seeing any mention from CB about dividends here. Will be needed if we are to achieve his mid-cap ambition.

Guzz, needs to be long before 15th October to get the 60 day average

The average share price. In this case the average share price over 60 trading days.

And thinking about it we've no longer 60 trading days left before the test date (15th October). So if DW is to get his full bonus this year, there will have to be an increase over 200% (starting from 3 cents) to get the 60 day average.

Just saw my typo, of course meant vwap :)

And yes I think most will be happy as well, I certainly have no objection to DW getting a bonus if he can get us in a position to hit any of those targets. All of them would be fantastic.

11.17 - DWs bonus terms for the full bonus briefly summarised as:
1. SP growth of 200% on a 60 day vmap above 3 aus cents.
2. Increasing 2p and 2c reserves (150mmbls and 400mmbls)
3. Hitting production targets (5,000 bpd)

Does all depend on the details and what it means for us. And difficult to use other farmouts as a comparison as the ones I’ve seen are typically for much smaller prospects.

Supposing the deal is roughly what you’ve given as an example, but we’re only giving up about 10% WI for it and not the 70% or so that’s often mentioned. Could we then place a value on the other 90% using the 10% as a guide for its current value before drilling?

Lots of unknowns at the moment.

I see, so you believe that over 12 months 66,000 tonnes of ore can be dug up, transported approx 70 miles and processed through the plant all for $2m? And then we can also get 100% recovery and full market value for zinc when we're going to be producing zinc concentrate that will require further refining?

As a guide, the rough profit margin LC has indicated at Kabwe is about 40%. That's for material sat at surface next to the plant, and dependent on metal prices and processing costs at the time.

Star zinc ore will have a higher grade of zinc, but additional costs to dig it up and transport it could result in a lower profit margin than from the tailings.

Should still be profitable, but £10m profit each for JLP and GLR is way off imo.

Tradedesk, that RNS doesn't say they have applied for a mining licence, only that they intend to apply for one. There's been no confirmation that the application has been made.

As for the figures quoted, its very unclear just what they relate to. But we can say for certain that the costs given as $2m don't include processing costs. It may be the cost to dig up the material, and may or may not include transportation costs.

And regarding the revenue figures, this is not profit. Its the amount that may be received for selling whats produced, but doesn't include production costs. It would be great if we could work on figures giving JLP an additional £10m profit per year just for processing star zinc material, but it won't work out to be anything near that.

TT, I think the relevance of phase 1 and 2 at kabwe is being missed though. During phase 1 we'll be producing zinc concentrate and Vanadium Pentoxide only, so its reasonable to assume that V is going to have a significant contribution to revenue and earnings during this phase, and zinc concentrate will only have a minor contribution to revenue/earnings. It makes little sense to prioritise processing non-vanadium material during this period, and so the amount of star zinc ore we process may be limited. Unless the GLR off take terms are very favourable to JLP to make it worth while for us.

Looks like he's busy ramping on the GLR board this morning. Apparently GLR are going to be making £10m+ profit a year starting in Q4 this year.

I've really no idea how that's calculated. For a start, there's no indication that GLR have actually applied for the mining licence yet, and we're only about 7 weeks away from the start of Q4. Secondly, we haven't any confirmation that an off take agreement with JLP and GLR will definitely be agreed (although it does seem likely). Third, there's been no indication at all of the terms or quantities such an agreement will be on.

And last, phase 1 of Kabwe is to produce Zinc concentrate and Vanadium. If the prices that can be achieved for zinc concentrate are at all comparable to chrome concentrate, the revenue that will be generated initially won't be anywhere near the revenue zinc metal could achieve.

Phase 2 is to produce refined zinc metal, which will see higher revenue and earnings. But that's probably around 1-2 years away.

All in all, it's probably very good for GLR in the long term. But anyone expecting to see £10m+ profits a year starting in the next few months is going to be very disappointed imo.

Kaiser,

Heres the link:
https://www.ukinvestorshow.com/videos/galileo-resources-plc/

CB's comments on JLP funding are in the Q&As towards the end.

Yes me too. I think the exclusivity agreement and reason for payment demonstrates that all parties know the clock is ticking and it has to be signed off soon.

Not quite what the RNS said Jiddy, but get your drift :)

Always a possibility that an exclusivity agreement can be extended. But the payment of $500k to get things moving for drilling this winter is a strong indicator that the farmee wants to get cracking sooner rather than later, and doesn't see a serious obstacle for the farm out that can't be resolved. Whatever these final terms are, it can't drag on indefinitely

Kaiser 22:57 - Going back to your original post, interesting idea. Not sure why MM has got so worked up over it, its more favorable to GLR and XTR than the other option of raising the funds that will be required through placings.

But in his investor show presentation for GLR, CB said he'd be looking to raise funds from the market but doesn't know when, and that they won't be getting any money from JLP, he described LC as tight and guarding the money.

Personally I'm not sure the XTR plans at eureka have much relevance to JLP. Its a long way off mining anything, probably at least a few years. And from the looks of it, we're going to need copper ore in the next few months. Perhaps its something that will come into play in the medium to long term?

The BP rumour looks to have surfaced at least 11 days ago. A couple of BP employees in Alaska saying not true according to this:
https://www.thelayoff.com/t/10hDcngJ

But if a big deal is going through, how many employees on the ground would actually know about it before its formally announced? I would guess not many.

Just looking at the updated website, for Kabwe it now says production set to begin Q3 2019.

I assume this means the copper circuit, too soon for Zinc and Vanadium? Not long for that to happen, and still no word on a source of copper ore to process.