Member Info for moneyhawk

A bit early for April Fools jokes? I mean, expecting insiders from the company to be posting on an open internet forum, and then complaining when they're not and there's no inside information available here. That's got to be a joke?

P14 - Interesting idea. I had just taken the sable purchase to be part of the overall Kabwe project. But you may be on to something there in terms of how the ownership set up is structured.

Thinking about it, the Kabwe project is operated through a joint venture company with JLP and BMR (87.5%/12.5% split). The assets are owned by EML, a BMR subsidiary, and which we have a free option to acquire 100% of after regulatory approval for the change of control. See RNS on 6 Aug 2018 for full details of it.

Now the Sable deal, that would appear to be JLP buying it. We have taken the hit in terms of dilution and debt, and the debt is secured against JLP assets. There is no mention of the JV company, BMR or EML being involved with the purchase or ownership.

So if Sable has been purchased as a separate standalone entity to the JV company then it opens up a big question about how the project is going to be run in terms of company/ownership structure. It could be that our newly purchased Sable company will be charging the JV company for use of the refinery, or a profit share arrangement, or a toll processing arrangement etc.

The knock on effect of this could mean that BMRs share/royalty stays at 12.5%, because the bulk of our expenditure is on a separate entity to the Kabwe project and JV company. But in turn, the JV company may be significantly less profitable than being assumed depending on whatever arrangement is made with Sable. We still make the revenue and earnings being expected, but in a different manner to it being solely the JV company generating earnings where BMR have a right to a royalty payment.

Thanks, useful to know that it does work!

Does the new "short positions" button actually work? Every stock I've looked at says there are no open short positions.

Looks positive, that's a sizable stake for one holder at 6%. Would have thought at least 1 more TR1 will be on its way though, still a lot of the placing shares left.

Although Milton did have a sizeable holding previously, having taken part in a placing last year. I'm not sure if they've taken 111m of the placing shares, or if they've added to their previous holding.

Just a thought, it could be that the 17m trade last week just prior to the placing announcement, and possibly some of the other trades may have been Milton, and not BMR, meaning BMR still hold some shares.

Miltons portfolio statement as of 30th November 2018 showed 34m JLP shares:

https://resources.mitongroup.com/srp/lit/XbW697/Interim-Long-Report_LF-Miton-Investment-Funds-3_30-11-2018.pdf

Yep, back to normal :)

Seems to me that no one wants to sell any substantial amounts, and anyone who is currently interested has already taken their position.

Reinforces the point of view that whoever has taken part in the placing has done so for a long term investment. There's no way they can sell 500m shares anytime soon, it'd take years at this level of volume to sell off that amount.

We have already had the farm out update, it was on the 20th March, well within the end of Q1 deadline.

The update said:

" A further announcement will be made in due course on the outcome of the ongoing negotiations, which are currently confidential in nature."

The update did not say the further announcement will be before the end of Q1. No news therefore means negotiations are still ongoing and there isn't yet an outcome to report.

And if everything goes roughly to plan, that will equate to a P/E of just 1 in 2 years time.

I would expect a P/E of around 5-7 is the valuation we'll probably end up with. Maybe higher if in 2 years we've got further projects coming through that will give continued earnings growth beyond that.

Just listened to it.

LC raises an interesting point about the Sulphuric Acid plant at sable, with the acid requirements being the most expensive part of their leaching process.

Being able to produce our own acid rather than having to buy it is perhaps very significant in terms of the profit margins we'll be seeing at Kabwe.

Good point Bring. I'm working on the assumption that JLP will be acquiring 100% of EML, especially now that we've got a signal that the government approve of our plans. So it just looks to be a matter of time now for the necessary consents to come through for the change of control of EML, and more likely than not to happen before profits start to be made.

But you're quite right, until that happens BMRs share will be through dividend payments (or similar arrangement) based on the ownership % of the project, not from royalties.

Brom - "how many home buyers here have had solicitors attempt to screw them with unnecessary indemnities"

I should imagine most people who have bought a house have experienced silly delays at some point in the process. My last house purchase got delayed because my solicitor got hung up on needing an original death certificate of the sellers late husband. Once we got over that point a further delay was then quibbling about whether the copy I instructed him to accept was a properly certified copy. Completely unnecessary and delayed the whole thing for weeks.

Who knows what is happening behind the scenes and how far advanced negotiations are, but once things get into the hands of lawyers there is an almost unlimited number of 'details' that could result in delays (and further work for them!)

Agree AIM4/rosso. I don't see why people are still hanging on to the Q1 'deadline'. The RNS last week seemed pretty clear that it was the update on where we are at the moment, and no further news on it will be forthcoming until the negotiations are concluded.

If it wasn't for the previous announcements giving the end of Q1 we may not have been told as much as we have been told.

From last weeks RNS:

"A further announcement will be made in due course on the outcome of the ongoing negotiations, which are currently confidential in nature."

No where did it say negotiations will be concluded or a further update given before the end of Q1.

I would assume that at the moment the BMR's royalty remains at 12.5%, and will only drop to 11% once the cash spent exceeds $15m, as per the RNS in August 2018. Although we've raised the total funding required, the purchase of sable is in staged payments and the refurbishment/conversion cost won't have been incurred yet. So we won't have spent $15m yet to trigger the clause.

Fair comment asaiaka. But something will have to give sooner or later. Its difficult to see any way we'll stay at this MCAP with annual profits forecasted to match the current MCAP in 2 years. Maybe that time frame will slip to 3 years? But even still, profits will be starting to ramp up before then.

The only question marks now on a re-rate look to be when it will happen and what the catalyst will be. Will it be major institutional holdings, start of production at kabwe, first quarterly results showing kabwe's revenue, audited annual results showing a profit?

May have to wait a few days for the TR1s. Looking at the Quantock one in December, that was a transaction on a Thursday and the TR1 didn't arrive until the following Tuesday.

It is good to see costs firmly under control is well. Pretty much no change from the same period last year, despite increased activity, production and revenue.

I'm not expecting to here anything else until the deal is signed (or talks have broken down), today, tomorrow, next week, 2 weeks time, doesn't really matter. DW has already updated us on it, and before the end of the deadline, to say that confidential negotiations are taking place with the preferred bidder. He can't really say anymore than that.

I wasn't expecting that much from the interims, but these are showing better progress than expected with a profit for the first 6 months to Dec. Although the platcro acquisition was in January, so the cash outlay for that isn't included.

The forward looking statements from CB give more encouragement, including:

"I am pleased to announce that at this stage we have a very full understanding of the Kabwe Project and are confident that revenues from Kabwe will be achieved during the fourth quarter of this year."

"We continue to investigate new business development concepts and are investigating a pipeline of projects, a number of which have the potential to even more significantly increase earnings and the Jubilee Metals profile. The industry is now aware of our capability and this has led to a number of approaches from major players in the industry to assist them with their tailings and other secondary deposits"

I hope so 34Deg. But if those are the figures shard are working with, they will have also used Hernic at 15% for the earnings forecast in 2020-21, and those forecasted figures are very positive irrespective of what we earn from Hernic in future.

Another point on the shard note, they are assuming Zinc will be first at Kabwe, followed by Lead and Vanadium in the second stage. We now know that both Zinc and Vanadium will be in the first stage, so this may bring forward the earnings forecast.

TBTT, found it, that's not a good % share for us! (Page 26 2nd Paragraph). So if our costs are £13m, plus 30% would be £16.9m before the profit share starts. The Q4 update had earnings to date of £8.2m, and I think we can expect future earnings to be typically in the £2m+ range per quarter. This quarter looks like it'll be less than Q4, so assuming production resumes to previous levels for the rest of the year that profit split will probably be starting in Q1 2020.

However, they're talking about introducing the fine chrome process into Hernic. I've wondered this before, but why would we do that unless it has a material benefit for us? I suspect/hope there's scope here to renegotiate the deal for a better PGM % split in our favour, in exchange for improving chrome recovery at Hernic.