Member Info for MountTeide

For the next 5 years they will have to find around £13m a year just to pay back loan+ interest. This will be nearly double the annual turnover in the next few years, let alone profit.

By all means invest but do it with your eyes WIDE open. Any longer term holders will likely use this to exit..........as is currently happening!

3rd November 2016 - i posted on Adv*n

'I am staking my reputation of 25 years on ensuring that we have an operational port, that is fully funded, by the end of 2015'......Nikhil Ghandi.'

I'm staking my reputation of 35 years running ports, shipping and ship management companies, that SPL will not have an operational port by the end of this year(2016), as claimed by management in the Shareholders Circular dated 31 October 2016, and will most definitely not have a completed 200 acre port facility, with 1000m of berths by the end of Sept 2017'

In fact, i would bet serious money that: "there is more chance of Nikhil Gandhi going to Mars riding side saddle on a Saturn 5 Rocket than having a fully funded and completed 200 acre port facility at Kajana by Sept 2017, as also claimed in the same fantasy world document."

The reality is that by mid 2020 SPL has a massively draft restricted 80-100 acre harbour barge handling facility, with 400m or so of quay, that will have 'cost' shareholders the best part of £165m and be worth at best some £130m less.'

Shockingly for shareholders, the progress by the end of 2020 is even worse than my dire predication for the end of 2017 - Management's latest update reveals they have reclaimed around 90 acres of land and developed around 15 acres for storage, and built a small, lightweight 400m barge jetty, serviced by a farcical 3.5m deep 3 mile access channel from Mumbai Harbour(which probably will have had NO dredging by the company other than off the jetty): and is likely to have according to management a fantasy world carrying value of circa £160m.

Having run shipping companies and ports for over 30 years........it is my opinion the management need over $30m of revenue a years just to generate the cash flow to pay the interest on the outstanding debt !!!

The asset valuation is the professional opinion of a firm of Marine Engineering Consultants i have used for over 20 years, who have designed and built port terminals for over 40 years!

How to turn £1 million into £3k!

Invest in the business management skills of the shysters that masqueraded as the MPL management for over 9 years since the London IPO and sell the shareholding today!

Laughably, the previous executive management claimed they were of high quality - so lets do a human audit:

Executive Chairman - currently fighting two lawsuits alleging he siphoned tens of $millions from one and over a $billion from another previous company he had Executive Responsibility for, into accounts run by him and his family AND has a previous criminal conviction for industrial Scale Insider Trading which saw some of his companies either banned permanently or suspended from the Indian Securities Market for up to 8 years.

And the

Former CEO and now highly paid MPL Consultant - who was recently arrested by the FBI on arrival at JFK Airport and charged with carrying out a $300 million securities fraud in the US.

Video shot in November 2019 of the dirt track port approach road (and fishing boats in the creek alongside it) running up to the closed rusted gates( held in position by a rock), at the entrance to the Port Terminal.

No Port activity whatsoever, No ships, No HGV vehicles collecting or dropping off cargo, NO security presence at the Entrance gate, No dockers, No Landside workers, No Cargo in storage, No port traffic on the approach road.

After nine years, the Port(ABOUT 20% OF IT), according to management opened for business 9 months ago BUT as predicted, other than for a stage managed video of a single barge cargo that was loaded directly to road vehicle and went straight out the port, NO SUBSEQUENT PORT ACTIVITY looks to have since occurred. The cargo handling revenue figure for 2019 should make sobering reading for shareholders - particularly since the CEO had confidently predicted 2.0 million tonnes for 2018 (we said Zero, actual figure: Zero), ratcheting up to double that in 2019(Actual: our prediction: Zero - looks spot on the money once again).

INSTITUTIONAL INVESTORS - YOU WERE REPEATEDLY WARNED YOU WERE BEING CONNED, well before the first of two subsequent placings totalling circa £70 million!

hTTps://www.youtube.com/watch?v=R8BE2-RZ4Lw

By comparison JNPT Terminal 4 Container Terminal just 5 miles away on the Uran Peninsula, is nealry 10 times the size of Karanja and orders of magnitude greater specification, was built and operational in just 2 years 3 months, and is already out-growing itself with the owners submitting a new planning application to expand.

Jeremy Warner Allen said, "I truly believe in the potential of MPL and have full confidence that we will deliver a profitable and valuable business to all our stake holders. I have no doubt that the future will be exciting for the Company and I look forward to playing my part in growing the business and the platform as a whole."

Begs the question - What have you been doing for shareholders since joining the Board in 2018?

We note, in common with your predecessor you do not hold any shipping or ports industry professional qualifications or have any first hand senior management experience of either industry.

Consequently, as shareholders (one share each), currently holding the highest professional qualifications the Shipping and Ports industries currently examine for, and with decades of senior management experience running ports and shipping companies, we'd like to offer you a little advice in your new role.

We suggest you start by appointing a reputable Marine Civil Engineering Consultancy to carry out a cost analysis of the Karanja Port construction work completed to date and then, after pouring yourself a very large brandy, compare the figure with the carrying value that is currently in MPL's accounts for this 'asset'.

After you've finished the brandy bottle and sobered up, request the Marine Civil Engineering Consultants to then conduct a forensic audit (and give a professional opinion) on every payment over £10k made to contractors since 2012 - while they're doing that, we suggest you order yourself a case of brandy for when you read their report.

AIOHO/DYOR

99.8% down since 2010 £73m IPO
98.7% down since 2013 £50m Bank Loan - providers have a lien over the assets
97.0% down since 2016 $37m Placing
80.0% down since 2019 $32m Placing

A current market cap of £6m for a company whose management claims its only asset has a carrying value of £160m, and an actual market value well in excess of this!

They could go on tour doing stand-up with material like that!

I estimate the current market value of the only asset as £25m-£30m - identical to the level at which the banks stepped in and put a stop on any further drawdowns from the £50m loan facility they provided in 2013. Smart people - have they been reading our Adv*n posts?

MPL has one of AIM's largest graveyards of falling knife catchers who failed to do their research - including some of the City's finest II's in the last two placings - who all subsequently found to their horror that the Mercantile Management had welded the falling knife to a two tonne anvil!

Long stockmarket history has shown that finding differences between price and value is by far the most effective equity investment strategy.

The most important distinction between price and value is the fact that price is arbitrary and value is fundamental.

Professional investors find companies on sale for less than their true value by using a set of fundamental standards - Meaning, Moat, Management and Margin of Safety - which look beyond the company's current price tag.

Meaning - If you understand the business of the company, you'll be more likely to properly research it.

Moat - Is there something inherent about the company that makes it difficult for competitors to step in and carve away part of their market share?
JSE's moat is the impact of the recently introduced IMO 2020 Shipping Fuel Regs, its ultra low sulphur heavy(very rare) and light sweet crude oil production, and location close to the World's largest Marine Fuel Hubs, within the World's fastest growing, largest consuming, and highest priced energy market.

Management - Companies live and die by the people managing them, so its essential the management is highly talented, respected and with a long track record of success.
Having built two multi $billion O&G companies from scratch as a specialist second phase operator, Jadestone's management has an industry track record for creating shareholder value that is second to none.

Margin of safety - risk/reward: does the price offer good downside protection( as well as plenty of upside return).
There are a number of ratios you can use to calculate a company's margin of safety. Jadestone trades at a deep discount to its current P2 NAV, currently offering a highly material 78% of upside potential.
Post sanctioning of the Vietnam Phase 1 Nat Gas Asset Development, the valuation falls to just 41% of the P2 NAV, offering 140% of upside potential.

Operating cash flow - with IMO 2020 premiums and oil hedges Jadestone is currently realising an average price for its production circa $50/bbl higher than its current OPEX/bbl, and is in a Net cash position.

Leveraging differences between price and value is as simple as that - since in well managed companies at some future point, a stock's price usually levels back out with its value - an observation which has made investors such as Warren Buffet very wealthy.

Despite Brent falling $16 from $70 to $54 over the last month - the latest cargo of Australian Pyrenees heavy sweet crude still achieved more than a $21/bbl premium to Brent at auction yesterday.

Pyrenees has achieved a rate within $3/bbl of the spot LSFO price at both cargo auctions this year and is now following very closely that rate not Brent.

'Australia's BHP Group sold a cargo of Pyrenees crude loading April 11-15 at a premium of just over $21 a barrel to dated Brent via a spot tender, three trade sources said yesterday'- Reuters

Feb 2020 - Pyrenees Crude Auction - $21 premium to Brent
$54 - Brent
$75 - Pyrenees - March/April Loading
$78 - LSFO - Singapore

Jan 2020 - Pyrenees Crude Auction - $31 premium to Brent
$65 - Brent
$96 - Pyrenees - Feb/March Loading
$99 - LSFO - Singapore

Very interesting - someone has changed the SAVP stock on loan figure today.
It was definitely 4.19% when the report was published last night and now 1.47% today.
The actual figure of stock out on loan has also changed from last night.
The report is compiled automatically as an average figure so it is difficult to understand why it would be changed after publication and by who.

Rollovers trades

Your guess is as good as mine - we can only be certain of one thing, they are doing it in the expectation of making money!

Inter - the 2.65% increase in the short position, is in fact a circa 24 million increase in one month !

Highly illegal - but when has that ever stopped the CITY!

The skill is not to get caught!

But even then, the fines are so derisory for the very few that are brought to book, it does not in any way act as a deterrent!

If Riverfort borrowed and sold the shares they would have triggered a notifiable (>0.5%) position - currently, there are no notifiable positions !

Short position surged by 172% last month from 1.54% to 4.19% (37 million shares)

There are no reportable positions ( greater than 0.5%), so it would suggest hedge funds using opaque structures in an attempt to hide their involvement are likely behind this development.

Euroclear's latest Stock on Loan(short) Report published yesterday together with the change in brackets from previous monthly report.

0.00% - Jadestone Energy / ( No Change)
0.00% - Petrotal / (No Change)
0.00% - Touchstone Exp / (down 0.86%)
1.46% - Shell / (up 0.43%)
2.36% - BP / (up 0.15%)
4.19% - Savannah Petroleum / (up 2.65%)
5.70% - Enquest / (up 2.50%)
6.88% - Cairn / (up 2.95%)

I'd take most brokers and analysts forecasts with a large pinch of salt.
Never come across one that held any professional qualifications whatsoever in the sectors they cover or had any hands on management experience of running companies in those sectors.
In my areas of expertise - the global shipping and ports industries - the broker notes are generally not worth the paper they're written on - most are compiled by people who have done little research worthy of the name and have little understanding of what they are writing about.
I came to the conclusion if Brokers notes and price targets are mostly worthless for companies in my sectors - the same probably applies to most other sectors!
A good rule of thumb is to stick to sectors you know and understand, do your own research and place a very high investment case weighting on management's with a proven track record of success.

Miton selling down the holding from 7% to 4% - realised a circa £7m profit in 18 months on an initial investment of £11.5m; with the remainder of the holding worth circa £15m .

Vietnam Nat Gas Project - Phase 1

At an average $60 Brent, the equivalent value in barrels of oil per day of the targeted minimum 55 month plateau of 80,000 mmcf/d at various gas sales pricing:

12,000 bopd @ $9.0 mmcf/d (rate in latest Vietnam HOA's for new supply contracts)
Gross revenue: $263m/yr - $1.21bn over the minimum 55 month plateau

11,333 bopd @ $8.5 mmcf/d (average rate of existing Vietnam supply contracts)
Gross revenue: $248m/yr - $1.14bn over the minimum 55 month plateau

10,666 bopd @ $8.0 mmcf/d
Gross revenue: $234m/yr - $1.07bn over the minimum 55 month plateau

The phase 1 project would in many respects be like bolting on another Montara in production terms.

Mitsui buys Australian heavy sweet crude Van Gogh at large premium for IMO fuel - Reuters

'Mitsui has bought a cargo of Van Gogh crude at a large premium to meet shippers' demand for low-sulphur fuel, trade sources said.

It bought the 300,000-barrel cargo for March-loading at a premium of $27-$28 a barrel to dated Brent from Inpex, the sources said.

The deal could not be independently verified as the companies do not comment on deals.

Japanese traders Mitsui and PetroSummit have paid record premiums to secure Australian heavy sweet crude supplies in recent months.

The trading companies blend the crude with other fuel to produce Very Low Sulphur Fuel Oil (VLSFO), a new ship fuel containing 0.5% sulphur which meets emission rules set by the International Maritime Organization which took effect this month.'

That's around $91/bbl - a circa $10 discount to the current LSFO price in Singapore.

Considering where the Stag oil pricing has been relative to Pyrenees and Van Gogh over the last three months - Stag should be attracting around a mid twenties/bbl premium to Brent.

The last Stag lift was mid November, so the sales tender for the next cargo is probably underway currently, if not complete.