Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Honest truth Theo, i believe to the Angolans have already stepped into and are driving the LJ financing. which is why i have every confidence that this time it will come off.
It would appear that the reason for the devaluation was due to the government stopping their policy of propping up the currency using the proceeds from crude sales which are lower than budgeted to amortizing the foreign currency debt thus reducing the interest payable in the current high interest rate environment. This has reduced the FX in circulation leading to the recent devaluation. Before this it had been very stable from November 2022. Fitch have revised the outlook from positive to stable, the rating remaining B-. The revised Fitch report dated 23rd June can be found at https://www.fitchratings.com/research/sovereigns/fitch-revises-angola-outlook-to-stable-affirms-at-b-23-06-2023
Theo, believe it or not some us do have a clue about the how it can work, maybe not the specifics, there being enough information available , if you have knowledge of how Project finance works and are able to run your own model . Secondly whilst the local currency may have devalued, the functional currency for the construction and the product is US Dollars, consequently the impact of the devalued Lwei is that Opex costs that are incurred in local currency will be lower in relation to US Dollars, From a free cash flow generation perspective this is positive and can only help in providing the cash flow required to meet the debt coverage criteria.
You have no idea do you SP, do you really think that Non-Execs such as Jeremy Beeton, or Steve Sharpe would put their name or sign of on this if it is as you say. As i have said many times before, what you say “is compulsory”, is not. Doesn't mean to say that the financiers will not do their due diligence before before making a decision. That is what ABSA are doing at the moment . The difference between my posts and yours is that I’ve lived this life. Up to readers of this forum to decide what they want to believe. I would prefer do their own research and determine what is required in a typical project finance loan structure.
DP/SP, in respect of valuing Ozango for project financing purposes, it has nothing to do with market cap as its not a listed company. It has everything to do with the potential investors (in this case the Angolan sovereign wealth fund) determining a commercial valuation based initially on expected as built costs and existing asset values, against the operating companies ability to generate free cash flow that meets the financiers debt coverage requirement during the tenor of the loan (which almost always include a front end payment moratorium during which interest on the drawn down amount will be incurred and have to paid back within the same period), followed by the estimated NPV of those cash flows for the expected life of the investment. It has nothing to do with the Share price and ultimate market cap as determined by market sensitivities. Consequently a worst case scenario where FSDEA take up a maximum option of 35% would suggest they value the Longonjo operation at $228 million at this stage of its development. Which is the expected cost of building the asset, without consideration of expected future profits. From their perspective this represents incredible value compared to the potential revenue expected to be generated.
Re your comments on build costs, i have no problem believing the budget figures determined by Wood group, who have costed based on the data applicable to the location and project. Without providing comparative numbers to enable a like for like analysis your statements dont standup. A huge proportion of development projects require the construction of entirely new infrastructure, railway lines, roads, some times over 100’s of miles, power generation facilities, power lines, some projects even require the construction of a port to bring the equipment in. These items can add many tens, sometimes 100’s of million of USD to a project CAPEX. Longonjo does not need them, , it is only 6 kms from the rail way line which os connected to a modern port. The initial attraction of the Longonjo reserve was that the reserves are virtual at the surface consequently the capex required to develop the mine are extremely low, The budget figures and what the plant and machinery required at the site are all available on the website. If you have an idea of construction and fabrication costs you can form an estimate of your own. So your statement “IS OBVIOUS TO ANY ONE WHO LOOKS” isnt obvious to me
TDA depends entirely on how the finance is structured. The expected structure for Longonjo has the 20 million ABSA loan plus 80 million from the Angolans, which will be either a loan or equity or a combination of both. Currently, the Angolan contribution consists of $ 15 million of debt. Leaving a question of how the balance of $65 million will be structured. Whether debt or equity determines the cash distribution to Pensana PLC, PRE owns 85% and will not go below 51% (or 50% plus one share). We are still determining what the discussions have been regarding the Angolan expectations are from their direct intervention to make the project work. But if the 35% maximum shareholding and $80 million contribution are converted to As-built asset cost, the project (or Market cap, without considering future P&L) would be valued at $228 million. Taking up their full equity option in Ozango of 35% would reduce Pensana's share of the cash distribution by a maximum of 40%. But this would be from the first day of positive cash flow. If it is put in as debt, then depending on the debt repayment obligations, cash available for distribution to Pensana will be reduced at the front end. Still, it will increase to 85% once the debt is repaid. Pensana favours the debt option; unsurprisingly, the Angolans favour equity. Either way, there is no direct dilution in the PRE share price due to dilution. Still, valuations based on potential future profits will take a hit of a max of 40% based on the level of Angolan Equity in Ozango. If Saltend is built, this hit could be less than 20%, with Ozango contributing 50% rather than 100% of the P&L.
China, the bots are, and are logically, more effective at lower trading volumes. Their actions have a more significant effect at this time than when large volumes are transacting. The SP direction is a consequence, not a trigger, of the BOT activity.
Maybe they could, if it becomes necessary. Current plans are for it not to be. But optionality has considerable value.
Ok, AS1971, why did you participate in what you believe to be a self-fulfilling prophecy? You ask what the point of Sundrums post was. I ask you, what was the point of the posts you made? They served no purpose other than to potentially increase your losses. I usually refrain from taking part in the pointless tit-for-tat that takes place on this forum. Preferring to post information and opinion that I hope helps shareholders to form a balanced view. All your posts since you joined this page have encouraged holders to sell before they lose any more. Why was that?
AS1971, I care, and quite a few others care. I don't care what you think. The relevance is to demonstrate that the posts that Theo et al. (including yourself) put up were part of a strategy to either depress the share price or shake the tree to bring more shares onto the market. It is (except for the recent credit unwind) such a tight stock that the smallest percentage tends to have a disproportionate effect on the SP. A fact that wasn't lost on you.
I note that you joined this page on 28th April, the same day the funding arrangements were announced, and that you have commented in the same vein from your first post in which you stated, ".......but for all the positivity around funding/investment, the share price has just about lost the entire gain after the recent announcement", at that stage it was 28% up. You followed with.
"Everyone please accept that this stock is cooked, gone, good bye. This holding on for a few months since April has just given a lot of you false hope. Any stock that falls by 90% does not recover. This will be no different".
"15.5% drop, not long now and it's all over people..."
"………….. that the share price is in freefall again and will be worth zero within a very short space of time. It cannot recover from this and all the positive spin in the world is not going to change that. The share price is never going to recover, like this company and its business plan."
"Pensana will be long gone in 12 months mate!"
Very close to the end now, under 18p. A matter of weeks.
Another 20% drop. It's over very soon unfortunately.
"Stand by for SP to be single figures within a few days..."
The point is to demonstrate to other readers of this platform the comments are part of a strategy to enrich the posters, not to inform new and existing shareholders.
To your question, "I CARE". However, I hope your strategy worked, and you have profited handsomely.
Major Tom, im sure it can be traced directly back to the interim results RNS released end of March.
I just got direct from the holder in PA's note that the position of the Brisbane holder and the time required to close out of 2 weeks that the size of the position was overstated and pessimistic. And that that particular position is now closed out. For your information.
Factfinder, PRE isn't an AIM stock. It is a fully-fledged listed company with attendant reporting and governance requirements.
Daytrader i am intimate with all the details stated in the letter and can vouch for every one of them, having experienced the whole journey. There are NO lies in it.
I can assure you it is a fact... i know this, but you are speculating
To day trader, i guess it doesn't suit your narrative
Eloro, if you post misleading and erroneous posts then they need correcting. Otherwise, other readers of this board may take them as the actual fact and come to conclusions that do not reflect the actual situation.
Also, your generalisations about the African population are disgraceful and misleading. And for clarification, we are talking about the generalisations, not disputing that the countries don't have some serious issues.
We agree that if the company fails, the blame can and should 100% be placed at the door of the PRE management. We are discussing the likelihood of that happening, that is all. No insults, no name-calling. The status of your PRE investment is very relevant. Or more to the point why do you consider facts that didn't matter to you then, to matter now? Especially when they don't relate to your opinion of the PRE management. So is your sole gripe the board handling of the project, which has some justification? Or is it also where LJ is located and the competence of the local populace you insultingly believe to be cerebrally challenged? These points have been a constant from day one. Before you say, "I didn't say that", please clarify exactly what you met by Angolans "not being the sharpest tools in the box" if you didn't mean that.
Your attitude is very revealing about character, and more importantly your knowledge about the project and the real and potential difficulties that companies experience working in this region. i feel very comfortable now that you have revealed that you don't understand or don't want to understand the region. Consequently, your opinion doesn't add any value to this board
Eloro, I used to work in Nigeria and have now gone back for a second helping, this time for myself. Consequently, i have first-hand experience with what I'm saying. Angola and Nigeria are both very similar in respect of the demographic. Not least is the huge divide between the haves and the have-nots and is 100% responsible for the prosperity ratings you quote. The personnel that PRE is dealing with are the well-educated elite. Not nice, but fact. The prosperity index you quote is irrelevant in this case. "Not the sharpest tools in the box" is a sweeping and unfair generalisation emphasising a non-existent point. Also using Elisabeth de Santos as an example of corruption should be used as the opposite. She should be used as an example of the reforms that the Laurenco regime has put in place to try to eradicate what was systemic corruption. Elisabeth de Santos had her Angolan assets seized by the Angolan supreme court in December last year and was convicted of embezzlement by a Dutch court last month, largely based on evidence provided by the Angolan authorities. Since you first started posting, and I assume you were a shareholder at that point, the endemic corruption that was in place is being tackled, with considerable credit being given to the Laurenco administration by governments and global financial institutions. I have to ask why you are now trying to look for facts to support a point that previously you didn't care about when the situation in Angola was far worse. https://www.africanews.com/2022/12/27/angolas-top-court-orders-seizure-of-isabel-dos-santoss-assets//https://www.africanews.com/2023/06/23/isabel-dos-santos-convicted-of-embezzlement-according-to-dutch-court/
Eloro, i have been having a look at your posts since you started following PRE. i have to concede originally you were fully in with the project and that as time has passed the delays, missed deadlines etc have lead you to form the opinion that change of leadership would probably be the best thing that can happen to them. ill admit that at times I've had the same conversations. But whatever my view, and my interactions that i have had with the board, lead me to the conclusion believe that this is going to happen sooner rather than later. especially now. However, your statements that the Angolans are not the sharpest tools in the box is grossly unfair and unnecessarily disparaging. They have ben dealing with the oil majors in contract negotiations for many years. the majority of them have been educated in London, Europe or the states, Engineers at Berkeley, Business degrees from Harvard and Economics from the LSE. they are as bright as anyone on this board. The new dispensation under Lourenco, are dedicated to the interests of their country. they know exactly what they are doing. i can also assure you they will have all their bases covered. All the hard work is done, for them this is now the quickest route to exploiting the resource for the benefit of the country. Don't get me wrong, I'm sure there have been some very forthright discussions between the Pensana management and the Angolan SWF, but they are pragmatist. unlike many on this board.
Theo, obviously designed to provoke a reaction rather to provide any kind of useful information to the board. you know the reason why. And its not the Chinese, its not FUD shorters. you've no need to shake the tree as there are plenty available for the moment, so i can only assume you are enjoying baiting china.