Member Info for Mumbles2021

What on earth are you talking about

Kitzzz, you know that. I know that. But apparently that is not the point

Why is it expensive…… the operation has been valued at 800 million compared to 250 million a year ago.. LSE isn’t market value it is a construct,. The market value last year was 50 million, is that the one they should have used

And nobody invented anything, if you don’t want to know….. stop asking

They have agreed a valuation off the Longonjo project based on fundamentals and perceived risk, as a proportion of the stage of development and also willing buyer . Willing seller. If you work on the economic benefits to Pensana based on the revised shares on Ozango of 68.4%. You get an agreed value of $800 million, 68.4% of that is 533 million. 30% of 533 million is 160 million. This compared to a commercial valuation in March of last year of 250 million…

You have to believe what you have to…… I’ve tried. But at least i know you aren’t part of the discussions. The MCAP has sod all to do with the commercial valuation

TBOW, over the last 12 months their have been three notices on finance, at different times and at different corporate levels. They should not be conflated with each other or with the LSE market capitalisation.

The first transaction, in March last year, was at OpCo level. It was based on a project valuation of approximately USD 250m, when the LSE market capitalisation of Pensana PLC was around USD 50m. No PLC shares were issued and no shareholders were diluted. Pensana’s economic interest in the project however reduced from 84% to just over 50% as part of project financing. Pensana had an option to increase its economic interest back to 75%, which would require a cash payment of approximately USD 107m. This transaction was independent of the PLC share price.

The second transaction, in December, was the first PLC-level equity proposal. A strategic investor submitted a non-binding placeholder proposal, subject to due diligence, indicating USD 100m for 25% of the PLC, implying an equity valuation of USD 400m. To deliver that ownership, new shares would need to be issued, resulting in dilution. This valuation exceeded the LSE market capitalisation at the time and exceeded the original OpCo financing valuation attributable to PLC shareholders by a multiple.

The M&G placing was completed at the same time and price as the December placement. It was not a separate transaction and was not priced off the market. The purpose of the December placing, including M&G’s participation, was to fund corporate costs, including legal and advisory fees, while the strategic process continued.

The third transaction, announced on 10 February, followed completion of due diligence. The investor submitted a revised offer, subject to shareholder approval, of USD 160m for 30% of the PLC, implying an equity valuation of approximately USD 533m. Compared to December, shareholders were asked to accept 20% more dilution in exchange for 60% more capital, with a 33% increase in implied valuation. This valuation also exceeded the original OpCo financing valuation attributable to PLC shareholders by a multiple.

In all cases, the commercial valuation exceeded the LSE market capitalisation at the time. Market capitalisation reflects secondary trading prices. These transactions involved primary or project-level capital. Issuing new shares results in dilution, but the capital raised is expected to increase company value by much more than the limited dilution incurred.

My own experience of the board is that they are very risk averse and well aware of there responsibilities. Also they know they have to be totally compliant with US requirements, including Sanctions, non contracenrion of any requirements that would preclude them from supplying into the US market and complying with the non Chinese origin requirement

Novice, I honestly believe those are perfectly reasonable questions. You know your own bank wants your inside leg measurement when trying to transfer any amount of funds.

TBOW. There is nothing wrong or peculiar about my logic. Some will have to agree to disagree. And anyone following this thread can make their own minds up.

It is also hepful to do the same calculation when the strategic investment was first muted, before due dilligence

100 million for 95 million shares,

shares on issue then 295 million

total shares on after issuance 390 million shares

95/390 = 24.4%

valuation then 410 million,

valuation now 537 million.

strategic increase vauation by 30%

I;ll do it at the figures when the deal was signed, (80 million, not quite a 100 million but not far off) and what it is today. So tell me why the shares were sold cheaply

144,508,671 million shares for 160 million dollars,

Current shares on is 339,522,689

share price on 10th February when the strategic deal was revealed was is £1.00 (x 1.35 = $1.35) .. on the 6th it was a slow as 96p

MCAP 10th January was 457 million USD

Shares on issue after placement is 484,031,360

%age of shares issued to Stategic 29.8% (144,508,671/484,031,360)

160 million / 29.8% = 537 million....

today the MCAP closed at almost exaclty 500 million.

so its still higher than the investors MCAP valuation

Novice, its not a pointless tit for tat. if you think that i am love goggle bully brigade... believe it or not I've lived this life, and do have some idea of what i am talking about........There needs to be a semblance of reality applied to the principles. its not bullying if all you are trying to do is explain a situation. whether any want to believe it or not, is a different issue.

As for no where to hide if the resolution passes and the 160 million isn't immediately in the bank i believe i have already made that statement.

TBow —just read this again..... "Shareholder value, on the other hand, is, as far as I am aware, not even mentioned company law and there is no particular obligation on companies to maximise that particular metric. if you’re saying that because the phrase “shareholder value” isn’t explicitly written into statute it therefore isn’t relevant, I honestly struggle to follow that logic." ... Are you serious?

In a commercial company, success is judged by whether it can fund itself, execute its strategy, manage risk and deliver economic returns to its owners. That is exactly what “promoting the success of the company for the benefit of members as a whole” means in practice.

If a company can’t do those things, it hasn’t been successful — regardless of how rigorously principles were observed.

TBow — it isn’t nonsense, but one of us is talking past reality.

You’re still framing this around screen price and principle. I’m framing it around risk, execution and valuation.

Whether a rights issue is legally required or underwritten is not the point. In this sector, on this market, an un-underwritten rights issue of size materially increases the risk of failure. That’s a fact, not an opinion, and boards know it. Execution risk is what destroys value.

On the “discount”, you’re again mixing up price and valuation. The investor is buying 30% of the company at a valuation over $100m above the current market cap. That is not cheap in valuation terms. The lower per-share figure is simply the arithmetic consequence of issuing shares to achieve a defined post-money ownership stake.

The investor is taking the view that the market cap does not reflect the fundamentals, and is pricing in risk by entering earlier on the risk curve than later investors will. That is normal capital pricing.

We both want the same thing — shareholder value. Where we differ is that you appear willing to prioritise principle and optics, even if that increases the risk of failure. I’m not. I’d rather accept dilution that enables progress than defend a position that leaves the fundamentals trapped.

So if the question is who is talking nonsense — I’d suggest it’s the argument that ignores execution risk and treats a thin LSE quote as a meaningful benchmark for funding decisions.

TBow — this is where I fundamentally disagree with you.

Pre-emption rights exist to prevent arbitrary dilution, not to force companies down funding routes that materially increase the risk of failure. The Companies Act allows those rights to be disapplied precisely because insisting on them in certain circumstances would harm the company and its shareholders.

My priority is maximising the return on my shareholding. In this sector, given current geopolitics and the LSE’s attitude to small caps and miners, a rights issue would materially increase execution risk. It would require underwriting, add delay, and could fail. That is not theoretical — it is exactly what we have seen repeatedly.

Here the company is raising capital at a valuation more than $100m above the current market cap, with the investor acquiring 30% of the enlarged share capital. The lower per-share figure is just arithmetic. The capital unlocks the fundamentals and allows the project to proceed.

Insisting on a rights issue as a matter of misguided principle risks the company stalling or failing altogether, to the detriment of all shareholders. I would rather accept dilution that enables success than defend a principle that increases the probability of failure.

This is about outcomes, not ideology.

TBow — I don’t think you’re being unreasonable, but I do think you’re being naïve about how capital is raised in practice.

This isn’t about taking an easy route. These deals take months and the detail is heavy. They are anything but simple.

It’s also not about principle or individual shareholder sensibilities. The obligation is to choose the route that maximises shareholder value — including, presumably, yours.

A rights issue at this scale would require underwriting, introduce delay, and could fail. That execution risk is exactly what lenders and counterparties will not accept. Failed or delayed funding destroys shareholder value far faster than dilution.

The shares are not being issued cheap. The investor is paying for 30% of the company at a valuation over $100m above the current market cap and will own 30% of the enlarged share capital. The lower per-share figure is just arithmetic.

They are investing because they believe the market cap does not reflect the fundamentals. They are also coming in lower down the risk curve than later investors will. Early capital absorbs risk; later capital pays for certainty.

This capital unlocks trapped fundamentals. That benefits all shareholders.

I think this says more about the poster’s approach to voting than about British corporate governance.

Last March, when the AFC/FSDEA financing was agreed, shareholders had no vote, yet Longonjo was effectively valued at ~US$250m, with Pensana’s equity in Ozango diluted from 84% to just over 50%. That was a genuine governance moment — and it passed without objection because there was no alternative.

By contrast, the current strategic transaction followed full technical and commercial due diligence, after which the agreed valuation increased by ~37% from the December placeholder level, resulting in a ~US$800m valuation.

After allowing for FSDEA’s US$25m equity participation, Pensana retains ~68.4% of Ozango, implying a value to Pensana of ~US$547m. The strategic investor is taking ~30% for ~US$164m — clear third-party price discovery.

As set out in the RNS, Pensana’s equity interest in Ozango is expected to increase as strategic funds are deployed into resource expansion drilling and Dy/Tb recovery circuits.

Voting as a matter of principle, rather than on the merits of valuation, dilution, and outcome, is of course a personal choice — but it shouldn’t be confused with a conviction that this transaction is value-destructive.

And after re reading I’m sure you can work the gist out even if it reads like an illiterate wrote it

Novice, let’s be realistic. If this isn’t the real deal as t eh money isn’t in the bank immediately the vote is passed, then that is the end. I strongly suggest you sell as the SP will be zero afterwards . However, I strongly suspect you won’t. So pls stop with the

I suspect you won’t so why with the BS. However, I strongly suspect you won’t. So pls stop with the Rhetoric which serve no purpose. This serves no purpose. FYI I’m writing this from Cape Town