Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Great article Rob and despite the illogical protests of the well-balanced non-holders (chips on both shoulders) HAA couldn't be spelling it on more clearly.
The COO, Eddie Solbrandt, said mid-Dec and the pr volume with the 'done deal' message is increasing in line with that timescale. Of course, the timeline is with the banks but they wrote to Kefi to state a two-week delay which would take things up to mid-Dec, so, unless there is any different message or unanticipated further slippage from the banks, then that's the highly likely timescale.
HAA doing the rounds and saying "Construction crews are on their way to Tulu Kapi" is about as clear a message that he could give.
Mr P - ho ho. No, not announce but, who knows, quote possibly it gives a hint that Harry is hoping to discuss something with TW in that timeframe (weekend, early next week) of interest which he is unable to discuss with Tom as of now. Perhaps the biggest hint was in the recent interview when HAA was doing his best impersonation of the laughing policeman. All relative of course.
TW said he has exchanged emails with Harry and the 'shindig' that Tom was invited to `(but declined) went 'very well' , funding is 'on track' and he will speak with Tom over the weekend or early next week.
A couple of points I had to google 'shindig' and it means 'a large, lively party, especially one celebrating something!'
With reference to 'on track,' it's important to remember that Eddie Solbrandt anticipated hearing by mid-Dec. I don't know whether we should read anything into HAA's timeline for a call with TW before early next week. Harry said he didn't know which week but I'm not sure. For sure, at a minimum, he'll have a better-educatedRegarding guess than most.
Either way, I tend to have a two-year rather than two-week outlook and whilst I want to see the funding signed, sealed and delivered ASAP as much as anyone, I will not be perturbed if the signing comes in Jan. It won't impact where the two-year share price is going. But for the record, I'd have an extra Christmas shindig if it comes in the next two weeks as I firmly believe it will!
Deedee, 200m m/cap based on "5,000 potential more than 5 million ounces of gold over the next coming years" is a fair but perhaps conservative valuation. In Harry's recent interview, he projected this 5,000 figure would double (10,000 ounces). His point was that most countries have been worked over but this is completely the opposite for Ethiopia and Saudi Arabia so there is little ceiling.
I also think the prospect of a Saudi listing (which HAA has flagged up as on the cards) would propel the shares to a much lower NPV discount. Others have quite rightly pointed to the potential acquisition of the Tulu Kapi assets from a larger player which would no doubt give an early boost to KEFI's mcap.
I suppose KEFI as a whole might be an acquisition target but I think seeing Saudi assets developed would probably enhance shareholder value the most rather than an early takeover.
Lastly, if the gold price motors as many have predicted next year, then junior minors and especially the likes of KEFI are likely to have their turn in the sun. They have had 10 years or so in the doldrums so it's about time. Exciting times and the initial re-rating will be kick-started once TK financing credit approval comes in.
Toyin, I can see why you perceived they had achieved 20,000 litres and he reiterated the same line in the March 23 release "Sederma ... is testing the scale-up to 20,000 litres in a custom built vessel in Widnes.” I suppose SA would argue that he referenced a 20,000 litre capacity vessel but he, carefully or otherwise, skirted around confirming whether Sederma had filled it!
I sense Stuart is content to let bullish misperceptions float or even fuel them. The same applies to the possibility of a multinational deal on acne before year-end following a successful 2023 study completion. I don't believe that was ever realistic and the last reference was recruiting participants. I recollect SA fuelled the belief a multinational deal was possible before year-end in his answers to either TW's or Elric's questions. That obviously would only have been possible if a successful study had been completed and that was surely never on the cards despite SA leading listeners to conclude otherwise.
TC, I agree BSFA are very early stage and there is an element of hype in the announcement. SBTX will be well ahead of them. Croda have invested circa £6m which endorses the view that they will launch as soon as they can:-
"3DBT is pleased to announce that it has entered into a proof-of-concept contractual agreement with one of the largest cosmetic companies in the world"
I think Stuart plays up expectations unrealistically either clumsily or deliberately.
Toyin, who observes the analyses the Company more than most thought that the Sederma had scaled up to 20,000 litres. Presumably that view was based on SA's interviews or, understandably on the wording in the March '23 announcement :-
“SkinBiotix Pillar (skincare/cosmetics)
Sederma has successfully scaled-up manufacture to 600 litres and is testing the scale-up to 20,000 litres in a custom-built vessel in Widnes.”
In terms of acne results, SA hasn't managed expectations very well and rather than a study completion in 2023 it looks like it may only be recruitment for a study that commences early '24. SA hinted in interviews he hoped to get a commercial deal for acne before year end 2023. That implied the study would have been completed with successful results by then. Elric, who has made some terrific contributions and who I know even more after chatting with him is a very good-humoured and likeable guy, had to put a footnote after the last interview that clarified that the acne is a two-part study with the second part to come.
I think there has been some slippage in Stuart's anticipation of Croda/Sederma scaling up progress and associated launch timescale along with delayed acne results which are essential for multinational licensing deals hence the acquisition strategy. Slippage is normal and I think SA would still have been better off waiting for the Croda launch say mid-2024 and the completion of the acne study before embarking on acquisitions.
Fair comment Aquae on acquisitions but I think the timing and scale (£20m over 18 months) is wrong and sends negative messages on the prospects of a timely Croda launch and a multinational deal. Perhaps SA's hand is forced and the negative connotations are a reality but that would conflict with the public domain information about Croda/Sederma being on track and Acne completing the study in first qtr 2024. I believe SBTX will come good but in my view they shouldn't dilute at current levels to fund the acquisition strategy and should put it on hold until share price-enhancing news (acne, Croda and updates on licensing progress) is delivered.
I
It looks like there will be some potential competition for scientifically validated anti-ageing cosmetics and possibly acne treatment as well.
https://www.londonstockexchange.com/news-article/BSFA/3d-bio-tissues-product-partnership-progress/16223351
Not necessarily a negative as Croda appears well advanced with potentially exciting scientifically validated claims and it's a huge market. Also, the announcement by BSF Enterprise might mean any resulting licence is exclusive to the large cosmetics company referenced and competitors will need something with similar claims. Step forward Croda who will be much more advanced in their studies. That said, I am confused by Stuart Ashman's comment "scaling-up manufacture of SkinBiotix™ from 600 litres to 2,000 litres which is expected to ultimately lead to the 20,000 litres vessel required to service the global market." I thought he has said they were already up to 20,000 litres?
I am currently out of SBTX due to the prospect of further requirements for funds for several future acquisitions. I will monitor and potentially look for entry when Croda launches if the cash burn is under control, OPTI's remaining holding is in stickier hands, and SA has modified his £20m acquisition spending spree. I also hope he will modify his salary a bit as well or at least make it performance-related.
More important than that, I hope SA will avoid multiple acquisitions as it sends the wrong message. Croda and multinational deals are the game changers and diluting in advance of such events suggests to me that SA has little confidence in achieving a decent licensing deal in the medium term and isn't overly confident of a revenue-enhancing Croda deal in say the first half of '24. If he is confident then his focus should be in both of these areas and then there really would be no need for acquisitions as SBTX would be on a pathway to substantive profitability.
I know his argument is that he needs SBTX to be financially strong to get an optimum licensing deal but a) any multinational can see he has been able to raise funds and the balance sheet is good for 12 to 15 months now so his negotiating position should be fine b) he says he plays one multinational off against another to get the best deal - that competition should be enough to get a decent deal c) licensing deals are regularly made with small caps and biotechs with much higher cash burn than SBTX d) get a slightly less than optimum initial licensing deal rather than dilute and get diverted focusing on multiple acquisitions.
There seems to be some confusion here. The warrants can be exercised at any time including now. Logically they are not going to be exercised unless the share price is above 1.6p.
Realistically at say 1.7p and above, most holders will exercise. The confusion arises by the fact that at 2.4p or above for the specified timeframe, warrant holders *have* to exercise or lose their warrant entitlement below 2.4p exercising is optional.
Thanks Banjoroeguy. I am mainly looking at the difference between accuracy (94%) and sensitivity (86%) for the PSE test and getting a handle on which one is the key figure. I assume the former and that's certainly the one that will get the media attention. In terms of take-up it doesn't matter too much because sensitivity for the PSA test drops to 33%.
Can anyone clarify why there are variable figures for accuracy? The first link gives the generally accepted 94% accuracy figure for the PSE test and 55% accuracy for the PSA test? Although, within the text, they cite 93% accuracy for PSE rather than the 94% headline figure.
https://www.94percent.com/?gclid=Cj0KCQiApOyqBhDlARIsAGfnyMoSN7IcK5iwhloRsonaEk-Qb-iqAr_hrFXdpKccOeP26UtukA_eEB0aAqXTEALw_wcB
In this blog, however, they reference 33% (PSA) "sensitivity" compared to 86% PSE.
Is the 94% accuracy figure derived from a patient having both tests?
"The PSE test substantially improves sensitivity, raising it from the PSA test's 33% (based on results from the PROSTAGRAM study5) to approximately 86%. "
https://intheloop.oxfordbiodynamics.com/blog/time-to-rethink-prostate-cancer-testing-a-q-and-a-with-obds-cso-alexandre-akoulitchev-phd-frsm?utm_source=social&utm_medium=blog&utm_campaign=nov-post
Interesting research Sajy. I assume if NIAID were to pursue a deal to fund clinical trials there would be a decent upfront payment involved as well. I wonder if they have an option on a licensing deal within the current Non-Clinical Evaluation Agreement.
Is there anything in particular that makes you think the results could be announced any day now other than the fact they are overdue and investors are due an update?
4) I was aware that he wanted to do a small acquisition and maybe one or two very small bolt-ons. A decent enough strategy if it allows the likes of Axisbiotix-ps to be rolled out significantly through an acquired sales channel. The scale of the acquisitions disappointed me and raised a lot of questions about the strategy. Generally, I don’t like growth by acquisition, as TW says 70% of acquisitions fail. Look at a stock like Totally who attempted that approach. Aside from the risks it can create overhangs and haven’t investors experienced enough of that with the annual share price demise when OPTI decided to sell?
So let’s see what this ‘heavily pregnant’ ‘so much news to deliver this year’ ‘transformational news’ that ‘nobody will see what is coming’ actually is. I will be delighted if it goes well for other investors and for the small holding I have retained. I will watch and may change my mind in line with the quote ‘if the facts change’. I don’t think Stuart is the devil incarnate – far from it – but on this occasion, he was morally wrong to hype the stock with at best massive exaggerations and it was a lesson learned for me. He also has 13 dissolved companies to his name which is a bit of a red flag. I’d also save your touching heart-felt empathy in the interview for more deserving causes than a CEO who has yet to deliver a deal yet takes 450k per annum out of a heavily loss-making company. Last post from me whilst I watch developments and all the best to you personally.
2) You asked him about funding in the first interview. He could have said we need to raise funds because we have the results coming and we would have the ‘going concern issue’ flagged up. He chose not to and gave an answer that hid the fact that he already knew a placing was imminent. Tom has clarified that Stuart was allowed to answer honestly and Stuart has, deliberately or otherwise, misunderstood, the rules and claims he would be breaching the law if he did answer honestly.
Yes, we all knew he had to raise funds at some stage but in the context of this supposed mass of positive news that is coming this year his phrasing of his answers suggested it wasn’t imminent and the sensible conclusion was it would come after all this transformational news which he hyped with phrases such as ‘nobody will see what is coming.’
3) He was in hype mode like he had never been before. He said he'd worked for multinational companies and been responsible for products with 100’s of millions of revenues but he’d never seen anything like what he had in front of him now. Really? So why buy a series of tiny cosmetic companies when one or two would do the job to roll out these potential hundreds of million revenue products he already has internally?
That’s fine and everyone wants a positive CEO but in the context of the imminent placing, I believe he was hyping the stock to get the share price up so it allowed for forward selling and discount from a higher base. Fine for those who didn’t buy based on his hype as it means less dilution (I think it would have been about 15p otherwise) but for those that added significantly his vague hype to pump the share price was an unethical way to behave.
Lric, thanks for the reference to me in the interview :-) It was an odd comment as you are an astute investor and to use Stuart’s style of phrasing you’d have to be the dumbest investor ever not to understand why, as someone who bought a lot of shares after his interview, why I changed my tune after the placing and the accompanying detail. “When the facts change, I change my mind - what do you do, sir?”
You bemoan investors who don’t read past the first line of an RNS release but I have given detailed reasons for the change of view. As an aside, I think those investors are right and Stuart isn’t at all confident of early Croda commercialisation hence the 12-month extension and accompanying plan for numerous acquisitions with the inevitable convertible loans that will go with that. The commercial deal with Croda hasn’t even been formalised yet as I understand it.
I accept of course that it wasn’t some Machiavellian pre-plan and Stuart is generally an upbeat and excellent speaker but he overdid the hype on a monumental scale in the context that he knew a placing was imminent.
Let me spell out my reasons again.
1) The first interview said there would be transformational news and he didn’t exclude multinational deals or other news. I think we can be pretty sure it is solely related to the first on many acquisitions and he left the prospect of a multinational deal as a disingenuous incitement for suckers like me to buy in.
In fact, he used ‘transformational acquisition’ in a subsequent RNS release. He had already announced an intention to acquire a company in previous announcements so there is no reason why he could not have specified this was his reference to transformational. I even emailed him after and he was equally vague.
To me, in hindsight, it was clear he wanted to create pre-placing share price-enhancing hype and leave it hanging that there might be transformational licencing news when there is no chance whatsoever.
Note the change to ‘early stage’ negotiations with regard to multinational deals. He backtracks on that a bit in the latest interview but I’ll take what he puts in an RNS over that. His vague reference in the first interview clearly didn't even relate to ‘transformational’ results from the acne study because it looks like that has been delayed beyond investor expectations. He didn’t clarify that in the first interview and you added a footnote. His answer regarding the acne study in the second interview was far from clear and Stuart was uncomfortable and unusually inarticulate in answering it. Nope 'transformational' related to a whole bunch of acquisitions but he wanted to play games with investors by keeping a few other more enticing reasons up in the air.
Yes, a 20-minute blistering appraisal by Tom Winnifith of Stuart Ashman and his 450k salary package (including N.I. contributions etc), his acquisition strategy, his failure to do any commercial deals and his misleading use of language before and after the placing.
Tom points out that 70% of acquisitions fail and he, like many shareholders, can't understand why SA is going down this route on this scale when Croda revenues should start coming in early next year. He also believes SA could have preserved cash via salary and other cost savings and put off a placing until after Croda launch and royalties start to kick-in.
Despite Stuart Ashman and his acquisition concerns, Tom is keeping his shares and taking part in the retail offer. He'd like to see a restructured board to ensure SA is kept under scrutiny and a reduction of costs, especially salaries. He will recalculate his price target but it's still likely to be over 100p. It will be adjusted to take into account increased corporate (SA) risk but any reduction would be reduced if SA shaves off his beard.
Yes, I think Elric will now be the interviewer of choice and I don't see the prospect of endearing Christmas card wishes exchanged between TW and SA. It was quite a savage 20-minute assessment but my view is that Tom should be commended for being frank, expressing some concern at the new strategy and speaking up for shareholders of which, of course, he is one.
I believe the acquisitions will be a drag on the price but SA implies there will be abundant news this year and, although it isn't wise to be guided rigidly by his words given it was in the context of SA in pump mode. I assume, perhaps incorrectly, it's not all acquisition-related so I'll keep a significantly reduced holding for this year at least.
SA jettisoned the distributor approach which may well have led to breakeven because he stated he was getting multinationals knocking on the door to do deals. Clearly, he got that wrong massively.
Now he says he needs to buy in revenues to have a position of financial strength and this will assist in getting the multinational deals.
I think a better way would have been to have done deals with distributors outside North America, brought in decent revenues from Axisbiotix-PS and have a vastly increased source of reviews and positive retention rates to encourage the multinationals to sign up for a licensing deal in the largest market.
My feeling is that he knows he made a mistake and to go back to rolling out Axisbiotix-ps via distributors would be embarrassing so he is going down the acquisition route.
Why do this if the Croda launch and the building up towards £24m revenues are genuinely likely to start in say March or April next year? Maybe those who read delays into the 12-month Croda contract extension were right to do so.
Management is key in every company and Ashman has 13 dissolved companies to his name. That combined with his recent pumping of the stock prior to the placing doesn't inspire confidence or trust. One or two small acquisitions may be the right way to go but not the level he is aiming for.
He needs to come clean and say his decision to jettison distributor deals because he perceived he would get a reasonably early licensing deal was a mistake. I see late-stage negotiations have now become 'early stage' with multinationals. He also needs to come clean on the realistic launch timescale and 2024 revenues from Croda/Sederma. He must have a handle on this.
He doesn't need a mass of acquisitions to prove the in-house products as just one or two small ones would provide for that. The fear is that he has lost confidence in the prospect of 2024 commercialisation of the in-house products (including royalty revenues from Croda) and now wants to buy in revenues. Happy to be proved wrong but not convinced by SA, his morally dubious recent interview or the scale of his acquisition strategy.
Nick1978 - yes that's right. I tend to use that site more.
Elric, in the context of what has been announced I didn't like the way he worded his answers. It was disingenuous and misleading in my view as he left things like multinational deals as potential reasons when asked to define what he meant by transformational. We all knew he would have to raise at some point and clearly he knew it was going to do it shortly. So to answer your question in the interview about funding he said words to the effect 'it would be a foolish CEO who said he would never raise funds again.' That was a disingenuous reply in my view given he knew it was going to do it imminently.
In a nutshell he threw it out there that transformational news was coming and that there was a mass of news (with the hint it would be transformational) to be delivered before year's end. He knew investors would buy shares on the back of that and presumably was aware they would be out of pocket doing so in the context of his plan for an imminent discounted placing. I don't like that approach or his £20m debt-funded acquisition spending spree plans over the next 18 months. Stuart is smart enough to know that investors would assume he would get the transformational news 'nobody will see what is coming' released before funding. I feel it was tantamount to ramping before a placing which is not particularly edifying.
My view over from the 'other side':-
I can see the rationale for buying one or even two small acquisitions with a relevant customer base to use to roll out Axisbiotix-PS and hopefully the acne product but not the 18-month £20m acquisition via equity/debt plan SA has outlined.
SA wants to be in a position to get an optimal deal with a multinational from a position of financial strength. Well, my preference is for a slightly sub-optimal deal rather than taking on £20m of debt convertible or otherwise. An unknown funding package he still has to put together.
Why not just do a couple of small accretive and synergistic acquisitions and let Croda/Sederma royalties build up? I think in the TW interview these royalties were anticipated to grow to £24m (pretty much straight profit) and probably a higher figure with th anticipated premium pricing given the enhanced proven claims that seemingly are going to be able to be made.
Stuart speaks very well but he's yet to do a commercial deal (Croda was done by his predecessor) and he has 13 dissolved companies to his name as well. I am not convinced by his strategy here at all. Croda launch alone should mean the Company makes breakeven and a couple of small acquisitions could be used to grow Axisbiotix-ps sale to a level which entices a multinational to do a decent deal. If (and only if) he can't do that (and I don't understand why not given the reviews over an extended period) then perhaps the original idea to use distributors was the pragmatic approach.
Perhaps it will turn out to be a stroke of genius but I am not convinced. It suggests Stuart doesn't have confidence that Croda + a multinational deal or two will push the Company to break even within a year to 18 months. That alone would push the share price towards or above TW's 150p target price without the 20m of acquisitions. I can only see up to £20m of convertible debt (which is the most likely source of funding) suppressing the share price I don't doubt he will put forward a passionate well-argued case but I'll be dubious and I think there was a certain amount of hyperbole in his last interview with Elric.
Elric - SA should not have agreed to do the interview, particularly with the hyperbolic statements he used if, as you say, a placing or talks about a placing were underway ("a placing was in the works" ..."it worked better than expected" ... "some crooks bailed when they knew the price"). Placings are invariably done at a discount and it looks like SA lured investors in with statements he knew would inflate the share price at levels that inevitably were going to be a significant premium to the placing price. In fact, you seem to suggest the placing price of 19p was agreed at the time of the interview or perhaps I have misinterpreted your comments.