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Miles McNulty projecting 5.3m revenues from contract manufacturing including revenues from ABISS. So based on Bill Brown's assertion that contract manufacturing companies are valued at 7 times revenues that's a £37m m/cap without factoring in cash, vascular and of course Structural Heart and the AurTex MTA. A 37m m/cap equates to flyinghigher's 60p share price. I think that's realistic as RUA moves into profitability which it seems to be heading towards. Add in a deal of some sort on the MTA and it's well into three figures for the share price.

Just to add I am guessing that it's Edwards who are the MTA partner hence I think they would only want the film for heart valves. If it were another company they might want Vascular or even Contract Manufacture as well.

Popeye, yes that's a good point. So, I think the way around that would be as you say to buy the whole company or, alternatively buy Rua Structural Heart and Rua Biomaterials where the

Elast-Eon IP resides. I'm not sure they would want Rua Vascular or Rua Contract Manufacture so they could buy the entire company and give RUA a license specifically for contract manufacturing and Vascular.

If the MTA major does move forward with Aurtex, it will be interesting to see whether it's a licensing deal or an outright sale. Even with an outright sale it would still be possible to negotiate a large upfront payment combined with a 4% or 5% royalty from future sales. That would be the ideal scenario for me. Licensing would get a much lower upfront but the prospect of double digits and potentially keeping the IP but I am am sure the major would want exclusivity.

RUA is a rare beast amongst the small caps - a value play but with significant blue sky prospects.

Agreed on the investing rather than trading posts. For me it's simple - if the Company moves to profitability it's a 30p to 50p company (£20m to £35m m/cap company) and if the MTA partner snaps up AurTex it's a 100p to 200p company. Odds are very strong for the former and a good chance for the latter. Happy to sit, watch and wait.

All we've had here is momentum traders looking for a quick break to 20p and when it stalled they have cut. They will be back and FOMO will also be a factor. Probably the wrong stock to trade though. Positive news on the due diligence for the bargain acquisition should see a new trading range.

CTSFO, as a general rule the share price would just reflect the amount paid for Structural Heart Ltd plus the value of the remaining businesses.

There could be a slight discount or even a premium as, to make the case for the latter, the Company would have enough cash to do the Vascular trials, accelerate the growth for the contract manufacturing division as well as issue a dividend to shareholders for the bulk of the cash.

It's an interesting one and someone with greater knowledge might know if there is essential IP for AurTex within Rua Biomaterials, if so, then inevitably any major wanting ownership including the relevant IP would bid for the entire company or at least the two divisions containing the IP. It's just curious that they have opted to put the new patent in application in Rua Structural Heart Ltd. Either way, if a major buys AurTex the share price would inevitably be many multiples from where we are now.

By the way, I missed referencing the patent application number and it's Gb2314136 9

searchable on https://www.ipo.gov.uk/

01 November 2023

(Journal 7015) GB2314136.9 Applicant: RUA Structural Heart Limited

Title: Composite material, heart valve and method of manufacture

Date Lodged: 15 September 2023

The attraction of this share is that even without the MTA progressing (and I hope and believe it will) the other two profitable strands mean the company is under-valued as per Bill Brown's citation of industry valuation figures in the annual report.

In the annual report he said for Contract manufacturing "revenue multiples of 7 are paid in the sector" . With the acquisition then around £4m annual revenues going forward seems about right which gives a £28m m/cap for 7 x revenues.

For Rua Biomaterials based on £554k revenues and a 89% margin (after patent costs) he wrote: "Rua considers the cash flows from the business segment as a 'growing perpetuity' which at a discount rate of 12% and growth rate of 5% would value this business segment at around £7m."

So that equates to a £35m m/cap based on Bill Brown's citing of industry standard valuation figures - and he's an accountant by trade so should know. That's a share price of just over 56p based on 62m shares being issued with nothing factored in for cash held, significant additional contracts for contract manufacturing, Structural Heart or Vascular.

Probably have to see the Company as a whole reach profitability and deemed a high growth company before BB's industry figures are applied but it highlights the current under-valuation leaving aside Structural Heart prospects.

Https://www.ipo.gov.uk/

Applicant: RUA Structural Heart Limited

Title: Composite material, heart valve and method of manufacture

Date Lodged: 15 September 2023

Obviously an important protective patent in application and the MTA could only be done after this was submitted. Full details are only normally published 18 months after application.

Usually RUA put their IP in RUA Biomaterials but presumably have put this one in Structural Heart Ltd so that it's a saleable entity rather than selling the whole company if the MTA partner decides to make an offer.

WIll the MTA partner make a move? Fingers crossed on that. RUA's internal tests have come out positively in all the key testing criteria and the partner will be acutely aware that if they don't buy then a major competitor could snap up the opportunity.

The cash held and the move towards profitability in the contract manufacturing division means RUA will be negotiating from a position of strength. If the partner wants to proceed then it shouldn't be hard to negotiate a price. It would be relatively loose change to the MTA partner to buy. Finger in the air on the amount but an outright purchase would surely mean the share price is somewhere north of 100p.

They have moved off NT now. Hate to tempt fate but it does look like the main seller is out now and their presence has meant the recent advances and future prospects for the Company hasn't been reflected in the share price.

So it's catch up time along with the prospect of both value enhancing news (due diligence on the acquisition, further contracts for contract manufacturing) and potential transformational news - some form of deal on AurTex whether it be licensing or an outright sale of Structural Heart or the whole .

The latter would quite probably take the share price into 3 figures. Nice risk reward given the seemingly positive strides towards profitability for the group as a whole and a mere 8.4m m/cap.

The management seems driven in their efforts to reach profitability which has meant the stock is a bit of a hidden gem - partly because part of that effort has included cutting costs including not renewing the pr contract with Equity Development.

Currently, the only way to buy is either to call a broker for a price in size or via online putting in a fill or kill order for normal market size (5,000 shares). The MM's are obliged to fill any order for normal market size or less.

Yes, they may well opt to buy the whole company if they choose to move forward as hoped.

My best guess though is that they would just go for the Structural Heart division. I think previously they put all the IP in the Biomaterials strand but now I think they are putting all the IP relevant to AurTex in Structural Heart. It looks like each division is set up as its own stand alone entity but I stand to be corrected on that.

So if Structural Heart was sold that would mean RUA Vascular trials could go ahead as well as a substantive dividend paid to shareholders from the remaining cash.

The statement accompanying the issue of the 11p options included clauses in the event of a sale very clearly (a different type of statement than other option issues I have seen) and that for me was an clear indication of Bill Brown's plans and aspirations.

Well bid at the moment (200,000) but just 12,000 shares available at 12.5 with just one MM (SNGR) offering.

At some stage this should have a decent move up from the trading range but whether it is in spectacular style or gradually remains to be seem. Obviously it will take news to do the former. Next anticipated news should be the due diligence on the acquisition. That said, BB and RUA play their cards very close to their chest and, for example, the acquisition came out of the blue.

Insightful post Bracelet .... and of course a RUA director has Edwards on his CV:-

"John Ely is a non-executive director at Rua Life Sciences who has worked at Edwards Lifesciences Corporation. Ely is an expert in cardiovascular devices and has experience in managing the process of obtaining pre-market approvals for heart valves. He has also led research and development teams at Edwards Lifesciences."

Just to add that PAF's all-in sustaining cost is $1300 per ounce whereas Kefi's is (from recollection) $950.

I don't know the tax arrangements for PAN but, for Kefi, HAA has been astute in holding TKGM through Kefi Minerals (Ethiopia) Limited, which is a subsidiary of Kefi Minerals (Cyprus) Limited. The effective tax rate for Cyprus is 12.5% and Cyprus has a reciprocal agreement on tax rates with Ethiopia.

The valuation anomaly should close a fair bit after second bank finance (hopefully) next month.

HAA has also said Kefi will hedge before production. Presumably some or not all of production and there are means of paying for this only when production starts - futures contracts and call options giving Kefi the right but not obligation to sell at a specific price.

The latter sounds the best approach as it's an uncertain world going forward with all the global conflicts and debt issues and the gold price will of course reflect that.

My own view is that Kefi will be acquired before production start either in its entirety (most likely) or just the Saudi assets.

The potential bid price? It's hard to predict but a significant multiple of the current share price. Depends if junior gold miners go on a bull run but given the compelling economics the Company will be in play and both the West and the BRICS are looking towards Africa to increase their gold assets.

Got to get over the line with that second bank as projected for October then the fun starts.

Thanks for that info IntraVnus, hopefully they are out now.

I am not one for conspiracy theories but years ago a CEO of a listed company told me that their adviser/broker (can't remember which one) had advised there were means of keeping a listed company's share price suppressed prior to a bid. It's a murky world out there. Don't envisage that is happening here but I wouldn't completely rule it out. If, for example, the major heart valve company wants to move forward with AurTex, the outlay would surely stack up in favour of acquiring rather than licensing.

No need for the aggressive post. There are clear signs of a persistent seller, quite likely a forced seller, that is preventing a breakout. They may be out now but we'll know when initial break-outs aren't met by sales.

As has been suggested it's a few bored participants in the 11p funding but you'd think they would have long been out by now if they wanted. It's gone on a long time hence the gross under-valuation anomaly. Hopefully they will be out soon or anticipated good news gives them the volume to do so. It gives a chance to top up which I did today.

I agree Jimzi. I would like to see Midas (Joanne Hart) or Simon Thompson (IC) cover the stock or even the odd Proactive Investors or Investor Meet interview, but, there again, I wouldn't mind picking up a few more shares at current levels. It's better not to have the share tipped with the pump and dump tipsters (the likes of Justin Waite springs to mind). This isn't a bb favourite either which is another bonus.

It's under the radar status is partly because the Company, in its relentless drive to reach profitability as soon as possible, have cut back on pr to zero although according to the FD they are reviewing other communication means - they didn't renew Equity Development's contract (good) and Bill Brown shies away from pr. Being based in Scotland is probably another reason the stock isn't picked up on.

Aside from the persistent seller (I think it is just one but who knows) and the inevitable small number of 1p profit scraping traders, the shares are tightly held with a relatively small free float so when it does start to move it will be hard to get a decent holding at these low levels.

So a patient hold for me and one that should reap very decent rewards, almost certainly gradually but with the added bonus of being a potential over night multibagger thrown in for free. I've always felt 30p to 50p for contract manufacturing (circa £20m to £30m m/cap) and potentially 3 figures plus if they get a deal with a decent upfront for AurTex or, better still & more likely in my view, an outright sale of the Structural Heart division.

I don't think directors are allowed to buy right now. There are several bits of potential news in the pipeline where they will be privy to more information than the market is aware of - the recent acquisition due diligence results, potential contracts from the contract manufacturing division and of course the AurTex major heart valve company blue sky element.

Not too bothered if they buy or not as they are aligned with the options award. The slight run up earlier shows that there should be a re-rate once the overhang is cleared. Not a lot of shares in play. Probably needs a Midas or Simon Thompson tip to take stock of weak holders/single seller.

The low valuation is beyond bizarre and those with a modicum of patience should be well rewarded from contract manufacturing - potentially £20m to £30m (30p to 50p) value for this division once it moves into profitability and three figures if a major licenses AurTex.

Looks an astute acquisition and scales up the contract manufacturing business. Detailed forecasts to come but with the synergies it looks like it will accelerate the move towards profitability.

Another interesting contrast in the results compared to the AGM statement:

Results: "AurTex material is currently undergoing testing with a potential partner and the full data pack of internal testing results will shortly be available to the wider industry."

AGM statement: " As previously announced, the AurTex™ leaflet material has been tested by a potential partner and having concluded this initial stage further data is now being shared."

No reference to the wider sharing. It strikes me that the obvious strategy would be to share the "full data pack of internal testing" with the potential partner first before making it available to the wider industry to allow the potential partner the chance of an exclusive licensing deal or outright purchase. The AGM statement suggests this is probably the case as the wider release hasn't been referenced.

An annoying persistent seller around at these levels. But the Company looks grossly under-valued with the prospect of share price enhancing news from short-term developments in contract manufacturing. Thrown into the mix is the potential licensing deal or sale of Aurtex/Structural Heart which would be an instant company maker and multi-bagger development.

The second half figures should be very good given only a small part of the £700,000 contract is credited to the first four months (to 31st July '24) for this half ending 30th Sept '24. Looks like the bulk will be delivered second half and the Cavendish 'morning note' suggested it has the prospect of being ongoing. Silly valuation by Cavendish of 25p but my understanding is that they haven't included anything for Structural Heart or Vascular in that valuation. No more 600p (or whatever outlandish figures they came out with) forecasts from Equity Development as the pr contract with them quite rightly hasn't been renewed. There are better options and it looks like RUA is focused on a relentless drive to profitability rather than pr.