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This is very disappointing news and goes against the RNS narrative of 'significant interest' and 'looking forward to updating the market' that was released in the 19th January RNS statement. To find out that there is really now no interest is very disappointing and will have cost folk quite a lot of cash. I trust the RNS wasn't misleading at the time of release in January but it would be very serious (possibly fraudulent) if it was found out to be in the future... something has gone seriously wrong at the Deltic HQ and sadly I'll be licking my wounds and being glad not all my eggs were in this basket. Fingers crossed something can be salvaged.
RNS from 19th Jan:
As previously communicated, Deltic continues to work on a number of potential options to both realise value and mitigate exposure to future drilling expenditure on both Pensacola and Selene and has received a significant level of interest. Deltic is continuing to engage with a number of different counterparties in relation to a range of potential transactions on both of these assets and looks forward to updating the market in due course.
Newgrange, I'd be interested in if you have any info to support your comments or if you're simply suggesting that you've bought at a much higher level and now wish the company was worth a lot more. I understand you're feelings but anything to back up your comments would be helpful.
Someone else mentuoned a shareholder visit in the last few days. I can't see the company announcing anything formal so suspect anyone can knock on the door and ask for a tour from the comment but if you can expenditure this would be helpful for.the rest of us to understand.
Lots of useful comments on this forum which is great.
For disclosure, I bought in at 6p but sold again as it dropped to 5p but can see that if sales targets are some of the other issues are resolved that this company could move into a stable position, it does feel like more cash will be required though although very little has been said. GLA
'This success further demonstrates Deltic's ability to attract world class partners and our priority now is to build on the Selene farm out success with Pensacola. We are progressing an active and ongoing process to realise value and farm down our Pensacola discovery with the aim of bringing in another high quality partner and reducing cost exposure to the well.'
There really is only one way to read this and while it's buried in the middle of the RNS and with no other mention of the progress of a Pensacola f/o anywhere else, it's about as good as you can hope for while negotiations are progressing. This seems to be a standard, but very important, style of wording Deltic have used several times during negotiations with the result then being declared almost with no warning (suggesting theres little leaking of any info going on which is excellent). I'd agree with GGG that there's a very good chance of news on f/o in the pipeline. I've deffo got my fingers crossed and may also top up a little if so falls any further.
I'm reading all the negativity around the company and understand the s hit show that's clearly happened in the last few months.....it's clear there should be a lot more information around what the level of scrappage is so investors can assess it's significance. Not disclosing this does suggest a CEO with his head in the sand and with these unknowns I should likely avoid these shares..but I've just taken a small punt as I can see some upside:
There's clearly a demand for the product - customers are still paying for discs and buying more than can be produced.
Most of the technical issues have been resolved, so it feels like there's some technical competence in the company.
Expansion is on the books with facilities nearly completed and management still expects to triple sales this year.
So I'm unclear how bad the scrappage issue is and it's also not clear why the accounts are delayed which is also very bad and there seems to be a cashflow problem about to hit which again there wasn't much detail on.
I'm now wondering what I was thinking buying in but what are the chances
Any thoughts on these 3 risks would be helpful. I'm also hoping though that in 3 months we have had the accounts published and significantly improved the scrappage which along with increased sales and increased capacity sounds like good news....although I'm still worried the cashflow issue leads roca rights issue or something else just as bad news. Sounds like I'm daft buying in at this point, anyone agree there's a very small chance of light at the end of the tunnel? #feelimaskingfortrouble
I've a paltry 100k holding but thats me at my limit before I enter territory of spending money I can't afford to lose. If we see this go up it'll still be a significant gain for me which would be nice. 600k holding I've got my fingers crossed for you too GG. GLA
I agree Escala, until a break even position is reached the company is not viable without outside support either debt or equity (more likely equity tbh). They also seem to have recruited quite experienced sales managers with industry experience and so hopefully this makes a difference but it's taking time. My concern is that a 30% YoY sales increase may not be enough of a take up and it seems from the info the company shares with investors that the main route to new customers is through a lengthy trial period which I fully understand but it adds to the delays in sales growing and a break even position being achieved.
I think the company is doing everything right though and so have some hope things work out. They are also ahead of the pack in terms of shareholder Comms which is refreshing. I have my fingers crossed for them.
Smkr, Im hoping you're right there's quite a few folk been in this a long time with an average around 70p so hopefully we climb back towards that. From the last RNS there's multiple parties interested in a Pensacola deal and so assuming that's announced at some point before the next drill in June/July there's still plenty of upside. I added to my holding this morning even though it climbed last few days. My average price is now around 45p then it'll all be profit. Anything above 70p and I'm buying a new car 😊 or getting the lounge decorated (if the wife gets her way) 🤞 there's definitely a growing number of daily trades which is a good thing.
Aye, quite a few 50k plus trades going through today. Nothing happening out of the ordinary though that I'm aware of but trading volumes do seem to be higher than normal, possibly the market catching on.or a little bit of excitement out there. It seems a no brainer that a deals in the pipeline with multiple interested parties so can really only get Nd one way imho although anything can happen. I've been slowly adding last week but now quite exposed if it does go pear shaped so not going mad.
It might be just me but it seems like there's been an increasing number of larger value buys today...... obviously this could be anything but hopefully something positive coming.......I'm aware timing is just speculative but noise could be getting out that we are in a strong position. Would be nice to see the share price rising.
DrP, thanks for sharing wise thoughts. I agree with all and seems like this has real chances of us all looking back and hopefully breaking even or better. 🤞i think my break even is around the 65p mark but would need to check to be sure.
On funding this feels like an easy buyout from shell as this is small change for them so feels very possible for them to take 10% for covering all costs, same kind of deal for Selene. With several interested parties though it can easily increase the value which is a good sign. I'm happy waiting for the outcome as most are but very tempted to drip feed in a few £'000 as feels up side very high. Totally understand everyone been through this before and been let down, I also subscribed to the rights issue at 70p and expected the sp to increase when oil was found. Just made no sense we were prospecting and found oil and then company value fell.....mad
Thanks, I'm sure good advice. I know with other shares it's always paid to go slow and if it feels too good to be true it likely is. Maybe that's why I'm not good with small companies. My normal holdings are in Rio and M&G and the US tracker (VUSA). This just feels like the we have a valuable asset even heavily discounted is worth more than 26p. Fingers crossed.
I've never bought into a penny share before that's had a strong upside so I'm interested in anyone who has experience. We've just had an independent company valuation give a NPV10 of £200m. This is the current value of future cash flows with a 10% discount factor (the discount factor represents the cost of capital for an investor). Does this also include discounts for unknown operational risks - I'm assuming not? And from this it gives a indicative share price of around 170p. Any deal will only reflect what someone's willing to pay. So the outcomes we seem to have are, no one pays and we fund ourselves and realise the £200m or 170p per share. Or we cash out and get what the market will pay. What amazes me is that if this was a car which had been independently valued at 170p and had a price of 26p then folk would be biting your hand off for it. But with Deltic that's not happening and the sales volumes are tiny. Feels like I should be filling my boots and buying all I can.....am I missing something(other than it's only worth what someone's willing to pay for it? And the obv Green political risk?)
105p/12p ( I view it being 85% upside and only 15% chance of failure) - 105p being a 50% premium to the company valuation at the time of the last rights issue. Surely a deal has to value the company higher than major investors values the company at the point of the last rights issue with all the positive news that's been confirmed since. I see some think the market will only value at around the same price, the final result will be interesting to see. Certainly feels like Deltic is in a strong negotiating position if as the RNS advised there is lots of interest 🤞
Yep, things are looking up and I've just topped up with a couple of small buys (market capping out trades around £2k) - slightly nervous as buying after the hype is never the best time to buy but I'm hoping that even if it drops back slightly over the next few days it's still be a good price. I've looked back and seems that under 30p (1.5p equivalent old money) is about as cheap as it's been for last 3 yrs. Also seems almost certain more positive news in the pipeline as any company with NPV of near £200m and market Cap of £20-30M allows for a fairly strong up side, even after a chunky discount factor. I've never been on the right side of a very high risk stock before so this is new ground for me but I'm hoping I don't regret it. Just making sure I don't get carried away.
GLA
SE18. - I totally agree with you, it's not possible (would be considered fraudulent or market manipulation) to use such strongly positive language in an RNS and not be able to back it up so my view is also that the ball has finally started moving with likely more to come. You've also got to assume any deal price has to be above the 70p rights issue price but we have to wait and see.
GLA
Comms from the Board around this type can only be described as
I should say though that my view is that the board would have a responsibility to advise if they have been unsuccessful in relation to a monetisation where they have continued to advise that they are progressing discussions through RNS statements as recently as the 5th Dec. My strong view is that due to the length of these discussions they must be heading towards the final stages and an announcement could come anytime. I think the wording of the RNS statements has provided little negativity and used words that would suggest something is in the pipeline. I may be wrong and will feel mislead if it comes to nothing, but would encourage others to check out the wording and share how they interpret. Most recently they used 'progress continues to be made....to realise value' to me this recognises an ongoing discussions with an engaged buyer.
Hi GGG, I'd agree, the principle risk is a fund raise on the back of previous RNS comms being all about a monetisation event followed by a prolonged period of silence which as it goes on suggests the company is struggling to agree any monetisation. There's also the eco crowd influencing the government to stop issuing new drilling licences which is offset by the energy security Britain needs and economic boost of jobs new production would provide. I guess though that cashflow is the big one as last funding round was done at 70p equivalent and so anything less than that would reflect badly on the board as the company has achieved excellent drilling results since and so most would have expected the sp to be above 70p at the moment to reflect the higher chance of success.
There's also very low trading volumes, normally trades are around 20 per day and average trade may be a few £100, suggests existing shareholders are keen to stick around but also very few new money looking to be put on the table. There's other risks like the inflation rate which will have pushed down the discounted cashflow value of the company and lenders being heavily criticised for lending to high carbon companies etc plus technical risks around flow rates and volumes able to be extracted but these are fairly normal. I hope that's helpful
Hi GGG, all good points and I suspect most here would concur with your analysis. Personally I'm not an oiler and so can't add anything technical, there are others though how do come from that background. I'm from a finance/investment and accounting background and so have experience in that. We welcome all chat here