Member Info for okenia

Other options are available of course! The main difference between this and the sort of small AIM shells that get RTOed into is that you'd not want to reverse a tiddler into AUCT, because it would then be smacked with the hassle and cost of a main listing for no point. That makes me think they will be targeting a company of scale, as opposed to acting as a route whereby a dodgy company that couldn't normally list on AIM gets an AIM listing (lol).

As well as the business case for a company being RTOed (see other post about access to capital raising), the shareholders in the target company would see a RTO as beneficial form a personal perspective. Imagine you are a shareholder in my private resource company Okenia Resources Ltd. How do you turn those shares into cash - what's your exit strategy? There isn't really a market for them, not an easy one anyway. Your shares might be "worth" £1 each but unless you can trade them or otherwise sell them that valuation is worthless. Once you're listed however the shares have a market and suddenly you have exit options. I might well accept a deal to get OKR listed, even if it meant the acquiring company took a chunk of OKR and thus diluted me, because I can now sell my shares. A 80p share that I can trade is better than an almost illiquid £1 share. Thus some deal where AUCT do a RTO of a £100 company, AUCT shareholders end up with 20% of the share capital of the new company, works for everyone - OKR shareholders now have a market for their shares, and the value per AUCT share has gone up around 20-fold. Not the 100x you were looking at, but with the right sort of deal the shareholders of the acquirer could still make a nice little profit. That's the plan as far as I see it and why I'm here.

laxey - I would agree that an explorer is probably too early a stage company to be an attractive RTO. What might be nice would be something that is on the cusp of production, just the point where they would typically be looking for financing for capex. An RTO would then get them listed and in a position to tap wider capital markets for funding. The other option would be for them to IPO, but that's a harsh option at the moment for commodity companies - I heard a figure that 90% of proposed AIM IPOs in the sector haven't gone thru recently. AUCT let them bypass that. You also have to remember that AUCT is main market (with all the costs and hassles that entails) and it'd be unusual for a 2-bit microcap explorer to list here, they'd be on AIM. That again points to a company with a reasonable size/scale, which means producer (or close-to-producer).

Somehow doubt it now the 24hour crowd have moved on as fast as they swept into town.

Even if unlisted the other company will have shareholders who are the current owners of that £100m. They will want something - usually shares in new company. Now it's listed they can now trade those shares, so that makes them more valuable (to them) than shares in an unlisted company. Thus more complex than that.

Nope. The people involved are big natural resources people, plus listing doc says that sector … other than that, absolutely no clue. It'll be an unlisted company (lol) wanting a listing so they can raise capital. That doesn't really narrow the field down. I guess one that doesn't fancy the risk of IPO-ing in the current market but would like to be listed so they can try tapping capital markets. I'd personally like it to be Ironstone (Canadian DRI and vanadium play) but it won't be that unless I am very very lucky!

Interesting that AUCT is trading at roughly net cash level, while those other two SIVs with a similar plan (CLEE and MITH) are trading at a premium to net cash. OK the latter have larger cash piles. Does make AUCT look cheap in comparison and it's not like AUCT isn't backed by a top-notch team. At this price there's very little downside - if the RTO doesn't happen the company will return cash to investors.

Highly volatile so good if you are an experienced momentum/day trader, otherwise I would agree it's totally uninvestable from an investors (as opposed to speculators/traders) perspective. Completely concur with earlsfield.

Lol, that's a cracker

Day late Andy! That's Peel Hunt (MMs have to notify when breaching 10%)

Thus using my guesstimate figures just from what's in today's RNS, the current production is around $1.8m gross value per annum and the aspiration is to triple this following the EVO cash injection. Let's call the aspiration being to ramp up production to around $5m per annum gross sales. EVO's 10% stake (costing $1m) would thus eventually generate $500k per annum gross income, with an option to increase the percent for further cash if desired. Whether that's a decent deal depends on the margins I guess. Which aren't given in today's RNS and will take a bit more digging.

They didn't say how often they ship and thus whether this $150,000 load is from a day's work or a year's (lol). Here's my sums: Grade from Pajeù (currently operating) is 0.7-1.0 %, and about the same from the about-to-be refurbished Central shalf. 60 tonnes of ore at 65% recovery yields 39 tonnes at 0.7-1% [equiv] and thus 0.3-0.4 tonnes of 68% percent concentrate. 0.3-0.4 tonnes of 68% percent concentrate per day at $15,000 gross per tonne concentrate is $4500-6000 gross concentrate per day. That $150,000 load would thus take around 25-33 days to produce and given a 6-day working week we're thus talking 4-5 week's production, weighing around ten tonnes of final product.

Nice to see we have some line-of-sight as to what the money will be used for. In short, to get the central shaft back on line and get production tripled (and the recoveries increased a bit from 65 to 80%). I'll do some maths in a moment and someone can check the sums for me. "The Bodó mine is currently operating at approximately 50-60 tonnes of ore per day from the Pajeù incline Shaft on a 6 day per week operation. The last shipment of tungsten concentrate from Bodó was on the 5th January 2015 with estimated gross proceeds from this shipment of $150,000. At an APT Price of $290/mtu, this translates into a gross sale value per tonne of standard export concentrate containing 68% WO3 of approximately $15,000/tonne. Bodó is a high-grade tungsten operation employing 96 people, and is currently operating at the rate of about 50-60 tonnes of ore production per day from underground operations. The ore is being processed through an onsite treatment plant with a current capacity of about 200 tonnes per day. Tungsten concentrates are sold to the global export market under an existing sales agency agreement with Wogen Pacific Limited. It is intended that the funds provided by Evocutis will be specifically used to provide the necessary working capital to expand and improve the existing operations. For the mine, funds will be utilised to refurbish an existing incline shaft and advance underground development so that DAILY ORE PRODUCTION CAN BE TRIPLED. For the mill, funds will be utilised to modify the plant, which is expected to improve tungsten recoveries from approximately 65% to an anticipated recoveries of over 80%, by adding grinding equipment to fully liberate the tungsten mineral."

On the other had, a bit of a royalty would help cover the generous remuneration DS/DL are receiving for fronting this shell (see prior RNS for details). They clearly don't believe in minimising cash burn prior to success! (Contrast approach of things like AUCT) Good news is current SP is below the exercise price of those outstanding warrants (equivalent to a third of the current issued share capital) Riddler - what's your thinking of the value of the Labskin and acne cream royalties ?

I can think of two other current listed SIVs that are at the same stage as AUCT ... main market, cash has been raised, seeking to acquire a single company/business and then run it (which says RTO to me). Targets similarly unknown and again a punt on the credentials of the acquisition team and the timing of such a strategy. There may be others I've not found and I suspect more will emerge during 2015 especially if these early ones show the strategy to be a success. You're right that historically there are very few examples of RTOs directly onto the main market, it's usually an AIM trick! I can't think of any other than Pizza Express either. Come end of 2015 we may have a few examples though ...

Actually it's not unheard of, there are several SIVs that have been set up (and are listed on the main market) to acquire and then operate a target business. I think the current market conditions have caused a little cottage industry in private equity vehicles to go bottom-feeding for distressed/cheap assets. Sadly most of those are private vehicles and thus not accessible via a listed share (unlike AUCT and a few others). With all the blood on the floor now is certainly the time to go bottom feeding, hence AUCT and the other similar SIVs. I have a small stake in AUCT for reasons I've said before (track record and credentials of the team, I agree with the bottom-feeding approach, and a sensible fiscal approach to control cash burn and to return cash if an opportunity doesn't emerge - oh, and significant skin in the game from the founders at a price not too dissimilar to the current SP). It may not pan out, but if not we'll get at least some of the cash back.

Me too. No worries!

Sent.

Killer = assassin8 The first seven userIDs weren't as funny, glad he waited :)

Are you on twitter? We could chat there. Don't want to be an unwelcome nuisance on the bb!