Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
Dodge: Good post. At least there are a couple of people thinking rationally on here.
Lots for AP to answer and deliver in a relatively short space of time.
I was increasingly optimistic about Vast’s outlook in 2018 as AP seemed to be making strong strides in funding potentially highly profitable projects in BP and Eureka which have been acquired for relatively low figures. The deals with Mercuria and SSGI (Eureka) we’re certainly far better than the previous ones proposed or completed under RP. In October 2018 it looked like we only one important hurdle away from sustainable profitability.
That was clearly not the case and there have been some setbacks and although Mercuria T2 was primarily for Carlibaba (an asset I’m less interested in), we now find ourselves as shareholders staring once again at a deal (Bergen) which is not the route Vast should be taking in any decent scenario.
So in short over the last 2 years the Company IMO has taken 2 steps forward and one step back. I don’t mind some dilution via equity raises if it’s going towards bringing profitable assets online or high value growth opportunities. The problem is AP has clearly got the balance wrong. He has spread Vast’s cash too thinly as risks have materialised that he might have considered low probability. A decent CFO would have surely helped here.
Whilst I think the recent sp movement is overplayed to the downside I think even AP’s most loyal supporters will be able to admit things have not gone to plan and there needs to be a reassessment of the growth strategy and risk appetite of the Company at least in the short term (next 12 months) with an absolute focus on getting Romania ops fcf positive and not overstretching ourselves in either jurisdiction.
Vast was in a much poorer situation at the backend of 2016 and 2017 for that matter. There is absolutely a way out of this hole but first the Board must accept they are in a bit of one. Focus and calm heads are needed as well as an appreciation of why shareholder sentiment is rock bottom.
Dodge - I think you’re on the money with your last couple of posts.
TBTT - I’m sure they’ll be delighted that they are 480k down...
I see a 30% increase to 13000 tonnes per month for BP at full production (up from previous 10000 per month). That should have a significant positive impact to the cash flow.
Good point Castaway. I think it’s quite easy to misread/ misunderstand this RNS. Don’t get me wrong I do not like the Bergen deal one bit. Needs paying off pronto.
Lol Erredy. Couldn’t agree more on that one.
Yep, agreed Castaway. On first read it looks horrible. But the situation isn’t really any different from post Bergen loan announcement. We know we need to get assets online. We know we need to T2 and some further capex. They just need to hurry the fook up and do it!!
The other thing to note is Bergen will only convert if they think the sp is going to go up. Otherwise they’ll be taking a hit on their loan. So the irony is that short term sellers today will likely be helping them to a sweeter return
So on the face of it dilution looks massive. Reality is unknown. We are in exactly the same position that we have been for the last couple of weeks. That’s the funny thing. What we now know is that we need - £2m for diamond mine capex - £800k for BP working capital The rest really is just noise.
So if Bergen weren’t involved the numbers for resolutions 1,2, 5 and 6 would be the same as it is for headroom and you have to use nominal value without knowing the future sp. Worth remembering when reviewing.
4kandles - I had to bite, just too tempting. You’ve heard of these things called interims? Yes. Good that will make this quicker. Well in these there is a section called segmental analysis. They’ve kindly broken out the profitability of Rom and Zim operations. Considering Vast has only 2 operational mines during the period, 1 in each jurisdiction, you can safely assume where any profit, would come from. So when Zim profits stand at $3.1m for the 6 month period, I think it safe to assume PP is profitable. Cheers then.
4kandles - thanks for the advice and making it personal. Thank god there is a poster here of your calibre to help all us poor PIs. Slotted somewhere in your post about how AP is basically a charlatan you barked on about photos of BP. My point was that whilst you are calling into question anything AP has said or achieved for the Company and ultimately shareholders over the last 12 months (not that you’ve probably been invested for that long) Vast hasn’t made up the existence of a mine which AP was instrumental in delivering and will be churning out c.$15m fcf per annum with an NPV north of $100m. I’ve been critical of AP for a number of things over the last 12 months. Bergen deal included. But chat on here about him delivering nothing is bo11ocks. It remains to be seen whether this translates to decent sp growth. The last 3 months has been very poor, but that is down to a number of factors some of which AP is certainly accountable for. Anyway I think that’s me done on here for a while. Good luck all.
4kandles - I think you have a point on some of the issues you raise, others you are wide of the mark e.g photos of BP, go look at the website and presentation from 2015. They haven’t made up a mine lol.
Good move by AP.
Very interesting consistent upward price move. We all know central banks have been on a big buying spree.
gbk - I would suspect that given the overlap and significance of what looks like is going to come in Zim it makes sense on a number of levels
Dodge - T2, repayment of Bergen with no conversion, BP plan showing production H1 2019 and IMO this will very quickly move up to around 1p. The fundamentals in that scenario would support an sp significantly north of that. I will not talk about other projects potential impact as there are currently still too many unknowns and for fear of ridicule given the current sp.
Yep, I’m guessing that’s them out now with the large trade the other day for about 14m. Hopefully cleared for a rise now....
Dodge - I would have been fine with that too. Manaila was never going to be a decent profit centre for Vast. Carlibaba should be though but not at BPs level. The golden quadrilateral is a pretty incredible area. That’s why I have such high hopes for Blueberry.