The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register here.
Broker target price still at 6.5p:
https://research.arden-partners.com/portal/portal.html#
*edit* - example 3
https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/48375/5350-emr-annex-d--update-on-the-emissions-performance-s.pdf
Example 1 looks like a good comparison
OHS
https://www.dawn.com/news/1638483/five-cpec-power-projects-face-delays
The title of the article doesn't do the article justice as it's quite positive:
ISLAMABAD: The Pak-China Relations Steering Committee on Monday directed finalisation of a uniform policy framework within a month for extension in commercial operation dates (CODs) of five power projects of about 3,600 megawatts being set up under China-****stan Economic Corridor (CPEC).
The meeting presided over by Planning Minister Asad Umar also directed the Power Division to ensure availability of sufficient power for operationalisation of 660kV transmission line from Matiari to Lahore from Sept 1. The committee also directed National Electric Power Regulatory Authority (Nepra) to finalise tariff for the project during the testing stage.
A number of projects under the CPEC, including those in the power sector, are currently facing delays for various reasons including the ongoing pandemic and surplus generation capacity. The multi-billion dollar economic cooperation had not been able over the last three years to maintain the impetus that delivered a series of power plants and other infrastructure projects in the first phase of the CPEC implementation.
The meeting discussed in detail the “ongoing projects under CPEC and the issues facing their investors,” said a statement after the second meeting of the recently created steering committee, mostly represented by federal secretaries and chairman of CPEC Authority besides military and intelligence agencies.
https://www.powermag.com/cause-for-celebration-plant-provides-power-economic-boost-to-****stan/
*edit* - not £77.5m - need to know what their limit is, then £50 x the difference annually. Anyone know?
OHS
Here's another incentive:
https://www.reuters.com/business/sustainable-business/britains-carbon-market-begins-trading-higher-than-eu-prices-2021-05-19/
Approx. £50 per tonne for CO2 produced at present. With Uskmouth currently projected to produce 1,550,000 tonnes annually, that's a hefty £77.5m to pay out annually!!
https://www.edie.net/news/11/UK-ETS--Post-Brexit-carbon-market-opens-for-first-time-with-carbon-price-topping--50-per-tonne/
"Under the UK ETS, power plants and other high emitting corporates will be charged for every tonne of CO2e they emit beyond a certain limit. They will also be able to sell excess reductions for profit to other companies that have failed to remain below their specific limits".
OHS
Hmmm, clearly not having a coffee with the person who is derisking in multiples of 1m chunks today and over last few weeks……someone’s not happy
Strangy, Wenglish et al - have a read through the attached links for details of why the decision was made to call in the Uskmouth application. It should allow you to get a better idea of what I was trying to explain with regard to the decarbonisation and waste policies that Wales is trying to achieve and why the decision is unlikely to be a quick one based solely on the additional infrastructure of silos etc....
https://gov.wales/sites/default/files/publications/2021-04/atisn15033doc12.pdf
And also this (Section 4 and 5):
https://gov.wales/sites/default/files/publications/2021-04/atisn15033doc13.pdf
OHS
The investor pre-paid an initial investment of £2m cash in exchange to subscribe for £2.09m worth of shares with a 24 month period. They have prepaid 2 investments of £2m each so far (the initial one and then one 3 months later) and have so far subscribed for £750k, £500k, £1m and another £500k worth of shares. Its nothing to do with a discount as such, I see the £90k additional value of shares as coverage of their eventual selling fees on the £2m investment if you like.
Hmmm, you might need to go back and read it again yourself. The investor has paid 2 x £2m tranches (Dec and March), of which they have 24 months from the date of each investment to request shares to the value of each investment. Latest request for circa 12m shares (£500k) makes the SP around 4.1p a share which is significantly more than a 4.5% discount. You’ll also note that the 3rd tranche of £2m would have been due in June as the 3 monthly increment but wasn’t invested due to the SP being below the floor price set out in the RNS you mention.
This is not additional funding Skeletor - this is a draw down of subscribed shares as part of 2 x £2m investments (so far) that an investor has made as part of an investment relation with SAE. In this case, the investor has requested circa 12m shares in exchange for the sum of £500,000 of their already paid investment. If I recall correctly, I don’t think they hang on to the shares so I would imagine you’ll start seeing them sold on here in the near term - very good profit margin for them at 4p each.
As much as I would like to see some news on new and upcoming projects I would much prefer to read an update on one or some of the following that seem to have gone off the radar:
1. NPA Fuels Ltd - Heads of Terms signed back in August last year - an update on proposed sites for subcoal PAF production would be very welcome - are they waiting for outcome of permit decision by NRW? Would seem the most obvious reason
2. Hana Financial - are they still the main backer should the project go ahead? There was a 6 month exclusivity period for them which has long since passed - would be good to know they are still the main interest and/or have others put forward an interest?
3. The investor from last year was due another £2m investment in June - it didn't come (presumably due to the SP at the time being below the floor price set for the 3rd tranche - an update on their involvement would settle some nerves also as it would suggest another equity raise was less likely - if they don't invest, should we assume SAE will seek equity elsewhere for future/current projects?
4. Clarification on the moratorium is probably the most important part here - Where does Uskmouth Power Plant sit with regard to this? It's clearly many multiples above the 10MW limit - the call in decision was delayed until this policy was set - why?
5. The Senedd Plenary don't sit again now until the 14th Sept - would NRW release a draft permit for public opinion before or after a decision is made regarding the moratorium on efw plants? It would make sense to gauge public opinion beforehand imo
To all those who have joined SAE at the 4p levels or longer term holders who have averaged down - absolute blinder of an investment before the GFG RNS!! 110% rise in a trading day!! Wow!! It seems there is much news due but in what order or timeframe, who knows! GL all
OHS
Yet another issue of equity to pay the bills. Can see this dropping to a new 52 week low shortly. nothing to bolster the SP and create any revenue cash. Disappointing
Strangy and Wenglish - perhaps my use of the word ‘entirety’ has confused matters. What I meant to imply is that the ‘bigger picture’ of how the Uskmouth plants will affect Wales as a whole will need to be evaluated and considered as they weren’t fully considered by the Local authority of Newport. It is not simply a matter of approving some additional infrastructure and changes to the current layout, it is the following:
1. Weighing up the CO2 emissions of the plant once re-energised, against the current ZERO emissions currently being produced. Wales as a whole has a limit of how much CO2 they can produce from ALL producers, not just power plants (let’s get real, they’ll not be re-energising with coal if denied the permit, regardless of stating it’s their fall back option)
2. Impact on roads surrounding Nash due to the amount of lorries that will be in and out on a daily basis transporting the pellets and the subsequent truck CO2 emissions that would result from these deliveries that are not occurring at present
3. The fact that waste would be brought in from outside of Wales was not considered at all by the local authority and this is a big concern as it affects Wales strategy for recycling and reducing waste as part of their Circular Economy Strategy
Let me be clear, I see tremendous benefit of what SUP are trying to achieve with the concept of subcoal as an alternative fuel, I just think it seems that Wales is not keen to be the Country that starts the journey
OHS
Ultimately, I see the following NEEDING to happen for Uskmouth to succeed (imo):
1. PERMIT for co-incineration (subcoal approved) officially granted after public consideration timeframe
2. Welsh Government APPROVAL (if needed?) to re-energise as a power station (each plant is 190MW over the 10MW Moratorium limit)
3. CARBON CAPTURE implemented prior to first burn
4. FINANCING - is HANA Financial still the main source here? Their period of exclusivity has long since passed - are they still tied to the offer? Are they still interested?
5. MANAGE EXISTING DEBT - will it be restructured? How will they pay it off? SP is currently below the floor for the 3rd tranche of £2m investment (which I believe would have been due sometime in June as the 3 month marker of increments being December and March for the first 2)
Interested to read other opinions/thoughts
OHS
Agreed isas, the call in was for the current application for the ancillary facilities. However, the application is now discussed in its entirety and will therefore also discuss the impact of the plant on the environment. The moratorium was for the following:
"As a result the need to burn waste, or send it to landfill, will reduce and the Welsh Government is putting in place an immediate moratorium on new large scale energy from waste plants. The new moratorium will cover new energy from waste plants with capacity of 10MW or more, and will come into effect immediately."
It's a grey area......what category is Uskmouth in? New or existing? Uskmouth was an existing power plant with a permit to burn coal. They sought a 'variation' to that permit but couldn't get one so had to apply for a new permit. If the upload yesterday was correct and a draft new permit is to be issued for co-incineration of 2 of their 3 plants, what is Uskmouth now classed as? New or still existing? I doubt they would continue with all this effort if their was a strong chance the plant would not be allowed under the moratorium? It explains the delay in calling in the application though - they waited until the moratorium policy was official.
So my main 'thoughts' or question is; If there is a moratorium on ALL new applications and CURRENT planned ones for plants that exceed 10MW then how will Uskmouth be approved for 2 x 200MW plants?!
Hi Strangy, not sure what you mean? 'Is the following you out' - are you asking me if I'm out of SAE or if this info is out in the public domain? With regard to the moratorium comment - that was stated months ago as part of Wales' drive to reduce CO2 emissions https://www.mrw.co.uk/news/wales-introduces-immediate-moratorium-on-efw-24-03-2021/
Note the date it was released being the same as the 'call-in' RNS: https://www.lse.co.uk/rns/SAE/planning-update-d8eo31s4ce7wk7c.html
From the snippets of info posted yesterday and this paragraph: "Permit Variation V003 issued to Simec Uskmouth Power Limited. All LCP activities (3 units) are surrendered, 2 units are newly permitted as co[1]incineration plant." - it does fall in line with SAE's original plans to convert 2 of the 3 power plants from coal to subcoal - SAE wanted a 'variation permit' of the existing permit but it seemed they and NRW couldn't reach that conclusion so a 'new' permit was sought (by direction from NRW) for 2 of the plants as 'co-incineration'. Just the matter of now understanding what the additional conditions are and how they may affect SUP: "If you’ve concerns about the conditions we’ve chosen you may discuss this with me and I can explain why they’ve been included. If there are conditions which you are concerned you may not be able to meet (e.g. the timing or logical order of pre-operational and improvement conditions) then you should highlight these and we can consider technical adjustments if necessary" - and also, the bigger issue of the moratorium placed on large scale EfW plants in Wales!