Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
After a pretty impressive results release we're still trading below the recent placing price - the market just doesn't seem to have any faith in the board to deliver. The lack of confidence for me stems from (in addition to JP paying himself a bonus of $191,000, PW agreeing that he deserved it and AB approving it)
1) We're hearing now about 'potential' JV parties even though we were close to agreeing a JV last November. We're no longer 'in a rush' to do a deal - well thank God for that, because if we were in a rush up to this then we were really screwed as there's nothing on the table.
2)We submitted a 'draft' PEPR and they've come back with amendments that we need to make to it. The 'draft' PEPR was submitted a long time after it was supposed to be submitted - we had various reasons given as to why we should delay it's submission but now, even though we were well behind time in getting it in, we still have issues that 'should' be easy enough to deal with (as per JP in his proactive interview). I would like to see what these issues are and a timeline on when we can expect they will be dealt with.
3)We were informed in the last RNS that we've spent the last number of months reviewing 'old data' from Redmoor - what does this even mean? PW was taken on as an executive Director to take charge of Redmoor - what exactly is he doing considering we have no money to progress anything there and we're now going to appoint consultants to go and try and locate a JV partner to progress things - this is a complete u-turn on what we were last told the plan with Redmoor was.
4)The debacle with the major client was just cringeworthy - leave aside the fact that shareholders were misled regarding the 'letter of intent' (it was a text message from a woman who had made 37 previous promises to pay money and had failed to do so because her bond issue kept getting 'pushed back') - investors bought shares on the back of that RNS and it's as clear as day that JP knew or at least ought to have known that there wasn't a hope in hell that we were getting any money.
I sincerely believe that we have good assets. I believe that we are at or pretty close to being at the bottom with this share price and there is incredible upside potential - a three bagger as Prop alluded to is more than possible and indeed I believe more than likely - there is no reason why we can't get to 2p pretty quickly on some solid good news. But therein lies the problem, I just don't believe JP when he 'alludes' to good news, because he has consistently disappointed over the past two years.
A clear out of the current BOD, an honest appraisal of where we are with regards to the PEPR submission, JV discussions for LCCM and the Redmoor strategy could do wonders for this share.
For too long now we've been comforting ourselves with the hope that JP has a deal up his sleeve. We've convinced ourselves that he's a great strategist who gets deals done and he's in the background, working hard on our behalf. The truth is, he's been an abject failure - I bought in here at 1p, averaged up to almost 2p and then down to my current position of 1.14p. The only thing that caused the SP to increase from 1p to 3.75p was the prospect of some nickle in HC - when that fizzled out things went down hill and now we're here, with a truckfull of additional shares in issue at a price of 0.4p! The gig isn't even a full time job for him (he teaches in a third level institution in Australia) and we pay him US$500k a year. I'm disgusted at his bonus!
We were led on a meandering journey there too. Dr Gole spent an age doing 'stuff' that took an age waiting to be 'analysed' because the research labs were 'busy' and then the bad news was quietly released jumbled up in the midst of other news!
John Peters remuneration 2019:
Salary 13,000
Consultancy fee 173,000
Bonus 191,000
Share based pmt 114,000
Total 491,000
It isn't until you see it in black and white that it really hits you. This is immoral! The man presided over a company whose share price halved in the year and he rewarded himself with a bonus of $191 000 US.
The thing that concerns me most from the RNS is the line stating "pursue potential joint venture partners". I was under the impression that we were at an advanced stage of negotiation with a potential JV partner for LC! The RNS would seem to indicate that we're only now in a position to go look for one?
Am heavily invested here already and well under water I'm afraid - I believe, based on what we know, that there has to be a positive result from the arbitration. We'll then have to try and recover monies from the major client and that brings it's own problems perhaps but one can live in hope......:)
Am heavily invested here already and well under water I'm afraid - I believe, based on what we know, that there has to be a positive result from the arbitration. We'll then have to try and recover from the major client and that brings it's own problems perhaps but one can live in hope......:)
Why on earth would someone be selling big chunks in advance of the arbitration result? Surely a negative outcome is already priced in - it has to be, in a share price of 0.5p, considering the assets we have. On that basis, there should only be upside and consequently, selling before the news on arbitration makes little sense?
The last financial evaluation on Redmoor showed a positive NPV of £94 million - that's NPV - the equity value increase in today's money from progressing the project - nobody is selling Redmoor, we're going to make a packet on it!
Gorsuch, I'm an Accountant and that's a pretty standard paragraph to be included in an Audit Report when a company is reliant on a small number of customers who make up a large proportion of the Revenue.
If anything, it strengthens our position in the arbitration process for damages and specifically for compensation beyond the payments due under the contract.
All in my own opinion etc...
It's hard to imagine that we won't be affected but the market appears to have over compensated for any potential downside.
I'm still hopeful that the arbitration will proceed along the timelines JP previously advised and, based on what we know, we have to be successful (contract in place and said contract breached).
The question then is how much we get awarded and how strong financially is the major client. In my opinion, they must be relatively strong as they insisted that they can't be named so they must be concerned about their reputation (and only a going concern is worried about reputational damage) and they did issue a letter of intent for a $4m payment - they hardly bothered doing so if they didn't expect to be able to pay it.
All in my own opinion etc.....
In order to effect a squeeze out an acquirer would need to purchase at least 90% of the issued equity - I can't imagine that JP or PW would sell at anything even close to 1p and I'd be confident that the Manners family wouldn't be selling out at anything close to that level either - what % of the equity do the Manners family own? After topping up recently at the 0.5 level my base cost is now 1.14p so here's hoping we get back to that level before anyone with deep pockets potentially decide to look at SML!