Member Info for pekingduck

DeepVerge plc
DeepVerge has announced its proposed Q1 2022 launch of compact Microtox® PD
surveillance units. This upgraded system significantly expands surveillance capabilities
into smaller communities and/or facilities/locations where larger groups of people
routinely gather, thereby extending the reach of real-time national pandemic response
to local community level. By accelerating its product evolution beyond just the
monitoring large populations through fixed semi-permanent installations, the Group now
seeks to capture the technology’s true global potential through development of smaller,
mobile and mass producible designs that enable Microtox® PD to become a standard part
of home or office utility. Significantly in this respect, the business model being adopted
permits these units to be manufactured and franchised to companies in the developing
world in order to speed international access at locally affordable prices. Recognising that
regulatory enforcement and community pressure is likely to demand a sophisticated
response from both national and provincial authorities, replacing current manual
sampling processes with one capable of delivering instantaneous results combined with
predictive analysis from the billions of litres being generated daily, prospective
international demand (plus ongoing maintenance) for networked installations of
Microtox® PD equipment could become very large indeed.

Recognising the scale of the opportunities now being presented
Today’s news follows hot on the heels of last month’s potential landmark announcements, in which the Irish Government became
the first to fully publicly endorse DeepVerge’s COVID-19 Microtox® PD technology plus receipt of a €480,000 order from an
unnamed government for its enhanced monitoring equipment as part of an extended performance trial. Shortly before that, there
was £2.2m of Microtox® PD shipments to the UK, India and China in order to meet customer and partner obligations for delivery
in the current financial year. With works now being completed to ensure the product’s final design remains wholly unmatched,
with potential for ongoing upgrades and heightened performance capabilities, while also preparing for its mass production in order
to satisfy delivery schedules from governments/local communities that are expected to demand rapid installation by both domestic
water/wastewater utilities and regional institutions, 2022 is expected to witness the start of a step-change in both international
interest and demand for Modern Water equipment. In tandem with this, Group receipts continue to grow rapidly as processing
capacity for Skin Trust Club’s home test kits continues to expand in response to surging demand, while Microtox BT’s regulatory
tests and joint venture negotiations with China Resources remain ongoing. Recognising the scale of the opportunities being
presented and in expectation of continuing significant news releases early in the New Year,

sorry, that should clearly be 'not'... ! it's catching.. :)

according to the most recent research note, quite clearly yes. I don't think AV is being evasive, he's just very good at giving clear answers to direct questions.

In comparison to other tin producers and developers (there are only three in production listed on Western
equity markets), AfriTin has by far the largest resource albeit at a low grade (0.134% Sn). However,
considering the tantalum and lithium (petalite) credits the tin equivalent (SnEq) grade increases to 0.37%.
The other two producers, Metals X and Alphamin have market caps 3.5x and 13x bigger than AfriTin. The
earnings power and profitability of the business on delivery of Phase 2 is comparable to Alphamin which
currently has a market cap of US$960m. If we look at other lithium producers, the lithium content only
at Uis should deliver a market value twice that of AfriTin at the moment. Combined, we believe this more
than supports our Price Target below.
Overall, we believe one year a PT of 20pps is appropriate, situated at our SoTP risked NAV for Phase 1
and 2, and would view this as erring on the side of conservatism given there is clear exploration potential
at both Brandberg West and Nai-Nais.

GB, that's been a problem for some time now - Matt does his best to get Anthony to answer specific questions but he manages to miss the goal most of the time. He hit the nail on the head during the interview - your message to the market is muddled and mis-understood. As CEO, that's his responsibility - the sp will drift around at these levels until he improves on this. Swapping brokers to try and achieve this doesn't work - what he says on these calls counts a lot more, he needs to understand this.

Feels like recent placing investors are putting the squeeze on AV to spread the word more widely and get them above their placement price. Frustration growing at lack of price movement given de-risking of project and huge upside potential. Partly that's down to AV not being the best front-man in the world (which we know) and partly the slow pace of progress - we're more than 6 months behind where we should be based on announcements made <12 months ago.
Ditching TP does smack a bit of desperation. Let's see what the new, and most-likely, nicely comped brokers bring to the party. They're being paid in our shares don't forget.
Maybe a bit more right now, rather than now-now..

maybe news on lithium separation results or tantalum circuit installed and operational..?

Couple of key points where we're currently awaiting updates. All very positive, patience needed...like the off tha charts comment :)

Bulk samples were acquired from the active mining area and transported to test work facilities in South Africa. Heavy liquid separation (HLS) test work and pilot dense medium separation (DMS) test work is being conducted concurrently. Preliminary results from HLS tests indicate an upgrade factor for lithium oxide of four to five times, which is in line with the company’s projections for DMS pre-concentration. HLS and DMS test work will be followed by characterisation of concentrate samples, which will inform the second phase of test work.

Test work completed to date in this regard includes a range of technologies aimed at exploiting the differences in magnetic susceptibility of the tantalum and tin bearing minerals. The results demonstrate the potential to produce a saleable tantalum concentrate, particularly in the coarser fraction (+1 mm). While optimisation test work continues, the company will proceed with the process flow design for a pilot tantalum concentrate production facility at Uis, with implementation planned for Q4, 2021.

AfriTin’s production capacity stretches beyond Uis – and for the more immediate horizon includes two ore bodies in relatively close proximity to Uis, namely the 35 000 ha Brandberg West and the 33 000 ha Nai-Nais. Both have historically already revealed tin and tungsten and tin and lithium content respectively. “We have already commenced with confirmatory test work and mapping on both – and we have seen grades that are off the charts at Brandberg,” Viljoen highlights.

• A major withdrawal of tin from the LME warehouses in Malaysia is causing concern in the tin trade
• Tin prices continue to support $35,800/t despite the 285t of official stock withdrawls.
• A further 210t of warrants were also cancelled taking on warrant stocks to 470t
• Shanghai warehouses also saw 287t of withdrawls reducing stocks to 1,009/t of official available stock.
• A further 407t of warrants were moved reducing the on warrant stock to 641t
Very tight conditions, begs the question as to why ATM are only moving to modest phase 1 expansion when surely the numbers and banking relationships they now have justify going straight to phase 2? Phase 1 expansion is at least 6-9 months away. drilling programme for full mineral JORC is 12 months away - so phase 2 is at least 24 months away if it proceeds..? Feeling frustrated with progress here, probably not the only one..

Feels like the market is pricing in no real revenue growth until Q3 next year, P1 expansion shd be on stream by then, and drilling complete (taking 12 months..?!) to establish jorc valuation for lithium and tantalum resources on current pegmatites. Ok, may see some tantalum revs early next year and lithium separation but can’t see that circuit being in place until middle of 2022. Dependent on tin price for any revenue growth over the next 12 months. Happy to be wrong but can’t see where else it will come from. Those RI investors probably frustrated with being 20% offside with this pace of progress.

Disappointment with delay to phase 1 expansion, not likely to be complete & ramped up until Q3 2022, market expected Q1. Tantalum separation may start Q4 2021 but Lithium still in test phase so again, disappointment that this is still uncertain and timelines have likely shifted well into 2022. And still no overall JORC figure for total resource size. My guess is ATM are just not giving investors the news they want to hear, steady but not spectacular progress.

Promising initial results on lithium separation using density methods
Preliminary results from ongoing Dense Media and Heavy Liquid Separation
(DMS & HLS) testing in S Africa show a four to five times uplift in the lithium
grade could be achieved. DMS and HLS exploit the relative density of lithiumbearing petalite in comparison to other minerals in the ore, The current (inferred)
resource grade at Uis is 0.63% Li2O, which suggests these density separation
methods could boost the grade to ~2.5-3.1% Li2O; it is expected that flotation and
magnetic separation methods will also be employed to further upgrade the
petalite to a standard 4% Li2O concentrate, with a low iron content of <0.05%
Fe2O3. For Phase 1, we currently model a conservative 28% Li2O recovery rate,
generating ~46ktpa of petalite concentrate for average annual lithium revenue of
US$16m. However, we see scope for this to be considerably ramped up in Phase 2
to a 62% recovery rate, with lithium comprising 44% of mine-gate revenue over
the life of the operation. Tantalum, by comparison, makes a smaller contribution
to our forecast LoM revenue at 10% of P1 and 8% of P2 based on an assumed 30%
recovery rate.
Uis shaping up to be an African technology metal hub
Both tantalum and lithium are important metals in the green-tech revolution with
dominant uses in capacitors and batteries respectively. Combined with a positive
outlook for tin (read our tin price update note here), AfriTin is well placed to
become the battery metals champion in Africa. With significant exploration
potential on the Uis licence and studies advancing on the larger Phase 2 (“P2”)
expansion, we continue to see considerable upside beyond Phase 1, which on its
own already drives solid valuation metrics for ATM. We forecast Phase 2
production at ~5-6kt Sn per annum, placing AfriTin as a key source of conflict
free tin as demand continues to grow on the back of uses in electronics and
batteries. We estimate AfriTin’s cost per tonne of tin at Uis Phase 2 is US$5,844/t
when accounting for by-product value - versus record spot prices of ~US$35.5k/t
- markedly derisking the project.
Valuation: SOTP GBp15.4/sh offers 177% upside
We derive a SOTP target price of 15.4p, 177% above the current share price, based
on our Phase 1 and Phase 2 DCFs using a long-term tin price of US$25,000/t. We
also note at the current 3m forward price of ~US$33,050/t our valuation would
increase a further ~33% to 20.6p. With tin appearing to have stabilised slightly
below all-time high prices, we expect ATM’s focus to remain on optimising P1,
infill drilling and advancing studies on P2, building upon the Company’s strong
news flow so far this year.

AfriTin (“ATM”) released an update on Monday on its ongoing metallurgical testwork programme to assess the addition of lithium and tantalum concentrate byproducts to its existing tin output at Uis. The Company will also commence an
8,000m drilling programme to upgrade the confidence in the tantalum and
lithium Inferred Resources at Uis to Measured & Indicated categories. The
existing Phase 1 plant at Uis is currently producing tin concentrate at a rate of
~0.7ktpa, ramping up to 1.2ktpa by year end. Testing to date has shown the
viability of splitting the tantalum content from the tin concentrate using magnetic
separation methods to produce a distinct tantalum concentrate product. While
optimisation of the process is ongoing, ATM will now proceed to flowsheet design
with the aim of implementing a pilot tantalum circuit during Q4’21. Meanwhile,
metallurgical testing of bulk ore samples to investigate the potential to produce a
petalite (lithium) by-product is underway; initial results from density separation
test-work look promising, in our view. We remain positive on ATM stock with tin
prices remaining strong (albeit slightly down from recent highs), a continued
recovery in lithium prices, and our 15.4p target implying 177% share price upside.

SP performance looking even more bizarre in the context of this:

• AfriTin are enjoying an unexpected lift in margins on shipments of tin out of Namibia.
• The Uis mine in Namibia is also looking to double monthly tin concentrate output from the mine to around 120t per month.
• The expansion combined with high tin prices should see the company report profits for this year and could also pay down £3.8m of current borrowings.
• Tin prices hit US$ 36, 594/t yesterday on strong demand and low official inventory levels
• Tin prices have risen by >70% since the start of the year with little sign of a retracement.
• Premiums for physical ‘cash’ delivery have risen on the LME bringing in some 6,000t into the market but this is still below outflow levels due to rising demand.
• European buyers are paying premiums of ~$1,500-2000/t for physical tin, the highest since records began in 2009.
• Shanghai stocks are at their lowest since 2016, currently at 1,542/t from 8,853/t in March.
• Shanghai tin prices hit a record high of CNY244,900y/t this week.
• Yunnan Tin, one of China’s largest producers, has shut a smelter for 45 days disrupting an already tight supply chain with other tin smelters slowed by local power restrictions in China.
• Malaysia has raised production by just 2% this year with Indonesia also struggling to react.
• Myanmar which supplies tin smelters in China may be seeing reduced production due to political issues within the region.
• Demand for tin has risen to rising demand for electric vehicles, electrical goods and circuit boards.
• A joint study between Rio Tinto and MIT in March 2018 showed that tin is the metal most likely to be impacted positively from new technology.
• Tin scored very highly using the MIT framework because of the potential for increased demand applications, particularly in the electrical and energy storage areas.
• These demand changes might be large in comparison to the current market size.
Conclusion: We expect AfriTin to report significantly higher profits in H2 supported by high prevailing tin prices and rising production.

Updated note from Roger Bell this morning. SP trading at 64% discount to their Feb 22 risked target price (15.4p), This rises to 25p share for next Feb if tin price remains at current levels. They forecast revenues of £16.6m/profit£2.4m for FY22, revenues predominantly from tin but with contributions this year from tantalite and petallite. FY23 revenues of £32.3m and profits of £7.3m (could be seriously understated IMO).
Suggests a serious undervaluing of the revenue growth we should see in this financial year, which is almost 50% complete. MC not reflecting this at all.
Still think the company has presentation/messaging short-comings. AV was announced as the presenter today, thought the FD did a good job but still not lighting a fire under the opportunity here. Roll on by-product news, re-stated resource figures and completed expansion.

If the Ta and Li extraction gets proven as viable (within next 3 months, high probability?), that subsididizes the production costs for Tin and may lower it to $6k/tonne by phase 2. ATM wins. If the Tin market tightens further, without by-product sales, ATM wins. With both, ATM goes parabolic.

..by-product sakes drastically reduce extraction cost of tin..

In fact, AfriTin’s cost per tonne of tin at Uis Phase 2 is estimated at -
US$5,844/t when accounting for the by-product value, derisking the project
significantly. With Phase 2 production forecast by H&P at ~5-6kt Sn per annum,
AfriTin is well placed to emerge as a key source of conflict free tin as demand
continues to grow

We upgrade our SOTP valuation to 15.5p, up 24% from our previous target and 167% above the current share price. Whilst increased 25%, our US$25,000/t assumption remains 24% below the current spot price of ~US$33,000/t. We note the impact on our AfriTin SOTP is dampened through by-product output at Uis, with lithium and tantalum accounting for ~52% of LoM revenues on our estimates. We expect ATM’s focus to remain on optimising P1, advancing studies on P2 and completing infill drilling required to prove Uis’ Inferred tantalum and lithium Resources up to a Reserve standard in the medium term, building upon strong news flow so far this year.

We have updated our long-term assumption for tin to US$25,000/t from US$20,000/t on the back of accelerating demand and tight supply, with our analysis of incentive prices suggesting higher levels will be required to fill a growing deficit. As a result, our target price for AfriTin increases to GBp15.5 from 12.5p. With significant exploration potential on the Uis licence and studies advancing on the larger Phase 2 (“P2) expansion, we continue to see considerable upside beyond Phase 1, which on its own already drives solid valuation metrics for ATM. Currently the stock is sitting at just 0.25x our unrisked NPV of 22.9p and 63% below our risked target of 15.5p/sh.

P 23 of annual report:

The Committee considered the proposed agreement between
Aminex and ARA to enter into a loan for US$1.7 million. The
Committee assessed the risks and implications of the terms
of the proposed loan agreement. This included that the loan
is currently not signed but agreed in principle and that ARA
still owed amounts to the Group under the interim costs.
The Committee received comfort from assurances received
from ARA that the remaining interim costs would be settled
in July. The Committee noted the funding amount of US$1.7
million was sufficient for the Group, before exceptional items
and contingent liabilities, for the 12-month period up to June
2022, but that further funding would be required shortly after
the period.
The Committee considered the Group’s ability to source
other debt and equity funding as required during and after
the 12-month forecast period, noting the recent negative
impact of the ongoing global pandemic on capital markets.
The Committee noted that the Group would require its
disapplication authority to assist in its ability to secure any
equity funding in the period.

He’s an armchair blogger who’s been pushing ATM for a few quarters, not a professional analyst. I’d take his views with a pinch of salt.