Member Info for pekingduck

GD101, agree, this is another form of debt financing, similar to Orion's royalty. Without knowing the discount term or duration, no way of calculating the cost of this $3m loan. Early redemption would actually cost $3.9m.

Effectively, ATM are now giving 10% of revenues to Orion and selling all their tin to Thaisarco at a discount. For how long we don't know. I expected they would need to raise finance before the FY end and this is what they've done - more expensive 'debt'.

I expect it will be used to finally fix the Jig as it seems this isn't commissioned yet. Ore sorters, no doubt still under a tarp in the desert, that will require more funding, I expect.

HF0 - that target is based on full phase 2 expansion and cashflows, which will require $ hundreds of millions to fund, let alone timeline (years away..)

H&P's price target has always been extreme and based on this happening. It was mooted 5 years ago but ATM have dropped this from their discussions and it is rarely considered as likely to happen. The company have not delivered a strategic presentation for the future in more than two years so impossible to know if its being considered.

H&P get paid to build dreams, this is one of them.

FTP - agree also. On a basic higher highs/higher lows trend since Feb '24 this should push on to to 2.70+ in the coming few months, maybe sooner with drill rig contract news.

Locked and loaded for material upside..

J2M, so this follows on from Thierry Bretons visit to UIs just over 3 years ago, following the EU/Namibia agreement on rare earth/critical metal supply from 2022.

Only taken three years to happen but we’re talking EU and Andrada here so shouldn’t be a surprise..

Looks like a blocking tactic by the EU to secure much needed critical metal supplies from under the noses of the Chinese, who have been all over UIs since the beginning. No doubt Viljoen made the EU aware of that again to get this handy little, no-strings ‘funding’.

Am sure it comes with the caveat that you don’t supply or consider a take over offer from the PRC now you’ve taken our cash! Or something along those lines.

Hopefully they’re desperate enough to get supplies on line that it’s not another three years before the feasibility study is produced.

But I’m not holding my breath.

COYS, Zeus published a rare note on ATM today which sees the drill results as 'significant'

They are ATM's nomad and broker, and yet as they state 'they do not currently have any forecasts on Andrada'.

The company's broker and nomad, doesn't have a view on their financial position or have any model for future revenues, profits, cash flows etc.

If they don't, why would you expect anyone else to?

F=====g useless, but sums up why so few investors are prepared to take a punt. Poor financial visibility - something Viljoen has cultivated since listing.

It needs to change.

BW and LR might be the icing on the cake, but unfortunately the cake is still stuck in the oven on a low heat. The chef needs to turn the temperature up but he seems to prefer baking on a low heat - despite the messaging.

To me this is the markets main concern right now - very slow progress, continued expensive financing e.g 10% royalty on revenues and ongoing concerns about the balance sheet. I don't share your confidence that the ores sorters will be redesigned and fabricated, and then installed, without further funding. Despite raising $25m in Aug '23, with a then stated target date of 15 months to have them installed and commissioned, they probably won't be contributing to increased production for another 12 months, at a guess, given ATM's poor track record in expanding Uis. And the Jig plant, who knows, sounds like more problems than just what's been stated in official RNSs.

BW and LR could provide some meaningful support to the balance sheet if re-rated and valued on progress, but the market wants to see increased production, reduction of that poisonous royalty, and the ability to get to breakeven cash flow and not be reliant on more, painful opex funding.And its not seeing it yet.

Strong positive, potential ‘major source’ of copper, excellent progress.

TD2 - the last I heard OT weren't interested in increasing their exposure to ATM, having big loan exposure as well as their equity holding.

I was surprised to see them convert and add to the latter - they have tended to do this at opportune times in the past. So I'm hopeful this is the case again. They are close to AV.

I don't post here to complain - but its the only avenue to express concerns and challenge the board of the company. I know it is read by members of the board. I actually think some of them post here.

As the company doesn't provide a forum to communicate with shareholders, and haven't updated their strategic plan for more than 2 years, and the AGM is a closed shop (i have been on the call once, waste of time) - this is the only option there is. Which is poor.

Yup, typical Viljoen, trying to spin a failure into a positive.

The failure to have the jig operational means the company is further diluting shareholders whilst also delaying the reduction of the Orion royalty, which this was flagged to do 12 months ago.

OT are sticky holders so i don't see them monetising any of their holding.

The timing probably coincides with pending news on the jig being commissioned, i would hope. Converting after such a strong move only makes sense if there is further +ve news to follow which could see a higher share price.

We'll see..

Trouble is EB they have a great track record at shooting wide

CCC, makes sense.

The supple squeeze has bailed AV out and hopefully they can finally get into production growth phase and capitalize on the opportunity. Maybe this time the geopolitics means a sustained new price level rather than a spike.

200 day MA is around 4.52 so a clear break of this would be very positive, on rising volumes.

The big winner here so far has clearly been Orion who are getting 10% of a revenue stream which is up over 50% since they made their loan, at least, so the cost of finance to ATM on the loan value is extreme. And the debt has yielded nothing in terms of production increase. Looks like the ore sorters won't be contributing to production growth until the end of 2026 - this is easily Viljoen's worst screw up and one that has yet to be properly explained. But running out of cash to implement it doesn't seem to be all of the story.

TD2 - From the interims:

The current Bank Windhoek contract runs from June 2025 to May 2026, securing a fixed price of US$34 400 per tonne for the same 20-tonne monthly volume.

They produced 255 tonnes of tin according to the last 1/4ly report so looks like just under 25% is being sold $10k below the spot price.

Taking into account the Orion royalty and this (strange decision to hedge, given Viljoens bullish view 12 months ago) - i'm guessing the net price they're getting is around $38.6k based on same production volumes and @ $44k gross.

So they should be clearing a decent margin this quarter, but that's if you trust their cost calculations to be accurate, which i don't.

Todays buying suggests news soon on any number of items - Lithium DFS, Jig commissioning complete, SQM interest in LR, take out of the whole shooting match....? who knows, but it's welcome, maybe the start of a rerate.

TD2, you need to factor in here that ATN are selling a portion of their tin well below this due to the hedge, plus they are giving Orion 10% of revenues from the topline, effectively reducing the selling price to c. $40k as a result. The market knows this.

Https://www.tradingview.com/x/b5cMcVH9/

Whilst the 5 year correlation to tin chart still looks weak, the one year relationship to the tin and spodumene price is starting to resemble something healthier.

SQM has been a big beneficiary over the past quarter. ATM has reconnected, and this is in GBP terms, so rebasing to $ would be c. 8% better still.

Signs of life..

Spot on C1, they couldn’t ask for better supply side conditions, just a howling lack of urgency to deliver into a perfect market for a tin producer. Mainly down to a lack of funds I understand to actually get the work done. Underestimated the cost and had to divert expensive funding to staying solvent.

Fully expect a new finance package before the FY end.

Viljoen yet again failing to meet his own goals.

I’m in Namibia in May and whilst I wasn’t planning to travel west I may plan a day in Uis to see wtf is actually happening.

Share price should double at least next year if the board can finally meet some targets, and get through next through few months without another expensive financing option.

As you say, in the meantime the resource just gets more attractive from a valuation POV.

TD2, very mixed, very ambiguous.

The interim financials were really poor, details of the finance costs alarming, zero cash, continued loss making, stressed balance sheet. Needs more finance urgently, as flagged.

Ore sorters not installed with various excuses, most notably they used some of the Orion cash borrowed for this purpose for other purposes. Like staying solvent.

Jig commissioning not complete, no doubt lack of funds as loan from OT has been used up.

Lengthy delays on production ramp up so no likelihood of Orion royalty coming down an6 time soon, huge impact on take from top line revenues.

Yet despite this, a West Midlands property developer hoovering up whatever he can when his MO doesn’t suggest any previous interest in African mining companies. OT not selling and likely to, Talent10, an experienced SA mining investor in place and possibly interested in owning more. SQM and Orion considering increasing their loan exposure as well perhaps?

Fundamentally, the income statement and balance sheet look dire. But with ATM it’s always bee; about the value of the asset/resource, which AV has failed to exploit profitably in 8 years. Which by itself, given the bull market for tin, seems impossible to understand, yet he’s managed it.

C1, not knocking you but Andrada are not profitable at present. Their tin swaps mean they are selling a large % of their production well below the spot price and are also giving away 10%+ of revenues to Orion to meet the royalty charges. They aren’t producing nearly enough tin to reduce the royalty and cover their very high finance and operational costs, even at $40k. Unfortunately you’ll have to wait till August 26 for proof of this as that’s when you’ll see the FY 25/6 accounts, but believe me, it will be another large loss.

The operational report might show a small improvement over the previous quarter but with no commissioning of the jig due until at least next year now, it won’t be significant. They are also not going to report production costs on a 1/4ly basis anymore either, as mentioned in the interims.

This report on X is another paid for PR from an obscure Namibian website and looks AI generated, based on the extracts from the interims. If a mine with revenues of £25m pa is the 4th most important in Southern Africa, my name is Donald Duck. More bulls*it I’m afraid.

Https://www.tradingview.com/x/GFlPyYVD/

ATM vs AFM vs Spot Tin since November 2017

What happens when you borrow money with payments linked to revenues that don't grow fast enough and don't use the borrowings to fund the expansion promised to lower those costs. What's worse, as per the interims, some of this borrowing has been diverted elsewhere in the business, most likely to cover bloated admin, travel and opex costs, most likely leaving ATM woefully short of cash to actually complete the ore sorter fabrication and commissioning.

And as for the jig plant, paying OT $50k a month 'facility fee' on the borrowings for that ($600k per annum on a loan of $2,5m) and yet to produce an ounce of production growth.

As someone else posted, a tripling of debt in 3 years to increase production by less than 15%..? Whilst finance costs skyrocket.

And yet someone appears keen to build a sizeable stake.

What happens next?

Https://www.tradingview.com/x/geKS27Zp/

Correlation to tin price ended with Orion's arrival

Firmly in your camp rgbuk, summed it up perfectly.

The current position is worrying and clearly untenable given the quarterly negative cash burn - more funding will be required before the year end.

On this point, I understand various packages are on the table with the key lenders/stakeholders to ATM. We'll have to see what they announce, but I can't see how further dilution is avoided. Whilst the balance sheet just gets progressively worse.

Someone, and I suspect it's Talent10, is buying in size, will have to wait for the next holdings updates unless news comes sooner.

They have deep pockets and are clearly interested in resource assets close to SA. Maybe they fancy the idea of complete ownership?

What gets me is 8 years of failing to realise the potential of this hugely attractive resource asset. And counting..