Member Info for Phoebus

The £7.5M deal undoubtedly unlocks more than £7.5M in value, but 5.5 times as much is pushing it especially given ZNWD has next to no cash and plenty of hoops still to jump though before the real value can be unlocked. It's not a simple as just owning 100% of a project. There are plenty of mining companies with 100% ownership of decent development projects, but going into production in reality takes a lot of time and money and unless a company gets a transformational asset sale or farm in then projects can take an awfully long time to unlock value. If that sort of deal occurs then we're talking, but simply increasing ownership of the asset, not so much.

ZNWD has just paid around £7.5M for the remaining 50% of its flagship Zinnwald project and the market cap has increased by almost £40M to £62.5M on the news. Whilst it's great news that the company has the whole project under its control, the company says it only has EUR 2.7M or £2.35M in cash so it clearly has no funds to develop the asset. Mine development is a slow and expensive process and a near £40M increase in market cap for an asset they just paid £7.5M for looks well overdone.

ZNWD has just paid around £7.5M for the remaining 50% of its flagship Zinnwald project and the market cap has increased by almost £40M to £62.5M on the news. Whilst it's great news that the company has the whole project under its control, the company says it only has EUR 2.7M or £2.35M in cash so it clearly has no funds to develop the asset. Mine development is a slow and expensive process and a near £40M increase in market cap for an asset they just paid £7.5M for looks well overdone.

A lot of folks will no doubt have seen us on the leader board overnight and taken a look at our excellent farmout RNS. Lithium is most definitely in play at the moment and I expect IRR will continue to re-rate as news spreads and people take positions on this transformational deal. Hopefully I bought enough. GLA

A lot of folks will no doubt have seen us on the leader board overnight and taken a look at our excellent farmout RNS. Lithium is most definitely in play at the moment and I expect IRR will continue to re-rate as news spreads and people take positions on this transformational deal. Hopefully I bought enough. GLA

PaddyGoLucky and Bits, I'm guessing you have no actual argument to justify the current absurd market cap.

20p? The market cap is already a ridiculous £271M at 2.03p.

I loaded up just over 2p. Yesterday was the first time since then that I've felt a bit miffed.

Tony. I think you'll find that 6% is the grade of the product as sold, not the grade of SAV's ore in the ground. Indeed the standard price of spodumene concentrate is based on 6% Li2O. https://www.metal.com/Lithium/201906260003. SAV's Mina do Barroro project is 2.62% LiCO3 equivalent by my calculation.

Also, you refer to Li2O grade. This is different from the LiCO3 equivalent grade I quoted. Different companies use different molecules when quoting the grade of lithium in their ores be it lithium, lithium oxide or lithium carbonate, so it is necessary to convert the grades using relative atomic weights as I believe I have done.

Tony. I think you'll find that 6% is the grade of the product as sold, not the grade of SAV's ore in the ground. Indeed the standard price of spodumene concentrate is based on 6% Li2O. https://www.metal.com/Lithium/201906260003. SAV's Mina do Barroro project is 2.62% LiCO3 equivalent by my calculation.

Also, you refer to Li2O grade. This is different from the LiCO3 equivalent grade I quoted. Different companies use different molecules when quoting the grade of lithium in their ores be it lithium, lithium oxide or lithium carbonate, so it is necessary to convert the grades using relative atomic weights as I believe I have done.

based on my research earlier this year. I am aware of 12 UK listed stocks that have lithium JORC resources and IRR's Ewoyaa that was farmed into today has the second highest grade at 3.21% LiCO3 equivalent. The only project with a higher grading is IRR's other project Egyasimanku Hill which has a grade of 4.13% LiCO3 equivalent. By contrast, three other UK listed projects are around 2.65% and the others are all between 1% and 2%. IRR has the goods.

The strong TESLA connection here cannot be ignored and should really pull in the investors.

Absolutely. FAR and OMI soared massively in just a few days when they had similar news. What happened at FAR in particular appears to be a good analog for IRR.

My expectation is that once we've had a bit of churn this will start to re-rate. I'll be surprised if this isn't significantly higher a couple of weeks from now. Great chance to get in just over the placement price. GLA

Great spot on the Tesla link. Thanks SC.

Me too. This news is hugely significant as it unlocks a major asset. KOD's only significant asset is the Bougouni lithium project which is unfunded and has a much smaller NPV and yet their market cap is 72% that of IRR. Either KOD is overpriced or this is far too cheap. Go figure.

An IRR of 125% is one of the best for a mining project listed on the LSE. This should attract a lot of attention especially with the massive interest in Lithium and EVs at present.

What lithium price is that NPV based on? My guess is it's lower than the current price, which means the actual net cash flows for IRR should be higher than that figure. This deal looks excellent for IRR so the subdued reaction seems a bit odd. We can buy at only 4% above the placement price. Am I missing something or is this just a gift?

The problem is if you have a really large holding there isn't enough liqudity to take advantage of such moves. It's easy to say buy the dip if you have little skin in the game, but managing a huge position is much harder and you're always wary of getting locked in and being left holding a huge loss if things don't pan out as you'd expected. Management moving goal posts certainly doesn't help as you can't react quickly to changes in circumstance. With gold miners in the gutter at present I won't be surprised to see this head back to 10p while we wait, although that is by no means guaranteed. Once Red Setter drilling is closer and confirmed then I will feel more confident, but for now I remain cautious. Best of luck all.

this is one seriously overvalued share.