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Agree with your analysis. Given UFOs position I imagine any company which wants to JV will get an absolute steal, since it's no secret that UFO need the money flowing in from a project to sustain the rest of the portfolio. I can only add that the Mexico projects reopening gives me some hope that Bill is getting more confident about laying out funds precisely because he's in advanced stages of a deal, otherwise I feel like he's spreading himself way too thin (and I think he's said similar in previous interviews). Getting the team in Mexico is going to be unnecessary expense and focus given everything we have in Australia and all the time he still has to put into organising and analysing the Munni Munni legacy drill results, plots and maps. Maybe he's getting those results on their way to labs so he has something to look at later in tbe year.
We've been stable at around this level for a month and a half, volatility is hugely reduced. I think we have seen the last of the traders for now, there have been far fewer random spikes on speculation. Every day that progresses without information on AVA6000 should increase confidence in investors, until we reach the middle of the year. Glad this isn't being reflected in the SP as there is more time for LTHs to accumulate, who are here for the cancer side, now that the LFT has been all but pronounced dead.
I agree with Bill that UFO shouldn't be mining. The skills on the team are in prediction, discovery and assessment. The main reason against mining ourselves would be the capex of diggers, transport, personnel, waste disposal and such would overcommit the company resources and brainpower, and to tasks that they don't have that much experience in. However, if we don't get a JV, which would be the preferred option, UFO could do it I think. A lot of the complicating factors usually involved aren't present when talking about surface mining and close to transport hubs. Some complicating factors are still present and further assessment is needed, but I think that it's a viable path forward and something that should be getting worked up if we don't have strong JV options by the middle of Q3. I'm not sure why every Tom, Steve and Harry in the Pilbara with a mining set up aren't falling over themselves to JV on one of the projects, but hoping that IOCA set up will allow that to develop in the near term while a program is developed for the Munni Munni area.
I don't see the SP moving until we start to see more moves towards mining, through JV or by ourselves. MCap of £35M is a steal for any one of the 3 Aussie projects, IF we are producing. We just need to get the drills and trucks out ASAP and when we do, the SP will moon.
Rhodium is only really used in gram scale in car engines, they can stomach the price hike in the car profit. Silver going up 50x would be an economic disaster for all the downstream industries using it, which is one of the reasons it is controlled.
Demand for silver is soaring due to their use in electronics as the most conductive metal (more than copper). Supply is in the sink. Silver and gold are traditional inflation hedges, and yet, silver spot price has been dropping. Rigged market, will have to see if we get a silver rally even if the indicators are all pointing to it being significantly undervalued.
Yeah the whole COVID sector is up, something's up, we just don't know what. My personal hunch is that a big short on the whole sector has finally decided to stop stomping on these stocks as they aren't going to go much lower, so started buying back. I can see no news reason why this is happening unless everyone is really keen on Djokovic missing out on grand slams. NCYT had the dump and pump a few weeks ago and stabilised, but it happened in AVCT over the last few days, very sharply. Someone robbing PIs in broad daylight I think.
AS purposely tanking the SP for IIs is as much a conspiracy theory as the idea that he will put out a surprise placing when he's said there is runway till H2 2023. He has often not told the whole truth, for various reasons including NDA / NHS protocol, but the idea that he already knows the trials aren't going well would be barefaced lying. As such, why would he raise at any point before the P1 results can be made public midyear at the earliest?
I think two things are clear. LFT has been sabotaged by the DHSC and then by AS, with the company valuation taking a huge hit from those folks exiting since the announcement that AS eloquently put out: "um, err, no" to paraphrase. Secondly that the whole sector is in a rout. The Fed are tightening and biotech are super risky, the market believes COVID testing is winding up, and war fears are dropping all indices at the same time. This has compounded into a remarkable collapse in valuation driven largely by sentiment, but yes the fundamentals of half the business proposal have been completely gutted, there's no denying it. Valuation is now riding almost exclusively on one early stage biotech clinical trial, which are known to be very safe investments in this volatile time. I am shocked, as I guess everyone else is, how fast and deep this crash has gone - I increased my holding substantially at 95 twelve days ago, and I've seen my paper loss over triple, coming close to quadruple, in that time.
@Runner, I genuinely think he did. Given the history, I don't see a big brain attempt to change over the investor base, I see someone who isn't very good at talking about things in an investor-oriented way. He is talking like a scientist, being conservative both in outlook and in the information he gives out. It is clear he isn't very interested in short term shareholder value, that the results will speak for themselves in time, and that price fluctuations have nothing to do with the inherent worth of the company. So I think IIs probably got the same message. The silver lining is that I think he is so poor at communication that we can disconnect what he says from progress in the company, meaning that we might have fast progress on getting the LFT running again and people can make their own minds up about approvals, but I think this should be relatively quick and easy. Just because he says he doesn't know regulatory steps and hints that it could take a while doesn't mean it is. While I believe that the scientific value will drive the SP over the longer term, short term weakness is obviously important for takeover bids, for distressed LTHs, and as a market signal for IIs and traders. Even people sitting on their shares for the next 3 years would rather have the SP steadily increasing along with its "true" value than wildly crashing and scaring away other potential LTHs. The transformative technology that could revolutionise cancer treatment is undergoing step change derisking and the SP is deflating, as if AS wants a pretty cheap buyout from a big pharma company.
The SP cratered when AS went on vox, nothing more or less. Comms have been vague and scary, and honestly don't blame people selling up. The CEO is critical to success and if he repeatedly puts his foot in his mouth then he might also make decisions like taking the LFT off the market a short time after getting HUA, and not even announcing numbers as to why. Maybe good to rephrase "loss of confidence" as "accurately predicting AS shooting himself in the foot again unprompted".
The tone of the communication and content was shocking for what was actually being said. Investors don't like uncertainty and emphasizing how little he knows about how long it will take to reprepare and how regulators will see it is awful for confidence. "We can't know for sure but since the end user experience will remain the same and one modular component is being changed, we hope to be able to keep the product CE mark and HUA approval under term x.y.z of those regulations" - something like this would have the same content but perceived very differently. Also emphasising how developed and competitive the LFT market is ... no, it's not developed for the specificity and accuracy of Avacta's LFT.
"Whilst the AffiDX® antigen test is effective at identifying high viral loads of Omicron, further laboratory analysis carried out by Avacta indicates that the sensitivity of the test is reduced at lower viral loads when compared with the sensitivity of the AffiDX® test with previous SARS-CoV-2 variants." - 10th Jan RNS
A continuation of such atrocious communication it is almost impressive. What sensitivity does the LFT have towards high viral loads? How does this compare with other tests on the market? I expect it still outperforms the cheap Chinese tests, but the emphasis is that it wasn't as good as when testing the previous variants. This implies it now just doesn't work at all, which is what was pretty much said by AS in this interview but seems to be contradicted by the words used in the RNS. They could have continued to sell it while upgrading it using a different antibody to improve the performance and enable stronger multi-variant testing. But they refuse to release any data and just give vague smoke signals to the market implying the worst.
I think the situation is possibly much better than is being suggested by the company but am completely mystified as to why they are selectively presenting the worst possible interpretations of the information. Almost makes you think that AS is getting some under the table funding from Jupiter.
Metalhead25 thread "fun with numbers" started 28th Jan:
"EH. The one everyone is excited about at the moment but also the one we know least about. A lot of guessing/hoping here but if you imagine we have an ore body 150m x 150m x 50m you get c. 3.375MT of ore. If we assume/hope 50 oz/t Ag, that’s about 170m ounces. Silver spot $22/Oz, AISC $10/Oz gives lifetime operating profit of c. $2bn. Round down for capex, inefficiencies etc: gross future value c. $1.75bn."
It's real finger-in-the-air stuff at this point because we only know it was an old mine that was shut down because of poor silver price, we have no idea whats down the mine but do know it was producing fabled chunks of pure silver and that they were very sloppy mapping and testing. The surface and the polymetallic halo around EH were never really tested either, it must have felt like looking for crumbs around the table when there is a 3 tier cake on top of it. This style of resource simply doesn't exist anymore. How expensive it will be to extract the silver and other metals, don't really know. This is all as background as to why I think Metalheads numbers are pretty conservative but still come to $2bn in revenue forecast.
The big risk isn't that we don't have enough, it's that we get acquired or run out of funding before revenue generation starts. My hope is for a JV with Fortescue to get Hanc0ck running, invest in more infrastructure, people and kit at EH and MM with that revenue, and produce those ourselves, because PGM and silver are the future and we have an insane amount of it.
The SP drop looks more like consolidation to me, it is not tanking. We were at 0.57p less than a week ago, shares don't go meteoric unless the AIM crowd decide they do, often based on nothing. Meanwhile stellar performances can be ignored because the momentum stalls. It's an exposure game and people who have been here before the EH news will know that EH was already very promising from previous grades and Han**** / Brockman could make the company a £1B cap by themselves. We have hardly scratched the surface but that region of the Pilbara is surrounded by like 5 of the top 10 iron ore mines in the world. The company has shown DSO fine grades that Rio and the like aren't pulling up nearby, and yet the company sat at £15MM for most of the year. This isn't a new event really, Alien is really under the radar. The vast majority of investors don't even look at no revenue miners, they show up on SimplyWallSt or Stockopedia as the worst stocks you can get. Once we get some numbers to put on those sites they will calculate our resources fairly and the rerate will be mind-numbing. Hopefully we see a steady raise until that point to assure LTHs but the market is very skittish right now.
It's a volatile share and the upwards buying pressure we saw Thurs and Fri was immense, it is natural to expect a bit of a pullback. UFO were materially undervalued before EH, and even blockbuster grades won't reduce the perceived risk for some people, since this is still pre-production. For gains to really stick we need to get to revenue generation asap. The general market is also in a pretty tense downward dip currently, so people are going to be even more skittish around small caps. I agree that I think we're seeing the traders clear out with their 40% and some big money move in, maybe helped by the MMs.
I'm not so concerned about the suppression because it appears that UFO is materially undervalued and will make significant profit even in the current silver climate, but yeah we could be well positioned for a huge silver rally as demand keeps increasing and supply keeps dropping . Inflation worries are looking to put unprecedented demand on silver and as soon as some of the big shorts start closing up, because of how overloaded the silver market is with short positions, it might well squeeze like WSS thinks. The paper silver market dwarfs the bullion market in terms of monetary flows by something like 100:1, and if people start calling their contracts it could be another huge financial crisis. I just don't know why this level of disconnect has been perpetuated for so long and why no one has forced the call cascade that occurred during the 2008 crash for example.
The subreddit (which has apparently bought collectively 500 M Oz of silver metal) is having a raid of buying physical silver today for their 1 year anniversary. Was just curious what people thought of the various theories that are around in that community, notably that the silver price is heavily manipulated by the futures market which sets the price. It really doesn't make sense that from May last year the silver price has dropped while inflation fears run rampant. I think the original WSS was hyped up by the banks to distract and remove buying pressure from GME during that short squeeze a year ago, but I was wondering if they had a valid investment case and what I'm missing if they don't. I would be surprised if this raid materially affects the silver price but was asking more about general sentiment concerning silver manipulation and COMEX.
https://www.reddit.com/r/Wallstreetsilver/comments/nwzadx/a_comprehensive_compilation_of_all_due_diligence/
It's very difficult to value but I have reduced your estimates to bare minimum where possible and halved the resource at EH to get an insanely conservative resource estimate. Notably these aren't including significant copper, nickel, cobalt, zinc and lead in the EH envelope. Total conservative estimate is still £4.75 bn total and the company is currently worth 1% of that.
Things removed to reduce the value: Nothing else discovered at Hanc*ck, lowest estimate at Brockman, EH halved in size, and $22 / oz is also very conservative for silver. This also isn't include the "complete unknowns" (but we have a good indication that stuff is there) of the other projects and the source motherlode of the malefic intrusion in the EH / MM complex. Even with it being early stages , the market valuation doesn't make sense at all. I would hope this will hold 3p over the next couple of months and possibly rerate further as new assays come in from Hanc*ck and EH and progress is made preparing for extraction.
We are still very under the radar here, only reason why resources like these are still valued at this level. EH, Han****, Munni Munni and Brockman could individually justify a £100M MCap company - and that was before this RNS, where BBG has revealed that we will be able to essentially dig out the topsoil and get grades 25x the average underground grades.
I know you've been here a lot longer but I got into UFO last year and have been questioning if there is some huge oversight I've made in valuing these resources, or if the market is inefficient by possibly 2 orders of magnitude - after today's stunted rise I have to believe that the latter is the case. This is as close to picking money up off the ground as you can get.
Sorry to be the bearer of bad news but if you're 45% down you would need to see the share price nearly double, an 82% rise, to get back up to baseline. I am at -48%. Some people here are 80% down, meaning if they ever get back up to break even there is likely to be some French traders seeing 5 bags at the same time. Such is life, such is the market. Not fair, never claimed to be. Admittedly I didn't see this share commit seppuku as being the reason for the loss, but for some reason they have decided to never talk to the market except in the most stilted manner once every 4 months. 100 days with no comms and DA doesn't appear to have much of a plan out of COVID. We shall have to see.