George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
Wizard, this is the last energy I am going to expend upon your consistently negative and misleading posts. I accept that a resource might have fantastic reserves but be uneconomical. But the FACTS in that respect are that LS's minerals are within 250m of the surface, some in world class grades, in an area being extensively operated by other miners, close to transport links, close to processing facilities, in a stable country with government support etc etc. Mining there cannot by any stretch of the imagination be uneconomical or risky. You urge others to do their research but you quite clearly have NOT done yours or have misunderstand what that process involves. Yes there are always risks but the disclaimer you oft trot out is a legal one they are required to give (look at any equivalent RNS) and it needs to be read in conjunction with one's understanding and interpretation of all the facts. That's what we try to do here, without selectively and repeatedly picking on merely one fact and one legal disclaimer. That's it from me.
Whilst accepting alternative points of view, I too am pretty fed up with a certain poster appearing on a downturn to be once more so patently myopic and/or transparently de-ramping. The only research fact ever quoted is what the previous owner sold it for (i.e. THC's book cost). Why then would (a) the bod put out this June an assets in the ground valuation of a 15% interest of LS at $146m (real legal liability there!) and (b) invest in a 10 hole drilling programme, assays, re-assays and now a geo upgrade assessment unless there was a really worthwhile return in prospect? I too urge potential investors to do their research and look for the excellent fundamentals here. MAFL is a value stock where under-appreciated assets are being investigated for significant upgrade IMHO. World-class mineral grades have come out of recent core samples. I for one feel confident that in only a few weeks time the clear majority of value investors here who have looked at the fundamentals will be proven right to a greater or lesser degree. DYOR GLA
It may be worthwhile re-posting a recent post of mine about resource values. As others have said, the bod have already indicated 15% was worth $144m in the ground so 100% is $960m (based on 4.5Mt and out of date metal prices). The new drill programme is designed to confirm and increase the resource to 8-10Mt (i.e. by 75-125%). If achieved, that would imply a total value in the ground between $1.6-2.1bn (simple scaling up, no account of changed mineral prices, better grades or targeted resource estimates being exceeded). Price ranges for sale of "minerals in the ground" may vary according to stage of exploration, quality, location etc but I believe 2-3% might be a reasonable guesstimate (Lewis has recently done a more arithmetical calculation, with a broadly similar result). On the same basis as above and assuming a 75-125% resource increase is achieved, every 1% of value in the ground would come to $16-21m. MAFL's interest is 49% of that, with some speculation that % may increase under its financing terms. So say $24-32m if one takes 49% at 3%, less of course tax and costs. And really none of that is in the sp today. We can be sure potential buyers are sniffing. Barring unexpected twists, it won't be long before the geo produces the resource upgrade and then sale news awaited. Patience as ever required here! IMHO, DYOR, GLA.
Nomlungu: You are right that LS has many acres of sulphides and the quantities of minerals indicated there seem to be growing healthily! I am not sure mining economics are really MAFL's concern, as they will not be doing the mining. As you know, neither THC nor MAFL are mining entities and the declared intention is to sell. Whilst economics will be of concern to a purchaser, there are so many other favourable factors here (first class resources, stable country, local infrastructure, close to ports, government support etc) that there should be some competition between purchasers, helping ensure a good price is fetched.
Good morning all, an interesting variety of points of view expressed this morning. MAFl is not a straight-forward story, mainly due to the length of time getting to this stage (=frustration) and the involvement of THC in its principal value-adding investment (=complication). That story will hopefully all become clearer once a sale of LS is announced and the true value of MAFL can be appreciated. I am thinking (=hoping) sale announcement within a couple of months is a reality but everything takes longer than expected here. Ma5k is right that there does need to be sustained buyer interest, irrespective of outstanding value. We should be pressing for some corporate PR here to help awaken and sustain that interest. In the meantime, excellent upgrade still looks assured, imho, so put frustration aside! Continued patience as ever required!
Max/6Z: The share issue resolution passed at the AGM is absolutely standard for quoted companies and is not just for new capital via placing, rights etc. There might be a corporate deal where MAFL wanted to pay in shares rather than cash. I feel it highly unlikely that THC would go public at this stage. It seems not as far advanced in developing its business as MAFL. Before its JV with MAFL, THC had tiny assets and one does not know what its residual share of LS and the Spanish assets will be. It is also unclear if MAFL might de-couple from THC but I am sure sure that MAFL will seek some cash out of THC to pursue its own wider objectives. And Max, you are a newish contributor on this bb so may not be aware there are many more enthusiastic MAFL followers here than you give credit for!
Hardy: You are quite right, although with a potential LS sale in the offing, that alone should generate plenty plenty of cash? Nonetheless, � propos other comments today, it is perhaps important to remember that MAFL's stated objectives are about much more than LS. The bod is trying to build a long-term investment and finance business, for which it will need capital (LS proceeds and/or placing), other project ideas (cobalt has been mentioned), bigger investment portfolio (update to that is probably due by year end) as well as perhaps a few unquoted ideas? They also need to extract proceeds from TCH. They seem to be in this for the long term so maximising share price now may not be their first priority (sorry, traders!).
Max: Good morning too! You are of course right about the need for PR and this was acknowledged the summer AGM. But I would have thought (from the company perspective) you only want to get into PR when you have a clear story to tell. The final chapters of this story are even now being written so PR once publication occurs? LS sale negotiations are surely going on so maybe the last few chapters will all come out together or close to each other. I have no real concerns over the delay (we have also been here before). This is also an economically run ship (if I may mix metaphors) so I doubt they have engaged PR. But one director has a journo background and both have done plenty of press releases/industry presentations so PR may be DIY.
Hardy - indeed the other anomalies are not in this drilling programme and are presumably something the geo might and a purchaser will take account of?! Unless they are to be retained for separate sale by THC - I seem to recall the total site is about 13 hectares.
Lewis XT: I agree your additional point 5 but you might add points 6&7: "6. It all really depends what a third party is prepared to pay for the LS resource and the terms of that deal. Perceived value may be reduced if, for example, the consideration includes a significant proportion of shares in a purchaser in lieu of cash (particularly if that is not a liquid or very liquid stock). 7. There may be taxation on the sale proceeds." I guess there might be other qualifications like commodity prices, FX rates etc?
Hardy - well, no actually. This shows the complications in valuing MAFL at this stage. Asset values being estimated are USD so you need to convert to GBP. Then there is the 49% issue (which might become more) so divide in half, although there may be tax on some of that. Then there are other MAFL portfolio investments and cash to add back in (some are carried at book), perhaps �3-4m. So if you take $60m as your LS 100% base (still a hypothetical number, especially as it is estimated on 10Mt!) and 49%, you get MAFL to around �25m so perhaps slightly less than a 5 bag from here and before tax. Sorry - but it would still be a good number! IMHO, DYOR etc
LewisXT - sorry, think I missed your earlier post, which is very helpful, thank you. Obviously we (and the market and potential purchasers) hope soon to know the size and constituents of the LS resource. When writing my post I was wondering if a simple percentage number for a broad brush, back-of-the-envelope approach for "in the ground" might be available, bearing in mind we have a mixed bag of minerals. As you describe it, LS is "zinc rich" so your approach should work. I think I had heard somewhere that 2-3% of "in the ground" value was a rough guideline (which on the original 4.5Mt at 3% would be $29m and on 10Mt scaled up would be $64m), so same ballpark.
Max: Reference your post about values, as Hardy says the bod have already indicated 15% was worth $144m in the ground so 100% is $960m (based on 4.5Mt). The new drill programme is designed to confirm and increase the resource to 8-10Mt (i.e. by 75-125%). If achieved, that would imply a total value in the ground between $1.6-2.1bn (simple scaling up, no account of changed mineral prices, better grades or targeted resource estimates being exceeded). Nobody here has yet suggested a price range for "minerals in the ground" but your $25/oz for gold would represent about 2%. At LS we have mainly bulk commodities and easily accessible etc. But, on the same basis as above and assuming a 75-125% resource increase is achieved, every 1% of value in the ground would come to $16-21m. MAFL�s interest is 49% of that, with some speculation that may increase under its financing terms. And really none of that is in the sp today. I am not going to speculate on MAFL's theoretical share price as we do not have the information. But we can be sure potential buyers are sniffing. It won�t be long, patience as ever required. IMHO, DYOR etc.
Folks, I do not want to curb enthusiasm unduly but my perspective is that LS is primarily a zinc/copper/lead resource with a whole lot of interesting precious metals (gold, silver) and minor metals (selenium, indium) alongside. But the latter are surely just icing on the cake and I certainly feel it is unlikely one can add �1 to the value for the indium alone or the precious/minors altogether. I may of course be proven wrong but I am not holding out hopes for indium etc being the primary value driver.
Zanman: At HL in your portfolio summary screen you will see a legend saying Delayed Prices. If you click that, you should be able to switch to Lives Prices. If you have a non-isa account too, you will need to opt in on each account. Hope this works!
Max: I am not sure I want to speculate. MAFL is a tiny company without a full-time office and they in turn are being fed information, at least technically, by TCH, a tiny private company. I am relaxed about the delay (we've had them before) as there is nothing to suggest anything untoward is happening. It may well be that the geo report or even some news about sale negotiations is coming out contemporaneously, so much the better if so (and it would account for a delay). But I am sure the last hole report will be good, just a question of how good, imho.
It shouldn't be thus, a trade is a trade and trade reporting obligations exist for a reason. Going short or being long is part of a mm's modus operandi but should be invisible to us, except sometimes guessable in the way they move the prices.