Member Info for ragnarlothbrok

Given the volatility in prices I have updated my summary of MTRs listed investments below... all translated into GBP at current fx rates, tell me if I'm way off base. In summary, we have £16.2m in quoted investments. There is also an investment in Pan Asia Metals due to IPO in September of which we held 7.29% at last count, which I'm guessing is worth around £850k.

So around £17m in quoted or soon to be quoted investments. Current MCap of £31m. Which leaves £14m for:

- T3 royalty: capped
- Tshukudu Exploration Limited 2% NSR royalty uncapped
- Kalahari Metals 2% NSR royalty, uncapped
- Project investment in Kalahari
- Cash (no idea)
- Various warrants (no idea)

SFR - 10.34 (17.66 less 7.32 loaned out)
SAU - 1.83
CBE - 1.72
THR - 1.47
TRR - 0.74
ARV - 0.37
AUL - 0.22
PGZ - 0.15
TOTAL - 16.2

Pilbara gold bull run ... buy everything!!!

Haven't see one of those in a while. I remember the uranium bull run in 2007. Discovery of any patch of dirt that looked like it might have uranium could produce a 400% rise in a day...

The central banks are causing the mother of all asset bubbles here. Literally everything is surging, base metals, oil, precious metals, crytpos, emerging market currencies, even unloved gas up again today to around a 7 month high.

Prices are up 50% from the June low of around $1.50!!

BBOX is another share I own which I see as having similar qualities to DGOC. A huge SP rise from the depth of covid has meant its yield has compressed from over 10% to around 4% given its relative immunity from covid.

The same thing could easily happen to DGOC. A reliable dividend stream is becoming very highly valued and the current surge in prices will give DGOC a chance to lock in prices for future production which will support the dividend.

SP performance over the last few months has been truly phenomenal... not only has it returned to pre covid levels but has hit a one year high. This is one that I had my eye on and piled into during the covid crash when the yield was over 10%...seemed crazy at the time considering the customer base.. have been thinking of exiting several times as I watched the yield being compressed and is now around 4% based on the old guidance.

How much lower can the yield go? Could the SP put on another 25% and the yield go to 3%? 50% with a 2% yield?
In this era of no interest rates a company which can maintain its dividend even during the covid crisis will be valued very highly...

Welcome Bricks. My prediction is 360p in 6-12 months, which is 10x 2020 EBITDA of £20m. This is more bullish than consensus but my guess is as good as theirs as I think what we are witnessing is a burgeoning remote working movement which will structurally drive a rebased level of revenue. The 3 key questions for me in hitting this target are:

- can they keep the new customers they have won during lockdown? How sticky is revenue... in the past churn was very low, until last year that is
- where will growth come from... new clients, volumes from existing customers as the economy recovers, Teams!
- will they control costs to drive operational leverage and increase the EBITDA margin. They hit high 30s in H1 with 3 full months of lockdown and very suppressed business activity. H2 could see 40%.

I'll be keeping my eye on these measures and topping up opportunistically. Enjoy the ride

I currently focus more on capital returns than dividends. Ironically maybe given this is an income stock. But I think the SP will chase the dividend yield and FCF yield down to a more reasonable level.

In the current price basket, the dividend yield to me, after exchange rates and WHT is 9%. I think a reasonable yield is 6%, which would give 140p. I would sell somewhere around there if there were other opportunities. But if I was looking for a steady dividend stream I would be looking at 180p, which is a 5%.

TRR seems to be doing well, up to 27p from MTR purchase price of 20p, on a total of 2.85m shares means MTR is up £200k on paper. Iron ore prices are killing it meaning the value of their royalty is rocketing.

https://www.lse.co.uk/rns/MTR/investment-in-trident-resources-85649kdafktw2cs.html

And Thor, my nemesis, has rocketed with that hint of Pilbara gold. MTR bought 50m shares at 0.5c which are now worth 0.8c, a gain of 60% of $A150k. MRT owns 11.5% of Thor which at the current Mcap is worth over $A1m.

https://www.lse.co.uk/rns/MTR/participation-in-thor-mining-placing-z6zd4yd5581fe7x.html

They have made it hard for themselves with a name that includes 'diversified' and 'oil'. There is nothing diversified about it and oil is only ~5% of revenue. Investors are looking for growth now which means DGOC just isn't that appealing to many

Good spot MrG. NG prices up 16% today!! Some shorts are getting burnt. And more importantly for DGOC, the forward price curve, from which all of DGOCs revenue is fixed to, has also shown significant improvement over the last few weeks. So this would be one of those times when DGOC is opportunistically hedging future production.

https://www.cmegroup.com/trading/energy/natural-gas/natural-gas.html

I took a lot of DGOC from the table in the pursuit of rainbows but still hold a decent amount for the relatively stable dividend. Not many around which can boast a 10%+ quarterly yield unaffected by covid. Really should be much higher but this market just isn't exciting anyone at the moment.

Indeed trendz. Nice way to run into the weekend. I'm looking at the chart and seeing all that blue sky up to 400p :-)

Trendz I made a cheeky top up yesterday as well. The last chance to get sub £2 I think. All these little pieces of news and the overall sentiment made me re run the numbers the again and I really do believe we are looking at £3 in 6 months.

Thanks for sharing investhome. I think 10x EBITDA is a good start. That would give a valuation of £200m or £3.60/sh based on my expectation for this years EBITDA of £20m. And around 4x revenue. I don't think that's a demanding multiple for a tech led, trend driven business model. There are a bunch of small cap tech stocks which are at 10x EBITDA, Kape is one I know that shares some similar qualities to LOOP.

There is an interesting paragraph from the announcement yesterday where you can see average annual revenue per enterprise customer. On the call Steve mentioned that he personally had attended 10 calls with prospective teams customers within the last week. Converting 50% of those would give around £100k of revenue p.a using the below revenue per customer.

"Last but not least, the Group has a running start as an existing player and early mover into the cloud voice market. We currently provide cloud voice services to approximately 120 enterprise customers via both Microsoft Skype for Business and Teams, which generated revenue of approximately £2.8 million in FY 2019"

ShearClass I think you're right. Might be others as well as Jupiter. The rules have changed since Woodford, funds don't have such a broad mandate to invest in smaller, less liquid stocks and some of those funds will be sitting on a very healthy profit. The VCTs will be very sticky.

notaflipper also feeling the frustration here. Made a couple of small top ups over the last couple of days. Volumes are extremely low right now and movements are replicating those in PFG and NSF, its nothing necessarily company specific but more sector related, so would be consistent with some covid/economic related worries and everyone sitting on the sidelines.

IPF have said they would update the market regularly so would be reasonable to expect an update on the 10th like they have done in previous months. Might need to keep some dry powder for a possible move to 50p. This is a deep value discount to NTA play so will take much patience and some faith the company can translate this into cash flows.

Great summaries Trendz, thanks for sharing. Overall management were very very bullish and excited about the opportunity. I don’t have the technical expertise to fully understand the tech and the market but I was happy before this so won’t complain any new revenue stream.

B66 as I mentioned my journey has been long and painful. When the business was valued at £4-5 there were huge expectations and when they failed to hit these the SP tanked. THE LTV/CAC was very attractive and at one point the business was valued at 30x EBITDA from memory.

They ultimately badly overpaid for the MZ acquisition, because they were using their own valuation as a baseline, although that’s easy to say hindsight, but they should have issued more equity to the sellers with a lock-in rather than doing a placing. Management were pretty naïve but I’m guessing they have learned over the last couple of years. Two months ago the total value of LOOP was well less than the £60m they paid for MZ. I badly underestimated the downside to the usage model when the economy took a dip and overestimated the resilience of the business. LOOP management did as well and the huge investment in marketing via increased headcount didn’t pay off. It has proven a very competitive space with much larger well-funded competitors and LOOP just didn’t have the model or scale to compete. As a result the SP tanked. I remember that day very distinctly.

Fast forward to today and rather than competing with Teams/Zoom etc LOOP have identified their niche in professional services and targeting external call participants, they have integrated MZ, they have their opex under control, are delivering much better returns on marketing investment and they have the wfh tailwind behind them. Most importantly though the valuation is very modest. Around 6x my expected 2020 EBITDA despite having achieved stratospheric growth. Expectations beyond 2021 are for very moderate growth and the multiple reflects that. Compare that to future expectations for Zoom and therein lies the opportunity.

Hi Oska,

I would be super keen to hear your rationale around your decision. Have you done a valuation of each?

Hi TBTT. I’m not really surprised. I’m a long term holder in SLP and its still my largest holding but I’ve been shifting to Tharisa over the last few months so its nearly half the size of my SLP holding. I think Tharisa has a better chance than Sylvania of big gains over the next 1-2 years for a few reasons:

- The dumps only have 8 years supply left. In 2 years it will be only 6 years which is a huge red flag for resources. Beyond that depends on Samancor’s operational decisions which are driven by the chrome market. I’ve always been very uncomfortable about Samancor, its lack of transparency as a private company and its links to shady individuals. Tharisa has 10 years of open pit and then 30 years of underground supply which it controls and can balance according to the fundamentals of both chrome and PGM markets
- The Tharisa business has proved much more resilient than SLP. I don't fully understand how SLP can show a huge reduction in quarterly production due to a lengthy stoppage due to covid, when Tharisa can increase PGM production compared to Q1 and last year. Tharisa has the only fully mechanised open pit chrome mine which can continue to operate during the covid pandemic. This is a HUGE advantage
- You're right about chrome prices but equity markets operate very differently to commodity markets. Chrome production has plummeted with long lead times to restart, while the Chinese economy is bound to recover, unevenly no doubt, but quicker than supply
- Growth potential – SLP has some small efficiency options but this pales compared to Tharisa which has a set of mining and processing growth options for chrome and PGMs with potential to produce 200kozpa of 6E PGMs

B66 not a bad move based on today's announcement. I'm fully loaded after buying as high as £4 :-(
I've been here a long time but finally turned blue today after averaging down extensively below £1. Been a long and painful journey this one, except for the last few months!

Indeed trendz, a proper tech covid success story creating new revenue streams and leveraging off its 15 year investment in its global network. Is this the pivot where we start to see true scale develop?

I have re read the announcement twice and there is a lot of very interesting stuff in there. Would recommend any serious LOOP investor get into the details of this one. I will definitely be dialing into the investor event at 1030, it sounds like there is a lot to go through