The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen here.
Been trying to think about what to do here. Heavily down but the value of my holding is still an amount worth not losing.
Im thinking they will raise around 5m, perhaps around the 1.45 area (hopefully). We then should hopefully be able to drill Itumbula with a fixed drill and also go back and finish off Tai 3.
I then think okay, that’s not too bad. A commercial discovery still has the ability to send us back into positive territory.
However, it’s the odds of commercial discovery I’m struggling with getting my head round. When people are drilling for natural gas and you find some helium, the existence of that gas draws out the helium, so you have free gas. Where we have green helium exploration, are we likely to keep hitting this exsolved gas situation which the market doesn’t seem to be impressed by (and perhaps because the extraction process will be new and not really understood)?
Just trying to figure out if we can still nail this
If I was a competitor firm, I would say I’ll lend you the money which is secured on the rig and the licenses. If they hit helium, they do an equity raise and the lender is repaid.
If they don’t, you take the rig and the licenses on the cheap. This is of course predicated on them not needing a huge amount of money I.e less than the value of the rig and licenses combined
I still can’t get over that she announced a need for funding before securing it. Could have easily just kept quiet and carried on conversations behind the scenes. It’s like she’s scared of being considered dishonest and feels she needs to always be completely transparent. But that’s not the case when you’re talking about funding.
God a loan from the Tanzanian government would go down a treat right now…
It’s an everything or zero situation. What I’m holding on to is that if they do actually get a commercial discovery, there are enough multiples involved to get even the most underwater shares above the cloud. So there is still hope. Whereas if you were 80% down in something which in an absolutely best case scenario might go up 30%, then you’re in a lot worse situation. Volatility is now our friend..
Just get me to January…
I really hope that they pinned down a share price with the investor, if it is equity, which is not then impacted by any fall we might now see because of this announcement. It’s always annoying that companies mention a raise, tank the price and then raise at a discount of that reduced price
Nice director buys. They wouldn’t just be throwing their money away. Also it suggests that an equity raise is not necessarily round the corner. Otherwise they would have just bought in through that