Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
It’s shocking how the long term PI’s have been treated here.
Now we now know why £5m is needed:
£2m for the Environmental Security Deposit, £2m for cash flow / startup costs and £1m contingency. They must have known about the deposit required as they are mining experts! We were told last week that the extra funds being sought were for future exploration activities?
We bought this Asset 3 Years ago at a bargain price with seemingly a short (months) lead time to become operational. We’re now 3 years down the line and need a further £5m to get up and running. Let’s not forget our Mcap is only £9m and to raise £5m against that has proved challenging - they’ve been trying to get funding for 12 months or more. IMO, DYOR
JP alluded to the fact that £5m Sterling could be paid back in around 18 months. Presumably with half being used for LCCM start up / cash flow and the other half for exploration activities.
Fira makes a good point - why not just raise what we need; say £2.5m and then start the exploration activities 6 months in with the profits from the Ongoing Copper Cement operations?
The costs of the exploration activities can then be offset against the bottom line profits each year thus reducing the overall net profit tax liability etc.
400 million shares issued after PEPR approval at circa 0.80p = around £3m after costs and only results in a dilution of about 17%??
The above scenario has no effect on the operational element as these can still be sub contracted out to a 3rd party.
This option also maintains 100% ownership of all projects
It’s complicated and as much to do with sentiment as anything else. I would argue that the current Mcap of circa £10m is purely a valuation of Cobre only and little or no value is attributed to LCCM, Redmoor or any future Exploration prospects/activities.
You could make a case for each of the four elements having a Mcap of £10m each and possibly Redmoor at £20m or more in its own right. Thus resulting in a £50m Market Cap for the whole group. I expect to see the MM’s acquiring a significant number of shares this next week to give themselves plenty to sell back to Jo Public at a much higher price once the PEPR is finally approved. IMO Good luck all.
We need to look at the positives with LCCM here and there are plenty. Most mining projects involve underground mining operations and significant infrastructural costs. LCCM does not require this and there are no inherent risks as it is not an underground operation etc.
Many mining projects on the cusp of moving forward have a decent NPV £100m+, but often require an initial investment of up to £100m and crucially have a payback period of 3 years or more.
So,What do we have so far with LCCM? A NPV if circa £50m (so it’s not a huge project), however crucially the investment required is only circa £3m and the payback period is less than one year and the operational risks / mining risks are minimal. These shares are a steal at less than 0.50p. IMO, DYOR
Yep Shed, I know what the NPV is, so that box is ticked (albeit a fair amount is inferred).
If we can get the high grade stuff in the early years and get that payback period to 3 years or less, Bingo. IMO
Don’t be fooled here, progression to Pre-Feasibility stage for a European project is no mean feat.
We’re massively undervalued at an Mcap of £5m. If the EU and G7 leaders are fully committed to clean / greener mining operations then European Projects will likely become the focus for the future. Whilst they’re more expensive to operate than in far flung destinations like the DRC, they will likely be more successful from a socio-economic point of view and more environmentally friendly etc.
Ultimately it all has to stack up financially. The payback period has to be 3 years or less and the NPV needs to be $100m or more. IMO. GLA
Two excellent posts last night by Trout and PC2R.
Lupi also talked about communication from the BOD. Communication has unfortunately been almost nonexistent recently; this is poor by anybody’s standards and whilst information which has been communicated previously has at times been hyped and misleading, it doesn’t mean that the BOD should stop communication altogether which is what appears to have happened? IMO DYOR
Goldman Sachs sees copper prices average $11,000 per tonne over the next 12 months and by 2025, the metal could be priced at $15,000 a tonne, a rise of 66%, Goldman said in a report titled “Copper is the new oil”.
Also the G7 summit in 10 days time; #Redmoor
We’re in heaven aren’t we?
£40m+ Mcap inbound once Pepr approval in place? Any suitors will be falling over themselves to get involved as copper moves towards $5 per pound?
Much better to raise the money ourselves though - £1m through institutional investors at a premium to current SP (circa) 0.80p and then a rights issue for the other £1m also at 0.80p; Then Directors warrants at 1p all resulting in minimal share dilution of approximately 15%.
The actual mining operations can then still be contracted out to a 3rd party with a short lead time. The current SP has been stagnant for nearly 18 months, but 0.50p could look like a bargain in a few weeks time.
IMO. DYOR