Member Info for SeagullsFan

No, the share price has not moved.

What you are seeing is the LAST TRADE PRICE.

AndyOz explained this earlier to you.

BID - what the MM’s will pay you. (Roughly, but they all set different prices).

ASK - what the MM’s will charge you (As above).

MID-PRICE - this is usually the SP and is the MID pint between BID/ASK.

Last traded price. Will usually be between the BID/ASK, but can be higher or lower if a large or delayed trade gets printed,

Read the 18:01 post before the 18:02 post.

So expected turnover, assuming £2500 average gate-fee/tonne and £5500/tonne black-mass is: £20.8m + £27.5 : roughly £48m.

Next is profit (which is the important thing to value companies - PE ratios).

The gate-fee should be viewed as pure profit (as it's accepted it won't always be paid). The change in black-mass price from £3500 to £5500 (mid-point) should be viewed as profit. I'll assume an operational 30% profit on the black-mass at £3500/tonne (the 70% will be to cover all the costs of operating the plant, wages, etc.)

Gate-fees : £2500/tonne = £20.8m Black-mass price increase : (£5500 - £3500 = £2000/tonne increase) * 5000 tonnes = £10m Black-mass : 5000 tonnes * 3500/tonne * 30% = £5.3m.

Potential gross profit of £36m.

From this potential profit, I have no idea how much we be invested back into new plants, mines etc. Also, the black-mass price is volatile as it's based on the market process, so it could go down, although they don't see that as a short term issue.

Let's be cautious and say we get £25m profit from the plant in a full year.

To get a fair company valuation, take the earnings (profit) and multiply that by PE ration of 20 (which is reasonable for a growth company), the mcap should be circa £500m. That equates to 20p/share. Even if we went in at a very conservative PE of 10, that's £250m mcap so 10p/share.

Bear in mind, this is not factoring in anything for mines, lead-acid not battery boxes.

It's not factoring in increasing the throughput of plant 1 for more than 1 shift.

It's not factoring in adding more plants.

It's not factoring in the mobile units for the future.

Again, these are just my figures based on what I've understood from the roast podcast.

To help investors/new investors, I've created this post to explain the structure of the company and the potential revenues/profits.

Important : this is only my understanding and happy for anyone to point out any errors.

First, I believe TM1 is the group holding company which is listed on the main market (not AIM), and there are subsidiary companies for the various other activities like recyclus, Halo boxes, mines etc. Recyclus is 48.5% owned by TM1 and the balance is owned by Robin/Alex and some other people. There was an RNS dated 19th Oct 2022 which details the plans for TM1 to acquire the remainder of Recyclus via issuing another 921m shares. Assuming there are 2500m shares (after the recyclus deal completes), then at 2p/share, this would value the company at £50m (simple maths).

There are currently just over 1,500m shares issued for TM1 and with the additional 921m, that will take us to 2,500m (near enough to not worry about). At 2p per share, this would value TM1 at £30m or £50m (post the recyclus deal). I have heard that they are about to start the process to complete the aquisition again shortly - no idea how long that will take.

I don't believe any of the above is contentious nor challenged.

Next, there are four main activities for TM1: Mining assets. Lithium recycling plant(s). Lead-acid recycling plant(s). Halo boxes (safe transport of lithium batteries).

I will only focus on the revenues/profits from the lithium plant. It's known that they are in a ramp-up phase on the lithium plant and that may take another few weeks/couple of months. Frustrating, but it's going well from what they've said so far. It's also known that they will process roughly 8,300 tonnes of feedstock in a year on a single shift of 40 hours/week. The EA permit allows 22,000 tonnes p.a. although this could be varied by applying for a license variation. They want to expand that to multiple shifts (I'm assuming at least 24hrs x 5 days) but that would need the variation. This would allow 25,000 tonnes p.a. (24 x 7 would allow 33,000 tonnes of feedstock).

So revenues (figures are from the Roast interview https://www.thesundayroast.net/podcast/episode/506a1bf4/s5-ep42-sunday-roast-featuring-technology-minerals-lsetm1-tm1-genf-vrs-chll-prem-cel-ciz-bsfa ).

Bear in mind that they know the gate-fees are likely to diminish and the disappear in the future, so the plant must be profitable without gate-fees.

Gate-fees (feedstock) 8300 tonnes p.a. Price range is £1500/tonne to £4500/tonne. This equate to revenue between £12.5m and £37.4m Assume £2500 as an average of the gate-fee. This equates to £20.8m gate fees.

Black mass - 5000 tonnes p.a. Price at IPO was £3500/tonne. Current price is £5000-£6000/tonne. Let's assume an average price of £5500/tonne.

£3500/tonne revenue £17.5m £5500/tonne revenue £27.5m.

So expected turnover, assuming £2500 average gate-fee/tonne and £5500/tonne black-mass is: £20.8m + £27.5 :

From my understanding they delayed pushing ahead due to lack of funds. I believe that once they are generating revenues from the lithium plant this will be moved forward. A new prospectus may need to be sent to the FCA, but it should all be a formality.

This will be funded by issuing 921m new shares, so although the size of the company will grow (as 100% of recyclus will be owned by TM1), and the mcap will increase, there will be more shares so the SP shouldn’t change much due to the deal.

However, having full ownership of recyclus will change sentiment I feel and that could cause an increase to the SP.

Have to wait and see, but this is a long term growth project. You won’t get a major re-rate on one piece of news (for example, like SNG getting a covid product approved). However, once revenues come through and people wake up to the huge profits from TM1 the price will rise.

Expected profits from 1 shift (based on gate fees and black mass sales)will be circa £20m (or higher).

Mcap (after extra 921m shares issued) is under £50m.

PE ratios for growth companies should be about 20 - 25 times profits.

BTW, that excludes anything from the lead-acid plant, Halo boxes, mines etc.

Anyone selling today is an idiot who understands nothing about companies IMO.

@NewInvestments

They have multiple trading companies and TM1 is the group (parent) company.

Currently Tm1 owns 48.5% of recyclus and, after the acquisition completes, it will be a 100% owned subsidiary, like the mining companies etc.

This is perfectly normal business practice and a nothing issue.

Oh dear. Hardcore1 with his finger on the pulse again.

The Jim Cramer of LSE.

Https: // t . me / +3d8QFLBJwD4yMzVk

Remove all spaces.

Lots of discussion and no ramping/deramping :).

There are multiple MM and they all quote slightly different prices. He could have been quoted 1.97 but didn’t transact hence it won’t show as a trade.

The current live prices are still 1.85/190. LSE only shows delayed prices unless you pay for live price.

Other sites will show live prices, such as investing.com

Do you have the telegram app on your phone/PC?

If not, download it from the App Store.

Then copy the link, paste into notes or something, remove the spaces, then cop/paste that into a browser and it should open the group in telegram for you.

But yes, you need an account on telegram (it’s like having whatsapp).

If you’ve listended to the Roast podcasts, they’ve detailed in there what they expect in terms of tonnage, gate-fees and black mass revenues from the first 12 months. Quite easy to take that, and extrapolate into cash-flow and profit.

We know the gate fees are pure profit, as they will need to be productive without them.

We know that they are profitable with black mass sales at £3500/tonne as that was the IPO figure.

So, it’s quite easy to see where £30m comes from for the lithium plant, and that exclude mines, lead-acid and batter boxes.

Most people haven’t worked this out yet.

P.s. I’m assuming the recyclus deal completes and the extra 921m shares are issued.

That would make current mcap circa £45m-£50m based on 2.5bln shares (very rough calc)

This is another post I made in telegram which was before the follow up post.

——————————

Most companies tend to be valued on P/E (price/earnings) ratio. Growth/startups are valued more on expectations (e.g Tesla and tech start-ups). However, often these are unrealistic IMO and leads to large price movements. TM1 should be classed as a revenue generating growth stock.

Search in google for “fair P/E ratio for growth companies”.

Assuming a 10% annual growth (conservative), then a P/E ratio of 25 is reasonable.

Factor that into TM1 and say £30m net profit p.a. from one shift, plus the lad-acid plant and halo boxes, but after some profits have been used for expansion and mining asset investment. (This is all purely wild guesses of course).

So, a PE ratio of 25 * £30m = £690m mcap.

I can’t see that as a realistic mcap in the short/medium term, but if the revenues do start coming through as expected then the current mcap looks seriously low.

Happy to be corrected on any assumptions/mistakes I’ve made anyone???

Last point - the £30m could be lower if their costs are higher or they invest a lot in expansion etc. If it’s only £15m, then the mcap drops to £345m @25 P/E ratio.

This is something I posted in the telegram group (and refers to other posts made discussing the TM1 valuation based on expected profits

People need to differentiate between the share price and the true value.

They have had an independent valuation (yes, I get that that valuation could have been done by someone who was persuaded to give a preferable valuation for recyclus), but when we’ve discussed figures as to how much is it worth on here, no-one has disputed that we are seriously undervalued.

When I’ve posted figures based on expected profits/turnover and hence market valuation, no-one has questioned those and said “they’re garbage”.

So, if you agree that the valuation by the market does not reflect true value, you can’t then dispute the valuation of recyclus (based on assets etc) of roughly £70m.

I’m talking in terms of valuation of TM1 (post the recyclus deal) of at least £200m (based on a P/E ratio of 10 and profits of £20m), both of which seem conservative.

Markets aren’t a true reflection of value - they are often a short-term popularity context based on sentiment.

GMBL have multiple projects of which the TM1 Leinster project is one.

They need to comply with the options (i.e. 2 years after Oct 22 for the 2nd option and then 2 more years for the 3rd option) or they lapse I believe. How that impacts the percentage which they have been granted if things lapse I don’t know. For example, if they don’t complete the 3 option by Oct 2026 and have no intention of doing so, do they still retain the 55% of the asset? I doubt it but that’s a guess.

The funds coming into TM1 at stages 2 and 3 are not material really, especially when compared to the revenues from the recycling. However, the potential from the actual mining operations at 10% may be useful, even if not substantial.

My guess is they will gradually try to expand the mining side with revenues from the recycling business.

@AndyOz.

I’d recommend reading the RNS dated 6th Oct 2022 to understand the timelines and agreement.

It’s mining, so it’s not fast. The 2nd option needs to be completed by Oct 2024 and then the 3rd option by Oct 2026.

This won’t be bringing in much profit for quite a few years, but if a few of these start to get traction and get developed into mines in the future, for no major cost to TM1, then that’s a win for little risk.

How they choose to progress other mining options once they are generating good profits from recycling will be interesting. Will they choose to part fund and retain a higher percentage of the asset?

@Sjsrace/AndyOz

My impression is that with the continued delays and the ‘bad deal’ with McQuarie bank, this impacted cash balance and their plans for the recyclus deal. These things cost money (fees etc), so preserving cash when you have no revenue makes sense. It only impacts investors as we get impatient, but from the running of the company, cash is king.

When the new investor came on-board, this clearly improved matters and allowed them to move forward/stabilise the situation.

I agree about deadlines/targets though. They either lie to investors or are really poor at estimating timelines. The odd delay would be understandable,. But it seems that every date (this quarter, next month, within 3-4 weeks etc.) fails. This erodes confidence in them as individuals and a company.

Saying that, the project will be successful (IMO) and I’m being patient waiting for news flow to progress in the 2nd half 2023.

The SP is totally irrelevant to the recyclus deal. Totally. It has no effect whatsoever. The terms will be as per the RNS previously released.

The deal will be done on the agreed terms due to Recyclus being valued by an external party at a certain value. If recyclus goes up, then the value of TM1 shares must go up too, as TM1 owns approx 48.5% of recyclus.

The delay is purely down to getting priorities sorted (and funding I assume once Ops start and cash starts coming in).

I’d much rather them focus on getting the plants up and running and agreements in place, then complete the Recyclus deal. I would expect that this will complete in July once the lithium plant in operational.

Agree Andy.

The minor drift is expected IMO. Nothing to worry about and serious investors will be holding as the potential gains 2nd half are huge.

Maybe mid-June for operations to start at lithium plant, and then July (guess) for both lead-acid permit variation and recyclus completion).

News on mine in assets could hit at anytime and also off-take/long-term agreements on black-mass and also news on g halo boxes.

Trying to guess when any of this hits is a mugs game IMO and wanting to trade small fluctuations in SP is pointless to me. Others may want to take the risk, but I’m happy waiting - of course I want things soon but a few weeks either way is not material.