focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
I just think you're comparing apples and oranges. GreenX and Indiana are the two logical comparisons here because they are both funded by LCM & have seen their valuations re rate substantially as the timeline has moved on.
Any company can theoretically self fund their own arbitration case, the two you have shared are absolute punts compared to a case with litigation funding.
Cassius Mining is another ASX listed listed small cap that is self funding a $300m case against Ghana. All looked positive until Ghana won the argument of where to host the case (it's going to be in Ghana, not London). You can guess how the share price reacted.
In my opinion that is par for the course with self funded cases, more often than not they are half baked & the market won't be aware of most of the key facts.
Having an independent third party review the facts of your case in the cold light of the law & decide to provide $13.6m in non recourse is a huge vote of confidence. It's assurance that the facts line up & that they believe the case has a better chance of success than 90%+ alternatives.
There are no guarantees of course & we could certainly do with a full update once the auction process has concluded.
Based on what @edhallas?
5 days ago you posted the below which you said was from the CEO;
"Subject to the details outlined in the RNS on 2 April, we expect to issue the Notice of Arbitration (NoA) in the near future with the Statement of Claim (containing the damages amount) to follow later in the year. We may however elect to included a damages estimate in the NoA, however, this is discretionary. "
Are you seriously telling me something changed since Monday?
Gallmat, no offence but you don't half confuse me. Let's look at the facts of those two companies vs PAT
Both Equatorial & Montero are funding the cases themselves, i.e. no litigation funder thinks the risk reward is suitable enough to provide non recourse financing. That is a major red flag to me; nobody has done independent due diligence with all of the facts so you have to take what the company tells you at face value. LCM have funded GreenX, Indiana Resources & PAT in the last 3 years, if either Montero, but especially Equatorial (as it's Aussie), had been attractive I can't see why they wouldn't have funded them.
Montero's claim is for CAD$90m, which is just over £50m. . Indiana also have a dispute with Tanzania and won their case 10 months ago, they are still in dispute over payment and are valued at just 25% of the award amount right now. Consequently, Montero at a CAD9m market cap is hugely unattractive to me. They could win their case in 2 years and the market might double their share price. They also just raised CAD800k, have no cash and have multiple ongoing projects in Chile. So to me they have little upside potential, inevitable dilution and no independent verification.
Equatorial have filed a large claim, but again don't have funding, so the risk vs reward is immediately less attractive. There is a further problem of collecting the award if you don't have litigation backing. They spent A$1.5m on the Congo case in Q1, so whilst they have a decent cash balance of A$14m right now, the market will soon price in significant dilution to a A$19m cap. Time wise they are still years away from anything.
PAT is unique in the sense that it has significant litigation funding which wouldn't have been won if their case was weak. In the eyes of the lawyers, it's worth risking a lot of money on. The timeline is what it is, the upside potential more than makes up for any minor delays. And we obviously know why they didn't file in Q1...
You appear to be complaining about having your money tied up, yet at the same time are investing in two other cases where there are no obvious catalysts. It's really quite bizarre.
@Gallmat
Hirukund Natural Resources are a wholly owned subsidiary of Adani Enterprises, market cap IND 3.5t / £35b
https://www.constructionworld.in/energy-infrastructure/coal-and-mining/adani-enterprises-establishes-two-wholly-owned-coal-mining-subsidiaries/36116
Ramgad Minerals are part of the Baldota Group, who are a large mining conglomerate
https://baldota.co.in/uploads/csr/csrReport521505.pdf
Mr Saiyyed Owais Ali is the CEO of Owais Metal and Mineral Processing Limited, who IPO'd a couple of months ago
Looks highly competitive to me
Https://mines.rajasthan.gov.in/dmgcms/Static/files/Letter%20to%20MSTC%20reg%20TQB%20of%20Gold%20blocks.pdf
On the official government doc it states that 'the IPO of the technically qualified bidders will be opened on the due date i.e. 14/05/24
Oh and there are 5 bidders, not 4.
Very exciting news. It certainly makes no sense to me for PAT to be making any comments whatsoever during the auction process, never mind submitting the formal NOA.
We're on the cusp though, of that there is no doubt.
None of us on here expected an auction to take place this year, however it's undoubtedly good news
Having 4 technically qualified bidders is excellent news in my view, if you'd told me 6 months ago that there would be an auction process for a mine valued at ~$1b & we'd still be sitting at £12m market cap I'd never have believed it. Nothing tedious about having money invested here, I don't know of any other LSE listed stocks with such latent potential.
Here is some news;
https://economictimes.indiatimes.com/industry/indl-goods/svs/metals-mining/hindustan-zinc-jindal-power-jk-cement-in-race-with-others-for-two-gold-mines-in-rajasthan/articleshow/110113103.cms?from=mdr
"Ramgad Minerals and Mining Ltd, Hirakund Natural Resources Ltd, Jindal Power, Hindustan Zinc and Saiyyed Owais Ali have emerged as technically qualified bidders for Bhukia-Jagpura gold block in the desert state."
"According to the website, the auction of both the gold blocks will be held this week."
More than happy to have my money invested here :)
This is a fantastic deep dive into the technology, commercial opportunity and strategic potential;
https://www.packworld.com/sustainable-packaging/recycling/article/22910049/disruptive-monomaterial-aseptic-hdpe-carton-tech-takes-aim-at-lpb
A couple of quotes below, but there is loads of content which is relevant / impactful;
"We recognize that for new technology adoption, there are, in principle, two issues.
One is complexity of the change, the other is the cost of the change. What's great about the reZource technology is that it's fully scalable using the existing plant equipment with some very minor modifications. For example, the packaging that I'm holding here, the longitudinal seal, is a flame seal, per the market standard. The top seal is ultrasonic, per the market standard. The modification that we're making is to the bottom seal. Instead of being an induction seal process, it is ultrasonic."
"Is HDPE the only material that could benefit from microcellular foaming tech?
There's a huge opportunity here. We prioritize HDPE due to the availability of high-grade rHDPE in the world. But we're now developing a polypropylene and PET version. We're developing different sizes, too. This is a 1.5 L pack. We have a 1-L and a portion pack to launch soon."
An opportunity like this for a highly profitable £250m market cap is the stuff 10 baggers are made of. They will have a huge growth runway once they start to scale production & disrupt the market & are already a credible player given their long term relationship with Nike.
I agree that the investment partner is key, if that happened to be Unilever / another multinational then things will really take off here.
working link
https://blogs.lse.ac.uk/southasia/2019/08/14/long-read-the-reko-diq-fiasco-in-perspective-****stans-experience-of-international-investment-arbitration/#:~:text=on%2012th%20july%202019%2c%20an,for%20the%20reko%20diq%20project.
@gallmat, have you ever looked into reko diq?
https://www.reuters.com/article/iduskcn1u80gs/
several apparent parallels with bhukia, and tim hargreaves who is a pat director was ceo of tethyam copper from 2005-2007!
it also makes me wonder whether india's auction tactic is based on avoiding a similar fate to ****stan where billions of compensation had to be paid & the mine ended up being a 50/50 jv with barrick...
i did some research last summer but perhaps time for a further deep dive
If you include warrant exercises to 30/09/23 they have raised ~£6.4m since March 2022, inclusive of the money they raised at admission. They've made that money go a lot further than I initially anticipated it would, and so the £4.2m raised today gives them a decent runway. Dowgate provide broker notes and had a 50p target price as of April , so I anticipate an updated note from them soon. If revenues scale anywhere close to forecast over the next 2 years then this will be a very good entry point IMO.
In the last two H1's before covid they made £10.6m PBT on £45.1m revenue in H1 18 and £11.9m on £63.5m in H1 19. Since then admin expenses have gone through the roof and TTV margins are presumably also much lower (they didn't provide the info as far as I can see). The market is more competitive and overheads are materially higher, which explains why shares are in a long term downtrend...
"It seemed plainly obvious that £1.08m wasn't going to go very far, a bit of a wasted opportunity to really make the most of the elevated share price in late 2023."
Amazing that some still don't have a clue on how the market works. At 23p there wasn't demand for more than £1m, otherwise the company clearly would have raised more... at 14p there is more demand, hence why they can raise £3m. Absolute basic economics on supply and demand / equilibrium price.
Revenue as a % of TTV declining by 1.3ppt / 9% isn't great, they didn't even used to report on TTV pre Covid which perhaps says a lot. Not sure why shareholders should care about a £106m rise in TTV if only £7.8m of that is dropping through to gross profit...
Classic rejection of the seemingly impenetrable resistance at £23, this morning was the SEVENTH occasion this has been tested since September 2021, again to no avail (so far). Already much more interesting now shares are floating freely on SETS, plenty of large buyers but still being met by outflows for now.
Buyback total passed £15m with this mornings RNS, with no extension communicated to date, this looks set to reach it's £20m limit in the next month or so. Based on the volume increase associated with the move to the main market I doubt it's expiry will make much difference now, but certainly helped navigate the final stretch of AIM illiquidity.
Thanks a lot for sharing that @edhallas, always good to get a steer on where things are at. A $1b claim will certainly get this moving into a new trading range given the market is currently pricing in a 1.5% chance of success. This is my favourite sleeper on AIM, ticks all of the boxes for a mutlibagger. I've managed to switch off for the last couple of months, helped significantly by the work of @gallmat & others on this BB. Fingers crossed we get the news we've been waiting for very soon.
Systemzero, why is the price going to rise when the entire placing is dependent on £3.9m being raise via the REX retail offer & open offer? At 1.5p the placing price values the entire capital of the company at last nights close at £2.1m, yet they want retail to save the day? Who is going to buy shares on the open market in this situation
Basically, whoever is behind the conditional £2.1m will only invest at 1.5p and wants nothing to do with it unless private shareholders stump up £3.9m, at a price point that these nameless 'investors' have decided is fair
To clarify this utterly shambolic mess of a placing, unless private investors stump up £3.9m, the only money raised by the company will come from the 11m first placing shares which was raise a grand total of £165k
"As previously announced unless the Fundraising, in aggregate, raises gross proceeds of not less than £6.0 million (the "Minimum Proceeds") it will not proceed other than the Firm Placing (should that element of the Fundraising become unconditional). Accordingly, the Company needs to raise a minimum of approximately £3.9 million (gross) from the REX Offer and the Open Offer so that the Minimum Proceeds are raised."
The FCA won't let us invest in Bitcoin, yet they'll allow people to buy utter shi*e like this and see their money go up in flames.
Someone bought £10k here just before close yesterday at 3.45p, so that's £5.5k down the drain unless they stump up more money?
I've never seen anything quite so ridiculous. How much PI money has gone in here since they pumped it on the NICE recommendation a month ago? Absolutely shocking that behaviour like this is legal.
Worth flagging the below news from last week as I believe it's highly relevant to ELIX;
https://news.sky.com/story/london-listed-consultant-alpha-fmc-draws-takeover-interest-13126764
AFM is trading at 435p this morning, valuing the business at £497m with FY24 EPS forecasts of £29m PAT & 22.5p EPS, so on a P/E of 19x.
ELIX is currently valued at £286m on FY24 forecasts of £21.7m PAT and 40.6p EPS, so on a PE of only 15x
I see very little reason for such a discount to exist, if anything ELIX should be more highly valued given that AFM's FY23 operating margin was ~10% whereas ELIX's was ~24%. ELIX is also growing significantly faster.
If AFM is taken out above it's currently trading level then I suspect money could flow into ELIX and re-rate it back to where it traded in mid 2022, albeit the 780p ATH was a PE of ~25x, so the relative valuation now would still be substantially cheaper.
Hmm, 7p gone with 40k of buys, now max buy 35k shares at 7.5p despite all 5 MM's being at 7.5p... something stirring?