focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Just under the £3 placing price looks like a very nice place to add, especially in light of the CEO buying £20k worth of shares at £2.96 last Thursday. I'd suggest this means the Beta test which launched on 31st August in 2 Cali counties has got off to a positive start...
The most recent CYBHI quarterly update from 14th September contained quite a bit of detail from Rachel Mackie on the app & rollout from 39 mins on; https://www.youtube.com/watch?v=x0Bydlc3FpQ
I also note that LinkedIn headcount for Kooth North America has exploded from ~15 in mid July up to 58 as of today, with dozens of posts from new joiners expressing their huge excitement at joining the journey. All very positive.
Many more roles are still being recruited for; https://www.paycomonline.net/v4/ats/web.php/jobs?clientkey=CA518AACD06747D958404929D26FA686#
Overall, it appears execution risk has decreased quite considerably since the contract award in July. The product appears to be 90% of the way there & the hiring process is going well.
If they can win another couple of states then I think its very feasible to see this becoming a mid cap (>£300m valuation) in the medium term.
"Are these sells being hoovered up by a big buyer in the background?"
Erm, no - otherwise the price wouldn't be falling!
Haha, the market? You mean one individual who sold 85k shares at 7p? 8% down on £9k of trading volume tells you nothing other than the market makers have zero intention of holding any stock & that we have disappeared below the AIM waterline again.
The process of finalising the arbitration timetable with LCM & Fasken must close to completion now, as soon as we have confirmation of that process things will be a lot clearer. However, the disclosure of the quantum of the claim will be the ultimate driver of value here over the next 12 months. That day is fast approaching and will be transformational in attracting new shareholders & increasing the market cap.
The rise this morning is due to a tip sheet pushing FDEV based on bullish broker forecasts for Age of Sigmar... they are taking sales figures from Total War; Warhammer III RTS and trying to claim FDEV's version can replicate it's success. That game was published by Sega & from a quick youtube it unsurprisingly looks leagues ahead of Age of Sigmar, but is at the same price point. Appears naive at best to expect similar commercial performance to a AAA studio with almost unlimited resources.
Therein lies the crux of the problem. FDEV are going head to head with AAA publishers and hoping to come off best - the odds are hugely stacked against them. Age of Sigmar will need to be sensational to generate positive initial reviews for a $60 price tag, if it's got bugs or a lack of depth then the backlash will be ferocious.
My take on any potential capital raise is that it'll be contingent on a poor performance from Age of Sigmar, if that game performs then they won't need to do one but if it bombs then they'll need significant capital asap to avoid bigger problems.
Zero point punting at these levels, I'll wait for the initial reception of Age of Sigmar and make a decision from there - I'd love to see it do well, but based on recent releases & the aforementioned competition, I have serious doubts.
Bit of an OTT reaction Kitrash? Grades are in line with what was flagged in July?
"The Kalaka Project has large scale, low-grade gold mineralisation potential. Historical drilling consistently reported significant gold intercepts including Diamond hole K1AD002 (191.8m @ 0.52 g/t Au) and Reverse Circulation drill hole K1ARC028 (117m @ 0.59 g/t Au including 41m @ 1.02 g/t Au) at the K1A prospect. "
I've certainly seen much worse drill results - i.e. GGP's Scallywag which reported 1m intervals of
Unsure where the debt discussion has come from, however to my knowledge & based on last Fridays annual report, PAT has zero debt at present!
We're currently in a transitional period IMO, traders who were after a near term settlement have departed causing the price to pull back, new investors who will be attracted by the huge upside from a BIT win are yet to arrive as they are unaware of the potentially huge claim. We've speculated plenty on here, but until confirmation arrives in black and white via an RNS, most will refuse to believe it.
To me, PAT feels like a lottery ticket where you know 4 of the 6 numbers, there is still a lot of water to flow under the bridge but many of the required pieces are now in place.
Yep, I've been looking at MSI this morning;
23/12 - £22.4m contract to be recognised during 2023
22/06 - "In this regard, we are pleased to report that we have received a new order to supply a number of these systems with a contract value of circa £54m"
01/09/23 - $49.8m 5 year contract for weapons system maintenance
29/09 - $23.5m contract to be recognised by December 2024
02/10 - $15.8m contact to be recognised by May 2025
Total ~£150m, the vast majority of which should be recognised in the periods ending April 24 & April 25
Shares are in a strong uptrend but as you say, clearly being 'managed' by Winterfloods. They've walked the ask down from 768p to 739p despite some 30k shares being bought, which is some 3x the 100 day average volume.
A continuation of that uptrend would see shares trading in a range from £8.20 - £9.40 by the end of December. By the end of 2025 these trendlines sit at £14.50-16, given the order book progress & seemingly inevitable uptick in EPS, those targets don't seem out of the question?
Sounds to me like news will be landing in the next 2 weeks if the CEO is going to be in the UK? Classic shake out on nothing volumes at present - 230k of sells leading to a 7% fall is laughable. GreenX announced filing of their claim in early September 2020 having received their LCM funding in at the end of June, so that would put PAT on for the end of this month...
And yet still traders pile in - wtf is wrong with people?! Falling knife for 2 sessions and still trying to bottom fish. Honestly, just go and chuck your money down the toilet.
This isn't a Woodford special that's got an overhang but is otherwise hugely oversold, this is a company that currently has no future unless it's controlling investors stump up nearly 3x the market cap. Bonkers doesn't come close.
The logic of the auction makes complete sense from an India perspective;
- Rajasthan state gets instant cash from a third party - let's say £1b from Vendanta Resources.
- The third party has no liability to the legal issues & can operate unimpeded.
- The mine could be producing significant cash by the time the arbitration hearings are completed in 3 years...
- The state can repay any BIT compensation settlement from Bhukia tax receipts and interest received on the £1b up front auction payment..
This looks like the best call option of all time to me...
The psychology of markets never ceases to amaze me. Why is anyone continuing to buy this steaming pile of crud? If shares had opened yesterday at 30p then nobody would be paying 36p right now! It's still pricing in significant equity value for shares which are worthless without the support of Glencore, La Mancha & Orion. If they decide to crush HZM and take it private there is nothing any PI could do. It wouldn't change their long term outlook one inch...
Re. Premium, it actually looks like a fair auction price. At £991m / $1.2b for the gold, the cost per Oz in the ground would be $152 @ 7.87Moz. That's actually quite a bit lower than the in ground estimate I've got of $178, based on 10.4% of in ground value at the expropriation date in March 2021. $152 / $1900 current gold price = 8% of in ground value...
Fairly incredible news to be honest, it's amusing to view the historic TOI article from the 2007 Indo Gold discovery vs this latest one;
2007 discovery by Indo Gold;
https://timesofindia.indiatimes.com/india/indo-golds-finding-to-lure-foreign-firms/articleshow/1653943.cms
"JAIPUR: The discovery of gold by Australian exploration company Indo Gold, according to international gold prices,
it will be worth about $120 million. Three global consultants — who confirmed 3.85 crore tonnes of lowgrade
deposits in Jagpura, 150 km from Udaipur — said the discovery needed state-of-the-art processing technology under global industry standards."
"After the discovery at Jagpura, foreign companies are expected to make a beeline for India to tap the immense potential of India’s mineral wealth," said Higgins"
"According to Surendra Chaku, MD of Metal Mining India Pvt Ltd, the potential of Jagpura mines was "immense". "In four years, the mines will be coughing out gold," Chaku said. Indo Gold exploration manager Antony James Truelove said the mine was "world class" and could be equated with the best in the world."
Turns out they were spot on... £1.7b auction value for the gold and copper is epic.
Ps. 114.76mt at 1.945g/t = 7.87Moz gold...
Ffs, it's not that difficult lads.
The current CAPEX budget is $537m, as per the September 2022 placing RNs, which was a 12.6% increase on the original figure quoted in the November 21 fundraise.
A 35% increase on $537m = $725m, and bear in mind that the RNS says minimum 35%...
They'll likely need $200m.
Yep, it's just a waiting game until they disclose more information on the claim size - everything has been said for now. Anyone that bought expecting a resolution within a few weeks of the LCM funding is pretty green to day the least.
As per the 4th October 2022 placing RNS;
"Inflationary pressure combined with engineering improvements to de-risk the operation have resulted in a 12.6% cost increase with total project capex now forecast at U$537million"
So a minimum 35% increase on that CAPEX budget takes them to at least $725m, so they need to find another ~$188m...
Crippling.
To get things back on track, I'm going to post the research that made me invest here. Note it contains links to back up opinions...
"Ok, here goes my claim quantum effort - no investment advice / DYOR...
IMO there are three key factors that will be used to determine the market value of the investment at the time of the alleged expropriation in 2021; the in ground value of the gold, when the expropriation became public knowledge & the estimated size of the resource at that point in time.
I found this 2015 research report really useful to try and put some meat on the bones of some analysis;
http://www.cipherresearch.com/reports/150601_The-Real-Value-of-Gold-in-the-Ground.pdf
It studied 253 transactions involving gold companies between 1990-2013 and determined that the average price paid per in ground oz was $63. The average price of gold over the 24 year study period was $605/oz. So the average transaction paid 10.4% of the 'in ground' value. That may be skewed by the fact that for 16 of those 24 years gold averaged ~$350, but to me that seems like a sensible figure to use and leaves some upside.
The 1999 BIT states; "The compensation referred to in paragraph 1 of this Article shall be computed on the basis of the market value of the investment immediately before the expropriation or impending expropriation became public knowledge"
Based on this link it looks like 15th March 2021 was when the bill was first introduced; https://prsindia.org/billtrack/the-mines-and-minerals-development-and-regulation-amendment-bill-2021
'Immediately before this on the 14th March 2021 gold traded at $1720, so using the 10.4% figure above, that gives us an in ground market value of ~$178.88/oz
Then we just have to apply that to the resource size. IMO there is no chance PAT are just going to claim for the 2008 JORC of 1.74Moz given how much that figure would have risen in the 13 years between then and the official expropriation. However, even if the arbitration panel decided to use that figure it would still come to a claim size of $311m, or some 20x the current market cap. That's the ultimate downside here IMO.
However, it's far more likely that PAT will utilise the 2 resource studies from the GSI, the 6.7Moz from 2014 or the 7.9Moz from 2021 that I posted earlier on.
6.7Moz * $178.88 = ~$1.2b
7.9Moz * $178.88 = ~$1.4b
That's the size of the prize... and before anyone says they could claim for 10Moz+, they would need some reasonable basis to do so, that is what makes the GSI work potentially so valuable."
JMUK26, why not just post the link to your "statistical averages" instead of posting like your are an authority on international arbitration?
I presume your stats are from this 2009 PDF?
https://icsid.worldbank.org/sites/default/files/parties_publications/C3765/Claimant%27s%20Response%20to%20the%20Respondent%27s%20Requests%20under%20ICSID%20Arbitration%20Rules%2028%281%29%20and%2039%281%29/Legal%20Authorities/CL-13.PDF
Note it says; 'Focusing purely on the more recent past, ICSID arbitrations may, on the whole, be shortening in duration. For the 32 cases commenced in the past 5 years which have led to an award and for which data is available, the average time from the request for arbitration to the award is closer to 3.2 years"
If you'd posted that document and asked questions around expectations then fair play, a sensible discussion would have ensued. However, you immediately went on the offensive. I'd also add that the handful of posters who expected a quick result were expecting it via the Indian courts, not arbitration.
Is there more recent data? I'm going to dig around to find it. However, around 3 years is about what we expect. Is a potential 10x over 3 years worth a buy and hold? I'd say so.
Ps. There is a big buyer on the L2 order book - 250k at 9.8p on the 2pm auction. I suspect that's why the market makers are moving the price up and down to try and generate some stock.
It's not typical to take 1.5 years all, where did you read that or have you just made it up to try and troll up some replies?
Indiana Resources, who were also funded by LCM, received a tribunal verdict only 5 months after final hearing.
The hearing completed on 6th Feb and a verdict was published on 18th July...
https://indianaresources.com.au/category/recent-announcements/page/5/
It really depends how complex the case is and whether there is agreement amongst the panel of arbitrators.
Indiana took just shy of 3 years from receipt of LCM funding to a decision being made & that was no doubt complicated by Covid.