Member Info for ShearClass

Something smells distinctly fishy here...

From page 76 of the admission doc;

"The Strategic Plan assumes significant increases in production from 2022 with the proposed peak production of 81,000 tpa flake graphite achieved within 2024. Commissioning further technical assessments including completion of multi-disciplinary pre-feasibility studies (‘‘PFS’’) to demonstrate the technical feasibility and economic viability of the expansion programmes in Sahamamy and Vatomina is crucial."

Can anyone shed any light on why they haven't done a PFS before attempting to expand their production by 10x? This is highly unusual in the mining world, particularly when doing so was flagged as being 'crucial' in the competent persons report?

The point is why would the co founder sell anything just as the share price started to rise?! It shows he is totally out of touch with the importance of market sentiment. It could also be a way of avoiding needing to issue a 'we know no reason for the share price rise' RNS... either way, not what an £11m market cap needs.

I had been watching the Odey short with interest, it appears he was aware of today's news and scrambling to exit his position before it was formally announced. Got to be worth a punt given the gap vs it's historic valuation...

https://www.finextra.com/newsarticle/28594/branch-based-challenger-metro-bank-valued-at-16bn-on-ipo

"Six years on from the opening of its first store in London in 2010, branch-based challenger Metro Bank has chalked up a £1.6 billion valuation after listing on the London Stock Exchange."

Even if Carlyle Group offer £2.50 a share it would be a 75% discount on it's IPO 5 years ago... and with interest rates poised to go up there has to be value in owning a bank!

Only 56 trades since their RNS on Friday morning that included the below quote;

"Being able to accelerate through the procurement process will help the roll out of our planned corporate metaverse, codenamed ENGAGE Oasis, next year. Much is being said about metaverses recently, and it is clear it is an area that businesses around the world are looking at closely. Today's announcement makes it easier for larger companies to engage with us and work together on their metaverse strategies."

Think 99% of the market missed this - I certainly did!

"They weren't at 30p yesterday thanks to This Is Money"

Without that article they wouldn't have gapped up to 15p last Monday and got on everyone's radar, trading was orderly for the first week of the listing. PR is fine but when it allows an insider to cash in over £1m of shares so quickly after the IPO it looks a bit suspect.

As for the TP stock being placed in firm hands, I don't believe it for a second. If I paid £15k for 100k LST shares yesterday and today I can sell them for £25k then I would take the money and see where the price settles. It's called not looking a gift horse in the mouth...

Yep, the whole thing stinks to high heaven - get a rampy article released in This is Money on 23rd October, share price opens last Monday day at 15p, wait 7 trading days for thousands of PI's to buy shares all the way up to 32p and then you announce that 8.5m have been sold at 15p... massive red flag for me.

15p a share?! No wonder they didn't state the price in the RNS! You have to be very careful of anything involving Turner Pope...IMO their 'clients' will be flipping them from the word go if it opens at 30p - you'd be crazy not to take 100% profit!

It sounds to me as though he has thrown his toys out of the pram due to the poorly performing share price... it presents significant uncertainty which I doubt the market will appreciate. Would any of the current holders here want to own shares in an unlisted entity?

Lol, why would having a US listing make a company look financially unstable? It simply allows US investors to buy shares in IRR, without it it’s almost impossible for them to buy shares. Considering the relationship with Piedmont & the fact most of our Lithium will end up in the US it also makes complete sense to have what is effectively a dual listing…

The fact it’s risen 8%+ with someone offloading 2 x 500k at 19.5 is hugely positive. We’re nearly 25% above the lows hit last Monday, I wonder if those that sold are getting FOMO ;)

Just the start - at £125m market cap we are still only valued at the NPV for the current Ewoyaa resource size at a price of $650 spod... the fact we are due an imminent substantial upgrade & Spod prices are now nearly 300% higher than the scoping study gives an indication of the potential upside here. If we get an influx of US investors via the new listing then this could be the spark needed to re-rate things. I've seen it many times before - ARB, KR1 & IKA all benefitted from US OTC listings and they have never looked back since.

You just have to read the last results RNS to see that they are…

“· A return to profitability despite the ongoing Covid-19 pandemic, generating profits before tax of £0.018 million (H1 2020: loss of £0.543 million)”

Not bad for a £14m cap forecast to grow at >100% per annum.

Up 9% since I posted so I’m not to only one that sees value here!

Have a look at GGP when it signed its $65m deal with Newmont in 2019, the share price took 9 months to get above the high on the day of the deal, it then 17 bagged in 9 months…

Swest42, did you watch this video from earlier this week; https://www.youtube.com/watch?v=kgglu5aP6CI

It’s not just VM that thinks IRR is undervalued by a million miles! Right now most shareholders are preoccupied by the spin off & whether they might need to move brokers etc. The new name & an updated scoping study will be a game changer IMO.

" I don't know any companies that announce to the market when an invoice has been paid."

It's not really an invoice though is it...it's more consummation of the agreement, I'd say it's pretty material information that should be confirmed in an RNS. As it hasn't been, I'm very much inclined to think it's not been paid yet.

Let's see, you've taken an optimistic view that is in contrast to the 4 x funds that are short + the red flags raised by the FT, as you say time will tell...

@Woopert, ok so you want to deal in facts... fair enough! I have also read the IPO prospectus in detail and it raises many many questions, here are some based on explicit facts that are stated in the document;

"In February 2021, the Group signed a USD $54 million multi-year subscription agreement with VeriSilicon for the China market."
+
"As part of the Product Partnership, the Group and Wise Road Capital have also entered into the SLA. Under this
agreement, the Group will license specified IP solutions, as set out in the SLA, to the Product Partnership on a
non-exclusive, worldwide basis, for a five-year term, for a subscription fee of USD $109 million (payable in
instalments over that period"

Q1: The Verisilicon + CPP fees quoted = $163m, so why has only $147m of bookings been recognised to date? It does not reconcile.

"The SLA provides for payment of a subscription fee and royalty fees by the Product Partnership Company under the SLA. The subscription fee of USD $109 million is payable over the Subscription Period as follows:
• first year: USD $12 million payable 30 days after the establishment of the Product Partnership Company,"

Q2 : has this payment been received by AWE? If not, why not? The June trading update stated : "The Group also executed all definitive agreements for the China Product Partnership (CPP), which is expected to contribute to subscription licensing revenues starting in H2 2021."

So where is the $12m cash? If it's been received surely AWE would tell the market...?

"and USD $12 million payable 30 days after the deliverables relating to the IP Cores have been made available to the Product Partnership Company;"

Q3. Similarly, what is happening with this $12m payment?

What happens if Wise Road fail to make the payment? Are AWE going to take their own shareholder to court?!

@Woopert, fair point re. Amati. I definitely take a lot more notice of their activity & positioning than I do of a Blackrock or Henderson. I listed to the podcast over the summer (can't remember which one) when Paul Jourdan disclosed their position in AWE & the reasons behind it. In a nutshell, they thought one of the reasons is fell was because it hadn't been marketed to the UK institutional investors. Essentially, they bought because the price had fallen as they thought they had snagged a bargain.

I had already bought AWE on the IPO day & increased my position after learning of Amati's involvement. However, all that changed when I read the interim results on 21/09 and saw that the Chinese 'bookings' made up nearly 75% of the 2021 total, a fact that was absolutely not disclosed in their 14th June trading update. Even in the interims you had to read beyond the main section to learn of the true breakdown. That plus the increasingly heavy short presence was a big enough red flag for me to sell.

Amati are defending their investment because it's the professional thing to do. If they sold the position so soon after buying in they would lose credibility & people would question their due diligence process. However, this is where the beauty of a proper portfolio comes in. AWE made up just 1.3% of the UK Smaller companies fund at 31/07. If it goes to zero it doesn't make a huge difference and will be offset elsewhere.

Ultimately, I felt the story changed significantly on the release of AWE's interims & so I sold. Those who bought since, why did you do so? Was it because the price had fallen? And do you have just 1.3% of your portfolio exposed to it's future fortunes as Amati?

Re. CODE, it's the polar opposite to here as far as I'm concerned. They are a micro cap with a hugely bright future, well worth researching if you have the time.

@Woopert, did you know that Blackrock have $9.49 trillion of assets under management? Their 'investment' of around $390m in the AWE IPO equates to just 0.0041% of their overall AUM. They could have ~24000 similar investments each worth $390m, so the fact one has fallen 50% means nothing at all. Why did they invest? It could have been to fulfil an agreement somewhere else in the dark labyrinth of the international investment world, we will never know. Do the care about AWE? No chance IMO.

For what it's worth, another 'cornerstone' IPO investor, Henderson Global , have $375b of AUM, so their £85m investment was worth 0.03% of their portfolio. It is chicken feed.

Agree, it's absolute madness to sell Ricca shares just because HL don't list ASX stocks. Just move them to another platform.

It's also worth noting that there is a 99.9% probability that all spin off shares will be subject to a 1 year lock in. This will ensure an orderly market in the shares (imagine everyone dumping on day 1) and will provide plenty of time to sort things out with a new broker etc. I hold IRR with both HL & II, I plan to migrate the Ricca shares post IPO once I have the share certificate. It'll probably take a while but we'll have time.

For what it's worth, I also think ASX is a far superior exchange to LSE with regard to mining shares. It's embarrassing to see how few PI's, never mind II's, are even aware of IRR at present.

Agree with both recent posts. I just listened to the Q3 trading conference call & one thing I picked up on from the CFO was that the China revenue from Verisilicon & CPP is to be recognised over up to a 5 year period, later in the call he said 3-5 years. I honestly don't think they can have a clue.

Given the scale of the China bookings ($147m) vs the 2022 & 2023 revenue forecasts, and the fact that quarterly run rate excluding China is around $20-25m, are they really going to get close to $140m for 2022 & $228m for 2023 if China takes up to 5 years to come in? The $3.9m of confirmed China deals in Q3 is a start, however even that is very vague -will this all be recognised in 2021/22 or over the life of the deal? If so, how long are the deals?

The shorts must think that China revenue will take longer to be occur than forecast or won't happen at all & that AWE will therefore have to downgrade 2022. If this happens then the price will have a lot further to fall. Net cash at 30th June was $519m / £378m. However, this is set against;

"The Group’s planned investment of up to USD $170 million in the Product Partnership is expected to result in
cash outflows of approximately USD $50 million in 2021, approximately USD $60 million in 2022 and approximately USD $60 million in 2023."

So in reality they had 'available' net cash of $349m / £254m, leaving a current EV of ~£1.1b and a forecast FY22 EV to Sales of >11. That isn't at all cheap for a company that has a minimal track record and huge opacity over revenue recognition.

It's a fascinating watch though!