The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Good to be confirmed, but was expected. However, the number of historic samples they sent to the lag for re-analysis is much higher than I thought, I thought it's only around 300. With over 1000, that hopefully goes a long way in derisking the scale of Boland (even if they should turn out lower grade as it's from drills that were before REE drills and hence didn't target rate earths at all). Pretty excited about that number of samples tbh, hopefully ANSTO is a bit faster with turnaround of the assays
I'd expect something in the next quarter or so to fill the coffers for the further work programme. Best guess is there's some flexibility with timing, but would think before Q3.
The thing with fundraises here is - which is quite different from the bulk of UK-listed juniors - the last raise was at a premium to SP, there've been other occasions when after raise the SP never even remotely fell to the raise price, as it is a very tightly held share after all, with 40% in the hands of the board and Andromeda Metals. So I wouldn't bet on any raise to give a cheap entry with Cobra, definitely not if trying to build any size in a position, especially if (and yes, that is still a considerable IF) the bench scale ISR tests return promising results; those are expected later this month or in May, as per p12 here: https://cobraplc.com/wp-content/uploads/2024/03/20024.03.25_bloand-results.pdf
Tbh my best guess is it'll be end of Q2. Why? The presentation shows the work programme until June, and it's usually been the case that the work programme shown was pretty in line with what was possible to achieve with the current budget. So let's see, not too concerned about any raises here, one positive of Cobra is how sanguine raises have been in terms of dilution - good to have one of the executive directors holding 10% of shares, aligns incentives to keep dilution at bay.
Is that how you do research though? You google "what mining tier is Brazil", open the first link, which most likely is the same I see, by "Spark Energy Minerals", a lithium explorer only operating in Brazil, that claims that Brazil is a Tier 1 jurisdiction (of course they would, it suits their agenda)? The source I linked you to is the independent mining jurisdiction survey and well, Brazil does come in 25th out of 62, which I'd call "investable", but certainly not Tier 1.
You can't really blame others for questioning your intentions and thinking they are disingenuous, if by your own admission you never looked into REE miners much before 27th March (which is what you seem to say with "Cobra came to my attention when it surged - from there I researched it and similar companies). Because if that is true - and it might not, but from what you wrote it seems likely - what you say later in your post, that others are "more knowledgeable than you on the share" is almost certainly also true about the entire REE industry. How much do you know about the industry? How offtake agreements are worked out? How the mining processes work? What type of deposit costs how much to mine? What grades are economical for different types of deposits? What is the value upside of potential ISR mining (and consequently what's the margin upside even with lower grades, same as Kazatomprom in uranium)? What's the outlook of NdPr compared to Tb and Dy? What are the main challenges of moving from REE exploring to producing (if it's clays, how stable are they, can you even operate heavy mining machinery on it, can it be reinstated to its initial state after, otherwise how will they gain permits when lots of it is on prime farmland)? What's capex needs for the different mining techniques? How about opex? If leeching is used, how acidic a solution do you need?
I doubt you can answer many of these questions. Yet, instead of asking questions and trying to learn more, you make statements like "What the company claims is disingenuous", "[A] is much better than [B]". I wish you all the best with your investments, but with that "talking yourself into thinking you know much about REE and are able to compare the complexities of REE projects without answering the above questions that go far beyond grade" approach, the likelihood of ending up with the wrong REE investment is likely close to 90%. Anyway, good luck.
Well, if you want to call 25th out of 62 jurisdictions "Tier 1", then yes, but that's what Brazil ranked in the most recent mining jurisdiction surveys - it definitely improved compared to years ago though, let's hope that continues and will be reflected in the equivalent end of 2023 release of the survey. (Source: https://www.fraserinstitute.org/sites/default/files/annual-survey-of-mining-companies-2022.pdf )
I never called it wild west, it's above average based on rankings, just not Tier 1 like South Australia, and that's not really my "impression", that's rankings.
Thanks for the info on RBW, but anyway, please let's stick to discussing Cobra on here mainly. The projects, jurisdictions, basket compositions, extraction techniques, as well as market caps are very different for the companies that you bring up and it's a very nice board to be on, one where news released by the company are discussed in an open way (there've been times any of the frequent posters - including me - were not cheering some choices management made; even though I now admit that they were right focusing on Boland and I was wrong when I thought they should have stuck to the Thompson exploration target), so it would be nice if the main focus can remain on the company the board is for. That's something that I find hard to understand about your posts tbh. You haven't posted on the RBW board once, you haven't posted on the PRE board once, yet you keep bringing them up here on a board that isn't about them, why is that? I'm always trying to give everyone the benefit of the doubt, but when you never discussed any Cobra news in an unbiased way and for the second time only through a "This other company with 10x the market cap of Cobra has higher NdPr grades [something that really really really isn't one of Cobra's focus points]", you do make it difficult to think that you are an angel who only wants to discuss research, rather than someone posting with a more sinister agenda in mind.
Rach, I'd say Brazil is a jurisdiction where you don't need to be scared the resource will be nationalised, but you do have a lot of shenanigans involved with local parties, be it getting drilling equipment to the right place, be it accounting practices that aren't always super transparent, any other things going on with local counterparts and consultants, look at miners present there, like SRB, like HMI, they all had their fair shares of troubles that are unimaginable in Australia. I'm not saying Brazil miners are uninvestable, they aren't, but it isn't a jurisdiction on par with Australia, Canada and the likes
More important are the other points to me when it comes to the comparables, all of RBW's deposits, including the one from today's RNS are hard rock, not IAC, and most definitely not potential ISR-suitable IAC. So it could be that RBW is a great investment too, very possible, I think a lot of REE explorers are undervalued right now, but it isn't a comparable to Cobra, it's a different style mineralisation, with different project requirements and costs, and a different set of REOs that are the focus (one LREO and the other HREO). To me the potential of a scalable ISR-mineable REE resource with a focus on the rarest REEs (which you also seem to see, as every other REE company you bring up has NdPr and little Tb and Dy) is just a completely different animal if it evolves that way, which is potential rather than guarantee, but great signs. Good luck, I hope that you'll join the group of Cobr investors at some point, I'd argue that at 7m pounds market cap with important results on scale and ISR potential possibly dropping soon with the lab results we wait for would be a good time to do so
it's not just that all the comparisons rach brings up have 10x the market cap, it's that in the end cobra will be the superior ree deposit by far if things go right
it's not all about grade, otherwise go tell kazatomprom their uranium grades are ****e, i bet they'll be impressed and stop mining even though they are the biggest producer and with higher margin than other majors too...all due to isr.
show me 1 other resource in a tier 1 jurisdiction that allows for isr mining in ree and has scale! that still needs derisking for cobra too, but it sure looks good.
i'm more than okay if cobra evolves into the kazatomprom of ree, with modest grades, but isr and hence huge margins and easy to get all the permits in place as super low environmental impact. i'd take that. and that's the chance here. no guarantee, ofc not, but no other ree explorer so far has that same chance, no other that i've seen has conditions suitable to isr.
Another deposit you reference in a high-risk jurisdiction, without citing anything but grade (how expensive is extraction, how feasible is it, e.g. is it prime farmland the clays are located at if it's IAC style? How stable are these clays when operating heavy machinery on it? That's 2 concerns that are not part of ISR-mineable resource). Also you again focus on NdPr. These are completely different projects and you're comparing apples and oranges - Cobra is low-cost, high-HREO concentration, ISR mining, in a Tier 1 jurisdiction, with management and related persons holding 40% of shares outstanding and a history of very economical budgeting. Compare it to other REE explorers with these same metrics. Hint: you won't find any others (+ your posts about any other REE company with completely different metrics does seem to be agenda driven given that it makes up most of your total 18 posts on LSE)
Well, we only just had pretty encouraging drill results and also stage 1 of the reanalysis results within the past 2 months, and know that more reanalysis samples are on the way and the ISR study. It's not that quiet really.
In other news, I managed to meet David Clarke on the weekend, very nice and enthusiastic guy, knowledgeable too ofc. It's great to have a company like Cobra, where management are not only heavily invested, but also very responsive (and I think anyone who ever reached out to Cobra via email will agree). That's worth a lot, compared to a wide range of miners on LSE, Cobra's management is a poster child for integrity, not only in investor engagement, but also in being invested themselves, and using funds economically and having an eye on keeping dilution to a minimum, it makes it easy as a long-term investment really imo. And no idea about you, but personally I'm very excited about the results so far this year and the news flow that we expect based on previous rns and presentations
What are you on about? Yes, the rig is hot stacked, but it was never the plan to have any action before Q3, and Q2 only started in case you haven't noticed, so there's 2.5 months time to get what's needed and the communication is, it's all on track to be ready for it in early Q3, as was always the plan.
Is it a big jump? When market cap is still bang in the middle of the market cap range of 2021 - 2023? When no helium had been found?
So that's the likely answer, maybe fair value was never the 30m£ market cap that it dropped to despite exploration success, and it's finally correcting back higher to reflect the fair value a bit more
To be honest, that one I don't care about anymore. It's been communicated several times now that the plan with the gold assets is to monetize them, and I do think it'll be possible to find a small-cap or mid-cap miner in the region that will acquire them for open-pit mining, especially if the gold M&A market that kicked off in the past year heats up. But is it possible to find a small-cap or mid-cap gold miner that pays a premium for the REE on top of the gold? I have my doubts about that, it might help in the negotiations, "Hey, you also have 40 Mt of REE at 700 ppm average overlaying the gold, which could come in handy if the REE market turns into a bull market either on green economy or China escalation dynamics", but I don't think a gold miner will pay extra for it in an M&A deal, it's at this point merely a factor to sweeten the deal for the gold assets.
Boland however, completely different scale, completely different economics (the acidity needed is much lower than for Clarke and Baggy Green REE, and ISR extraction seems likely possible), higher grades too. It did cost 6 months give or take, the shift away from the dual resource focus and the Thompson exploration target to a full focus on Boland, but as far as I'm concerned it was 100% the right decision.
I'd like to add, Rach, that with Cobr you have to look at the rest of the company too, because the gold resource, even though it is not high-grade, is economic grade, all of that gold sits at shallow depths and is suitable for open put mining, where economic grade is ~1g/t, see for instance this article, which has been written when gold price was still much lower in 2021 than it is now: https://stockhead.com.au/resources/making-the-grade-what-to-look-for-in-gold-and-silver-drilling-results/
So the gold resource is 279k ounces. No, definitely not huge. No, definitely not a company maker. But given it's shallow depths that lend themselves to open pit mining and in one of the Top 3 mining jurisdictions in the world, it's likely they'll manage to monetize it as gold M&A heats up even more with the gold price ATHs and rolls down to the juniors (while for now you mostly have megadeals only like the Newmont takeover of Newcrest).
So 279k ounces. It's of course a wide distribution of what's paid for an ounce in the ground in M&A deals, but the absolutely most conservative estimate I find for inferred resources is 20$: https://munknee.com/how-to-value-a-junior-miners-gold-in-the-ground/
Note that the comments on it are crowded with info that this does not apply anymore in a 2000$+ gold price world and that Inferred ounces were valued as high as 80 or even 100$. But let's stay conservative and use the 20$ number. Alright, so that would mean if a company acquires Cobra's gold resources, even at this conservative valuation, that's 5.58 million USD, so 4.42 million GBP at current FX rate. In all likelihood any such deal would be for a considerably higher price, and not 20$ per ounce, at least if we go by the info in that link, if anybody has more accurate info, would be much appreciated.
Alright, so then Cobra right now at the 1.05p SP has a market cap of almost exactly 7m£, lets use the 4.42m£ conservative estimate for the gold, why not. Then that means you can currently buy shares in Boland prospects for 7m - 4.42m £ = 2.58m£.
You can like other resources better for their higher grade, for their nearer-term production start, but do you really think that with the scale prospect that Boland has now, that isn't a buy at 2.58m£ valuation for Boland?
Keep in mind that 2.58m£ val for Boland assigns a very conservative estimate for the gold resource value, and essentially throws in the uranium prospects in the new tenement adjacent to the Yarranna uranium deposit ( https://www.isoenergy.ca/portfolio/australia/yarranna/ ) and the REE prospect in Tasmania that is adjacent to the Deep Leads / Rubble Mound REE deposit ( https://www.abxgroup.com.au/site/projects/mineral-resources ) entirely for free.
So from all the recovery rates I've seen on IAC-style rare earths projects, the ones in this RNS are at the higher end for pH3, and not quite sure where you found orange juice to be pH 4.2, it's closer to pH 2.5 - 3 from what I know, see for instance Table 1 in this scientific paper: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC6898880/
Where things become much more expensive and environmentally more impactful is when pH 1 is needed in the acid leeching, I'm not quite sure why the RNS includes both recovery rates at pH4 vs pH3, but possible to show that a relatively small increase in acidity from 4 to 3 vastly improves recovery %, especially when looking at Zone 3 (which also seems to be highest MREO grades) and especially the 79% Tb and 67% Dy are exciting to me given that these are the most valuable REOs.
Also, please consider these are the very first recovery rates, one resource that Rupert compares initial results to is MEI, and look for instance at this RNS by MEI: https://wcsecure.weblink.com.au/pdf/MEI/02779218.pdf
Initial recovery rates for MEI were 32% Pr, 59% Nd, 21% Dy, 41% Tb, look at the increases in the RNS. Cobra again is known for focusing on metallurgy a lot (and some here would say they focus on it too much, Richy was one of the people being quite critical about the amount of metallurgy going on I think), so it is very likely that recovery rates will improve considerably as they understand the specifics of the resource better and better.
On your question if I think it's economic or not, there's work left to do and I think Rupert is the first one to be honest about that, you have many explorers who will always make it sound like "in 3 months we go mining", while both Rupert and David Clarke have been open in the interviews that the pilot project with first production would be 15-18 months from now still. If ISR works as extraction method, you can be absolutely sure that these grades are economical and that much lower grades would also be; of course there's no comparables in REE space, but the slide that compares the biggest companies in uranium and shows that profit margins are a lot better for Kazatomprom with 0.06% uranium grades with ISR vs Cameco that also has a high-grade hard rock resource of 8%+ grades: https://cobraplc.com/wp-content/uploads/2024/03/20024.03.25_bloand-results.pdf
You won't hear me say "This will DEFINITELY work", there's work to do, this was the first drill campaign that really targeted Boland in a systematic way. But it looks good, imo very good indeed, the scale and very low-cost extraction prospects are what makes this resource so exciting to me, well, paired with a market cap of 7m£, it's not at 70m£ like Pensana or 250m£ like MEI, the grades, hey, I'm not shouting from the rooftop about them, but from all I can tell, they look economic enough, and ofc REE prices would additionally go through the roof on any China/Taiwan escalation
Rach, not gonna go into it more, I'm glad you found some more perspectives to explore from my post, but please be careful with things like "market put SP back to where it was, so it can't be good"
Because then you'd also have to say Pensana must be horrible, with SP going from 185 in March 2021 to 25 now.
As far as I'm concerned both have their merits, personally I'm interested in the province scale, ISR-suitable, heavy rare earths enriched deposit in a prime jurisdiction that Boland shapes up to potentially (!) be, with a board that holds 30% of shares and raised at a premium last time they raised. But that's personal preference, what is clear is that these two are hugely different, if you look for NdPr (which has a much more challenging outlook than Tb and Dy reading any REE focused news) and don't mind a high risk jurisdiction, or rather if you're okay with these factors for higher overall MREO grades (although also important to keep in mind that extraction likely will be much more expensive for Pensana), then I wish you good luck with your investment there, I can see it go well too, but for me for many reasons I wrote about at length, Cobra is the superior play, in particular with less than a tenth of the market cap, and with the similarities Boland has to MEI's REE resource (which is valued at 250m£)
The problem with your approach, Rach, is that you don't differentiate one bit between heavy rare earth and light rare earths. First things first, nobody says Pensana doesn't have nice grades, it also has over 10x Cobra's market cap btw...
Second things second, for Cobra's Boland drill results, of the MREO (and really that's what we look at, cause the others, well, Cerium Oxide and Lanthanum Oxide have a price less than 1/500th of Terbium Oxide, so who cares about the parts of TREO that aren't MREO?), 12% are Tb and Dy, 88% are Nd and Pr, that's the ppm split. The value split using current prices of the REOs, 47% of the basket value are Tb and Dy, even though they're only 12% of the MREO in ppm. For your guide, current prices are 760$/kg for Tb-Oxide, 253.5$/kg for Dy-Oxide, 50$/kg for Nd-Oxide, 53.5$/kg for Pr-Oxide.
Then you have to take into account the resource style and recoverability, if you even looked at the most recent presentation, you have the hard numbers how much more profit margin ISR produces at massively lower grades.
Then you have the jurisdiction, if you looked into it, you know at what discounts African miners trade to Tier 1 jurisdiction ones.
Then you have recovery % in the leeching process, the high 60-70% recovery rates at Boland are outstanding compared to pretty much all metrics for IAC-style deposits out there.
Even if we assume the same recovery % for e.g. MEI, which also is an IAC-style deposit and much more directly comparable, the basket value of MEI's resource is at most 2x higher than Boland average (across all zones, and in reality recovery % is lower at MEI). Then you have MEI in a somewhat dodgy mining jurisdiction, Brazil hasn't been great there, look at other UK-listed miners in Brazil like Serabi or Harvest Minerals, complete mess. And yet you have MEI at a market cap of 250m£ equivalent. So you're definitely missing some things here, the biggest ones being 1) the vast premium of heavy rare earths over light rare earths in market price, and the vaster premium of magnet rare earths over other rare earths (we're talking x50 premium of LREO and x500 premium of HREO over the others, making any talk about TREO completely obsolete, the ones that aren't MREO create zero value), 2) the jurisdiction the project resides in, 3) metallurgy, recovery grades, as important if not more important than the MREO %, what's the point of looking only at MREO %, when 1 has recovery rates of 70% of them and the other has 35% of them?
What does make this world-class, isn't the grades in themselves, but the combination of Tier 1 jurisdiction, very high recovery rates, the potential for very very low-cost extraction if ISR will really be possible, very decent concentration of HREO as part of MREO, and economic MREO grades (even if not the MREO grades that some others have, who lack the ISR potential and the high recovery rates, and the high HREO content, which yeah, is x10 the market price of LREOs, and the prime juri
I'm pretty sure Rupert holds more than 333k shares, Kuro. It was 333k shares in the Oct 2022 placing & 500k shares in the Nov 2023 placing that was at a premium to the share price at the time. See here: https://www.lse.co.uk/rns/COBR/result-of-accelerated-bookbuild-206pe5ciab1f0ew.html
I imagine it's impossible at the moment to buy for him with how rules for director buying work, there's lots of news flow in the next months indicated with the re-analysis of historic drill samples, the uranium side story, and who knows what kind of insight they already have in addition to what we know so far on ISR recoverability and/or offtake agreement perspective and/or attracting strategic institutional investors and/or any potential discussions about monetizing the gold assets, almost certain that any information on any of these fronts would make it impossible to purchase additional shares right now.
Also with 3 related parties (one of which is of course David Clarke) holding 30% of Cobra, and another 7% of shares held by Andromeda Metals, that's a lot of tightly held shares. So are my 3%+ that you also see in the major shareholders list on the website, I'd love to be able to buy more, but unfortunately am not allowed to buy any new single-name shares for the time being; however, sure as hell not selling any, and hard for me to understand why people aren't gobbling these up left right and centre at a market cap of 8m£.
Anyway, I plan to do some calcs on the weekend trying to replicate the slide in Rupert's presentation that shows heavy rare earths in the basket to be superior to what MEI have, because these are the most valuable by far, and also the outlook for Dysprosium and Terbium is much better than for light rare earths (see for instance the article on the right side here: https://www.metal.com/Rare-Earth-Oxides ). For me that slide really drives it home that it isn't about the TREO grades, MEI have grades around 3x of Boland, and yet in terms of basket value, as HREO are so much more valuable, they aren't far from each other. With MEI's market cap at some 250m£, and COBR's market cap at 8m£, that's well...a big difference. Too big? Yep, way too big a difference as far as I'm concerned. Have to say there were times when I questioned the decisions by management, I can't say I've been a huge fan initially of how the plan to drill the Thompson exploration target was scrapped very abruptly and Boland was drilled instead last year, but they've done everything right really by the looks of things and I gotta say the confidence they have on the drilling/mineralogy front (confidence that is built on huge experience for all David Clarke, Rupert Verco, and of course also Robert as exploration manager, also with ISR) gives me huge confidence in the company. Which is why I have increased my holding to > 3% in the first place.
Very interesting watch imo, as everybody who has been here for a long time knows: REE projects are notoriously difficult to compare, but in the video, the part after min 10:00 ticks all the boxes for me personally. It shows a good example how ISR mining of lower-grade resources can lead to immensely better results in both Total Metals produced/sold & AISC per unit (and consequently profit margin per unit) vs high-grade non-ISR mining. And doesn't use a random example for that demonstration, but the biggest uranium producer in the world (ISR) vs the second-biggest uranium producer in the world (only partly ISR).
The comparison with MEI that follows right after it in the video is also fantastic news in that for heavy rare earths content, Cobra's results are better than MEI and scale could end up being very similar. Considering that MEI has a market value of ~250m£ (470m AUD), personally I'm very happy today.
Some new names on the board today, which is nice to see too - and since some strange comments have been posted today by both the obvious rampers and the obvious derampers, well, I'm not getting into all of it, but let's please keep the facts straight:
1) several posted "this is AIM, anything can happen" or similar. Fact: This is not AIM, Cobra is not listed on AIM, this is LSE main market, a regulated market and not the wild west of AIM.
2) "They will raise anyway and you can buy cheaper". Fact: Again, it's not AIM, Cobra are known for being very economical with the funds they have & if/when they raise you can't bet on that being at a big discount, in fact the previous raise in November was at a premium to the share price. And undoubtedly another thing to consider is that the coffers could get filled by other means than an equity raise, it's been communicated more than once by the CEO that they're looking at monetizing the gold assets, it's also well known that the directors and related persons hold 30% of the outstanding shares, and it's well known to anybody who has been here for a bit that South Australian government has very interesting grants for critical minerals projects in development and it's safe to say that these results, with hopefully soon more re-analysis results on top of it, will put Cobra on the radar for these grants. So yeah, it might always happen that you get the chance to buy cheaper, it might also not happen, when I see the CEO of a company that is known for being highly technical in the presentations rather than a lot of PR compare the company's path to a similar company (in recoverable grade and resource scale) that has market cap of 250m£ with Cobra having market cap still < 10m£, personally I'm not waiting, when it already seems very undervalued (ofc DYOR and usual disclaimers).
Https://polaris.brighterir.com/public/cobra_resources/news/rns/story/x58nq8x
Great results, it looks like 1000 ppm+ across all the zones that have been targeted, these results from only 5 sonic holes are...well, no wonder David Clarke said "It sure looks great". The district scale size according to their model is also encouraging. If this doesn't spark market interest, I don't know what will.
I'd argue that in the environment UK listed mining stocks operated over the past 18 months or so, boring hold is pretty good haha
But yeah, agree with you, would like to see the Boland results to accelerate project derisking steps a bit