The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
The toll deal was a huge shame as any revenue would have been better than no reveune even if split was 75/25 in favour of Calibre as long as it included all our costs so we could be guaranteed a royalty. The value of our gold is almost worth 0 today so any way to realise any cash would have had a huge impact on the company valuation as well as provide the revenue to support the borrowing to go into production by now. Huge own goal to have not delivered on that. i suspect we just would not agree a split that would have got this off the ground. if they had i am sure they could have renegotiated later based on what they found in our favour. Key was to get it moving and make decisions fast.
I think Condor was planning and could easily manage a build and why you pay experts to build the mine so that was a throwaway comment that really made no sense given the board knows the gold once dug out of the ground is worth the same wherever you mine but the discount applied on Nic assets is quite high. It makes most sense to sell the gold at $2000 an ounce than sell the mine at $15 an ounce in the ground or whatever it might be. We are leaving $1000 an ounce on the table for the next man. The profit for the buyer will be enormous.
Lets hope the next weeks bring some conclusion to this extended sales process or announce another deal but we need action.
Eqtec are the supplier on this project so more a case if Carbon sole can close the finance. Eqtec only just raised £3.5m and we should have banked nearly £2m from recent front end engineering projects for starters. I think Eqtec have the projects to stand on their own feet, albeit after at 98% collapse in the share price from the peak and £50m of investment from last 5 years. I feel the current £4m market cap is not really factoring any of this in.
Great news. Hopefully they have funding as well so they can crack on as i hope after a 2 1/2 year wait they are eager to get cracking. so many projects bubbling along Eqtec could be 10 bagger in 2024 but most people will still be underwater. I have been averaging down but my word Eqtec need to deliver not just in revenue but in the boards plan to get back all investors money that has been placed into their trust. I remind myself of Richard Branson who took Virgin public and was so upset when shares we trading below the issue price he borrowed the money and paid out all investors at the listing price. That is the sort of management you want who are embarassed and will not rest until Eqtec give a return to investors.
We need to remind ourselves that the sales process was partly in response to the Biden sanction matter that was ultimately a storm in a teacup and financing was out of reach for a period of time. However i did expect, based on tweets an outcome was likely go happen in 6-8 months and if no serious bites market for finance would have improved so could pursue this. The fact this has gone on so long is arguably because we have serious interest but getting otl appears not so easy. I hope Condor are not being strung along but i think we must be close.
Lets hope we start to draw a line under this by end of January. Final bids or close a deal or move on to production. 13 months of selling the asset is coming to a close and 2 advanced discussions announced before Christmas with palapable excitment from MC. Maybe this week an announcement is made or if January is a deadline sometime in early February. The large number of shares changing hands in December was for a reason that only a few know but hopefully we close this chapter.
Tech is not the issue. As already said we have the bank finance proof and as far as i am aware the plant should be now on target for £1m profit as no bank would lend without that buffer. northfork is the biggie and we know it will be commissioned early February. That is huge. In meantime Eqtec must be working at full capacity for all the projects we are already billing in Hawaii and France. 2024 will be year we were led to belive we would have in 2022. 2 years late and a bloody nose but Eqtec are back on track having just raised £3.5m.
I agree. Second bank sign off is key as that all but guarantees the rest will happen given that is 65% of the financing. Our cash burn is less than i thought at only $200k a month that in the grand scheme of things is small and we have barely touched our borrowing facility. Once we break 2.4p we are guaranteed warrant money and everything falls into place for Saudi and Ethiopia. Harry knows the importance of warrants and knows the real time line so happy to wait a few weeks for the pendulum to swing and we start to climb. Just need to confirm the second bank and i then expect a good month or more of positive day on day growth.
Key is getting second bank to sign credit. We have been told its soon, maybe within a week. Once that happens everything will slot into place. We have plenty of short-term finance and currently we owe very little compared to previous years. Harry needs to keep the 1.6p warrants warm and he has reiterated no plan for a placing before TK finance that he must be pretty confident will happen. Once we get to that point remember Kefi is a supplier to TKGM so we will be putting in invoices to TKGM when the $390m finance is organised, and who knows, but as we are majority shareholder in the project we are in a good place as Kefi to borrow as we would be almost debt free as Kefi so would be able to borrow on this asset as security. Remember last webinar said Saudi news coming but would really like second bank to sign off debt so the impact of Saudi update will have some impact.
Eqtec advanced money to Logic and Logic signed a “binding” agreement to purchase the SPA and was only reason they advanced the money so any binding contract will have repercussions for Logic. Eqtec would not bring a case if they were in the wrong. Logic are very much in the wrong but more a question of how much they will settle for and i hope resolved in February/March.
While it seems fair to say Logic owe Eqtec something. Eqtec thinks £4m and i am sure Logic think less but one way or other Logic will pay something. Biggest issue is normally collecting the money but just checked on Companies house and they have exactly £4m of capital in reserves so when Eqtec settle or win case Logic can be liquidated to repay the money and Andy Flintoff who recently stood down is still open to being liable as a director as part of this case if wrongdoing is found. I think Andy Flintoff was tipped off that Logic case is weak and stepped back. However if court finds Andy Flintoff and others in email communications that will be required for court case it could all blow up. Pretty sure Logic will settle case but probably at time did not have the cash to do so and maybe hoped Eqtec was on its knees and might not have cash to battle. Sadly Logic called that wrong and they will pay alongside court costs probably.
If we follow last years trading update we should get this in first week of February. The last RNS covered a huge number of projects with some already happening so always worth a re-read to remind that £5m market cap for Eqtec, that only just raised £3.5m last October and probable success against Logic for up to £4m is almost more and not even discussing projects incoming. New investors (not already burnt) are likely to swoop but i am hoping news before trading update but i think the update will be very confident on future. https://www.lse.co.uk/rns/EQT/interim-results-pjgb26eo1giuan3.html
Last webinar in december MC mentioned several meetings setup for January and his meeting with Chinese embassy just before christmas regarding the two chinese operators in advanced discussions was looking promising. Will we get a sold sign up in January i am not expecting but it could happen in early February and someone knows more than us as a large smount of the company changed hands back in December. i guess we just need to wait and take opportunites like today to top up as looks to be the case. Any exit will be probably 45-65p but who knows but all i do know is we need any binding offer to flush any lurkers waiting to respond. Would be great to see Condor sold this month. Still possible if meetings this month go well.
Lets hope Kefi RNS on second lender finance sign off and then Saudi update. Sadly i expect Saudi update first and unless it mentions listing on Saudi whatever else will just be ignored. If Harry can pull in the bank RNS it largely guarantees us the finance and then Saudi update csn have some value, clearly the elephant in the room but until TK is done anything Harry says on Saudi is just ignored. Still hope he can split Kefi in two and launch Saudi on the exchange. That would be exciting. Second bank finance could come next few weeks as surely if the lead bank has gone all in surely they would do that on basis of second bank doing so as well. Harry has got to keep up momentum as delays are a killer!
Certainly agree with a lot of commentary but are we worth more than £5m? in our heyday we were worth £180m in dec 2020. Apart from the bad handling by the management and lack of risk mitigation the future looks a lot more promising in terms of real orders, given several have come in that back in Dec 2020 when Palumbo was, in retrospect, pumping thr stock like crazy with no revenues. Just questioning market value as i have been averaging down, still well under water but when Northfork lands and Idex unload on big deals this is going to rocket like crazy. If you look around for startups on AIM not many have the sales pipeline of Eqtec for £5m market cap and the IP and a sales pipeline in Europe and the US. Our 50% of just one plant in Italy should deliver 50% of £1m profit a year for next 10 years and this will be what bank was working from when they refinanced. If we hit those targets on a PE of 10 that plant is worth £10m to an investor interested in 10% yields and investing in green. I understand management have done over investors but we personally i do not see a placing for a long time as we just had one. Be interesting to see where we are after Northfork news.
Its incredible we are almost back to where we were before the refinance news on Italy which must bring in a decent amount of our loan repayment as we own 50% of the plant. Furthermore any expenditure by the Italian plant will be paid for services to Eqtec so its win win and the plant should be generating around £1m profit a year as i dont see that has been revised. once bitten twice shy is very evident today but i am expecting a lot of news over coming weeks as Northfork are nearly at the point of commissioning at Idex and Greece must surely be releasing an update.
While i think the management, especially Babar the previous CFO, have sadly not managed risks well a lot of things look to be changing for the better operationally. The recent Italy refinance gives the world a green light that the bank thinks they will get their money back on the operation of the plant. This is a big step as it proves the refinance model can work so investors can inject the cash to get a plant up and running and then extract most of it from the refinance. This will improve the investor appetite. We have Logic, who probably owe us between £2m-£4m, and that looks hard to argue from their side given we have invested the cash and they have tried to cut Eqtec out. We have NorthFork that is already stacking wood ready for the commissioning and while we do not know our stake in that project it could be easily worth $5m-$10m in time but until we know what stake we have we do bot value it , not to mention the Idex project already signed off and a few other besides in Hawii etc that all brings in cash. the other 10 projects in the US, as long as NorthFork goes live correctly wll be following up. The cashflow is finally coming in and given this type of front end work is highly profitable means we have a window where we should not have cashflow issues. I am and always been very impressed with the tech and for me where we need to be. i take the CapitalGTP partner with a pinch of salt. i just hope Eqtec invest limited time and resources into this and that CapitalGTP do the heavy lifting. The biggest question for me after the last few years is the management and Altair. Can we trust them? losing a large percent of investors money and doing a placing with Altair just at a point i think we might not have needed to is a question of trust. However we know that on news Eqtec can double as frankly £5.8m market cap today is trivial. Even a £50m market cap i doubt investors would think they are overvalued. We can recover to 50p this year on the back of the sort of news that might be possible and place a value of £58m on the company. Revenue could easily top £20-30m this year. While investors have been severely burnt there is every chance to recover a good proportion of it as all those projects delayed come to fruition. on the back on this there is a growing mountain of funds to invest in green energy and Eqtec really need to start tapping into that. i really hope 2024 and next 1-3 months are going to see us a lot further from where are today and 50p does not seem unreasonable?
I sense Eqtec have turned tge corner after the cash crunch in late 2024. So many things went against Eqtec its some credit it is still operating but much of the non existent 2023 revenue is starting to turn up in 2024 so i think doom laiden commentary is mostly, and i agree, a result of the disastrous share price. My over riding convern is now largely whether Pitcole etc are in for the long haul as their timely debt to equity conversion puts them in profit today. They might see option to sell and i think the drop down is possibly a reflection of that and not that Eqtec are likely to do well in 2024. Would be good to get some confirmation our major shareholders are not going to sell as has been part of the major issue in 2023 as major shareholders offloaded billions of shares. Would like to get confirmation on that so as not to be caught out again as Palumbo has the share register and knows exactly what is going on so can time his options packages and any director buys of susbstance with that knowledge. Great tech, great potential but a murky past that needs cleaning up.
We have not seen that level of buying for a very long time and still to this day there is no news i have seen that corresponds with that time period from any source that would support such high levels of buying for a sustained period. Something else was happening and i am sure we are about to find out.
I think all of the considerable buying activity launching share from 15p to 25p is a pretty indication something is happening. Can anyone explain that rise and the huge number of shares changing hands as there was no open information i am aware of that would trigger it. Was it Chinese investors or connected parties. It is just a waiting game.
Positive news is 2nd bank is just waiting on updated security report. odd as lead bank has already signed but this should be very soon. This will clear the path . we have £200k cash burn and only drawn £1m of loan so plenty of headroom so i cant see a placing unless we completely drop the Tk financing. Everyone in TK village is good to move and no blockers. Really nothing is holding this up except box ticking and frustratingly they still seem to be doing it. Harry has the bit between his teeth is strong so hopefully we can start to see a proper re-rate once the 2nd bank signs the credit agreement.