Member Info for Simms45

As expected Dodds has been making concessions to the Tribals this week to get them over the line and so far he has made the expected concessions to make the effort the Tribals have put in seem worthwhile. Topline adjustments so far are :

Amendments to California sports-betting bill would put more restrictions on cardrooms
Proposal would require in-person registration of mobile wagering accounts until 2023
Annual sports-betting licensing fees reduced from $1m to $500,000

The tribals should concede a little ground because this is almost identical now to their own proposal but this would come in 2021 and not 2023. Only difference is the mobile sports betting but Dodds has tightened that a little but for the state of California this is the big win and part of the possible billions in revenue so Dodds can only go so far without it impacting revenue generation.
I think this helps counch the chances of success at the committee even higher now. Dodds can present he reached out and made many concessions to the Tribals but the state cannot forego billions on revenue for the sake of a few monopolists creaming off all the profit for themselves forever. However i am still expecting a last concession behind the doors and just like many of these negotiations might find later today Tribals change their tune. A the end of the day everytime the Tribals tried to sue California they failed so i have no expectation that if the tribals try again it will not be thrown out. Could jump a lot higher as we seem very very close in my view.

I suspect Jim Mellon (Billionaire) and WH have already spoken frankly as if you want a foot in California then Webis is as good a place to start. WH and Webis could either partner to maximise the opportunity for sports betting online and through its race track or WH could offer a nice buyout given Webis has already done all the heavy lifting for securing licenses. We are aware the licenses have a value of around £25m and Webis are profitable so given todays ridiculous low market cap of £14m we are not even 60% of our license value alone. we do not know the outcome friday but omens are compelling on the upside for many reasons discussed. Any sniff from Tribals tomorrow with a deal would send this stock into the stratosphere but i am starting to get the sense Dodds has a good steer on his fellow democrats voting intention (as well he might) and he only needs to twist 4 arms out of his own 5 party members (assuming the 5th absteins) and we get that 2/3 majority bang on. he does not need any support from Republicans who while they should clearly support the bill they often just vote against because of partisan voting.

The $20m has been referred to in an RNS but that $20m is invested by the government already so this project is happening. In the recent Q&A that everyone should read (sadly they pulled the video as far as they can see where Harry waxed lyrically about how under valued the company was) but this point is pertinent and most recent :

"Q: Are you confident that the closing of local project equity will occur?

Yes, that is $58M from the combination of our Government and private partner, ANS
The Government has already closed and is spending its $20M
The Government is helping wherever it can because TKGM has suffered from some extraneous factors largely affected by the Government"

also this nugget from a recent RNS confirming the position

"b. the Government is now collaborating directly with ANS Mining and its shareholders to reinforce Project momentum. In addition, as an important new development, the Government has now also advised both KEFI and ANS Mining that it will this quarter look to arrange either direct or indirect funding into TKGM from its investment institutions for the required amounts if there is any further delay in investment via ANS Mining;

c. in the event this investment is provided by entities outside of ANS Mining, there will be a proportionate adjustment to the TKGM shareholdings. KEFI's interest in TKGM would remain unaltered; and"

To me again the latter points from the RNS offers a stronger outcome for investors and protects the downside.

Term sheet is based on due diligence of all business variables and those variables are reasonably fixed in terms of the gold in the ground and the amount of additional equity needed to trigger. I think the credit risk imho is less of an issue, especially since the EG are effectively a key party to this and its a major project for the country.

i always like to refer back to some nuggets from the last RNS in May :

"This includes the anticipated initial closing of the Project level equity in Q2 2020, along with that of the identified debt funding in October 2020, which was set out in the Company's announcement on 24 April 2020 and included details of support for the local investors available from the Ethiopian Government if required. "

Therefore i am not disputing the word 'anticipated" gives wiggle room as to when the project level finance is going to be forthcoming but the month is not over and EG separately have said they will step in if ANS consortium do not proceed for any reason and there was talk of some liquidity issue that presumably the EG are resolving. If i was in the ANS consortium you tend to delay putting the cash into a project until absolutely needed and normally this is the day you drawdow the fill loan later in the year. The $9.5m payment however should be possible even on this basis and probably it is going to be put to work.
Also
"The Directors are seeking to close the gap between the Company's market capitalisation and the significantly higher intrinsic valuations of the Company's projects. For example, KEFI's share of Tulu Kapi's NPV* at the current gold price of US$1,700/oz, equating to £163 million, according to the Company's financial model prepared by its project finance adviser, is approximately 11 times the Company's current market capitalisation at yesterday's share price based on the proposed expanded issued capital."

This is very compelling for investors as while 4 times is not usual at this time the fact it is 11 times undervalued is extreme.

The upside is enormous and with the Saudi project expected to land sometime next month or even before then this underpins its exploration. Kefi has said they think the potential copper amount could be as large as the biggest copper mine in Saudi that was sold for $1bn so i think if those maiden numbers come in then that is a sleeping rocket and with that deal Saudis are looking to fast track that project and Kefi will have its 34% stake and i suspect rather than invest further will allow further dilution so that might be a free ride on a massive project. if Kefi took that approach and kept 20% of the project on completion for no investment then that would be a huge win. There just seems some tantalising potential here that i hope regardless of Harry will be unlocked as once economics are so strong it happens.

Placing was only 20 days ago and my understanding it should be done at a time when future news is not certain. I think rights issue caught us all by surprise but clearly its a positive sign although i am sure also it was a last chance saloon for key individuals to load up before the key newsflow starts up to eoy. I think 20-30 days is a good enough time to elapse before some news could be released without a conflict of interest.

Generally a great time to buy when you can get in at the same price of placing. I sense a good next 6 months.

Great article written by Dodds laying out benefits of his proposal :

https://patch.com/california/across-ca/legalized-sports-betting-could-generate-millions-california-state-considers

Interesting he makes this point

“There are a few key differences between the proposal being considered in the Legislature and a potential ballot initiative being backed by some gaming tribes and the racetracks. Most significant is that the proposal in the Legislature would authorize mobile wagering.”

To me sounds like something is happening, perhaps even Dodds already knows he has 4 or 5 of his fellow democrats voting thursday in the bag. Only needs 4 democrats to vote in favour and one abstein and 2 republicans to vote against. i am sure a partisan vote is on the cards as normally political parties rally behind their own measures.

Thanks Topmoney. if we reach £10m net profit on HK that should equate realistically equate to a £150m valuation on a PE of 15. Remind me why we are still values at £25m? news expected soon so any loose change down the back of the sofa cnel is not a bad place to park it.

Buttsbridger. Cash In bank is £26m sterling. Check accounts. We are still valued less than the cash!

Technically there are 2 weeks before the end of the quarter so news could come any day now to confirm whether ANS/EG or someone else is joining the party. Harry mentioned plan A/B/C in the recent Q&A so has options but he did favour the ANS consortium. The EG must be working something up so lets hope we get that update. Confirmation of the funding and and we will be a multiple of todays valuation. a large find in Saudi would then be the icing on the cake and hopefully in that order.

Eqtec still at a ridiculous £25m valuation for a global leading waste to energy tech company on the cusp of huge growth and projected profits with projects in both the US and Europe. To have got entrenched in both major markets at this point in the Post Covid Green energy spending largess indicates that Eqtec could be on the cusp of huge growth. Certainly the management agree and happily taking shares in lieu of part of their salary. News must be imminent and momentum could push this on far quicker. Certainly £75m seems very credible on the good news and then if we see Eqtec technology start to fan out quickly in the US and Europe could easily add a 0 to that in 5 years time.

Thank-you for clarifying that point that CNEL needs to go onto HK with a £51m valuation and assuming they raise 10% on HK the value for UK pis will need to be around 10.4p once listed on HK. As i think most agree CNEL is not only a very fast growing company but also incredibly profitable with £26m in the bank from just 4 years of profitability and that is growing each year. I am still amazed CNEL have been so badly miss priced but i guess that is to our advantage. Also really surprised the company has not been carrying out a share buy back because it would make complete sense. Why have they not done that? Anyone have an idea?

Time is now. California state need to find $55bn deficit now, not in years later. Everything has changed. we have 5 democrats vs 2 republicans to vote on this so guess the outcome just on partisan vote alone? The pressure on Tribals to do a deal today is massive and i dont think anyone is in the least bothered anymore about the threat of legal action. Seomthing will give or Tribals will spend next 12 months throwing toys out their pram so they have one option but to agree with Dodds to drop the card rooms and jobs a gooden.

I think its $50m so therefore around £40m valuation. Assuming they enter HK with a raise maybe of £1-5m to create some float in HK they need a little less. However we are splitting hairs as frankly CNEL should easily be worth £50m today but looks like the market is the market and CNEL should rightly move to a market that better reflects in largest sales region.

Louisiana has become the third state to put sports betting question on the November ballot, joining South Dakota and Maryland. California is next :)

https://www.gambling.com/news/louisiana-sports-betting-officially-in-the-hands-of-voters-2258300

The text does seem to make reference to equipment they already had so its probably in the balance sheet as worthless. if they convert that into a steady $400k revenue stream Eqtec takes on a new meaning because that is dependable revenue over the lifetime of the plant. if you take a NPV of something like $400k over a 10-20 year period then pension funds etc are all interested in those sort of revenue streams. Therefore just that single deal could net a huge return if Eqtec sells this on in the future. Pension funds are being forced to invest in green energy but also need a steady reliable income so this ticks the boxes. i would like to see Eqtec, if they can afford it, to take these sort of stakes in projects because it massively increases the future upside and the market cap of the business. And did anyone mention we are valued at £21m only! We have a long re-rate to go yet!

For a company that is in a high growth sector with patents to enable construction of ethanol production and had a 59.4% increase in revenue to £45.9 million and had net profits of £6.8 million for the year ended 31 December 2019 and cash in the bank at the end of 2019 of £26m (probably higher now) how is the entire market cap of CNEL still £24m????

Once you take out the £26m in cash then you have a market valuation of -£2m for a high growth company

This is for a company that has an order book and contract backlog that has increased by 77.5% to £67.4 million

This is crazy but you come to expect this sort of thing on AIM but to anyone that is a steal at a market cap of £24m. Even on a conservative historic PE 10 CNEL should be £70m at least and realistically given the order book closer to £100m as Ethanol demand is rising with regulatory changes to phase out pollution.

I strongly support the idea that once on HK this will revalue considerably and we should really see closer to 9p before we depart AIM. if we departed at 9p we would meet the £40m/$50m listing requirements.

we know there is plenty of news held back for promoting itself on HK and that they will do a issue with the relisting but it seems that the listing is probably more to build a local pi investor base in HK than raising funds as they they have £26m in cash so surely they should be looking ore at share purchase and dividends, although i guess an acquisition might be something on the table. Enjoy the ride as i hope to.

i was particularly interested in this point as it opens a very interesting business model where Eqtec takes a stake in some projects in lieu of some equipment and then generates ongoing income from the project and a return should the project get bought out later. I hope the equipment put up for this was considerably cheaper to manufacture than the resale value but does anyone hazard a guess what the income generation might e and the sale of North Fork if it gets sold onto a fund later? i am quite big on Eqtec taking stakes in this fashion as it would provide ongoing cashflow going forward.

· Acquired a 19.99% ownership of North Fork Community Power LLC ("NFCP") which is developing a 2MW biomass project in North Fork, California for a consideration of US$2.5 million satisfied by the supply of certain items of the existing equipment previously held at EQTEC's Newry site.

I remember reading this so great that you reminded me of the wording as this precipitated with other factors a pretty decent investment. Really surprised there has not been a groundswell here in lead up as generally when a government is moving this, in the way they are, then this project is going to get funded. With a market cap of £18m that is absurd to the extreme for a mining company to be about to complete a $260m financing for a mine and contractors literally waiting to move and with minimum total gold revenue projection of around $2bn at todays price and a Saudi find that could be equally as large, albeit exploration but potentially on a fast track to production. There are just so many miss priced AIM stocks that are waiting for a serious re-rating. Harry if your listening i will remind you of your last Q&A when you mentioned a 10 bagger just for TK and the same again for Saudi :)

Kefi to me is in suspended animation while everyone waits for update. However the upside of those RNSs should not be underestimated as the investment partner RNS will unlock 10 years of very substantial profits. Its a funny story because KEFI has almost got it back to front with everything agreed except that equity investor, which in todays climate should be very easy to arrange. I feel Harry is being overly nice to wait for the ANS consortium so you might hope Harry has found a backup party and give ANS consortium a put or or shut up. i am sure some update will be forthcoming by end of June but something will happen. oddly i am more confident in the October kick off as that almost appears set in stone and contractors and EG are working on that basis. As the days tick by to the end of the month i suspect more buyers will enter on the basis that the upside is massive and the downside very little as the Saudi project alone might be worth a multiple of Kefis value just on its own. We are well hedged in my view.

Everything in that video is very encouraging, even the fact his office is clearly a little dog eared :) David Palumbo is for me focusing exactly as he needs to. I think the fact he has got a project in California and Greece is hugely encouraging in itself and should not be underestimated. David mentioned that other companies in the US based on North Fork have made enquiries. This is exactly how you scale projects like this as others look at what other companies are doing and want to do the same. California has a bigger GDP than the UK and is a huge market opportunity for Waste to Energy. His focus on strategic partners is essential to leave Eqtec to sell the technology on a large scale and secure ongoing contract income stream. These plants once in must have at least 10 years so there is great ongoing revenue. Really exciting.