Dan, the third and final tranche was originally expected by the 31st October, which is why we had notice of the delay only this morning. Until now, it wasn't delayed.
Furthermore, about 1/3 of the final tranche has already come in. So they have all the Zark money and 1/3 of the money from other investors, leaving only the last bit to go.
They've done well.
Again - no. Aje is cashflow positive from H1 2020.
Setting the bid to meet demand for selling. They're opening the gates to let people out.
Anyway, let's not get distracted from the fundamentals. They key questions are: (i) How fast can they raise the last 1/3 of the funding they're hoping for, (ii) what deals will that funding unlock, (iii) do they already have enough funding from the £500k to progress Deal One?
Osa has explained that they need cash to put down a retainer to let the seller hold the deal for them. They then know the deal they have will definitely be theirs, and on that basis go to the market and/or funders Zark and others will introduce to them, to ask for the funds they need to buy the asset. This way, they aren't asking for funding for deals unknown, but they don't lose the deal to someone else whilst securing the funding. So they need enough cash in the bank for the deposit for each deal. And that's what I meant they will (soon or now) have enough funding to do.
As for the MMs - don't blame them. They're just doing their job. If investors want to sell today based on a confusingly worded RNS, the MMs will do their job and relieve them of those shares.
Two reasons I can see.
1. It's the 7p money they need, i.e., new money, to close deals. It may be that the half million they've already successfully placed (which has been at a premium, ever since it was announced), is enough to close the first deal. But what we need is news the company has the full £812k they were after. Many will hold off investing at 5p until they know that's happened.
2. This morning's RNS was confusingly worded IMO. It looks like not all of Zark's money has yet come in. In fact, we have all of Zark's and the first £133k from someone else, so we're actually further ahead than I thought we were. I'm sure some of this morning's drop is market makers dropping the bid to let people sell in a panic if they misread the RNS (as I did until a couple of friends helped me see where the figures came from).
There's plenty in the bank, now, so they don't need cash to stay upright. They need cash to pay a retainer on any deals they want to enter into. Anyone who can see that this company's plans to expand require extra cash at this stage would gladly invest in such a way as to make that happen, at 7p, to see things head back to double figures, rather than buy on open market at 5p and have things stay at the 5p at which they bought.
Simples.
Which means all the Zark money is in, and so is the first £133,090 from another party / parties.
Surely we should get another RNS at some point confirming the new total voting rights, and also another TR1 confirming that Zark now hold their larger percentage.
And so sp drops on the open? Should recover once people have had time to digest the news.
The ADME bit is 1:20 to 8:30.
"For now our focus is on West Africa, although increasingly seeing transactions in North Africa and parts of Southern West Africa."
A good bit from 3:50 to 5:00 on the 3 types of assets he's looking for.
And a bit later on what Petranor brings to the partnership at Aje.
1. The CEO has skin in the game. His recent proactive interview said he wouldn't have invested personally if he wasn't confident about this developing into a world class mine. Now we have confirmation of that, and a figure.
2. We now have in RNS the cost cutting he's done to reduce the break even point from 270 to 110 tonnes per month.
3. His change of gear into mechanised is game on. We know things are happening on the ground with the first stage (surveys) underway. We even have the name of the lead geologist.
We're only at these low prices because sell half of a recent bed and isa caused a drop that never recovered. In fact that was followed by a pdmr notification, so should have lifted confidence because we know of someone still heavily invested personally. So that event should have lifted us above 3 not dropped us to 2.5. Now we have these new bits of news, it's surely time for a rerate.
Was that announced in an RNS?
Below the breadcrumb at the top of each page is the stock name in large letters, then a row of icons (price, news, charts, etc.). Some of those get a counter in a red circle to show how many entries there are today. So when there's an RNS, it'll show (1) next to "BOU Live RNS".
Dan - change your password. Someone's hacked your LSE account.
So it was the sell-half of that yesterday that knocked the bid right down to 2.5.
https://www.londonstockexchange.com/exchange/news/market-news/market-news-detail/RBW/14279707.html
Just a reminder that the CFO holds 844,688 of these
14 days clear notice.
So if the AGM is announced in an RNS on a Monday (say, 4th Nov), the notice period runs Tuesday (5th) to Monday (18th), and the earliest date the EGM can be held is the Tuesday 19th.
Thanks, mcadder - I take it when you say "others including myself will strongly disagree with you" you mean disagree with Dan rather than with me.
I'm now quietly confident, and I'm sure the true value will be represented by the share price eventually. But, as I say, DYOR. GLA
Obviously, DO YOUR OWN RESEARCH.
But I'm feeling a lot more positive about ADME than I was a couple of months ago, so I thought I'd post a quick list of reasons.
1. We have an energetic new CEO in Osa, who has significant industry experience and knows how to negotiate bottom-up (companies) and top-down (government bureaucracy) in Africa.
2. We have two new board members, one a very experienced oil exec, again with African experience, and the other an experience financier.
3. Since the Sheikh dumped all in a big fit, Peel Hunt picked up a sizeable chunk of his shares, before buying more a few days later. Since then, their exact holding fluctuates because they also market make here, but has stayed around 19%. They must see value here to do that. They know how to dump if they wished to, and haven't.
4. We've recently had a placing at a premium of 20-30% of current sp. That's 2-3 entities willing to invest here, but who think it worth paying more than they would on the open market in order to give the company the capital it needs to progress its plans.
5. Zark Capital now own a decent chunk too, and their role is to bring other parties to the table to secure funding.
6. Aje is soon to have covered the costs of its first phase of production. From Q1 2020, all money from that will be sheer profit.
7. Panoro has just sold its share of Aje to Petronor, for a total consideration of $35m. Even dividing that amongst a 12% stake (there's a case to be made for saying they had 6%), that makes $3m per percentage point. We own 5%, so that's $15m valuation for our share at a minimum, which is £12m, or 20p per share. Minimum. Just for Aje
8. The above Norway transaction also shows that Aje is desirable as an asset, not a rump to regret holding.
9. There was some worry that Aje phase 1 will run dry in about 18 months too and that the other partners may never develop phase 2. We now know, from an interview dated 4th Oct, that phase 2 is given the green light.
10. The CEO was working, even before his appointment, on some deals that will expand ADME over the next 12 months or so to take shares in new producing assets.
11. With a twinkle in his eye, there may be options eventually to expand further, either into owning assets outright, moving into exploration, or moving onto the main market. Who knows - but that would be the icing on the cake.
The share price is majorly depressed because it's never recovered since the sheikh pulled out. I'm underwater.
But it seems to me that the negativity of that has been more than priced in for some time, and some of the above items have come about since that crash. When you factor in the potential of Aje alone, a price of 20-25p seems right. Factor in the potential for expansion, for which funding is already coming in, it could well be higher. 5-6p is way too low. I don't have more to throw at this to lower my average, but I'm now quietly confident that over the next 12 months I'll break even, maybe into profit.
So anyone waiting to see if Aje itself has life beyond the first phase of production can now feel fully confident.
https://www.upstreamonline.com/weekly/partners-to-boost-aje-field/2-1-681077 (4th Oct 2019)
Here are some snippets
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London-listed junior ADM Energy — which has a minority stake in OML 113 where Aje is located — said the partners have concluded technical work to support a decision to proceed with phase two, targeting gross output of up to 12,000 barrels per day.
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In addition, the partners are developing plans to begin producing gas from condensate reservoirs in Aje's Turonian sands.
"Discussions are taking place with potential off-takers and investors," said ADM.
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I'll spell it out, since if Ripley is unclear on the 7p placing it may be that other readers are too.
The placing was at 7p, at the time about 20% premium to the open market price. They didn't have enough authority to issue shares to complete the placing in one go.
So It was in 3 tranches. One would hit immediately, taken by Zark (and did).
The second would also be filled by Zark, once the EGM had been held.
The third would be filled by one or several other parties. A subsequent RNS said they see the whole lot placed by end of October.
That means that Zark, and at least one other party, are willing to buy in here at 7p. That was and remains a premium to what they'd pay on the open market. The only reason to do that is because they see it being worth buying in such a way that the company gets more capital to work with. They must see the opportunities here as being worth paying 7p for if it means the company has the cash to carry out its plans.