focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Longfell, JP Jenkins is an excellent trading platform for private companies. I currently hold and trade (via ShareDeal Active) without issue, AMT Global Investments LTD (AMT) and Tende Energy (formerly Sirius Petroleum). I expect Redx's trading price to re-rate markedly once private.
https://jpjenkins.com/
AIMHO.
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“The plan to delist from AIM is disappointing but, in our view, understandable. The shares have failed to reflect the value inherent in the business and, importantly, the future potential. As we have stated in previous notes, Redx has a solid track record of delivery, with six molecules in the clinic and four major partnering deals over the past five years.”
“Data for lead ROCK asset Zelasudil for IPF (idiopathic pulmonary fibrosis), which are a key catalyst for Redx, continue to be expected during H124. Redx also continues to execute on business development opportunities within its pipeline, with a third deal signed with Jazz; further deal(s) could be catalysed once RXC004 data become available in H124.”
“Thus, we have increased our NPV target to £386m (99.00 pence per share) which comprises of the company’s current cash balance, incorporation of the game-changing and highly significant Jazz KRAS deal, and slightly de-risking RXC008 result in an increased valuation. The £8m ($10m) upfront from Jazz extends the cash runway into 2025, well beyond key H124 value inflection points (Phase II Zelasudil and RXC004 data).”
SM1 VIEW
Thus, despite its huge potential, Redx’s market cap stands at a mere £24 million, representing a glaring undervaluation of gargantuan proportions; and one that is unlikely to be missed by the £5.8bn-capped Jazz Pharmaceuticals (NASDAQ: Jazz).
AIMHO.
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Paraphrased extracts from today’s announcement:
1. “The company’s interests are best served by turning to the private arena where MEN can regenerate away from the microscope and constraints of the public markets yet avail itself of funding and exit opportunities.”
I ABSOLUTELY AGREE.
2. “My consideration in this direction reflects my conviction in the value of MEN as a whole and of the new businesses that we continue to generate within the company, which the London market clearly does not recognise.”
I ABSOLUTELY AGREE. And I believe a primary listing in the US, in the future, is not out of the question.
https://www.telegraph.co.uk/business/2024/02/08/london-stock-markets-decline-starting-look-terminal/
3. “I am confident that MEN, and its various businesses, will thrive once again as a private enterprise with my continued support and invite any holders so minded to continue the journey alongside. In return, shareholders can be assured that all who remain invested in whatever size will be dealt with fairly and will benefit from the openness in relation to shareholder communications through our website, social media and other channels, that we have always sought to apply."
I ABSOLUTELY TRUST THIS WILL BE THE CASE.
4. “Due to the continued challenging public market conditions, the BOD have decided that it is not in the best interests of the company, or its shareholders, to pursue an IPO of Green House on AIM at this time. The BOD will consider options for this independently run business in due course.”
I ABSOLUTELY AGREE. And I believe a primary listing in the US is currently being planned as the next steps.
5. “The company notes that Peter Levine has notified the company, without commitment, that, subject to the passing of the resolutions and confirmation that the Takeover Code no longer applies to the company, he may make proposals to acquire shares of any shareholders then wishing to dispose of their holdings on terms and conditions to be mutually agreed on a ‘matched bargain’ basis from time to time.”
I ABSOLUTELY BELIEVE HE WILL EVENTUALLY DO THIS. He is incredibly wealthy. So don’t sell your shares on the cheap between now and the 26th April 2024. JP Jenkins is an excellent trading platform for private companies. I currently hold and trade, without issue, AMT Global Investments LTD (AMT) and Tende Energy (formerly Sirius Petroleum). I expect MEN’s trading price to re-rate markedly on InfiniX.
https://jpjenkins.com/
AIMHO.
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Davey50, if the stock market was the perfect arbiter of value, then anomalies such as MEN just wouldn’t occur.
The reality is, the stock market is often wrong, and sometimes very wrong. The reasons can be many. But human psychology and poorly informed participants are often the causes.
This is not always a bad thing as it creates substantial opportunities for the discerning investor.
Davey, I’ve been in this game for over 25yrs. And during that time, I’ve lost some and I’ve won some. But the most important learning throughout this timeline, that has greatly contributed to my wins, has been the simple axiom coined by Sir John Templeton, the internationally renowned, American-born British investor:
“If you want to have a better performance than the crowd, you must do things differently from the crowd.”
Or put another way, YOU CAN’T BUY WHAT IS POPULAR AND DO WELL.
And it’s in environments like these—where stocks are undervalued, unappreciated, and underrepresented—that wins are achieved. Of course, capitalising on such opportunities demands patience and a resolute focus on fundamentals, undistracted by market noise.
Terry Smith, the incredibly successful CIO of Fundsmith once opined that, “A continuous focus on share price movements to the exclusion of the underlying fundamental economics of the companies is neither healthy nor useful. In the long term one will follow the other, and it is not the fundamentals which will follow the share price.”
AIMHO
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Kld1, I’ve gone through the 10-page report and it’s pretty bullish. I’ve provided a brief, paraphrased (to avoid any ‘copyright’ concerns) summary of the research note:
ATOME has achieved significant advancements in its projects, with the 145MW Villeta Project FEED, EPC, and Offtake Agreement expected to conclude imminently, while the 300MW Yguazu Project appears on track to finalise a power purchase agreement (PPA) in the first half of 2024.
Additionally, the company has made progress in Costa Rica, initiating a feasibility study with the national power company for a project similar in scale to Villeta. The goal is to secure a PPA by the second half of 2024.
Our valuation relies on a discounted cash flow (DCF) model of Villeta and Yguazu, with an assumption of equity financing at the price of the BH equity injection (95p per share).
We have, therefore, factored in a scenario where a farm out arrangement is in place, with ATOME retaining a 25% free carry but covering development costs to date. In this scenario, our valuation stands at 252p.
Alternatively, if we consider the possibility of the company selling the assets for 30% of their full value, our valuation then drops to 200p.
In either case, there is substantial upside potential from the current valuation.
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I have elected to simplify the valuation methodology for MEN by using NCAV.
Molecular Energies currently sports a NCAV of 49.2p. This, when compared to its current trading price of 26.5p per share, represents a staggering undervaluation of the company.
For those new to value investing, NCAV was a measure created by Benjamin Graham (renowned British-born American investor and ‘father’ of value investing) as a means of gauging the attractiveness of a stock.
The formula for NCAV is: Current Assets - (Total Liabilities + Preferred Stock) ÷ Shares Outstanding
Current assets are usually broken down into cash and cash equivalents, short term investments (stocks and bonds), receivables, inventory, and deferred tax assets.
And in MEN's case, current assets are comprised of £1.3m cash and £4.8m for its 18.8% holding in Atome Energy. Outstanding shares are at 12,378,197 shares.
However, it’s important to note that, over the coming weeks and months, the company’s NCAV is on track to increase substantially with the March and April receivables (Argentine funds), the Green House Capital IPO (see link below), and the ongoing rerating of the Atome stock as it approaches FID.
Legendary investor Warren Buffett once opined that; “Most people get interested in stocks when everyone else is. The time to get interested is when no one else is. You can’t buy what is popular and do well.”
https://www.sharesmagazine.co.uk/ipos
AIMHO.
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March 19, 2024
PARAGUAYAN PRESIDENT HIGHLIGHTS COUNTRY’S PRODUCTIVE MODEL
President Santiago Peña highlighted Paraguay's productive model and spoke about his country's future in terms of economic and financial development in the panel ‘Spotlight on Latin America’ sponsored by the Financial Times.
The head of state pointed out that the technology incorporated into the agricultural production system will allow Paraguay to achieve the development it has longed for.
“What will lead us to grow at a rate of 8% or 9% in the coming years is the installation of a pulp mill and several industries that will benefit from water and electricity to produce green hydrogen or first ammonia as a sustainable fertiliser,” said Peña.
https://en.mercopress.com/2024/03/19/paraguayan-president-highlights-his-country-s-productive-model
VIEW
A further show of support for Atome’s business case*, from the upper echelons of the Paraguayan political establishment, makes this an even more compelling story.
* Atome's central business case revolves around its flagship green hydrogen and ammonia project in Villeta, Paraguay. This two-phase endeavour aims to establish a capacity of 145MW, leveraging the 14GW Itaipu Binacional hydroelectric dam operated by Paraguay's state-owned power utility, ANDE.
Villeta has been slated to produce up to 270,000 tons per year of Calcium Ammonium Nitrate (CAN) fertiliser from Q4 2025, displacing up to 500,000 tons of CO2 per year in emissions.
And a close look at the latest media reports (below) suggests you dismiss this entrepreneurial outfit at your own peril, as it has the management and connections to deliver its ground-breaking objectives and achieve much more besides.
(Reported on March 18, 2024)
“Similarly, Latin American countries Chile and Paraguay are working to establish green hydrogen plants. Chile has already signed agreements with the EU, France, and Belgium, while PARAGUAY IS PLANNING TO EXPORT ITS PRODUCTS TO ENGLAND.”
https://myrepublica.nagariknetwork.com/news/green-hydrogen-production-the-turning-point-of-the-nepalese-economy/
“IDB Invest has placed a US$128mn request from the AIM-listed firm (Atome Energy) in its pipeline of potential financing.”
https://www.bnamericas.com/en/news/financing-in-the-pipeline-for-paraguay-green-hydrogen-project
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JAPANESE EYEING POTENTIAL OFFTAKE OF PARAGUAY GREEN HYDROGEN (Published: March 18, 2024)
Plans to produce green hydrogen in Paraguay have drawn the attention of a potential Japanese offtaker for the alternative fuel.
During a meeting in Kyoto between a Paraguay government delegation and the Tsuneishi Group, local authorities highlighted the latter’s incorporation of hydrogen into its vessels and other opportunities in Japan.
The delegation was led by foreign minister Rubén Ramírez Lezcano, and Rodrigo Maluff, deputy minister of investments and exports network Rediex who also discussed hydrogen opportunities with Mitsubishi executives, Paraguay’s industry and commerce ministry reported.
Development of the South American country's green hydrogen potential is led by Atome and its US$365mn Villeta project and the Yguazú early-stage project.
https://www.bnamericas.com/en/news/japanese-eyeing-potential-offtake-of-paraguay-green-hydrogen
VIEW
Another positive development that is, undoubtedly, likely to strengthen Atome’s business case as it continues to chart its way to the top of the South American green fertiliser market which is predicted to enjoy a 5.80% CAGR and a £2.35bn market by 2030 (InsightAce Analytic).
Looking ahead, anticipated milestones for the company include FEED, EPC contracts, Offtake agreements, FID, and Project Finance – all slated for delivery between now and July 2024, signalling strong momentum in project execution.
Thus, despite its vast potential, Atome's current market valuation stands at a paltry £25 million, significantly undervaluing the business which, by the way, appears to be gaining the attention of green-focussed institutional investors by the day.
With ZERO DEBT, FULLY CASHED-UP, a BOD sporting serious skin in the game, a strong institutional shareholder base, and a current period of exceptional newsflow, the stage is set for a markedly strong revaluation of the company’s shares.
AIMHO
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And further anticipated milestones include the following:
• Proposed RTO transaction expected to be completed in early April 2024. The Company's name will change to Recyclus Group PLC. Prospectus for shareholder approval to be circulated imminently.
• Game-changing update on the company’s application for a TFS (Transfrontier Shipment of Waste) licence to export Black Mass (contains battery minerals such as lithium, manganese, nickel, and cobalt that can be reprocessed and sold back into the battery supply chain) which is a potentially significant revenue stream for the company. And on this point, the company has built a significant inventory to boot.
• Commercial activity is expected to commence at the company’s lead acid battery recycling plant in Tipton in early March/April 2024.
• Game-changing update on its partnership with the UK Government on potential opportunities in India. Any commercial agreement in India for mobile phones will potentially advance the company’s market cap considerably.
• A progress update at its Leinster Lithium Project.
• Further significant commercial agreements.
Thus, despite its huge potential, TM1’s market cap stands at a mere £16 million, representing a glaring undervaluation in the market.
AIMHO.
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Whoknowswhy, if the stock market was the perfect arbiter of value, then anomalies such as the soon-to-be Recyclus Group (TM1) just wouldn’t occur.
The reality is, the stock market is often wrong, and sometimes very wrong. The reasons can be many. But human psychology and poorly informed participants are often the causes.
This is not always a bad thing as it creates substantial opportunities for the astute investor.
So, what’s the compelling story here?
Recyclus is the UK's first, industrial-scale lithium-ion battery recycler leveraging sustainable, next-generation recycling technologies. Targeting a £5bn global opportunity, the company is making significant progress on several fronts as it continues to benefit significantly from its ‘first mover advantage’ position:
• Industry-renowned and highly accomplished Chemical Engineer, Anwar Sattar (PhD), appointed Scientific Director for the company – January 2024.
• £5.0 million bond facility secured with CLG Capital LLC – January 2024
• Significant commercial agreement with Servicesure Autocentres (600 independent auto centres in the UK) to recycle their waste Li-on batteries – February 2024
• Teams up with the UK Government to explore commercial opportunities for both its Li-ion recycling plant and its award-winning mobile solution in India, the world’s most populous country (1.4bn) – March 2024.
• Significant commercial agreement with Beryl (300,000 e-bike and e-scooter users) to recycle their waste Li-on batteries – March 2024
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GMCC, as you rightly say, a significant achievement in its own right. This is a great company that is currently at an 'Inflection Point'. In differential calculus, this is the point on a curve at which the most dramatic change occurs.
And as such, I have only two words: Hugely Undervalued.
AIMHO
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IDB INVEST CONSIDERS FINANCING GREEN HYDROGEN PROJECT IN PARAGUAY (February 23, 2024, By Matías Medinilla)
The Inter-American Investment Corporation is analyzing the loan of up to USD $125,000,000 (£100m) for the ATOME firm's power plant, which will be located in the city of Villeta and will be associated with a 120 MW renewable park.
The Inter-American Investment Corporation (IDB Invest) has long expanded access to financing and supported projects to advance clean energy that have a significant impact and contribute to the sustainable development of the region.
And the beginning of this year is no exception since the private sector solutions bank of Latin America and the Caribbean analyzes a new plant intended for the production of green hydrogen, in this case in Paraguay.
The project called “Hydrogen, Ammonia and Green Fertilizers Production Plant – PARAGUAY”, by the firm ATOME, has already been published on the IDB Invest website, within the list of projects that came under analysis ( see more ).
It will use 100% renewable energy from an associated plant of approximately 120 MW of installed capacity and the loan considered (not yet approved) is up to USD $125,000,000.
The plant will be installed on a property of approximately 30 hectares that belongs to ATOME, located in the city of Villeta, near the eastern bank of the Paraguay River, 50 km south of the city of Asunción, next to the Villeta-Alberdi highway. and the Buey Rodeo electrical substation.
And to date, ATOME already has the respective environmental license granted by the Ministry of the Environment and Sustainable Development of Paraguay, which is valid for construction, but is being expanded to include the production chain.
And once in operation, the plant will have a useful life of approximately 25 years and will produce green fertilizers on an industrial scale (approximately 270,000 tons/year), from the electrolysis of water and the use of dolomite (173 tons/day).
Next steps of the process
The Inter-American Investment Corporation will analyze the multimillion-dollar loan during the next few months of the year and it is estimated that, if the process is positive, approval will not be given until July 30, 2024.
So, in a nutshell, ATOM is three months away from a significant inflection point - where it's valuation is pretty much likely to quadruple from today's prices. It's therefore not surprising that Schroders keep adding at these 'fire sale' prices.
Incredible opportunity!
https://www.energiaestrategica.com/bid-invest-considera-financiar-un-proyecto-de-hidrogeno-verde-en-paraguay/
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ShareBag, it’s been exactly four weeks since the company’s notable fundraising and leadership change announcement. In the stock market, that may seem like an eternity. However, in reality, this time period is wholly insignificant, especially when evaluating this potential multibagger:
• The company’s shares were changing hands at 0.32p only 10 weeks ago. And since then, the share price has dropped to 0.225p on extremely thin trading. Meaning, the free float here is puny. Or put another way, a substantial (in excess of 85%) number of shareholders are super long.
• The company's conservative NPV currently sits at £88.4m (8% discount rate). This equates to 2.24pence per share. However, the price of HPI continues to rise; currently £14.26 per Kg! And what’s the size of our JORC-compliant magnetite resource? 56 million tonnes! 68.6% of that is Fe2O3!
• House broker Turner Pope has slapped a highly conservative £30.7m DCF valuation (0.78p) for the business, which is over two-and-a-half times the Group’s current market capitalisation.
• The company’s head honcho, John Wardle, a former Emerging Markets CEO of the Year, has invested in excess of £1.4m into the company. And alongside his fellow BOD members, they control circa 17.5% of the business, which was secured at markedly higher share prices than today’s paltry mid-price of 0.225p. So the risk-reward ratio, at this price, is nothing short of incredible.
• Premier Miton, Catalyse (Jennings), and Jarvis all collectively control in excess of 15% of the business.
• Earlier last month, I mulled with concealed excitement at monsieur Wardle’s actions – where he stumped up half a million pounds, at a premium to the prevailing share price, to increase his shareholding in the company and, subsequently, took the reins from Giles Clarke in the middle of direct funding discussions!
Fellow investors, if you think the price of winning is too high, as in waiting for ages for a stock to come alive, then wait until you get the bill of regret which, by the way, is generational.
And a substantial number of private investors, today, are in possession of significant 'bills of regret'. “I wish I had just held a little bit longer before EUA exploded, or before ARB went stratospheric. The list is endless.
Thus, 4 weeks, 8 weeks, etc., is immaterial compared to a lifetime of regret for not exercising patience. To this end, I refuse to be swayed by emotion and, instead, remain steadfast in my resolve to see a substantial return on my investment.
I agree with you, not long now.
AIMHO.
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Xcoder, Ironveld stock has been forming a shallow consolidation since the 31st May 2023 (post the webinar). This is an extremely bullish formation and bodes well for the coming weeks and months.
Now, for those unfamiliar with the term, a shallow consolidation means the stock is not in a race to move either higher or lower. This type of chart formation is positive for a stock because it’s often a sign that investors are, essentially, holding and accumulating shares ahead of the next starting gun.
And in the case of the Ironveld stock, this is what appears to be going on. But that aside, and when positioned against its current bargain-basement market cap, the current fundamentals of the company are simply off the scale!
• The company is sitting on 56 million tonnes of magnetite resource!
• With two furnaces currently in operation, and a third on track to be turned on soon, the company is producing HPI, Vanadium, and Titanium products.
• The company is projecting profitable revenues of £16m ($20m) by August 2023 – this excludes projected profits from the DMS joint venture, HPI conversion into powders, and any further expansion of smelting facilities!
And all this for a paltry £11m!
Yes, feel free to bark the unsavoury but apt remark, “What the ….!”
Thus, take cue from the random, lumpy, share purchases made over the last three weeks. It may look contrived bit it’s not. It’s good old fashion avarice – where investors are scraping together cash to exploit the spectacular price disconnect that is currently on show, and on the premise that, the opportunity will soon be gone.
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Howard Stanley Marks, the serial value investor and founder of the multibillion, wealth management firm Oaktree Capital Management, once opined that:
"All intelligent investing is value investing; acquiring an asset for less than its value means seeing what everyone else sees and thinking what no one else thinks."
Longsuffering investors will have spotted today’s long awaited announcement from the company’s website:
• Time and date of the General Meeting is 11:00 am on 11 May 2023.
• Completion of the Disposal (and due date for receipt of £2m initial consideration) is 15 May 2023.
• The initial consideration of £2m will enable the Company to fund the transaction costs associated with a reverse takeover, and to provide initial working capital following any subsequent transaction. The Directors believe these cash resources will make the Company attractive for any such transaction.
• Under the SPA, AAG will pay the Company the greater of US$24m, or 20% of the aggregate amount (including all deferred or conditional payments) payable on settlement.
• If the Claim has not been settled or determined by the fifth anniversary of Completion, the Company can serve notice to require AAG to transfer the shares in IMM back to it for nominal consideration.
• The terms of the SPA require that AAG does not remove Peter Taylor as a director of IMM.
• AAG also confirms under the SPA that it has secured funding for at least US$15m to fund the Claim.
• The Board has consulted with Significant Shareholders and representatives representing approximately 40% of the issued share capital of the Company who have instructed the Board, in the event that the Deferred Consideration is received before a reverse takeover is concluded, the entire proceeds (together with carried forward working capital) be distributed to the Shareholders on the Company’s register at the time.
Here’s the real kicker though…
• As at 31 December 2022, the Company had aggregate unutilised tax losses of £18.16 million. The directors will seek to fully utilise the tax losses to the maximum extent permitted by law.
A re-rate of the shares is now inevitable.
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