Chris Heminway, Exec-Chair at Time To ACT, explains why now is the right time for the Group to IPO. Watch the video here.
Sometimes the story is about the company and sometimes it is about the people who have invested in the company. I'm happy to bare all and say I've lost money in the past investing. 'Keeping the faith' is great on bulletin boards like this, especially when a share price drifts down and down, but sometimes you need to look at reality. There was the expectation on this board that there'd be some value added to the company when it got the licence, and well, the markets didn't agree. And why didn't they? Because of risk. The risk the company doesn't deliver. That's the bottom line. This isn't Anglo American with hundreds of millions in the bank. It's a small exploration company hanging by a thread. And when the thread is just about to snap, a big company steps in and buys it all for a song. Seen it before and will see it again. There's no doubting Kurt's mining credentials. And the value of the asset. But those don't make a world beating mining company. It's being able to play the politics of the square mile, to get people on board, to mitigate risks of the whole thing being turned over in an appeal court a few months down the line by getting the opposition on board. The potential HAS been priced in. Don't kid yourselves that you're smart and have spotted something that others haven't. BEM's a nice company and you're nice people (on the whole, I'm sure I'd buy you a drink down the golf club), but you're going to be waiting some time for the mine to come. It will, but not many people think Kurt is the guy that's going to deliver it. Unfortunately. And that's why the SP is low. Anyway, good luck guys.
I'd imagine the LEAP IPO will be delayed because of events in Ukraine. We've moved from crisis management to a long term strategy vis a vis Ukraine, so that'll settle things a lot, but it was the crisis management period that I expect will have caused the delay. I'd expect perhaps October.
I don't know if anyone else has been following the CBX debacle over its selling of "ingestible" products? I have to admit it doesn't look like a well run company in the least. I'm glad we're a little distanced from the risk players in this new industry are exposed to via the experts running SEED. It's good to have people like Alfredo on board to filter out those risks on our behalf. I'd have never spotted that compliance risk that CBX exposed themselves to. And neither did they!
Midas - I presume that by 'steady returns', you mean a return on investment that is perhaps only two or three times the original, - or of a number of millions under ten, rather than the twenty-fifty million that is expected from LEAP?
I'm disappointed with the share price rise. I was hoping for another six weeks or so of SP in the doldrums. I'm in the process of remortgaging and had a few quid extra on the remortgage with a view of making some easy money here. With any luck, it'll retrace to 4p or so before the LEAP IPO. I'm increasingly feeling that it'll turn into a liquidity event with a decent re-rating upwards. BTW Mat78, your link doesn't work - LSE have hidden part of the link (before the dot co ).
Scanning this morning's news, I see Acceler8 Ventures have their results out today (ahem, doesn't look like anything has happened since they've launched last year as an investment company set to take stakes in high growth companies, including gaming). It's almost like FFWD but in miniature, even in name! I'm definitely not invested in there, but point it out as an amusing aside, and to say that we aren't alone!
Suzy2 - apart from pointing out the issue around capital letters, you haven't explained why my comment was "unacceptable". You have attempted a rather weak insult though. Should I read something into that? Is it because you know it is entirely acceptable and I "won"? Perhaps you should stick to part time English teaching or whatever it is you used to do rather than engage here, 'defending your investment'. You're making a poor job of it. And you're rude to other posters.
It ......is.......so.........frustrating.........just .......waiting........and.......waiting......and .......waiting.
I can't make out why others PIs don't buy into this in their droves! It looks a steal to me. Low risk, high growth. What can go wrong? And regardless of what Ed does with the £30M or so we get from LEAP, it'll still stick a rocket up the a++e of the NAV here, making it look even more ridiculously underpriced. Ed may make a bad deal of LEAP, but it'll be a bit obvious if he does. The longer we wait, the more time we have to dream up what we think will be a fair valuation, and then only to be disappointed.
Was the sale of EMMAC under value too? If so, by how much?
By the way, great posts everyone. I've chosen my villa in the south of France, to which I'll invite you all for a bbq and throw in flights (easyjet I'm afraid. I'm not a large holder here).
Great post TFE. As for Suzy's 'he tried and he failed', that pretty much says it all. If you give up, the failure is on you. The failure isn't on the Sami. In success, there is no such thing as giving up. You persist. You find other ways. You don't turn around and say "I gave it a go but they refuse to talk to me so I'm not going to try anymore"! Mo Mowlem never said that. Can you imagine what the world would have been like if she had turned around at 7pm in the evening and said "Ok, I've given it a go but it's never going to work, so I'm going home to watch Netflix". With Kurt's approach, what makes him think that he'll have more success in talking to the Sami now? Things have got worse for the Sami now, not better. If I was Sami, it's at this point that I'd dig in and really resist! I have nothing to lose and absolutely everything to gain. At least pre-award, I knew I could have lost the argument. And all of that is going to turn off potential investors.
It would be hard NOT to be in talks at this stage. All it takes is to pick up the phone and call around a few mates. It really doesn't mean much. But I do get the impression that Kurt looks at this board, and so, good on him for listening and responding. You won't be able to raise enough with a placing to build a mine. More likely there'll be a reach out to private funding. But there will be a placing to raise funds for ongoing running costs. Hello dilution. That's why pace is important at this stage. You don't want the company to go under before it gets a chance to realise the asset. And at the very least, you need to tip your hat to Kurt for acknowledging the need for pace at this point in time. In terms of timing, even if he got the funding tomorrow, it'd still be at least 30 months before the mine is productive. AIM directors make promises about jam coming very soon all the time. Don't believe them. He'll be doing well to get a plan in place, with half the funding within 12 months. But then there are all those that still oppose the mine. . . . . . . . . . Unfortunately, Kurt was waiting for the political bosses to say yes, rather than work, work, work at the relations with the Sami. He said he's going to work at mitigating those risks starting from now, but it's later than he could have done. Again, time lost.
I don't think anyone can doubt the value of the concession. I think you can doubt whether Budge 'delivered' the concession. It felt that he was a bystander to me. And finally, I'm not sure why people think anything is going to happen before Christmas? Isn't there going to be a 'feasability' study produced then? And once fully funded (if Budge is able to organise the funding - you can't just be a bystander for that one!), it'll take at least 30 months before production starts. So all in all, nothing before 2026, and that's a best case scenario! Add on top of that the fundraising that'll be ongoing. And risk of course - the risk that it simply doesn't attract funding. It's been a really rocky road to this place. And are there going to be legal challenges, further complicating matters? What big investor is going to want to buy in before it's all cleared up? Small miners like this carry so much risk. That's why they're so cheap. It isn't because you're smarter than other investors and spotted a bargain. It's because of the risk involved before they actually pay off. I'd say this is where the trouble begins. It isn't where it's ended. Good luck if you stick at it to the end. You may make money. But of course, you may have made a lot more money elsewhere.
Congo is a nightmare to operate in. Political risk is stratospheric, meaning physical risk to staff stratospheric too. You'd need ultra-high reward to make it worthwhile. Morocco is quiet and stable. Great investment environment. Take a look at Morocco's neighbour's in transparency international's corruption index to get a feel for the risk. And then look at Congo! Chalk and cheese.
Eric, I wish you the best. I know you've stuck at this a long time.
Suzy - I'm flattered you think my posts are worthy of re-reading by anyone. But I think that if anyone has time enough to read War and Peace, they're better off doing so rather than my posts on LSE. All I'd say to anyone is make up your own mind. Never, ever, make an investment decision based on what others are saying - there are plenty of people out to "protect their investments" as I have been told on this board, and there are plenty who have some other motive for wasting their time posting here. No one really knows where the SP will go, and if it was that easy, we'd all be millionaires doing better things with our time. So you need to make your own decision, and sure, work out who has the best argument on the board if you wish to. Good luck.
Hi borg. It's a fair question. To be honest, in my experience, AIM share price is pretty random and rarely really related to things like NAV or other concrete indicators that you'd find in a text book (though that's perhaps because I tend to look at early stage companies like BEM). You're right, it could be any of those. Or it could be 6p. But the point is that the trend is definitely down until Kurt announces what he's going to do with the asset, which isn't until December at least as far as I can see. As more people bail out, with a lack of a clear direction, fear sets in. Fear of missing out of being able to sell your shares at this price again. Fear that the company will run out of money and not be able to raise more (it isn't easy) so you end up with nothing. Fear of a fresh dilution, and at a lower price at that! Fear of new risks emerging. And so because of this fear, you bail out - and then there's a self fulfilling prophecy. The SP continues its downward trajectory. There is no doubt about the value of the asset that BEM is sitting on, but then again, the same was true of Sirius. But if you look at EML, the financing model to bring mining to fruition is clear and realisable, though they're (also) being given a really hard time by AIM, though slightly less so. Plenty of other examples exist. As well as examples of companies where the board gets it together and all of a sudden you're faced with a proper re-rating (not reliant on speculative shareholders buying in because of sentiment, eg Serica is a good example from a few years ago, from 7p to 140p, another extractor fraught by family tragedy but a really great board). But there is nothing at all with BEM in terms of direction. Squat. And that isn't the fault of the government, the Sami, the resource, nor the shareholders. I have to admit that BEM appears to be reasonably well run, but there's just a lack of spark at the top and perhaps expertise in pushing things to the next level. It's a little odd not to have completed at least, say, "preliminary discussions with a partner to deliver a working mine" by the time the concession was awarded. So that doesn't generate confidence. I don't think the fundamentals are all bad (except for the fact that it is basically burning cash with no clear indication of where the next cash is coming from aside from fresh fundraising/dilution and that cash will only be used for running costs. I think it's got enough money for eoy 2023, so fundraising is around the corner - and the question is what price will that be?) The discounted fundraising price will determine the SP at that point, so as far as I can see, the only question is whether to bail out now and buy back in at that lower SP, or perhaps a week after the price has settled - and then only if you believe the company will deliver on the resource? Anyway, we all have our own strategies in dealing with AIM. I hope yours brings you the prosperity you are seeking.
Whilst your question isn't directed at me Eric, I would like to comment. I have an enormous amount of sympathy for Roller and other shareholders here. Like others here, I am disappointed at seeing a board not on the front foot.
Anyway Eric, the idea that there is engineering in the SP drop is fanciful. The idea that MMs manipulate prices or, as you suggest, a company is engineering price drops, is absolute nonsense. The SP drop is about three things: (1). its about sentiment. People jump in when they think others will jump in. They have not much understanding about the company's management and want to make a quick buck. It's inevitable that when the SP drops, they will bail. (2) Its about better opportunities elsewhere. Budge said nothing much would happen before the end of the year. So those investors jumping in on sentiment created late last year around the Swedish government know there is absolutely NO reason to hold. Nothing to drive the SP up will happen until at least December. Better opportunities elsewhere. (3) Its about weak leadership. We all know Kurt is a nice guy. He knows about geology and mining. But he doesn't really have the drive or passion to make this work. He loves investors who are undemanding because it means he can do what he wants, which, lets face it, isn't particularly passionate. He tends to ignore tough questions and is more like a leaf floating down the river. One of the few reasons BEM still exists and had funding is because of the small number of passive shareholders.
Personally I'm expecting the SP to drift back down to at least the 4p level because of the above. It will go up one day, but only if it survives long enough. Many companies have great assets, but they mean very very little if you don't have the funding to exploit them. KB may get the funding, but that'll be somewhat random given his performance so far. So how long until BEM run out of money and go cap in hand again to shareholders? And if that happens, why on earth would anyone bail them out if they haven't yet worked out a plan to exploit Kallak? When that funding failure happens, it'll be an attractive buy for LKAB, perhaps at 4p per share.