Member Info for TarryBreeks

Fira, I think a lot depends on what deal is struck with any partner, what settlement comes from Cobre and what spending is required at RedMoor however you're quite right that it states revenue from Leigh Creek would be reinvested in Leigh Creek. The strength once this is up and running is diversification in jurisdiction, commodity and project stage. We've been unlucky of late but the BOD have, as the name suggests, attempted to create a strategic approach to our projects. If Leigh Creek and Cobre can be self-sufficient and perhaps cover some modest expenditure at Redmoor and CARE then SML becomes a really attractive investment opportunity. The main factor is time for investors and how much time we're prepared to wait for this to come to fruition and of course at what cost in terms of dilution be that in terms of share dilution or indirect dilution of our assets (hopefully that definition is okay for Slurm :) ).

So focus for now is really arbitration settlement and then how that translates into hard cash. Either way we'll need cash to restart Leigh Creek and at the moment the copper price is lower than cash forecasts for Leigh Creek anticipated (5300 vs 6600 / tonne) that said the most recent RNS stated that it was still attractive at current prices. I've not heard anything in relation to my email enquiring about submission of the PEPR - hopefully that's in and once we have it it will last for the lifetime of the mine.

Only 8 working days left in until the end of May and we find out the arbitration outcome. Personally I'm looking forward to an award of the full $21 million in $1 notes followed quickly by a video of JP surfing on it shouting TSUNAMI OF CASH BABY.

:D

Fira, it's perhaps worthwhile reviewing the November 2019 presentation on Leigh Creek which you can find here https://drive.google.com/file/d/1HVbCZRrmBqi9v54xbDxtCO7_cbYtLdiY/view

Focus is on Paltridge North which is where the existing plant is but Lynda / Lorna Doone look much very attractive with lower strip ratio and simpler metallurgy.

Key Points:

- 24,205 tonnes of Indicated JORC compliant copper resource at a cost of less than US$100 per indicated copper tonne
- Three granted mining licenses covering Lorna Doone, Mount Coffin and Mountain of Light (all indicated copper)
- Existing local offtake of 100% expected production, LME based - agreement with AdChem.
- Reactivate production of copper via heap leaching to produce a high grade copper concentrate
- Existing plant provides ability to access early cash flow
- Significant upside potential
- Reinvestment of cash flow to optimise remaining three deposits and develop regional targets
- Management team developed and metallurgical research conducted to confirm economic feasibility
- Project schedule delivers 5,300 tonnes of copper in concentrate (70% copper grade) over 58 months
- Project capital requirement of US $1.7m, with a peak funding requirement of US $4.6m

The presentation highlights the plan to use second hand equipment and to take a phased approach. The main issue with the existing operation at Paltridge North is the size of the copper fines - 90% of the copper is contained in fines of > 1mm so through testing they will wet screen to significantly increase the efficiency of leeching. This will result in the loss of some copper but at a massive boost to efficiency. It seems that this has been the problem historically at PN.

The main issues are the current copper price and the startup costs which are low in the grand scheme of things but we're not flush with cash as you know. Financial projections were based on a copper price of $6,600 / tonne.

On funding from the March RNS "the Board believes that [funding] is best sourced at the project level by either debt, trade related financing, joint venture with suitable parties or a combination of these. "

A good point Hawkmoon, I'm not sure what agreement (verbal, in principle or contractual) is in place for the copper cement as we're not currently producing any right now and I don't remember seeing any detail on that. On a wider point I'd hope we would look to have multiple contracts in place with multiple clients as with Cobre as this experience has shown it's important not to have all eggs in one basket.

How quickly we can get going may depend on the arbitration settlement, let's hope it's a good one. Tick-tock.

A joint venture could take many forms and which is likely to be dependent on the cash settlement we get from arbitration. We need cash to settle Redmoor and cash for equipment or at least enough to cover leases on equipment and supplies at Leigh Creek. So perhaps, as has been suggested here, our copper cement client may pay a deposit: in a similar style to our litigious Cobre client. Or perhaps, as you suggest Fira, we could strike a deal with a company to mine the ground and pay us a royalty although I would suspect such a deal would result in them requiring the lion's share of revenue.

As DV says, we're fortunate to have a heavily invested bod and Cobre covering our overheads but it is important we get a second revenue stream so all revenue eggs are not in one basket.

And of course if all goes to plan we'll be swimming in JPs tsunami of cash ;)

It's tough being down on your investment Blacksheep and can be hard to maintain positivity. We've all been there and many of us are right now with SML. I hope if we can keep the conversation positive the stars may align and that positivity might be reflected in the share price.

One less day till the end of May and an arbitration outcome :)

Look I'm as frustrated as anyone but let's not forget that it was the Cobre client breaking our contract that has led to cashflow restrictions and as a direct result this stagnation in progress. Redmoor is world class; there are some exciting leads at CARE and Leigh Creek has lots of potential. Yes it's going to need more cash and yes the copper price has fallen but we have a full offload agreement for all the copper cement we can produce.

COBRE ensures we're not diluted to keep the lights on. Could the BOD have anticipated this situation - possibly but remember the client has unilaterally broken the contract we have/had with them. When looking at cashflows you typically make assumptions that cashflow from contracted agreements is pretty secure.

WHY were we pursuing Leigh Creek? To bring in a second revenue stream to build cash reserves for further exploration/development at Redmoor and CARE.

Chins up and wait for the Tsunami of cash ;)

We'll soon find out - I've just emailed.

There's plenty of upside, just no news (yet) to drive buyers so we're just drifting along bouncing between 0.5 and 0.6p. Very frustrating. It would be useful to know if the PEPR has been submitted although perhaps were just meant to expect that it has been as per cost cutting measures and limiting the number of RNS updates posted. Is submission of the PEPR price sensitive? Wonder if they'd respond to an email enquiry?

Was there any confirmation, official or otherwise that the PEPR was submitted as per the march update?

"SML is preparing a draft PEPR application to be submitted by the end of March 2020".

Will it be this week or next we get the arbitration update? It would be really good to get this out of the way and move on, hopefully with some cash to kick-start our other operations at Leigh Creek and Redmoor which are somewhat cash starved.

Heck we might even get Dr Golemiester back on the hunt for nickel sulphide! :D

Yep, down for me too. It must have been hit by a tsunami of cash ;)

AIM is all about the herd, I think 2p is very achievable after all we had a sp above 2p not so long ago.

£100m is around 7p, it does seem a long way off but we were at 2p without Leigh Creek so as long as it doesn't turn out to be a black hole as you fear Fira and we can start generating some cash from it I don't see why £100m isn't achievable with income from Cobre, Leigh Creek and an MRE at Redmoor to attract the herd ;)

Maybe we could even bring back Dr Gole from the desert!?

We just need some positive newsflow. A shot in the arm from arbitration could set the wheels in motion for a sustained upward trajectory - we could certainly use one that's for sure.

Depends on the amount awarded ebygum but I seriously doubt it. If we're awarded a large amount this will spike the sp as it would need to be RNSd and thereby increase the market cap thereby Increasing the amount the client needs to pay to buy the company/shares. I also suspect that many of the large shareholders wouldn't consider a low ball offer (neither would I) so what is fair value? The bod had a top options strike price of 10p - is that fair value? Are we at fair value now? Given Redmoor is a world class prospective tin mine as the world transitions to electric vehicles is 20p fair value?

Not ruling it out but in my view it's more likely for the client to just refuse to pay and drag it out through the courts than launch a hostile takeover.

Arbitration is a precursor to litigation (should it be necessary) so we should be able to recover at minimum what is owed excluding damages and loss of earnings. The problem is time - we need cash to settle Redmoor and push Leigh Creek forward. We are fortunate to have steady income from Cobre and that income sets us apart from many AIM contemporaries.

On the seller who knows why they are offloading, sometimes you just need the cash and we are in unprecedented times with covid-19. Our time will come we just need a little more patience; this client has certainly caused a great deal of strife.

Agreed - this isn't what I had in mind, we want a tsunami of buys, not sells. I can't help thinking though it's a disproportionate drop based on the volume. Someone off chasing rainbows somewhere no doubt. Where is Fira with his unflappable positivity?? :D

The trades and chat have both undergone dilution ;)

About time we had some good news. The bod option strike prices have never liked so far away.

Sorry Slurm, my mistake, ultimately I believe the effect for shareholders is still the same but yes looks like my terminology is wrong.

Dilution isn't limited to shares. Shares are a divisor of the assets/value of a company. If you dilute the value of the company by selling some assets that ultimately is dilutive to the value of said shares.

Hopefully we can avoid that, however if it's the only way to proceed then so be it. Where is that Tsunami of cash JP?!

Agreed to some extent but, in my opinion, arbitration in our favour could and would be a precursor to litigation: particularly if it's cut and dry. I think if there is no payment forthcoming I would expect the bod to instruct legal proceedings to begin. If the client has the added incentive of protecting their anonymity then I would anticipate an out of court settlement. A judge would look poorly upon a company that broke the terms of a contract then the outcome of an agreed arbitration process. I would expect punitive damages and costs to be awarded in that case so will likely be much cheaper to settle. Just IMO.