Member Info for tedoby

Thank you for sharing that CF!

I have to say from an Analysts perspective Prem has the best assets and potential I have ever seen!

If ever prem can unlock the value here it'll be just amazing!

Worthy of note:-

In 14 months global lithium-ion battery Megafactories have grown from 17 to 70. In terms of GWh’s capacity has exploded from 289GWh to 1,549GWh – the equivalent of 22m pure EVs.The scale of growth is recognised as ‘unprecedented’, and will have a structural impact on the raw material markets which feed the growth.

For lithium alone, consumption specific to the battery industry is set to rise by a factor of 9. Cobalt, Nickel and graphite anodes are expected to climb 6x, 5x and 9x respectively.Global battery capacity currently sits at 9%.Capacity continues to be swamped by China who are expected to control 65% battery manufacturing capacity by 2028.

GLA sincere holders.

Good question jessell.

For me the new proposal is a no brainer and we need a new leader and BOD's with the right skills to take us forward.

But not until the main agreements are in place.

Thom_1987 with two elements in it's resource (Li2O & Ta205) and a split of the Lithium between Spodumene and Petalite an in depth analysis and valuation of Zulu's current license area is quite complex.

To keep things simple I like to discount the Tantalum & Petalite and just consider the Spodumene. I've looked before and the Ta205 and Petalite and they more or less cancel each other out anyway.

From the floatation tests the Spodumene will be >6% Li2O so it will be battery grade. Take also the conversion factor of Li2O to LCE which is 2.473 as 2.5 and the target resource based on the EPS as 100mt's for ease of maths and the calculations start to become more ones of mental arithmetic.

So if we use $1000/t >6% Spodumene as being a current off-taker rate which I think is about right and we assume an annual ROM less than Zulu's peers at 2mt we get a production figure of 20kt's of Li20 p.a. given the average grade is 1.06% which converts to an annual production 330kt's of Spodumene .

From there we get to an annual Revenue of $330m and with AIC's suggested in Zulus EPS of no more than $130m p.a. we arrive at an annual net profit of $200m. Finally based on an earnings metric calculation with a P/E of 10 we arrive at a notional Market Cap of $2bn or £1.6bn at current the exchange rate. But all at todays prices!

For me I'm not quite sure what the condition of the road network is like between the mine-site to the nearest rail link in Bulawayo. That may mean shipping 330kt's of Spodumene p.a. is ambitious without some Capex needed for infrastructure improvements. But as i say i'm not sure.

On the other hand my calculations are based on today's prices and were told by by analysts who know much better than I that the LCE price will more than double in three years. So overall my estimate of £1.2 is reasonable if not overly conservative.

I'm not sure what the EPO area looks like on plan but an area that size might lend itself to having two or possibly more production areas. Of course the future step change will undoubtedly be the production of Carbonate in lieu of Concentrate which is far more lucrative and again it could be an on-site production plant on a site on that size rather than having to ship it to shared the facility currently under construction in Bulawayo.

Anyway I hope some of this helps but clearly Prem owning 100% of it looks attractive under the new proposal. Very attractive indeed!

AIMHO

NaPoM that's an excellent post developed from excellent research which no doubt comes from being in a group.

Can I ask if you know when the committee sits to consider Prems application please?

Thanks for posting.

Johnos I agree with you. I think we'll here news that Circum has the necessary debt finance quite soon now.

An equation needs to be done to see whether it's better to keep the shares or liquidate them. I'm not sure we hold all the cards yet though..

GLA sincere holders.

shaun86 I realise Zulu should be worth more but I was using £1.2bn figuratively and for ease of maths.

GLA sincere holders. To

I agree CF!

The deal RNS'd will be more beneficial to Prem shareholders if accepted. More beneficial by far!

Simply take the case of Zulu. Yesterday we were looking at retaining just 50% of it's value. Under the new deal we will be holding 100%.

In numbers and for simple maths let's assume Zulu will have a Market Cap £1.2bn in three years time. Let's also assume the number of shares in issue will be 10bn under the old deal and 12bn under the new one.

Under the old proposal our shares would be worth 6p i.e. £1.2bn x 50% ? 10bn = 6p and under the new proposal our shares would be worth 10p i.e. £1.2bn ? 12bn = 10p. That's virtually double!

This proposal must be a no brainer surely!

GLA genuine shareholders.

Excellent post knicol!

Many thanks.

One of the most important ratios to consider in these redical changes is the "future shares in issue v future market cap" in my view.

If your're convinced the ratio will be improving as a consequence of the changes then you should consider buying and if it shows signs of it worsening then you may want to be selling. The situation and calculation are slightly complex but the maths isn't.

AIMHO

GLA genuine holders

Cherry burn. I emphtically disagree. The size of the resource will always have an influence on a stocks valuation. A considerable one at that.

It's all to do with "optimisation " of the asset and the benifits of economy of scale. If you believe otherwise in the your mind must be closed to such reasoning.

Although I could go into a more detailed explanation from reading your posts I doubt with it would be worth the effort. To savvy investors however the principle is easy enough to grasp and needs no explanation.

Whatever is niggling you (and I guess it's your losses in this) its restricting your reasoning and for that I feel sorry for you if that's the case.

Its time you sold and moved on if you're feeling negative I think. If you still have a vested interest that is.

If it's any consolation and encouragement try telling yourself only idiots denigrate the stocks their invested in.

Good luck whatever you decide.

Thanks fatsuperman.

It's often the best way of looking at it!

jessell your posts are great!

The last one really maDe me laugh. Seriously! !

steward1 I like your post! I like it a lot!!

RNS tomorrow?

GLA serious holders.

Thanks NaPoM! Your's in an accurate and realistic assessment in my view!

Good luck!

Don't think so this time - "Grumpy"!

Professor G I'm not sure there is a professional Analysts view of what you're looking for. But I posted these comments based on my own thoughts a few days ago some of which you may find of interest.

An indication of "material" needed to assess the quantum and timing in Circums case is now given on their new website. If you're imagining raising the debt finance needed in the Capex mix could be a spoiler you should bear in mind the project's resources is one of the largest in the world and the export markets Circum is targeting. Those close to Circum will be aware the team were in India a few weeks ago and I doubt very much they were there on holiday. It occurs to me India would be very interested in an off-take deal with debt finance involved and is more than capable of making an offer to cover that part the overall Capex needed even if it is a total of $1bn. But they won't be the only interested party I'm sure and there's no doubt Circum have put together a team well capable of making it happen with whoever may be interested.

A "fag-packet" assessment of what Circum might be worth to Prem when it IPO's tells me it should be between 0.20p to 0.25p a share. I've calculated it by discounting a value three years out at the ens of phase 4 which is one of the milestones on Circums website. The other dates given on there indicate there's has to be a corporate action of a kind very soon now if they're to be met.

A reasonable estimate of the value of the Danakil mine at the end of phase 4 then in three years time when it's forecast to produce a total of 3.5m tonnes of SOP and MOP in my view suggests a MC for the mine at that point of somewhere between $3bn and $4bn at todays prices given cash costs are forecast be amongst the lowest in the world. Working back from that at a high ROI of say 40% tells me that a very attractive value of Circum of at the point of IPO should be around $800m to $900m especially if the debt finance is agreed for the project beforehand.

Undoubtedly there's a good chance Prems holding will be reduced in % terms in the IPO process. It would be naive to imagine otherwise. I have it reducing to around 3.3% down from its current 5% or thereabouts. Capex for the project is set at $1bn with any further development after phase 1 being financed out of WIP/production if needed. $230m of the Capex has already been spent on infrastructure therefore leaving a balance of $770m to find. Assuming a 50/50 split between debt and equity finance is reasonable that would give Circum a need to release $385m in equity which is where my calculation of 3.3% as Prems revised holding comes from and that holding should in theory remain the same unless Prem chose otherwise.

So perhaps a reasoned contribution to Prems MC at Circums IPO could be around 0.22p being derived from a value of $900m x 3.3% applying todays exchange rate and perhaps as much as 1.2p by the end of phase 4 in say three years time.

AIMHO

Charlie FWIW I think as a Private Company Circums new website is a good as any RNS from a Pulic Company. That's one of the reasons Prem are directing investors to it.

The timing is laid out in some detail on there and the milestones tell us there has to be a Corporate Action soon if the dates are to be met. Very soon!

Anyone dismissing Circum at this stage is in denial and are about to be proved wrong in my view. I think we'll hear that Circum has agreed a debt finance deal before the CA and that news could land anytime now.

Mind the gap on the news!

AIMHO

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I couldn't agree more IQ157!

Darkelf if you wait for evidence or news when investing in AIM you'll always be behind the curve. I'm reminded of the adage "buy on the rumour and sell on the news".

An indication of "material" needed to assess the events and timing in Circums case is now given on its new website. If you're imagining raising the debt finance needed in the Capex mix is could be a spoiler bear in mind the project's resources will be one of the biggest in the world and the outlets Circum are targeting. Those close to Circum will be aware the team were in India a few weeks ago and I doubt very much they were there on holiday there. It occurs to me India would be very interested in an off-take deal with debt finance involved and is more than capable of making an offer to cover that part of financing the Capex needed even if it is $1bn. But they won't be the only interested party I'm sure than there's no doubt Circum have put together a team capable of making it happen with whoever may be interested.

Likewise indication of "material" needed for the events and timing on RHA has been RNS'd and is supported by the inaction of not trying to induce an outcome via an alternative route. That inaction indicates to me that negotiations with the Government must be closing.

Circum comments

A "fag-packet" assessment of what Circum might be worth to Prem at it's IPO tells me it's between 0.20p to 0.25p a share calculated by discounting a value three years out which is a milestone given on Circums website. The other dates given on there indicate there's has to be a corporate action in Circum very soon now if they're to be met.

A reasonable estimate of the value of the Danakil mine at the end of phase 4 in three years time when it's forecast to produce 3.5m tonnes of SOP and MOP in the ratio stated puts a MC for the mine then somewhere between $3bn and $4bn at todays prices and given cash costs are forecast be amongst the lowest in the world. Working back from that at a high ROI of say 40% tell me that a very attractive value of at the point of IPO should be around $800m to $900m for the project especially if the debt finance is agreed beforehand.

Undoubtedly there's a good chance Prems holding will be reduced in % terms in the IPO process. It would be naive to imagine otherwise. I have it reducing to around 3.3% down from its current 5% or thereabouts. Capex for the project is set at $1bn with any further development after phase 4 being financed out of WIP/production if needed. $230m of the Capex has already been spent on infrastructure leaving a balance of $770m to find. Assuming a 50/50 split between debt and equity finance is reasonable that would give us a need to release $385m in equity which is where my calculation of 3.3% as prems revised holding comes from.

So perhaps a reasoned contribution to Prems MC at Circums IPO could be 0.22p being derived from a value of $900m x 3.3% applying todays exchange rate

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Zulu comments

I don't want to go into detail on this one but regardless of the outcome of the current EPO application Zulu should be regarded as the "Jewel" in Prems or Newco's crown. The application first appeared in the Gazette almost four weeks ago and the Mining Committees decision on it should be no further than that away now. If the application is approved in its present form or only slightly amended it will be transformational for the project. Truly transformational!

I know a lot was posted about the news article relating to objections raise this week the main one being the impact on residential areas some of the 11 EPO's may have. I can't add much to the excellent constructive comments made this week and I'm very grateful to those who shared their views and relayed GR's comments. That is other than to say I believe GR was with the MOM last week at the Indaba Conference and it's inconceivable for me to think those objections weren't discussed given they were lodged in a letter from the Federation to him on 28th January. So as I see it GR's comments will have been well founded. I also think that Zulu may not have been one of the companies objected to on residential grounds. Prem were very careful to stay clear of residential areas in their application I believe. As GR said objections on economic grounds and other minor ones linked to womens rights are obviously weak and spurious in this case. The EPO process in Zimbabwe and others like it are a legal process that almost invariably attract objections in one form or another. I think it would be fair to say it would be unusual not to have objections rather than to have them.

Even without an increase in the licensed area Zulu should be capable of producing 250kt's of Spodumene and Petalite concentrates in around three years time. So very roughly that should give Zulu a MC of over $1bn at today's prices and perhaps double that if what most of the experts are right with their forecasts for Lithium demand and prices.

So in it's minimalist form the value of Zulu is capable of being more than six times that of RHA and possibly ten times Prems holding in Circum at any point but never more so than when considering them all running in a steady state.

AIMHO

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We have been told that both Prems and KME have completed their DD and regardless of the Governments position both have agreed to proceed to a formal framework agreement. We were also told that when all conditions are met, the transaction will result in a direct distribution of Newco shares on a pro rata basis to holders of Premier shares when shareholder consent is granted, and Newco shares are admitted to trading whilst at the same time retaining their shares in Prem which effectively will be Circum at the moment.

Both parties have shown signs of considerable confidence in starting the formal process before the official sign off by the Government and at the same time the parties have effectively removed the Governments protracted action off the critical path. So as it stands although it’s frustrating right now it’s simply not affecting Newco’s time-line.

Drilling and mapping the mines resources has been on going and Prem must now be in a position to be able to complete a comprehensive analysis if that hasn't been done already. That will no doubt be critical information needed for in the Newco process which along with RHA’s revised ownership confirmation should allow a fair valuation to be assessed for the mine.

From what’s been identified at RHA and can be extrapolated within reason from that data we know that the ore strike in the pit runs generally on a line of latitude with grades being the weakest furthest from the underground shaft but improving significantly in a direction towards it We also know that the grades improve significantly again as the deeper ore blocks are identified both in the pit and in the underground mine.

What the current Bara report and the minimalist cost appraisal tells us is that taking the worst case scenario the mine can be profitable at today’s costs and values even if ore was only extracted from the exposed ore blocks in underground mine and nothing more. As far as it goes the report has done exactly wat was called fal and nothing more. This is a really important statement shareholders need to appreciate. I read the BB’s often and I'm not convinced many do. Most generally with a negative view prefer see it as indication of the mines annual profitability. But it's not fit for that purpose and it can't be used that way. It simply allows RHA to say “ even if we only extract what we see here the mine can still wash its face or even show a little profit” or words to that effect.

A much better guide to the mines potential can be gained by considering what's been agreed between PREM and KME and been given in their Heads Of Terms Agreement along with Prems Mining Plan as far as we understand it.

So the drilling campaign will have enabled the ore bodies both on plan and depth to be delineated and that information will be vital in helping a reasonable valuation of RHA to be made, But perhaps more importantly to enable the design of the new pit walls to be finalised and to develop a best value m