Member Info for tedoby

2857mal it is strange isn't it.

But I guess you're not complaining!

Mr Magoo31. Thanks for commenting.

I didn't realise that and it could make quite a difference.

Can I you tell me roughly how far from the mine it is please?

Had dad I tried to make the adjustment here:- ". From there using a P/E ratio of 10 we get a Market Cap of $3bn for MauCo based upon an earnings metric and if Prem enters a 50/50 jv we therefore get to a notional contribution to Prems MC of $1.5bn."

"logarithmic curve"

K12bya well done! I agree the SP looks to be very near the bottom at the moment. It should very roughly follow a logarithmic cure from here and if it does you will have timed your buy this morning very well.

So just taking Zulu into account from the Webinar we know that Prem are supporting Cadence going through their due diligence at the moment. We also know that the plan is for MauCo to produce Lithium Concentrate initially as it's the quickest route to market. But then move on to produce Lithium Carbonate which is far more lucrative. Those close to the company will also know that moves are already being made to increase the licensed area by as much as two or three fold. All very positive moves

As far as I can tell the main restriction to going the Condensate route will be the logistics in transporting the material from the mine to the rail terminal in Bulawayo. To my mind I can't see it being possible to transport more than around 250kt's/annum given the lorries can carry 20 tonnes.

If that's right and keeping the maths simple 250kt's of Concentrate will be processed from around 1.5m t's of ore at a 1% grade producing 15kt's of Li2O and from there the 250kt's of 6% battery grade Spodumene Concentrate.

Current off-take agreements for 6% Spodumene are being entered into at prices of arround $1,000/t. But according to some analysts those prices could treble over the next two to three years. Being conservative if it doubles then the revenue to MauCo during the short Concentrate period would be around $500m annualised. With no Corporation tax to pay the 2% Royalty makes little difference to the calculation and I believe the credit for the Tantalum would easily pay for the small loss attributable to the Metallurgical Recovery rate so no adjustment needed here either

So with annual revenue at $500m and costs adjusted from the scoping study we could be looking at an "earnings" figure of at least $300m. From there using a P/E ratio of 10 we get a Market Cap of $3bn for MauCo based upon an earnings metric and if Prem enters a 50/50 jv we therefore get to a notional contribution to Prems MC of $1.5bn.

Finally if Prem has 9bn shares in issue Prems share price contribution form MauCo in the short period Lithium Concentrate is being produced would be $0.165 or approximately 12.5p at today's currency exchange rate in around 2 years time.

Be that as it may as I say the Carbonate route is more lucrative by far.

Yes thanks CF for the feedback!

It's very much appreciated.

CF73 That isn't and never would be a problem!

We're here for the same thing and share the same hopes!

As far as Prems cash position is concerned it's interesting to note that Zulu Lithium Mauritius Limited ("MauCo")
start to repay its $4m loan from Prem "Premier Loan" together with any interest on receipt of the Investments Amounts from Cadence Minerals Limited in accordance with the payment schedule on a pro-rata basis.

Quote:-

"The Parties have acknowledged that at the date of the Heads of Terms an aggregate amount of US$4,064,374.88 has been advanced by Premier to MauCo ("Premier Loan") and the Parties have agreed that the Premier Loan and any interest due under the Premier Loan will be offset on a pro rata basis against the Investment Amounts paid by Cadence to MauCo."

So MauCo will obviously need to pay for the work to get to the DFS as well as the loan. But that explains the difference between costs suggested for the DFS of just over $2m six months ago to the latest of just over $5m. The 5m investment isn't just to cover the cost of the DFS it's to pay back Prems loan too.

The repayments should make quite a nice contribution to Prems income and more than likely negates to need for dilution in the near to medium term especially given Directors have now agreed to take their salaries in equity. That is other than any release that are accretive and that may be be required for growth of course which no savvy and intelligent shareholdrs should object to.

"Indigenisation Law"

cherryburn "Whats to say that the Govt wil notl want 30% free carried ?"

The new Indiginisation Law enshrined in the new Finance Act!

So Wolf:-

"Out of the ashes rises the Pheonix" might well come true in this case after-all,,,,,

GLA

Thanks for more details Wingnut.

What I'm trying to say is that if you had 1m shares and your loss was about 0.5p/ share your overall loss wouldn't have been £52k.

You may have meant you had 10m shares though.

anyway whatever your loss I hope your able to move on.

Wingnut from your post at 8:16 this morning:-

"Average 0.84 sold at 0.32 just over 1m shares,52k ish"

Do the maths again and perhaps you won't feel quite so bad!

Losses are never great to accept but I hope you can move on.

GLA

Silverlight I sense you know this well but you touched on one of the two very important measures of any company's financial status in your post at 9:08 today. Prems long term assets far outweigh it's long term liabilities and therefore on that metric Prem is in fact in a much stronger financial position than many of its piers on AIM and some investors realise.

As you no doubt also know the second significant metric that's required is the ability for a company to pay it's debts as and when they fall due. Prem has always been in a very strong position on this score too given it's ability to raise finance as and when required and having the ability to liquidate assets in a very short period if it ever needed to.

Any company failure spoken about just because of RHA being mothballed was naive never really a genuine concern in my view.

GLA

Thanks for sharing that Wolf.

I'm taking that as good news then.

Thanks for the links Lockedin. Very interesting.

I had wondered which one of the two "sign-off's" will come first. The Governments or Auditors? Now as times going on I think we'll see the accounts signed off first. We'll see.

While we wait I also think its interesting to note that Zulu Lithium Mauritius Limited ("MauCo")
start to repay its $4m loan from Prem "Premier Loan" together with any interest on receipt of the Investments Amounts from Cadence Minerals Limited in accordance with the schedule on a pro-rata basis.

MauCo will obviously need the investments from Cadence not only to pay for the work to get to DFS but also the loan. For me this explains the difference between cost estimate suggested for the DFS of just over $2m to the latest investment heeded of just over $5m. The 5m isn't just the cost of the DFS it's the sum needed to pay back Prems loan too.

The $4m+ Prem Loan to the newly formed ("MauCo") represents the amount Prem Afr have spent on the Zulu project as as 26th June when Heads of Terms were entered into.That expenditure now sits as a loan from Prem to MauCo on MauCo's books

The parties have agreed that Cadence's part of Prems Loan (say $1.34 + interest) will be paid to Prem against the loan out of their stage payments. So out of the first one on $1.5m roughly $375m gets paid to Prem and so on. This could represent around $1.3m income to Prem from MauCo over the year or whatever the stage payments are spread over.

The repayments should make quite a nice contribution to Prems income and more than likely negates to need for near term dilution other than any that may be be required for growth which no savvy investor should object to.

The decision whether to go the concentrate route or the far more lucrative carbonate route long term on Zulu seems to a no- brainer in my view. Initially I we'll see Zulu go to market by producing concentrate simply because it's the quickest. But from there we'll see carbonate being produced as quickly as possible. Exactly as Prospect intend I believe

From the PEA and before that the Maiden Resource Statement ( SAMREC compliant and independently validated) it's not difficult to foresee Zulu producing between 50kt's and 75kt's of LCE from a ROM of around 2mt's of ore a year once running the carbonate production route.

The conversion factor from Li2O to LCE is 2.473 and assuming the Tantalum credits are in balance with the recovery adjustments for Lithium Zulu could enjoy an annual revenue of between $1,25bn and $1.9bn. (50,000t's @ $25k/t and 75,000t's @ $25k/t). The current market price for LCE being around $25,000 / tonne. I've used that figure but that's forecast to double by the time the mine becomes operational

Excluding tax and royalties etc. and from low Cash Costs and AISC's annual AIC's should be no more than $250m which if about right would give the mine an "earnings" figure of between $1bn and $1.65bn.

Then assuming a 50/50 j.v and a currency conversion of $1.3 to £1 we're looking a notional "earnings" to both parties from Zulu of between £385m and £635m.

It follows that using the "earnings metric" valuation method and assuming a P/E ratio of 10 both parties could therefore enjoy a Market Cap contribution of between £3.85bn to £6.35bn.

I imagine finance will be a cocktail of equity and debt and involve the jv's support and perhaps off-takers loans. So lets say there's 10bn shares in issue for Prem that would give Prem a SP contribution from Zulu of between 38.5p and 63.5p before tax, royalties and off-takers commissions and possibly as much as 25p to 40p net. But as I say that's based upon a LCE market price of $25,000/tonne but the forecast is for that to double in three years. If the forecast is right we could be looking at a SP of nearer £1. That's how valuable and lucrative Zulu could be and a measure of the opportunity here.

Finally if Zulu gets to a DFS within a year and approvals aren't a problem then we could see the jv getting to Commercial Production and achieving around these numbers within the next three years.

GLA

degsie thank you.

The hard rock resource at Zulu has the potential of being one of the largest in the world.

The scoping study was based upon just a fraction of it. Initially we'll see the lithium being sold in concentrate but then later and as soon as possible we'll see carbonate being produced I believe.

The potential is huge and KDNC should do very nicely out of the jv.

GLA

I'm sorry to say I don't know very much about Cadence other than what I've read recently.

As an investor in Prem I do know a little more about it's lithium opportunity in Zulu or "MauCo" as it's now called.

Can I ask what Cadence investors think of the jv please. Do the pair make strange bedfellows or could it be a marriage made in heaven?