Member Info for thelearner

I sure hope he is correct. And things calm down - just read through 7 pages of posts!

Well - came home tonight and just started reading board - looked at SP before lunchtime and was 13% down - glad I was too busy to do anything as might have been tempted to buy more - and determined not to. Will hold and watch and hope.
Prop - thanks - I could do with getting leaner :-)

The BOD - if I am annoyed with them at anything as a shareholder - it's always been the lack of accurate projections or plans for LC. I fully realise recommissioning a mine and perfecting a process is not an exact science, and having overly optimistic costings and production targets is very bad if they cannot be met - hence produce realistic ones with a safety % margin built in, and have a firm target for income and what you have to spend.

I think directors have to review the salaries being drawn when the company moves into financial difficulty - especially with small cap AIM companies - as these can bust the companies and lever the shareholders with nothing - but also if BOD do this, I'd also have no issue with a clause being built in to recover what they have given up when profits are delivered. But this is not my world, and I know nothing about this.

I am invested with money I can afford to lose - but it would still be very painful losing the hard earned - but I still have hope.
I have said all along I think Cobre needs plenty attention - it still has potential for more income - and if we lost Cobre it would make things a whole lot worse.

LC - JV would help - but we'd probably have to give a chunk away very cheaply - so if we can fund it with Cobre would be much better.

When I invested, I knew LC had been too tough to develop for the previous owners, and knew I was taking the BOD at their word that they knew how to make a success of this - so the next year is going to be interesting. Redmoor was still in exploration phase - and so glad it has turned out to be looking so good. At least is is an asset with value.
LC - only danger is if the mine owner loses confidence in our ability to move on the magnetite - so really important the BOD are working on this and making sure the mine owner has confidence in them, and we have to hope for a result from arbitration.
I still have some of a SIPP to invest - one thing is definite - not a penny more going into this one. This is always my first investment I look at - off to look at my others to hope for better news, but like many - not doing very well at the moment.

Just came home to read the board - very disappointing - MK - my paper loss is much larger than yours - but I am currently holding on - having purchased more around 1p - really never saw this coming.
I also do the BOD now have a duty to look at the salary bills giving the lack of income and the share price performance - some directors buys would restore some faith - but they recently invested at 1.4p - which bemuses me if they did not have confidence in LC.

Prop - I also just noted your typo - yes I also wish I was leaner :-)

No Problems Prop, I am too busy - working hard, and going on hols next week, still have plenty to arrange!
Investing in AIM would be easier if you had plenty spare time. Watch and wait for me - I've always thought Cobre and keeping it going provides a sound base for the company.
Let's hope when we get news on LC and Cobre it's positive - I've obviously still not mastered the art of buying at the bottom! I have some left to invest - just not sure it's time yet!

I also think the reason for the main Cobre Client's behaviour could play a part in the Arbitration process. If they have not managed to obtain Environmental permits for their plant (the reason we were given for the suspension of deliveries) and have no income, the Arbitration board would surely take this into account, but at the same time the BOD in deciding to proceed I would have assumed have checked the financial health of the main client.

Alternatively, if the main client are in full production and reneged on the Cobre contract as they have found a cheaper or better supply somewhere else - surely this would be viewed in poor light by the arbitrators. But we will never know until the process comes to an end.

Brief description of Arbitration in USA https://www.thebalancesmb.com/what-is-the-arbitration-process-how-does-arbitration-work-397420
and a much longer one which interestingly shows arbitration happens behind closed doors - so confidentiality can be maintained - don't have time to read through all this one.
https://content.next.westlaw.com/Document/I46606fd91c9011e38578f7ccc38dcbee/View/FullText.html?contextData=(sc.Default)&transitionType=Default&firstPage=true&bhcp=1

Fira - I searched but could not find any amount in the financial results or elsewhere for the fee paid for access to the magnetite stockpile and to be able to sell it on. I just found the agreement had to be renewed every year - and I'd imagine there could be some negotiation on the fee - but do not know - the mine operator will want the contract holder to be able to shift the magnetite - and having good performance, and good relations with the mine operator will be crucial.

Hard to believe how much the share price can move with so little trades/volume. I guess it's just AIM. I was very tempted at the new low to buy more - but resisted.
I still think Cobre is very important for SML - I hope the major client issue can be resolved, but if not hope the BOD manage to increase sales to other customers. Yes LC is important, but 2 income streams will always be better than 1.

I also agree with DV/DJH - the board know much more than us - and they were happy to purchase at 1.4p. I have also posted this before.

DGR1980 - completely agree with your comments about the financing of the company. Once the company has received the money from the shares at an issue/placing they are just a tradeable % ownership of the company and assets. If a company needs to raise further finance, it can borrow, or raise more by issuing more shares.

That is why I asked the question some time ago about the definition of Investor or Trader - I invest money in shares - hoping to make a profit - but I am largely a trader. I bought shares in a local investment startup through crowdfunding - i consider that to be "real investing" - the company has used my cash to try and build a business.

The BOD have large shareholdings. They are highly motivated to make the company succeed - as they will gain hugely financially from it. They also have their salaries - which are approved by the remuneration committee and shareholders - I guess if we wanted to make the salary more linked to performance it is up to shareholders to propose this and pass it at the AGM.

The BOD should also have a long term strategy - I do not think they are in the business of making announcements to keep shareholders happy. They make announcements more for the markets - if the company looks good and strong - it will be easier to generate more business - and investment if it is required for new projects.

I hope when they do announce something - it is some good news on Cobre - and something positive about LC. Good luck everyone.

I have already posted that keeping Cobre going and gaining new clients will I feel be crucial for SML. If the major client comes back onboard - fantastic. Just have to leave the BOD to deal with that.

The market for magnetite appears healthy, and from what I read - new uses and applications for magnetite are being found all the time, which is good - also good environmentally is that in most applications the magnetite can be reused, and it can help with processes which should bring environmental improvements to many industries.

I was searching for more info on Dense Media Separation, as this was mentioned in an earlier RNS, and found a very interesting article about what magnetite can be used for - in addition to making steel. Hope some find it interesting. There appear to be many companies going down this route.
https://qmag.com/newsroom/

I read through all the posts - and found DJ saying he was an investor. I am not looking for an argument, but I would say the vast majority of us are traders, not investors.
I say this as we buy tradeable shares on the open market - hoping to make a return on capital increase (no dividends on this one yet). We are buying speculatively to sell and make a profit.

I would class myself as an investor only if I purchased shares at a placing, or an offering where the money from the share purchase goes into the company funds to be invested by the company.

A company's board are duty bound to provide value for shareholders - but in doing so and having nice dividends or capital increase in share price means bonuses and increases in remuneration. If the SP is high, and there is a placing - the firm can raise more money for investment?

Maybe I am wrong - just interested in opinions.

Good luck DVH, I have a fill order waiting just now. Also for trading. Last buy went through at my limit price. Hoping we are at the bottom now.
Again I'd rather wait until we have firm news/plan. Cash Generation and project funding for LC - and LC projections will be key.
Redmoor - I think a JV would be a good option for this.
HC - if we have promising results - also a JV or buy in could be the way to move this forward and get another project going, without us needing to fund it.

Found the RNS - 09/08/18 https://www.lse.co.uk/rns/SML/strategic-minerals-exercise-of-options-allocation-of-new-options-dlfyadv9juauucv.html
Tranche 1 - Expires 30/06/20 - 79.25m shares - raising £2.18m
Tranche 2 - Expires 30/06/21 - 16.25m shares - raising £0.61m
Tranche 3 - Expires 30/06/22 - 7.25m shares - raising £0.36m

Directors also had some nice options exercised in that RNS.

In my opinion - the recent share raise has given the company cash which was urgently needed - due to the cash shortage caused by the combination of the Main Cobre Client not making planned payments, and the purchase of the NAE 50% share of Redmoor - the purchase of which was to be funded from Cobre sales.
We also possibly had a previously unexpected additional capital spend at LC - this is still not clear what on - and the projected ramp up of production and projected revenue/profit also does not seem clear.

This spooked the market and dropped the share price, way below the 1.4p paid by people with detailed knowledge of all that is ongoing with SML - so they must be confident of the strength of the company in the long term.

Dilution - there was always a bit of planned dilution with the issuance of the warrants . From what I read - there have been warrants issued to create a further 128 million shares in 3 batches - I cannot find the dates - the price of the options to exercise these warrants are 5.5p, 7.5p and 10p. These new shares are 9.7% of the shares currently issued - and this % would have been higher when the warrants were issued as this was before the recent raise.
Does anyone have the detail of how much cash would be raised for SML if the warrants were exercised - and if this was for any specific purpose.

Now - there is a risk that unless Cobre sales are sorted out, and LC comes on stream as planned, these warrants will not be exercised id the SP is way below the warrant price. So will reviewing these warrants and the funds they would raise also be part of the strategic review, or are these fixed in stone?

Grateful if anyone could answer this. Thanks.

Earningacrust - thanks for sharing research - I have been trying to research where the magnetite is going also - with great difficulty.
I have looked at the links you posted - but this looks to me like a process to convert landfill waste to solid fuel - and the new plant will generate "high margin revenue of $7million PA" - and for that amount of revenue I cannot see how it would make sense to be buying the volume of magnetite being bought by the major client. The minimum contracted monthly delivery is 4000 tons per month.

However I found an article showing the science in using magnetite as a catalyst for making organic contaminants degrade. Basically degrading hazardous waste is how I read it - although I am an engineer - not a chemist. Interesting.
https://www.nature.com/articles/srep10139

From what I have read, the magnetite sold by SML is likely to require intensive processing, which will yield "an almost pure magnetite concentrate with an iron content of between 68% Fe and 70% Fe that is highly sought after by steel makers. Magnetite ore is of little value in its raw state, but it offers considerable advantages in its concentrated form. The product from magnetite ore is also of higher quality than from hematite ore. The former has less impurities, making it a premium product that can be sold to steel makers for higher prices. In this way, the elevated cost of processing magnetite ore can be balanced out." Source below.
https://www.radiantinsights.com/research/global-magnetite-market-outlook-2016-2021

According to the RNS reports, in 2018 - SML sold 54,565 tons for $3,350,000 or $61.40 per ton. 2017 was 63,681 for $4,032,000 (this was from RNS but SML Report said $5.607m), 2016 was 23,477 for $1,533,000 and 2016 was 13,960 for $946,000. First 6 months of 2019 was 17,611 for $1,395,000. Still not too bad considering no major client.

Hence why I think getting Cobre back on track is one of the key things for the BOD to be focusing on, which I am sure they are., as well as cashflow for future operations.

SML May 2019 final report for 2018. https://www.investegate.co.uk/strategic-minerals/rns/financial-results-for-year-ended-31-december-2018/201905140700098939Y/

Slept on the path I went down with my research - and probably I was way off track - but I was going on magnetite being exported from USA for processing at a specialist plant and being sold on to steel makers in the far east. All pure speculation and probably wildly wrong.

I am still feeling positive in the Long Term.

I also forgot to add that I remain encouraged that directors were happy to buy in at 1.40p - and they have much more information than any PI and would know - I would assume - much more about the Cobre situation.

No psychology from me - check my previous posts - have never said anything bad about this share. Today, it may be tempting, but not much being tempted, not huge volumes but more sells than buys. I bought just over 500,000 recently, and yes I am tempted at this price - but being cautious - worrying about too many eggs in one basket.

Cobre may be a "minor quarter" of SML - but it's the failure of the major client that has in my opinion had a detrimental effect on the share price, and did we not spend much more than forecast at LC? I think re-establishing sales at Cobre should be the priority for the BOD.
We do not know the contract position with major client, although it appears from what we have been told they are in breach. There has also been speculation on the board that we have no funds for litigation, I have posted previously that there is no point in litigation if the other side has no funds to settle, or if our case is not strong and they can tie up the litigation with appeals - which also takes money.
We will possibly know more post strategic review.

And no, not bothered if anyone is interested in my investments - but when I joined an investment discussion forum, I did expect to exchange views - but yes, probably should have done that on the other board, but glad i cancelled the fill order for GGP - dropped a bit today.

I have no interest in persuading others to sell - quite the opposite - I am not selling. I have a considerable LTH. This board is full of speculation. I will not post something without solid evidence. Cobre is what provides this company with funding for the other projects - and I truly hope the board can find other clients to replace the problem "major" client. It might actually prove quite easy.

The reason I have cancelled the fill order is my uncertainty that we have reached the bottom, and I think I should spread my risk a bit more widely. I also cancelled a fill order for GGP tonight - I am going to wait to see what the price does tomorrow. I recently posted I has a relatively small SIPP to invest. Will be in 4 aim shares with potential for high growth - and I am accepting the risk that comes along with that.

It is very hard to find real data on the global Magnetite market using google.
This article from April 2019 https://www.mining.com/web/squeeze-brazilian-iron-ore-disasters-boon-1-5b-magnetite-pellet-project/ alludes to a shortage of magnetite/iron ore due to the mining problems in Brazil with poorly constructed/managed mines and dams.

Hopefully the BOD will be able to find new customers. Researching is hard, but I have continued - I will not post what I have been reading as it's purely speculative, but I think I may have stumbled on something - but I could also be completely wrong - but I am not so confident about getting the $4million soon. Hope I am completely wrong. But what I stumbled on could also resolve itself.
I have a fill order in for tomorrow - I am going to cancel it - in deep enough. I still believe in the company - and hope it all comes good.