Member Info for Tornadotony

Doubled check on historical VAT owed for repayment in 2022 annual report was $20.3M. The value of West Kenya is currently 30% of the company. 70% is worth £73M or $93.44M. This equates to $15M which is still $5.3 less then total VAT owed.

I supported all board members as they backed each other up. My life experience tells me if a lot of folks have given someone a second chance to do well in the future and the recipient knows deep down they could have done better, the probability of good delivery next time around is usually higher. Tony

I am hoping future guidance holds and that AISC costs are on or below target. If they can update on exploratory drilling progress in Egypt that would be helpful and confirming reserves and resources to be updated in December.

In the meantime we get a positive CB confidence report trying to push up USD and pull down gold. However, reading the report shows USA families reducing spend on holidays, going to restaurants and gambling. However, they are spending a lot more on health and doing repairs within their homes (the idea of moving somewhere in the current market with a high mortgage deal looks bleak). The report suggests recession in Q4,but the optimism mainly arose because those on $100k a year or more are doing better which is certainly not the case in other income groups (something similar being seen in the UK). More low paid jobs arose in July which is usual prior to hurricane season (Stand-by jobs on retainer contracts).

The drop from 13 to 11.5p was a result of gold price falling. 11.5p to 9p was Odey selling.

The Tanzanian government owes $25M in historical VAT payments that were not paid back which is far greater than 16% of the value of the company. They apparently acknowledged that money is owed. They also owe VAT repayments from Q2 that have not been processed as repayments yet.

Put things right! not write.

The presentation yesterday was mainly covered in the paper documents from the company. Brian Tenner has in my opinion pleaded naivety on what he put out on 6th January. However, he is paid quite well not to be naïve. The Board Chairman has backed him to the hilt after he and others clearly saved his backside with the second RNS on 9th January. Regardless of the low model argument it was up to all of us to be more cautious. When a CEO gets all that help, it is expected they work very hard in the future to put things write. If his ego gets in the way from such delivery undertakings and the future hoped for by the Board and Nanoco staff let alone all the investors is not achieved, regardless of winning the vote, the outcome should be for him to eventually step aside. Brian Tenner is in the last chance saloon and he should think himself lucky to have a workforce and a Board helping him to the extent they have done so. He is also lucky to have such a woeful offering being made to have him removed from his job. Tariq has done him a wonderful favour by accident in delivering an alternative that is quite awful for small private investors. I encourage everyone to enjoy giving their voting verdicts regardless of the opinion you hold.

Performance has held up over Q1. Debt increased by $9M, but the vast majority of spend on Santa Rosa mine has probably gone through and still on schedule for delivery in 2024. They have hedged quite a lot of gold around 5/8ths of Brazil production. Although hedging has worked well this year we await to see how well it turns out in years to come. Probably required to satisfy the banks to cover loans. 2025 looks like a recovery year for HOC for those patient to wait for it.

Whenever muck is thrown on the Pensana board it crashes the share price on Rainbow. Some of us are really getting fed up of attention seeking behaviour on that board and dragging retaliation on here. If PRE goes bust in 3 months so what. Getting a spoon out and stirring it up and attracts the same behaviour in other people who are happy to debase the real issues to a sub moronic cretinous level here on Rainbow LSE pages. It really is a race to the bottom and drifting to a place where the sun does not shine. Can we please get away from the gutter of baiting people and just maybe Rainbow rare may hold a rally and gain the wider confidence of new investors.

Regarding the question why LOAM sell Nanoco and for that matter other company shares is that they tend to be more active trading managers. A proportion of the portfolio may be buy and hold. What we learned later was that at least 1 or 2 other LOAM investments had not gone well elsewhere around that time and others raised this issue on here. For all we know LOAM may have been looking to acquire some cash to fix a few other portfolio problems.

The first observation is why the big gap at the open. LOAM was not on the buying end. It may have put a large blocks of sells on at that price and the market maker was trying to find buyers to support the gap price on where they could get decent volumes of shares to sell to keen buyers. Again if the buying was strong the share price should have continued going higher, but instead it declined as it was LOAM that had to reduce the sell price to off load more shares. LOAM was not the only seller, but liquidity was made available by FOMO buyers which soon dissipated as the price dropped lower and lower. This should have been a red flag at the time that the 6th January RNS was not the whole story.

The company has emphatically denied in the paperwork sent to us that it did not disclose price sensitive information. I expect it to be repeated tomorrow and some on here will not believe them even if they were all wired to lie detectors. Companies can lie to investors as most will have seen occasions on AIM and many end up being delisted and the managers find it hard to get a job elsewhere. Silence, omission or exaggeration is used as well, but outright denials sent to all private shareholders is a first for me. I am therefore on the side of having to see real evidence of it being otherwise.

I will listen carefully tomorrow and make my vote afterwards.

Apologies

The gross settlement value should be expected to be towards the lower end of the range of expectations for a successful jury trial outcome as previously guided by the Company. I thought this was guided by a judge. Re-reading the RNS I have got that wrong. So the question tomorrow is why was this introduced on the 9th and not on the 6th January. Hence why I initially thought the judge had something to do with it.

Troublesome

They have a duty of dealing with what something can look like. If they have been honest, then they have nothing to fear by explaining how things were worked out to an audience who will not necessarily have a lot of business and legal experience. The fact is, as shareholders it is our business to a proportional extent and the conduct of the board impacts on our integrity if their governance standards are not applied. Hence why there is a vote next month. If the Board has intelligent people they will demonstrate how their intentions were not to cause harm to all shareholders. In retrospect it would have been best if the 6th January RNS did not happen and we only got the one on the 9th January. If Tenner tomorrow says hindsight is a wonderful thing but he gives the logic of why they felt something had to be disclosed on the 6th January we should be told why.

We know that Samsung and Nanoco agreed not to go to court on 5th January. The company signed an agreement with Samsung not to divulge the term sheet details to other parties. This happened before any phone calls to LOAM and other investor/creditors. It also appears that a lot of details were not resolved. Therefore, the Chairman making calls to LOAM later that day would need to have been careful in how things were said. Hopefully he began with financial details can not be divulged, but we are trying to resolve this without a jury trial and will see the judge tomorrow kind of thing and a brief RNS comes out in the morning. That kind of heads up is not a disclosure.

The stock opened up with a large gap at 69p on 6th January and only moved up 3 -4p during that day and descended sharply (29M plus shares changed hands that day). In my opinion a red flag that something was not as expected would be when the share price falls under the open price suggesting somebody was off-loading shares maybe because they held to many of them. After all if the market maker was short of stock the price would be going higher so a lot of liquidity was made available. LOAM may have been quite happy to sell at a profit at that level, but there is no evidence they knew what the judge was going to say that evening when the market was closed in the UK.

The really important news arose when the judge directed that the settlement would be on the lower end of expectations and that news only came through at 5pm Texas time on 6 January. So the company issued a full and proper RNS on Monday. In fact the judge comments may have borne heavily on the what Samsung and Nanoco were working out and it played in favour of Samsung.

When the second RNS came out LOAM shifted quite a few shares and the comment made by the judge only made them de-risk further.

The company is of course is currently hugely undervalued. I am hoping that after tomorrow and the vote next month that we might get back to a proper valuation. I also hope that LOAM eventually starts buying stock again.

I am not sure what a barrister or solicitor would make of that discussion that has been posted.

I presume it was Thursday 5 January. If all they said was that a term sheet had been given and they were working through the details it would not be an issue. If the discussion said lower range model that was only raised on the Monday RNS for the two major shareholders then it would be wrong. The problem is that unless the two shareholders revealed the case model being followed was discussed how can anybody prove anything. The interview response only mentions they were negotiating the end of the deal. They may have only discussed as a result of not going to court the timing they would receive funds once concluded and they either did not discuss or did discuss how much it was.

There is nothing to stop people raising the question tomorrow of how this all looks and did the Chairman hint of the financial settlement amounts or just raised issues only on the term sheet that would be in the RNS to the two main shareholders.

Https://www.msn.com/en-gb/news/world/inside-the-uk-s-stuttering-attempts-to-mine-its-own-minerals-and-stop-relying-on-china/ar-AA1eebY8?ocid=msedgdhp&pc=U531&cvid=1c318baa3c844dbc9f967991709e0163&ei=6

SP it comes down to just one issue. Has the company acquired the evidence of consistent 38,000 tonnes of concentrated ore per annum for 5 years at the planned production cost rate. The company claims that FEED and the detailed FEED work and all the pilot programme work will have done that. Financers either agree or not agree with that data. We will find out in the coming months.

SP

In the last annual report.

With the exception of the variability testwork, all concentrator testwork was completed at the ALS Perth facility in continuation of piloting activities completed last year. The variability testwork programme was completed at Auralia Metallurgy in Perth in order to expedite the programme concurrently with other activities. The main areas of investigation are outlined below:

• Completion of a concentrator variability programme to

understand and define feed blend requirements;

• Flotation testing of site water and impacts of any seasonal

changes on the process; and

• Optimisation of process water recycled and the impact of

the build-up of flotation reagents and inorganic and organic

dewatering reagents.

They completed laboratory processing to a sulphate in November 2020. Processing to a carbonate was done in September 2020. They refer to them as MRES Flowsheets. Since then they have expended more money in de-risking and finishing fine details. The first phase of FEED was completed in April 2022 and a fine detail follow up FEED study began in in August 2022 on the mining facility and have been worked on continuously until they closed the design which probably happened in January of this year.

We shall see if the evidence accumulated by Pensana gets funding by the autumn.

Can either lose all your money with one Charlatan tribe or just 6-8p with another after they pay out a dividend on the current share price as worse case. Take your pick. What is clear is that the jam tomorrow crew tribe have a percentage chance of delivery at some point. Just think about it for a moment. A minority shareholder block at 5.2% controls a company priced at 18p and if they make a decision that asset strips all the value they get a 950% return on their investment and you get diddley squat. No inflation worries or cost of living crisis for that tribe on that result. It is an intelligence test costing time and money on all Nanoco shareholders. I just hope most people here are intelligent and can see overtime gas lighting including a matinee performance we got today.

16 January 16:50

I see it that way as well. The highest litigation costs is when the case is actually on trial and having a jury spend time on it as well. The company are most likely to get what they might have got from a licence deal anyway. If it is $50M or £40M after solicitor costs it would mean 12p in the share price is cash in the bank earning interest. So the entire revenue stream is at best equal to what the company may well get in interest from Samsung.

17 January 14:47

I came out with the following;

The company balance sheet outcome at £40M, £80M and £120M after all legal costs taken away.

The company route to profit generation in 2025 would probably utilise £20M.

At £40M with interest of £1M on a £20M Treasury held balance sheet. The enterprise value at forward earnings in 2025 becomes £55M plus £20M = £75M or 23p per share.

At £80M interest on earnings is £2.5M so PE rate earnings become £60M plus £60M = £120M or 37p per share.

At £120M interest is £4M so PE adjusted rate is £70M + £100M= £170M Enterprise value = 52p per share.

I have assumed the company is modelling its 2025 production targets to deliver a net £10M profit before interest is added.

PE rate is 5 times earnings and is pre-tax and depreciation costs.

19 January 08:57

Henry,

Although your model is reasonable. The company would not get a payment in advance. What may happen is they repay for the past at $150M and negotiate a lower rate in the future as a one off payment. I am staying with my high end working model of $120M balance sheet total after all costs and the share price returns to 52p. I believe the share price is at $80M on the balance sheet at this time. £100M for the company is transformational and does mean 86% of enterprise value is cash in the bank. The company would need excellent execution of how they use that cash to deliver shareholder future value. I would prefer Samsung just bought the company outright and that might happen instead.

My modelling was correct and not far from the company result. I was ridiculed at the time.

I am disgusted of all the time and money being wasted on a vote where it is obvious to anyone with a live brain cell

that a minority shareholder is trying to take everybody else here as a complete fool. I do expect far better communication strategy from the current board, I expect more transparency where it does not go against signed agreements on disclosures. I want a better website on the company. I want more presentations like once every quarter and a calendar of events for us to look forward to. I want these promised on Monday.

Finally, I believe the first production contract of reasonable size can take the share price back above 50p. Tony

Summary

The company has strong fundamentals. More than 70% of companies have a lower mix of growth, profitability, debt and visibility.

The company presents an interesting fundamental situation from a short-term investment perspective.

Strengths

According to sales estimates from analysts polled by Standard & Poor's, the company is among the best with regard to growth.

The earnings growth currently anticipated by analysts for the coming years is particularly strong.

Before interest, taxes, depreciation and amortization, the company's margins are particularly high.

The company is in a robust financial situation considering its net cash and margin position.

Its low valuation, with P/E ratio at 7.07 and 4.61 for the ongoing fiscal year and 2024 respectively, makes the stock pretty attractive with regard to earnings multiples.

The company has attractive valuation levels with a low EV/sales ratio compared with its peers.

The company has a low valuation given the cash flows generated by its activity.

Growth remains a strong point in this company. In their sales forecast, analysts sound optimistic with regard to sales prospects.

For the past twelve months, EPS forecast has been revised upwards.

Analysts have a positive opinion on this stock. Average consensus recommends overweighting or purchasing the stock.

The difference between current prices and the average target price is rather important and implies a significant appreciation potential for the stock.

Over the past four months, analysts' average price target has been revised upwards significantly.

Weaknesses

The firm pays small or no dividend to shareholders. For that reason, it is not a yield company.

The price targets of various analysts who make up the consensus differ significantly. This reflects different assessments and/or a difficulty in valuing the company.

The group usually releases earnings worse than estimated.

There is no evidence of any negative issues. The news flow has been very positive for all of this year except for the Odey enforced sell off. The stock has minimal short interest activity. We just need to wait and see what happens next week if we get a TR1 and LOAM or another significant shareholder is trading the stock.