Member Info for Tornadotony

Hi Hogsnipe

We are currently seeing China high grade its mining assets to hit production targets and lower NdPr prices. This is a management disaster in the making where the efficiency of mine planning is sacrificed over the longer term and undermines stable cost controls. The idea of Vietnam coming to the rescue to sustain such policies would require substantive benefit in kind elsewhere from China to Vietnam. It would certainly be obvious to all non-Chinese buyers of rare earths that the policy is completely unsustainable in meeting global demand. The upshot would mean that the depressed prices of today would need to be made up in future years of supply. Just as we saw an incredibly low price in oil during Covid-19 shut downs and have seen the rebound in 2022, the exact same event is likely to be arising in rare earth metals. Everybody with a brain knows that you can not high grade mines for the longer term. It is one thing to high grade mining to eradicate all construction debt to establish solvency, but to high grade in order to make it difficult for new market entrants and rely on company size as a buffer to control the market will not work. It is Venezuela economics that they applied to the oil sector. It only ends one way which is the worse kind of resource unsustainable management. Tony

1 year performance is the same. Ratio of outperformance against rising gold price is 25% in share price against 12.5% gold price increase over 12 months.

The bottom of the current bull channel is $1960 per ounce for gold. We are well overdo for a retest at that level. Cey would probably be around 102-104p on a channel bottom. The question is whether gold holds or break lower in a new downtrend. Centamin is likely to front run whatever gold ends up doing.

Yes I missed the peak by a penny, but I was out shopping today and spent all the profits.

Hi astro

It depends if the dilution is associated with enterprise value creation or whether it more of the dilution that was done last month. Increased share dilution without solid progress towards generating revenue one day is a glorified death spiral in a share price.

If the company carried out a dilution to build a mine, the enterprise value of reserve ore in the ground with a constructed mine in Africa is approximately 350% higher than its value without a mine. The upshot is that after a mine is built and its debt gets repaid and we assume enough high grade ore continues to deliver profitable return for a number of years after all the construction costs. So if 40% of high quality ore was used during the repayment phase, then we still have 210% value level and after 100% share dilution it would have a positive 5% net value. The mine of course could replace reserves used up by investing in more drilling. If the company replaces what is used up annually on high grade ore and the costs to do it are less than profits of what is mined out the share price rises corresponding on that metric plus whatever positives come from higher future ore prices.

Saltend would work on different metrics and risks. However, the outcome is eventually similar in that dilution of share is overcome by debt being repaid and eventually it becomes a cash cow and the valuation on share price is recovered on a multiple that is higher than what was impacted by any share dilution multiple. At different phases in the project the enterprise value gets re-rated depending how well or badly the company performs.

Hope the above makes sense.

I only had a single free opportunity to look at it. 3 Million shares were loaned on the stock around 8 March and it has been adding short volume nearly everyday since then. If you guys believe that 3M shares out on loan is not being used in that way then I have read it wrong. To me it looked as if someone was deliberately driving the price down since 8 March.

Of course funding changes everything as everybody has a percentage of something far bigger.

I stand corrected Mumbles. 55% other share holders.

It is now 19% Angola Government.

30% AWF and MG.

51% all other shareholders.

Mumbles it is a lot better than 27p odd here and the arrangements in play with MG and the AWF. The dilution today will drive the price down as those shares get added to the register. RBW have all the money they need to get to the big fund raise next year and they only need a fraction of what Pensana are trying to obtain. Pensana is already out of funds again and has to raise more shares to keep paying the bills until they get funding. There is a huge risk of AWF and MG between them owning over 50% of the company and support gradually becomes ownership outright. AWF and MG will get there money back but I am not sure what happens to other shareholders.

The multimillion short interest taken on 8 March is hitting the stock price. Eventually the short has to close.

Henry

Have you had your tenner this morning and flushed it out to the North Sea.

The right to participate in any future equity or other fund raising undertaken by the Company on a pro rata basis for the next two years.

My take on this is that the entire funding schedule has rolled out another 18 months here. It will take that long for the bond market to normalise along with inflation and interest rates imop. We are about to go into an economic global recession based on China data this morning.

Peak is in. 11.35p taken 2/3rds off the ISA. Fully loaded for Centamin buy back in the coming weeks.

This should I presume open at 10p-10.50p,

Most of us have a healthy distrust that includes the elite, the political class wherever it is, global banking and financing systems and the like. What we believe is the value of something that comes out of the ground and has been used for a means of value exchange for 1000's of years. It is real and can not be printed like paper or subdivided like crypto that is not really backed by anything.

The sources I have read were written by Chinese citizens. You may want to read the Centennial Issue of Foreign Affairs September/October 2022 entitled the age of uncertainty. Articles were written by Jessica Chen Weiss, Cai XIA cover what is going on within China. After you have read it perhaps you may want to reconsider your own opinions.

For the record I have many Chinese friends. I am not anti-Chinese people in any way. It is about Xi and what he is now doing to his own people.

Spoon

The issue is Xi and his repression. Prior to his arrival everything you mention spoon was to the credit of the Chinese Government. However, Xi is operating a far more repressive state. The intimidation on families for reporting crimes against Chinese women by Xi staff is appalling. The standards held before Xi came to power have diminished. All the problem of one person party state are manifesting. Of course the West has huge problems at the current time. It does not make the actions of Xi somehow appropriate. Xi is following Putin pathway of one person having supreme power. When power is held by just one person or a small elite the result is usually disastrous as collective intelligence and expression for the greater good is lost.

Correct. They probably took some off the table at 12.95p. I recall some hefty sells at that time. It coincided with some buying as it was the same day of the quarterly report and Eric letting us know that he will leave in six months.

Shanta is being treated like the other gold miners of its size. The pound sterling has moved up 5% of late and that is 0.55p headwind appearing over the past few weeks. What Shanta is achieving is a higher annual gold price on sales for every day we are at these levels. The market is hedging the miners against the gold price to a degree. If gold plummets, the gold miners do not go down as drastically if they were not rewarded on the upward journey. Basically the share price is like swimming in molasses and the SP is finding it difficult to move around. The uncertainty is whether the FED wants to defend the USD and I suspect they will do so. Ammunition for rate hikes is low and QT is now a joke as they take back their version of mis selling bonds to Regional USA banks. If the FED have gold to sell or other currency reserves they will want to sell and try and push inflation down over the coming months. Eventually gold and Shanta along with other miners will get the tailwind of better prices. Until then we need to see if gold breaks through, a major fundamental breakdown elsewhere happens and USD loses that 100 handle in DXM index. Until then, we have some uncertainty being played in the markets. Today was a wonderful divi day. I appreciate having it from Shanta and grateful with thanks to all the staff in making it possible.

Tony