Member Info for Tornadotony

TEN field conversion back from resources to reserves. Jubilee in-fill and southeast development so as to expand reserves. Improving recovery performance from Ghana fields to improve resources. The gas off take from Ghana fields- can they sell it. Suriname wildcat. Guyana block results from analysis and what next. What they plan to do with Kenya asset.

Holding and taking Shusha (High ground) was key. Conflict is entering the end phase.

The lower high achieved. Tullow should pick up some ground.

Paying off 16% of all debt is an achievement. If Uganda was kept and Covid 19 not happen and Jubilee and Ten achieved 90,000 barrels at say $65 a barrel and the company had made no cuts, net debt would have been at best $2.2B dollars. With future FID the company is only around $100M behind what it might have been. The Uganda asset was priced in at $950M and TEN 2p to 2C conversion was a $400M hit but the company share value declined $1690M. Hence why future fair value for Tullow is 38-40p. With the cuts in costs and breakeven reduced from $57 down to $45 and possibly lower the company has recovered lower production volume as well as lower prices. Any recovery to $60 oil and Tullow recovers all its fair value and capacity to reduce its debt further and repair Capex for growth.

We also have Suriname well drill early 2021.

Welcome aboard RedRoy. We share an interest in Shanta Gold as well.

Thanks it then gives a value of $32 a tonne for nickel.

I have excluded any value for all the indicated resource of Nickel tonnes in the previous assessment.

Am I correct that the company with 193 million tonnes of measured Nickel source in the ground is valued at just 44p per tonne of Nickel. The cost per tonne of mined and refined Nickel is over $11,000 in a very low price market. If another company was to buy HZM surely it would pay more per tonne of nickel for the company measured resource. 10.15p per share would equal a takeover value of $1 per tonne of Nickel. Please challenge my maths if I have something wrong somewhere.

AAZ has produced a very regular supply of copper and it has been increasing in price for six months as well. The copper silver ratio is just 0.12 and of course it has never gone below 0.10 in 4000 years. As silver goes up it may lead to copper pries increasing as well. AAZ is a gold and copper mine stock.

Any bounce would be say a penny to penny and a half up from the current 18.15p price. Currently just above the support line which has been trending up since 14.xp. The higher low is still holding and it seems odd to break trend when news is due next week.

If Opec plus agrees not to increase production in January and shifts to April, BP goes back to 300p next year. They are working on it now. Sector recovers September 2021.

Should add at $58a barrel Tullow makes 400M FCF a year. This would allow debt rollover.

Megan1

Once the 500M is in the road to another 75M begins for FID.

As Uganda project develops both Kenya Government and buyer interest will increase on that Tullow asset. A major may like the tax discount made available and Tullow might get something like 325M and get Tullow back to other opps. The last $100M is from farm down's in Guyana. When it comes together Tullow costs are down $82M a day and the company is 8% or so more cost efficient and make profits at $48 a barrel.

JMAX Nobody knows what kind of rise will occur. What I can see is a higher low forming in the chart today and this may set the next higher high close or intraday peak.

Stanley your making the assumption that it was priced in already. The net impact is a reduction in costs of $1.50 cents per barrel pumped on reduced interest charges. This equals $112,500 savings per day than if the money has not come across. This equates to $41M a year or 2.2p per share of money being saved as reduced costs. The company had an FID gateway of another 0.33p per share being saved. So a spike of some kind may well occur. What then may follow a month later is another matter. I still believe the Kenya asset may well get a buyer next year when progress in Uganda becomes evident.

https://www.metal.com/Rare-Earth-Oxides/201102250162

djryan777

I hold around 250,000 shares just above 7p so I am rather stuck in HZM. It is a small position. Pensana is where I do see a lot of potential with NdPr. Holding Shanta and AAZ on gold miners. Just need the conflict in Azerbaijan to close off for the AAZ to re-rate (20p of that share is cash in bank and it on 8PE rate). Coming back to HZM, I suspect one of the majors may just buy the entire outfit once Covid-19 ends. HZM is kept in the draw for a year at least. TT

Nickel rising and Biden is edging out a small win (not a negative).

Scaramonga88

It comes from developing gold mines. So when gold was $1000 an ounce a reserve ounce in Africa was $100 and a resource ounce was $30 if measured and $15 if inferred. The mine life however is often around 10 years for economic mines.

Although I gave the resource ounce for PER in my example the same as reserve ounce, I then brutally divided it by 50 on the assumption the company will spend a lot on more exploration to harness over a much longer period of that time and that recoveries in the process were not known to me. I also assumed a lot was lost on conversion from resource to reserve use as well. I also gave it an African jurisdiction risk.

As for your example with Lynas it raises an interesting red flag of why the net profitability is just 8.4%. It would be interesting to note the differences in labour costs between Angola and Australia, the cost of energy, the taxation rates, royalty rates, the concentration of NdPr in the source material per tonne, cost of managing waste from the plant, the cost of transport to export, the cost of debt, the administration costs of the company and whether the company just happen to have a very high capex expenditure in that particular year. Overall its important for any miner to work out what is their all inconclusive cost to deliver the product on the assumption they are working to replace what they have supplied to continue their business.

Earlier modelling that I had done on Pensana was based upon $160M revenue with the profit margin at $40M a year after all costs. So if the cost of production is $60, all taxes and Royalties are $40M and $20M dollars is spent on debt interest at 7%. It does leave the issue of debt principle repayments. So the company may decide that it uses half of its profits to reduce debt $20M in a particular year. Now suppose NdPr has a bumper price year, the company could reduce debt more substantially, provide some kind of dividend if most of the debt was already paid off or they could expediate items on a Capex spend or do more exploration work.

I am hoping that we do get some quality data on the 16th November and the company can share what they believe are good estimates for us to benchmark our own analysis.

All the above is back of the envelope guess work on my part and its helpful for a number of us to try and work through such a process and perhaps share what we come up with.

Finally when I came from USA to England, I asked a lot of questions. Some English people said in school are you embarrassed to do that. I replied no as I wanted to learn. They replied that demonstrates that you are dumb. I just smiled and I got my qualifications and went on to have a great career, where as those who worried about looking dumb, or overly concerned that a question was a challenge may well not got as far in life. Nobody should be afraid to ask questions from others as that is how we all learn.

Already trading at 8 times when most others are 24 times.

My calculations as China syndrome may be taking a nap.
The total income for NdPr is 178 billion dollars over 50 years. However so any resource value in the ground is 1/10 that gives say 17.8 billion (NdPr at $40,000 a tonne) divide by 50 = $356M before a mine actually gets built. This would give a value of 88-89p on the sell. So if the BFS gave a net profit of 25% it would confirm a 90p price tag for NdPR alone on 16 November. What value is put on all the REOs on top quite possibly takes the share beyond a £1. If the BFS after Royalties and taxes gave a profit margin of 35% the SP would go that much higher proportionally. All in my opinion of course.