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No way a company gives you that information unfortunately. Shareholders aren’t entitled to a margin breakdown of the product. Potentially for a one off it was a loss - that wouldn’t be surprising - who knows. The point is it proved the concept. They would need to partner with Hermes to fully get the value from bags.

However, bags are not the goal - maybe a nice sideline and a very profitable one. They are following the proven path of the competition - auto and sportswear. Competitors valued at over £150m with arguably an inferior product and one with certainly more impurities. Margins - don’t know, costs - don’t know - TAM - huge for all 3 product lines of which from 2 they have an edge and for one a unique moat.

Who knows where the SP goes short term, but it is certainly an asymmetrical play with several catalysts in the near term.

CLN’s typically have a valuation floor to prevent large scale dilution in the extent of a falling share price. We don’t know what that valuation floor is but any decent lawyer will protect against a number too low.

Also for a listed company CLN facilities typically contain an explicit clause stating that the investor cannot convert the note to the extent that it would trigger a requirement for a mandatory takeover offer (crossing the 29.9% voting rights threshold under the UK Takeover Code) or exceed the directors' existing pre-emption mandates.

Another way of looking at this is that Indigo valued the company at a minimum of £3m, i.e. £1m CLN can only ever get them 30% of the company.

The current SP is not good but it does not threaten the companies existence. The cash runway is close to 12 months. In other words the company has 12 months to either get a deal on the leather side or monetise Kerato for vetinary purposes.

The fact that they managed to get an offer of $130k for a purse / handbag should tell anyone that the value of that part of the business alone is many multiples of that. A competitor (there’s only really a handful) would likely pay multiples of the current market cap to remove BSFA and own their patents.

The value of the company is not the SP, that’s the price - the value is what is it really worth with two near term revenue streams - difficult to work out that value but it is certainly not £2m.

Unlikely to happen with LIT due to the share holding structure. Anexo was over 60% held by two shareholders and LIT has over 50% of the shares held outside of the top 10 holdings which are already spread around - the largest holding was 13%.

The biggest risk is that the lender calls in their loans but this is unlikely because their best way to get their money back is for LIT to win cases and repay them - they already know that they are likely to get 75% paid next year when GreenX comes in.

A low ball offer could come in from a capital rich company, particularly if the bidder has spoken to the lender and agreed to pay back the loans. But again, to get shareholder approval its difficult to see anything getting approved outside of the mid 20’s and even then that is a discount to NAV.

Is an equity raise possible? It is but LIT appear to have sufficient cash to offset this in the short term and the lender may support with another £5-10m.

Memories are short in business and a few wins puts LIT back on track. They have gone from being a boutique business where Patrick oversaw every opportunity to trying to grow which put Patrick in more of a strategic role. It didn’t work and the people overlooking the cases were not as good as Patrick. This has been recognised and Patrick is now back overseeing the cases - most likely as a condition set by the lenders.

I agree on valuing the business is difficult but it always has been. For me the risk is skewed to the upside because of such a low SP today.

I have just updated my ALL model following the new inputs from Friday's announcement. My model is almost identical to ALL's but I have a slightly lower LOM NPAT of $1,955m against ALL's $2,004m. My NPV is also slightly lower.

Peak EPS associated to ALL at SC6/5.5 prices of $1,587 is 13p and the first 3 years returns are 25p per share with the first 4 years at 37p per share.

So if everything remains equal and the average price of SC6/5.5 does not drop below $1,587 then ALL is grossly undervalued.

Big announcement from Toyota today that they will reach commercial volumes of solid state batteries by 2028 with major volumes by 2027. Whilst, they have been late on their claims in the past, solid state is fast approaching reality. FYI, solid state batteries are much superior in range and charging times and use much more lithium.

Also China's restrictions on Graphite exports also announced today is very important and a play against the USA's IRA and the EU's plan on Chine's car import duties. I fully expect refined lithium to follow. I track every raw material lithium project and every refinery project as well as China's demand from EV's. China will become self sufficient for Lithium within the next few years (from current contracts, overseas owned mines and domestic mining) and will also consume the majority of it's own refined product - that will create a big rush for both raw material and refined product elsewhere in the world.

LL,

Pro China / Pro West is correct. To go pro China though would be to delay the mine by at least 2 years - even the Chinese do good DD these days. Not issuing an ML would not mean that another company can step in, quite the opposite it would start years of protracted discussions - no side wants that.

On oil whilst off topic - oil and Gas products would have been more precise. Huge development happening in Ghana and my point is not about if they get to position 1,2 or 3 - the point is that the developments are happening which shows support for the investment decisions of the country. Interesting in these projects the state often own 10% although I am not so up to date with them to know if that is the max and if it is free carry.

Of course it's all conjecture so I will leave it at that. In my view ALL will get its ML but it will cost a few %'s.

Personally Share Sleuth i wouldn't go that far. They are not the first country, OECD or non OECD to try such a process. You could reasonably argue that is what they should be doing. Green minerals are new to them so having a new charter is fair. You will have noticed that no numbers have been discussed in terms of ownership or royalty percentages which means it is open for negotiation. Also remember that originally ALL were looking at a secondary DSO product and recently have moved away from that with the studies that have "recently" commenced. I would view that as they very much knew what was coming and are involved in the discussions.

Ghana is on the forefront of becoming Africa's largest oil producer and I believe it's largest gold producer - you don't do that unless the large companies, banks and investment community trust in what they are doing. It will be another step in the right direction to become Africa's largest Lithium Concentrate producer and there is no doubt that will be on their minds.

To think Ghana can have a refinery up and running before 2030 is quite frankly pure fantasy. Albermarles Meishan refinery currently on schedule is 2.5 years to build and 1.5 to commission and ramp up. Their Kemerton refinery is forecast to take longer - upto 6 years and this is from people who know how to build refineries. Look at the problems with the Kwinana refinery. Unfortunatley for Ghana it can stop DSO (quite rightly) but it needs spod. A phased approach will work for them - 6% spod, 18% spod and then maybe, just maybe one day in the 2030's a refinery.

Ghana are not the first nor will they be the last to want more for its resources. Now the horse trading commences - each party has strengths and weaknesses.

I would suggest that Ghana would want 25% of the project, with the current situation and all of the royalties it sits at about 18%. It is not unreasonable or unjust for a Government to want more of a sought after commodity. At a project level, even an extra 10% is only 5% to ALL.

Ghana will not issue the ML until they get an agreement - that is their strength. Their weakness is that they really don't want to delay this too much. Removing ALL for another party who agrees to their terms would add 2 years to the project (minimum) and be a real own goal for a mining friendly country.

ALL weakness is that they need the ML. Their strength is that they can push this project through quickly and have an American partner who has received US Govt money for a refinery specifically designed for ALL's product. With this in mind and Piedmont's desire to increase its refinery output longer term then Piedmont/ALL can dangle the carrot of benefication to an 18% salt in Ghana - again not an unrealistic opportunity. The potential with green hydro power nearby opens up the option for electro calcination of spodumene giving the resultant 18% salt a very low CO2 footprint.

We are now at the money end of the game. Talking of money, as per the conversation in Chile the question will be asked - what are you willing to pay for your extra %?

It's anybodies guess where the final lines are drawn. The most likely is ALL get an ML by giving up x% of the project and they may even get some funding for that x%. I think it's a tough one for ALL on their own but with Piedmont playing a supporting role it becomes a discussion that ALL are able to get a good outcome.

LIT is far too small for Hedge Funds.

My understanding is that the ruling states that Litigation funding is not the same as a DBA - see below. Also DAF lost the appeal.

This appeal is concerned with a matter of statutory interpretation in the context of litigation funding. Litigation funding involves the agreement of a third party (with no prior connection to the litigation) to finance all or part of the legal costs of certain litigation, in return for a percentage of any damages recovered should the funded litigant be successful. In particular, this appeal concerns whether each of the agreements to provide this funding, known as litigation funding agreements ("LFAs"), constitute a "damages-based agreement" ("DBA"), a term given a specific definition by statute. In order to be lawful and enforceable a DBA has to satisfy certain conditions. The LFAs have been entered into without satisfying those conditions, so the question whether they constitute DBAs is critical for their enforceability.

Lady Rose dissents and would dismiss the appeal. She agrees with the Divisional Court and the Tribunal that the provision of financial assistance is only included in the term "claims management services" if it is given by someone who is providing claims management services within the ordinary meaning of that term [154]. Lady Rose holds that the fact that litigation funding would not naturally fall within the scope of the term "claims management services" is important [111]. This points to the fact that claims management services include providing financial assistance, but that this does not mean that all financial assistance constitutes "claims management services" whenever it relates to a claim [115]-[122].

Indeed GK - $927m might be more accurate !

For supply / demand have a listen to the recently released Joe Lowry: Lithium Pricing narrative, Investing in Lithium Stocks and Outlook.

He shares many of my thoughts or perhaps I share his. The main one being DLE will be late which is lead to a large under supply at which point SC6 becomes very valuable.

I hardly ever post but am a large shareholder of ALL so wanted to clarify the assumption that if an interest rate changes so does an NPV. The theory is correct but in practice this is incorrect since NPV's take into account the interest rate through the time value of money throughout the LOM - in this case ALL use NPV8.

I use my own NPV calculations, it allows me to cross check to a companies own and also play about with various scenarios on extending the LOM, prices and also I am much more severe within years 1 & 2 on costings.

This is how the NPV number changes with ALL at various levels - Note my NPV8 is less than ALL's.

NPV8 - $1.41Bn.

NPV10 - $1.20Bn.

NPV12 - $1.13Bn.

NPV16 - $927Bn.

For those that are interested the NPV8 of ALL on a 16 year LOM with average SC6 prices at $2,150 is $2.57Bn. NPV's are more useful pre-production, for takeover situations or for raising finance. My calcs on year 2 EPS for ALL's 45% are 23p. It does decline after due to tax considerations before rising again.

In my view ALL will not require dilution to reach production.

Slightly confused as to whether TiO2 is included in the project economics and NPV. Initially I concluded it was - this statement seems to confirm that:
"The Company does not anticipate that the inclusion of the titanium to feasibility standard will result in a material deviation from the Technical Report conclusions and numbers below". Financial Overview follows.
However, when reading the report in its entirety - and I've only skimmed over the surface - it's not clear. Table 1.8 does not show TiO2 and neither do various references to sales prices throughout the document such as the one below:
"A reasonable prospect for an eventual economic extraction of the Mineral Resources has been established through the calculation of a conceptual open pit shell, following the input parameters: 1) Selling price for iron concentrate (62%/65% Fe, + V2O5 credit) of US$105.75/t; 2) mining cost of US$2.78/t mined; 3) processing cost of US$6.00/t processed; 4) general and administrative (G&A) costs of US$1.14/t; 5) global mass recovery of 80%; 6) mining dilution of 5%, and; 7) mining recovery of 95%."
So is it in or out? The opening paragraph implies it is in and no change expected to project economics but the remainder implies it is out - at which point TiO2 must improve the project economics.

In other words the company has gone from having a net debt position to a positive cash position - a turnaround in 3 months to the tune of + $32.6m, which is pretty impressive and sufficient for me to add quite considerably today.
The true extent of the turnaround will not be known until we see the full P&L and cash flow statement for the year but it is a good start.

Yes I think I did confuse on that one, purely the use of brackets to try to show negative from positive, but reading it again it is confusing.
Trying to show the turnaround from Q3 to Q4 in net debt.
Following this line from my original post is pretty self-explanatory
"On the upside net debt was ($11.7m) at the end of Q3 and $20.9m at the end of Q4 so a turnaround of $32.6m."

$20.9 is net debt not net cash. Still below the $34.6m net debt at the end of 2020 so I see your point.
Until the debtors and creditors are known it's very difficult to comment.
On the upside net debt was ($11.7m) at the end of Q3 and $20.9m at the end of Q4 so a turnaround of $32.6m.
However until the year end cash flow statement is seen and the debtor/creditor position is known then it's too early make assumptions on the actual cash movement during the year.
Also a positive looking at the carats produced against carats sold leading to a good inventory going into Q1.
It's also unclear if the 245 carat sold, if it did then its value per carat was low. It could still be in inventory though.

Keith / Sefton,
Many thanks for time in replying.
I think I have much research to undertake to fully understand my questions.
I should perhaps also say that I am not the “TotalTrader” on twitter, I am on Twitter and connected to a few people here under my real name.
I would also say that I am neither a ramper or deramper - I find it amusing that people believe they can affect an SP by comments on a BB, it shows a lack of knowledge in how the market works and what is required to move an Sp - up or down.
Personally, I don’t mind either side to an argument it can sometimes help me to question myself and my own research. A phrase I have modified over the years is “a thousand fools can agree on something that is wrong, but occasionally one of those fools comes up with a statement of genius so never stop listening”.
I shall continue to read this BB quietly from the sidelines and invest quietly in my research.
FWIW my view on PRD is that it has huge potential in a growing market that due to cross border politics has enhanced the position of PRD. Of course there are risks, big risks but with it comes big rewards - “that which is comfortable is rarely profitable”.
My view on will it need more money - maybe but it is in a very strong position to be self funded through an off take or royalty. To achieve the offtake and royalty it needs the answers to my original two questions however to fund $20m in the world of oil and gas is quite frankly peanuts and somebody may very well believe it is worth a very calculated punt to secure a very profitable supply - I imagine those discussions and calculations are taking place as we speak.

Afternoon all,
After maybe 2 years of reading this board I finally post a message actually a question or two.
1) What is required to prove up the resource?
2) What is required to prove the flow rate?
I am generally a mining investor, I class myself as pretty good which enables me to work out potential value at the early stage of a project. To answer Q1) above in mining would require a huge amount of geological work, infill drilling and step out drilling to name but a few, at a very large cost, and that would be for a resource potentially below 500m and not up to 2500m below ground. So I have a feeling it is somewhat different with gas.
I have read the CPR and appreciate that the answers are not as simple as my questions would seem, the smaller sands in MOU1 vs the larger reservoirs encountered in MOU4 an example of this.
I have used the content of this board in the past to give me some pointers at which point I then go off to try to understand the subject and make my own mind up. The fact that I have gaps in my knowledge really means this is currently a gamble for me rather than an investment and to buy more shares and turn that into an investment I have to fill those knowledge gaps.
Any pointers given would be appreciated, one way or another i will research to find the answers to my questions but I’m hopeful for a few wise words to point me in the right direction.
Thanks in advance.

Morning,
GRL is one of my smaller investments of which I am waiting to get clarification to move it into a larger holding. Whilst the project is significantly de-risked I have one major concern that my research cannot answer:
The plan was to produce circa 25,000 Oz of gold in 8 months. The CIL plant supports this as did the Elution plan of using the nearby facility. However, approvals not forthcoming led to the deployment of an in house Elution Facility - a great achievement in the time frame.
I have not seen anything about the capacity of this in house Elution Facility which of course is variable depending upon the specific properties of the GRL CIL. Sure, I can wait a few months to work this out but does anybody have any insight to know what the capacity is and if the 25,000 Oz is possible with the in house facility ?
The only data so far is that one gold pour = 464 Oz. To produce 25.000 Oz in 8 months requires 6.7 gold pours per month, or one pour every 4.5 days which means another gold pour by Monday next week.

Thanks TBTT - will have a closer look at the Rh content. TBH I was being rather lazy, I have that report but was hoping not to wade through it again. From memory I have it at close to 4% but I'm not sure.
Capital economics did a good report on various scenario's relating to PGM's and the chip shortage but kept the analysis to Pt & Pd - from their scenarios though I can have a very good guess on the Rh side and then balance that against the NN under supply. I think it was the CE report that spooked the market earlier this week.
I much prefer to run my own numbers though !!