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Couldn't disagree with you more ScottyDogg. Complete lack of knowledge of the POW business model.
At 14p a share this is a £15.4mil market cap today. POW's investments today in FCM & GMET are worth £8.4mil. Their pre-IPO investment values in FDR & UEE are worth £4.1mil, there must be at least £750k in the bank so that's = £13.25mil for starters. The market is now giving a valuation of £2.15mil for the following:
- Molopo – Conductor hit at depth, assays to follow
- Tati – Near surface gold found to date with opportunities for tailings processing for future revenue.
- GSAe - Future revenue stream
- Saudi IPO & future Saudi deals which Sean has stated are near. Sean also stated in the Proactive event a few weeks ago "the Saudi IPO will be POW's biggest to date"
- UEE IPO / U asset deals which are surely going to worth more than the UEE pre-IPO valuation of circa £1.5mil otherwise Sean wouldn’t have bothered listening to 3rd parties as announced last month.
- NBGC disposal worth up to £1.5mil as announced last month
- ION Battery Resources future IPO (contains POW's early stage Lithium assets)
- New Horizon Metals - future Aussie IPO which POW hold 20% of at present
- Silver Peaks (30% minority stake)
- Haneti (35% minority stake with partners Katoro Gold)
- Any upside from GMET as they move into a key Pilot Mountain drilling campaign with DoD funding possibly around the corner
If everything above is worth £2.15mil I give up! Well I'm doing the opposite of giving up in reality and adding more as and when I can, but you get my point. The market valuation at the moment is the most ridiculous it has ever been in the 3.5 years I've been a POW holder. Astronomical gap between reality and what the market prices this business at in my view.
Absolutely agree DonkeyOatey.
The only move I have not really agreed with this year from POW is this one hole Molopo drill campaign. It's very costly, you are never going to really prove anything with one hole and also drilling comes with a 0.001% chance of success. Certainly not the reasons why I invested in POW. I am here for the "spin out / merchant banking" model.
Focus for me should be on the Uranium asset deals which could shortly bring in a bolstered balance sheet (if POW go down the UEE IPO route), could also bring in cash to POW if they decide to partially sell the assets and joint venture some out, or they may even get equity from potential larger exploration/mining firms in a JV. I'm personally looking forward to see some tangible figures on these potential U deals. I feel they could be in the £1,000,000s rather than the £100,000s. The UEE IPO seemed pretty much done and dusted for the end of March 2024. Why delay this unless there is something significantly better on the table is my view.
Also the Saudi pre-IPO should raise substantial cash. Sean also said this IPO will be the biggest one yet for POW. Upon listing, GMET was worth around £4.25mil to POW in May 2023 (now circa £7.6mil), so you would assume POW's stake in the upcoming Saudi IPO will be higher than £4.25mil. Doubt the Saudi's would get out of bed unless substantial money was on the table too.
Good to see the business have positioned themselves so that Molopo results are just a "bonus" rather than "business critical" but nevertheless, happier to see funds used to get assets into IPO vehicles so that cash burn down the line is heavily reduced and POW can just sit back and watch their investments grow (GMET) or shrink (FCM). All of which costs POW ziltch!
As always, POW just need a fair wind from the market. At present it is anything but fair. Also good to see that POW are not reliant on going cap in hand to the AIM market and the shyster brokers. Latest financing done via Saudi & Purebond multi millionaires and POW also have Rick Rule's contacts too for favourable finance if required. With £8mil+ in investments already on their balance sheet (all become tradable on 10/05/2024), POW are in a far better position than most valued at sub £20mil in my opinion.
Https://www.youtube.com/watch?v=FLSEq-Jbfck
Video now available, some great points raised by Sean. Especially around POW's Uranium assets.
Worth a listen!
New heavily updated company presentation on the POW website (updated within the last week) suggests marketing could be about to crank up. Would have to assume the main focus would be targeting the US market after the OTC listing is fully up and running.
https://www.powermetalresources.com/wp-content/uploads/2024/03/POW-Presentation-April-2024.pdf
I ask myself, if the market cap is currently about £17.5mil and listed investments, cash in the bank, GMET warrants (in the money) and the RRR NBGC deal is worth circa £10mil, then is the following worth £7.5mil:
- Molopo
- Tati
- FDR IPO (pre-IPO valuation of £2.6mil)
- GSA potential revenue stream (company is already profitable before scaling up begins)
- Saudi IPO (pre-IPO funding round happening shortly)
- Uranium IPO (pre-IPO valuation of £1.5mil but looks like a far better deal on the table)
- New Horizon Metals 20% upon listing (most likely on the ASX)
- ION Battery Resources future IPO
- Minority stake in Haneti (closer ties with KAT now so progression on this asset my start up again)
- Minority stake in Silver Peaks
For me the answer is, yes that list is worth far more than £7.5mil in a half decent market. The Saudi IPO alone could be worth that for POW. GMET could easily add £7.5mil to the POW balance sheet upon grant funding for example.
PJ used to always talk about POW shareholders having many shots on goal, we haven’t scored yet, but for me we have more shots lined up than POW ever have since I became a shareholder in Sept 2020.
Jan 2021, POW was valued at £39mil and had £500k in the bank and a couple of licences. When the market overshoots POW’s valuation again, they have x10 more going on. Commodity markets starting to click into gear.
POW is the major GMET shareholder, but they don't hold the majority of the outstanding 10.75p warrants.
GMET warrants outstanding as at today = 16,517,816 @ 10.75p = £1,775,665
POW's 10.75p GMET warrants = 1,749,378 @ 10.75p = £188,058
Fully expect POW to convert these warrants and hold them tight but they only hold circa 10.5% of the outstanding 10.75p GMET warrants.
Nice article below regarding POW:
https://www.crown.co.za/modern-mining/industry-news/27985-how-power-metal-resources-is-crystallising-value-across-its-portfolio
So we all think Sean Wade has put in circa £125,000 over the past 12 months (at an average of about 16p / 0.8p pre-consolidation) just to consolidate the stock a few months later and go on a dilution mission to erode his own funds that he just recently put into POW? Common sense states the Sean isn't going to dilute POW holders to death. Common sense states that this is being done for the OTC listing (which is already making some sort of progress if you check out the OTC POW ticker on the OTC website) and for the price to look more attractive to HNW investors. On the HNW investor point, I'll only believe that when I see it however.
Will Sean potentially get some more strategic investors on board through recent Saudi Talks, Rick Rule contacts etc. I would certainly expect so but all will be done at a fair price to both the incoming buyer and POW shareholders. Just like we have seen a strategic premium raise with the past couple of months.
Company now worth more on paper due to the millions POW holds in investments, cash in the bank and pre-IPO investment valuations.
Sean Wade one of the few good guys on AIM if you ask me at the moment. Extremely knowledgeable and just as frustrated with the SP performance as all of us lot on here.
The average AIM punter seems to use SP performance as the only indicator of a business's performance which is bizarre in my view and using that approach is a clear way to lose money. Loads here with an average of 3p (60p now) after piling into a business in 2020/21 which was worth a couple of million on paper but the market was valuing it at £35mil+.
Now the business is worth £15mil+ on paper with solid potential in Saudi and the Uranium space to come throughout 2024 but no one wants it. I'm personally filling my boots here! Fantastic opportunity in my view.
OTC listing for POW looking very close now too.
OTCQB certification posted on the OTC market website under the ticker "POWMF" yesterday alongside all the relevant latest POW financial statements in order to meet the listing criteria.
Consolidation vote approved this morning, so probably just a bit of compliance/legal work post-consolidation and the OTCQB listing may well proceed in April 2024.
Link to the POW OTC listing page is a follows if anyone is interested:
https://www.otcmarkets.com/stock/POWMF/overview
As Rick Rule has explained my times, his modus operandi is to invest in the top co i.e. POW in these types of models. Not the subsidiaries. He will be telling his guys to buy in to POW I would imagine, not the spin out cos.
Markets are terrible at present for raising capital so the options for POW are:
1) Sit on 100% owned assets that they cannot get the capital for to progress unless they dilute shareholders to death, or;
2) Reduce their holding in some of their 100% assets down to 30, 40, 50% for a cash free ride in a separate vehicle which costs POW £0
I know some like the higher risk approach of Option 1, but POW are going down the Option 2 route and this has been communicated for some time now.
POW will retain a few direct 100% owned projects (Molopo, Tati etc.) for future exploration and/or future IPO vehicles but most of what POW own directly will soon be moving to an indirect stake I would guess in a spin out co. Cash burn reduced, risk reduced, activity on assets increased, balance sheet value increased. Anyone looking for POW to do huge risky drilling campaigns is going to be disappointed.
Balance sheet is the focus here, not throwing the kitchen sink at cash sapping lottery drilling plays unless the drilling is being done by a separate vehicle to POW. The UEE IPO, Saudi IPO, GMET etc. will be where the fireworks will occur. Most on AIM just don't understand a balance sheet unfortunately and seem to think the odds of drilling successes are far higher than they actually are!
GMET shares & warrants in the money = £7.3mil
FCM shares = £0.6mil
Cash in the bank (estimated) = £1.5mil
UEE pre-IPO value = £1.5mil
FDR pre-IPO value = £2.6mil
Cash/Equity due from NBGC disposal (assumed we won't receive it all) = £0.5mil
TOTAL = £14.0mil
Market currently values POW at around £17mil today so the market is giving a £3mil valuation to the following:
- Any potential increase in the UEE IPO value with large investors lurking. Seems the plausible reason for the delay now with a future update in April 2024 most likely.
- Saudi IPO which includes a near term pre-IPO raise (doubt that will be £100,000s, more like £1,000,000s raised). Most likely more deals to be signed between POW and Saudi/Oman based on Sean's conversation with The Roast podcast this weekend.
- Molopo Farm drilling
- 15 additional Uranium licences not currently earmarked for IPO, one of which contains a solid Helium anomaly.
- GSA Environmental future potential revenue stream.
- Tati Gold project which has near surface gold grades (best results to date are shallow 1m @ 45+ g/t Au)
- 20% stake in future IPO New Horizon Metals to be listed most likely on the ASX
- 35% stake in the Haneti project which is 65% owned by KAT (POW/KAT relations my get stronger with the appointed of Paul Johnson and Sean Wade over at KAT)
- Future IPO of ION Battery Metals which will contain a number of Lithium & Graphite assets.
Just seems a steal to me at these prices but the market just doesn't seem to care for junior exploration plays at the moment. POW valued at £39mil in Jan 2021 with £500k in the bank and a couple of licences. Now £17mil but with a vast diversified exploration portfolio. The interest will have to increase here soon enough as the strong investment proposition builds to an inevitable re-rate event.
Saudi plans pushing forward now in addition to big investors lurking around the UEE IPO it would appear. The market still seems to value anything POW have an interest in at pretty much £0.
In my view the Saudi and UEE plans in addition to POW's large GMET holding are the biggest value drivers moving forward here. I feel a lot of investors still seem to think the likes of strong assays from Molopo Farms drilling is a business critical event ... it was 18-24 months ago but certainly not the case now. Any positive news from Molopo is just a bonus now. For me, Molopo and Tati have potential, but they also have the potential to be huge cash pits. POW seems to be focusing on reducing cash burn and getting as many projects as they can active through smaller indirect IPO stakes instead. Albeit the progress regarding the IPOs has stalled somewhat due to the poor appetite for junior exploration stocks.
All eyes on Saudi, UEE & GMET moving forward ... POW could be sat on a very healthy balance sheet by the end of this year alone and could easily dwarf the current market cap of circa £16-17million. Fantastic potential here in my opinion but the market seems to value that potential at £0 from some reason.
To add to your comments below Donkey, on 24/01/2022 POW also cleared the $500,000 JORC milestone tail benefit by issuing Thor £100,000 of POW stock and giving them £50,000 cash at the time.
Thor have now subsequently dumped all their POW stock too. Certainly is free and clear from any attachments to Thor!
Exactly InvestorPA - Not deramping here. Just simply addressing the key pieces of info that have been omitted from the RNS regarding the potential profitability of this project in a reasonable manner. My opinion (which is going to be different to others) is "this doesn't excite me in the slightest".
Anyways will leave it there and hopefully more info comes to light down the line as revenue figures are meaningless here.