Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
It may well be that the share price rises quite a bit just in anticipation of news. I think we got a decent hint of this from late december to Feb, when it began to move in late december just purely in anticipation of the mining licence. GC did well here to hold off on his capital raise by around 8 weeks. Obviously we need the strategic deal before we can conclude financing. So it really comes down to do we think there are viable interested parties who would be interested in becoming strategic partners? I have concluded clearly yes and not just OCP although like all they would make the most obvious hints and to be fair GC was prepared to talk quite openly and dropped a few hints in his recent presentation. Are market movements in the potash price etc moving the right direction for the attractiveness of the project I think Yes.
So if I am confident that a strategic investor will come on board the question mark is the amount of dilution. Emmerson have put themselves wisely in a position I feel where they have not signed any off-takes and I do feel that was a good call in negotiations. We don't know how much dilution there will be etc and how good a deal we can get but on that front I am satisfied by HL's experience and success in his involvement in previous financings.
There will be dilution but when that is announced I do feel very confident that a finance deal for the rest of the funding required will be concluded. I feel confident because I think the economics of the project speak for themselves, the low capex, high margin (even with the potash price at the absolute low end the economics are sound). Once financing is concluded and construction is started I see limited risks in the development due to the lack of aquifers, no shaft, good infrastructure, stability in Morocco, GC very experienced in Potash mines at the helm.
So when we start construction I would be confident of the projections of first production in 2 years.
Therefore once we get the ducks in the row this year I see this as a company whose value will rise substantially in time. Of course it could rise due to the herd coming on board prior to strategic partner/financing, and if it does that would be most welcome for LTH's as will decrease dilution (that is the reason GC is doing all these investor presentations to increase awareness)
Yes there are uncertainties over the phased approach. I think GC was clear in his most recent presentation that option a is still preferred but being able to show that another approach is possible is of benefit in negotiations.
I think some bought in Jan/Feb without doing thorough research possibly due to the spike. If you bought at 8 I would not worry one bit, just research the project more and you should be calmed.
There is a lot of news flow to come over the coming months.
The environmental permits are now crucial. Without them we can't progress. When we have these GC and HL will be in a strong position to progress on the matters which will start to unlock the real value here.
When these permits come and GC has stated very confident in the next couple of months, then the economics of this project are there for all to see.
I didn't read the RNS as a confirmation they are going to go with the phased and or extended development approach just confirmation that see this a very much viable and offering the opportunity to substantially increase ebitda and npv in a possible phase 4 production.
I don't think it's a commitment at this stage that they will go with this approach, merely letting the market and potential financers / partners know that this is a viable alternative option from the initial plan.
He see it merely as something with improves our hand in negotiations and offers more options for securing a good finance deal which boost shareholders value and sets us along the path of delivering the project.
The lack of timescales on the phased approach I presume is deliberate at this stage and will become more apparent if and when this plan is decided upon.
Overall a positive RNS.
Just bought some more, may be my last purchase as have almost reached the number of shares I wanted.
I enjoyed watching the video. I am more positive to the guys in the video but I thought their video was informative, and there was one discrepancy that I hadn't noticed that was worth noting.
Not overly concerned about the precise price of potash at this point as shown by the FS the mines fundamentals of low capex, low costs to port etc make it profitable on all the reasonable price assumptions.
I think we need to remember that these guys review different company's each month, so their research whilst good is obviously going to miss one or two things. To be fair they welcome comments, so I say to them carry on what you do, as it was entertaining.
I do disagree with the points about over supply of potash, (the shipping points maybe had something to them, but I doubt many of us have bought in here solely on the precise quoted costs of shipping to Brazil).
So still positive but may now wait for the news now, rather than buy more. There should be something about the environmental permits soon.
Westie. Going to watch the GC interview tonight. I would hope that the price moves in anticipation and when we have some more news which will be coming. Not concerned about the price at the moment, it is an opportunity to buy a few more at a low price. Get paid next week, so will be doing what I normally do and buying a few more.
Agree with the comments on GC he has been a very good appointment, Hayden always said he needed someone with more operational knowledge/skills to more the project forward into production and I really think we found the right guy based on the way he comes across. Equally Hayden was the reason I got interested in looking into investing in Emmerson in the first place. Of course the low capex, great infrastructure already there at port, close to port, high margins are obvious but when you look at Hayden's track record on financing it really is impressive. He also comes across well in interviews.
I think we should be valued more at the current stage but's it not a big issue to me that we are not yet as I do think other's will notice this project and invest and when they do the share will rise accordingly. I think we got a little hint of that from end of December to Feb.
Of course Capex costs could increase if he sees a viable way of extending the scope of the project through SOP playing a bigger part but I meant Capex costs related to the original plan. I think the news on the SOP scoping study could be very interesting for us when it comes, which I assume could be before a further update on the possible phased approach.
Also awaiting the environmental permits which should come relatively soon I think.
Hi lew and all good posts today. Just to say the review into a phased approach is still ongoing, I anticipate that's GC's intention is to look for some earlier revenue streams as Redroy has noted but also possibly some cost efficiencies that may slightly reduce Capex costs. Not saying that is a given but I think there is a slight potential I certainly don't think he is likely to go with the phased approach if it results in any significant increase in Capex costs. Hopefully the detailed review that he is undertaking results in some opportunities to further improve the project. I don't anticipate an update on this for a couple of months as I imagine GC, HL and the team are carrying out a lot of work on this at the moment.
On another note please to see a truce between Testpack and other board members. In my view Testpack has made some detailed, valuable contributions to the board and is a thoughtful poster. I think it's pretty clear he wants this to succeed as much as everyone and I appreciate his posts. Everyone is welcome to filter anyone they want and let's keep this board free of petty disagreements and insults.
Most of the time it is a very civil sensible board which is great.
Our shares just switch across there is absolutely nothing to do. You do not need to sell and buy back. You still have shares in the same company they will just be traded on a different index from a particular day.
It is nothing to be concerned about.
Of course it always hurts when you see a price down on where it was a few weeks ago but we knew the raise was coming, it has been executed successfully at a higher price than would have been the case in November when it was confirmed to likely be happening by the end of the year.
GC always needed this capital, it was a success in that it wasn't too far below the market price at the time. I also noted that they managed to do it at the mid part of the announced range which should show something as to the appetite for it.
The move to AIM I just don't see as anything to be concerned about.
All that has changed is short term sentiment. (sentiment can be wrong or correct). If you think it is currently wrong like I do it is a good opportunity to buy a few more. If you think it is right and didn't like all the other recent updates that the market did at the time then it's time to sell. I think the fundamentals of the project are exceptional which is why I first bought in last June, when I took the time to really read up on the project.
Of course finance will not be a stroll in the park but I am confident it will be achieved. I don't think anyone with an average of over 7p has anything at all to be concerned about in the long term - just sit tight and hold.
Of course the only other reason to sell is if you are a skilled trader! I am not just trying to build up a long term holding.
Good post Testpack. Personally not concerned about the move to AIM one bit. The board have their reasons there is nothing sinister about it.
If it brings move coverage great, if it reduces some costs great, GC will want to spend the £5.5 million very wisely as it is to be used to put the company in the best possible place to conclude the financing deal.
The phased development plan is also designed to reduce costs and possibly also dilution, of course there will be dilution to raise funds to build the mine but dilution of a much bigger company should be no concern at all to existing long term shareholders. The board I believe have also said they remain very confident of a debt arrangement for up to 70% of the amount required. On that point I wouldn't wish to have anyone else but Hayden involved in working on that part of a financing deal.
Time will tell of course, but I would think that the increasing potash price, mining permits etc are all factors that will boost the company's hand in negotiations. GC is undoubtedly a big asset now and fair play to Hayden for recognising he needed someone of GC's operational ilk last year.
I think there is a lot to be very positive about given the progress made and recent announcements.
I agree the placing great news and the fact they raised so much is very good. It really should be the last placing before financing is completed, and puts Emmerson in a very strong position to conclude all the work GC has identified for improving the proposition.
We knew it would was coming, so long term holders should only be very pleased GC got it away at not far off the market price. He should be applauded for not attempting it before xmas as originally intended when the price was lower.
Of course all of us could say we wish we had sold a few weeks ago to buy back at where it is today (but it takes balls to do that and also the chance of timing it really wrong with a project where you really believe in the fundamentals and long term projects)
Get paid on Friday so will be buying more in the knowledge that everything is progressing well and the must mooted placing has been successfully placed. All systems go now. It may drift a bit over the next few days but then I would think more investors will become interested and that should be good for LTH's.
As others have noted there hasn't been a herd arriving. The market cap is £43.62 million + the £5.5 million raised so under £50 million. I am confident it will be more than that when a financing package is announced.
Rather than the share price it might be more useful to think of where the market cap could be if this was financed, constructed and into production with the high margins from the difference between the costs and revenues. The low cost to port is also a compelling part of this project, perhaps often forgotten.
The market cap has gone over £50m. The future share price after financing will depend on the terms of the deal, how much dilution and at what price, very hard to predict. However I am of the view that just over £50m market cap at this stage is still very low for the progress made.
If the permits come in and the financing is completed then the current NPV will rise further. Obviously at the moment it is rated by the analysts with those 2 events risked in, but they will change their targets once these milestones are met. Given the specifics of the Emmerson project I think its possible that more risk is attached to the financing than the construction as that is relatively simple compared to some projects.
The potash price is another great unknown and it is welcome that it looks like it bottomed out and is rising now but remember the Emmerson mine is still very much viable even at the absolute lowest end of potash prices.
What I have noticed is whilst we are finally rising the herd is definitely not here. I note that due to the absence of nonsense posters with limited knowledge of the project flooding this board. Long may that continue.
We may find that GC does his limited capital raise this week and if he does then he should be applauded for having the foresight to slightly delay it to get it away at more favourable market conditions. The work GC is currently doing to refine the project and looking closely at the viability of SOP will be very interesting. He will be looking to strike the balance between keeping this project simple but possibly slightly increasing it's scope if he see clear advantages in doing so.
I bought some more today, wish I had acted earlier but they are for the long term. With GC's operational experience and HL's finance raising experience I am confident for what is ahead.
With the price finally rising GC may delay further or may act now. It is impossible to know. All I do know is that he wanted to raise further capital to do further work to enhance the project, the extra funds may not be essential right now but are going to be required to do the work he wants to do prior to gaining finance.
Likely the price will settle back after a placing but I certainly haven't got the balls to sell all my shares in anticipation of that possibility as would not wish to be out - given EML is still in my view substantially under valued. Market cap is still only just £50m.
It is just more people becoming aware of the project and the hopefully positive news to come.
I find myself slightly annoyed today as I have just been paid and wanted to add, I know I shouldn't be as this gives GC the perfect chance to get his small capital raise away at higher level which is very good news for LTH's.
Will probably still add.
Yes exactly so finance taking place hopefully at start of q3 is completely logical as must follow the permits. Having the permits increases the hand in negotiations as well.
I do still think there is going to be a finance raise shortly as GC alluded that more funds were required to do some of the extra detailed things he wants to do. Whilst more dilution is slightly annoying it won't be if the fruits of GC's work is an enhancement to the project which is his intention on doing the work now. If GC's well written note to shareholders has the effect of rising the price to get a small raise out of the way all well and good for LTH's.
I am pleased to see it go up, but wish I had been paid last Friday and not this week coming to add. Will have to pay more now.
I think I am correct that the Align research note refers to a fair price of 24.7p based on what had been achieved in June, when permits are received, and if the SOP feasibility is viable, then this increases the current npv and also any price targets.