Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Not just BHP after Anglo-American
Telegraph report at 8:13AM
Anglo American shares jump as Glencore eyes bid
UK-listed miner Anglo American jumped in early trading amid reports that Glencore is considering a takeover approach.
Pawgee
Agreed. I think the funding required will be mainly by debt too, with the possibility of plant finance (leasing) and an offtake agreement to add into the picture. All existing shareholders, particularly major shareholders are not going to want to see any dilution of their value and (probably ) their voting rights so will be pushing for a pre-emption situation if there is any extra equity issued. So perhaps better to be in than out now.
Given major shareholders came in at 18 p per share, and since that March 2022 fund raise, the 2024 PEA has shown a significant increase in NBV over the 2017 PEA, together with encouraging results which are likely to push the NBV much higher, the value/share is arguably higher than it was for the 18p a share raise. Hence the comments in the presentation about VBR being very supportive.
Gingy
Not sure it will be the next thing, but I am expecting more results from the assay tests, which may indicate the existence of more tin for future mining. If so, mine life may be extended and the NBV augmented.
The company's broker has produced an update with a new target price on a 12 month view of 110p.
Doyezee
No, the issue probably will add value to the shares, as the discount for the risk of not getting funding comes out. That discount was probably quite significant. Also do not forget:-
"The Open Offer will include an Excess Application Facility to enable Qualifying Shareholders to apply for additional new Ordinary Shares in excess of their entitlements under the Open Offer."
Doyezee
There are two types of dilution.Dilution of voting power, and dilution of value.
For the latter, although there is an increase in the number of shares, the value of the company has gone up for two reasons. It will receive a big injection of cash in exchange for the shares, and given the issue price was very near the market price at the time, there is minimal value per share dilution from that. Secondly the value of the company has gone up because the discount for the risk of not getting funding has been removed by the fund raise.
Hopefully these factors will be reflected in the share price over a short space of time. In the short term however, many of the potential buyers of the shares have been satisfied. So one can argue, that all else being fine, the best time to buy shares in any company is just after a successful share issue. Hope that helps.
Given the discount offered was small, it indicates there is a lot of confidence in IES's future.
It is good to see that UKIB has learned its lesson from Cornish Lithium and bought its shares at the same price as everyone else involved. UKIB was fast becoming a watch word for disaster for other investors. As TurkeyGuzzler observes a re-rating is now entirely possible and I would think quite likely now that finance for expansion/ working capital has been gained.
Before the impact of the Wide Formation, the value of the tin at $31k/tonne is huge and will be a useful addition to world supplies just as supply shortages are expected to bite.
The PEA NBV is $201m at a tin price of $31k. With a significant contingency already deducted.
For me two key points are those highlighted by OM the Chief Operating Officer:-
The low all-in sustaining cost of about US$13,700 per tonne of payable tin is an important metric and potentially positions the project within the lowest quartile of the global tin industry cost curve.
“We believe the opportunities for mineral resource expansion at South Crofty, and beyond, are significant and this will come into focus when the current mine dewatering and shaft refurbishment project is complete by Q3 2025.”
The first point indicates that South Crofty once up and running, will be one of the least vulnerable producers of tin if there is a downturn in the tin price. More likely though according to most commentators is a shortage of tin which will cause a rise in the in price. SC will make large extra profits if that occurs, and be one of the biggest beneficiaries as its cost of production is expected to be low.
The second comment highlights that shareholders should not just think about the value of SC when considering the value of the CUSN business. There is likely a lot more to come from mine development - a particularly promising aspect will be the exploratory drilling from within the mine once de-watered allied to the prospects of large value in the Wide Formation. And all that is before we think about the prospects for United Downs Gwinear etc.
It will take a while for investors to get to grips with all the positives but we seem set for a good run in the period up to a production start.
Croissant
Perhaps also worth noting that the tungsten and tin prices are denoted in strengthening dollars and are rising, whilst our cost base is denoted in £.
"How a global race to secure copper supplies sparked a £31bn bid for a FTSE giant-
Heightened demand for net zero minerals could trigger a wave of dealmaking in mining"
https://www.telegraph.co.uk/business/2024/04/25/how-global-race-copper-supplies-sparked-anglo-american-bid/
Is this the lighting of the blue touch paper for the sector? The BoD can see the potential ahead, it is likely others will follow.
VBR will be aware of the holding in CL , and also the royalty arrangements and annual fee. In the whole valuation of CUSN the exposure to CL is a small component but may become much larger if CL goes into production. It has the backers to do so.............................
.. is reacting to the re-armament drive. TUN to benefit perhaps................
Natnrg
3 to 4 times his buy in price of 18p would equal 54p to 72p. That would be before the impact of the rise in the tin price.
Sir Mick's game plan......................
Here s an extract from an interview with Sir Mick Davis, whose Vision Blue Resources put £25m into CUSN
Question :- Generally speaking, what kind of investment criteria are you using to look for these opportunities?
Sir Mick:-
It all starts with the rocks in the ground, just to be very simplistic. I'm looking for the best quality resources that I can find. I look for resources that have been well-defined.
Then, I'm looking for high-value, low-volume commodities. My experience in the past running large mining companies is one of the big drains on the value proposition because is if you have to establish a large logistics system. You can only make it pay if you have a very large mine.
I want to be in geographies in which I understand how to operate. They can be complex geographies ... but I need to know how to operate in them. I need to know that I can identify and mitigate the risks.
The third thing is [that] I want to be able to know that I can enter into that project at a 0.2x, maybe 0.3x net present value. Then, put in the capital required for the project to progress either to feasibility, or feasibility to construction, etc. and inject my team into the investee, so that I can make sure that they are managing the risks associated with bringing up the value curve.
By the time we get into early-stage production, which is the time I would like to exit and hand over to the major mining companies, I consider maybe 0.8x to 1.0x NPV and therefore make my 3x to 4x without having to make an assumption about what commodity prices are going to be.
I'm looking for commodities that essentially talk to the energy transformation and the [environmental, social and governance investing] narrative. There is a hell of a lot of institutions that want to fund those sorts of projects. I essentially want to be the person who feeds the ducks that are quacking for that.
Its now or never, for fund raising that is.
The Gawthorpe gap? Please explain.
Https://markets.businessinsider.com/commodities/tin-price?op=1