Member Info for Valuation-it-is

Rio’s aims:-

“Rio Tinto is at the heart of the energy transition and facing an opportunity-rich world…”

“Global trends such as re-industrialisation and a renewed emphasis on supply-chain security are presenting even more opportunities.”

“Critical minerals are vital to achieving a net zero future, and we continue to explore opportunities in this area.”

“Progressing our strategy Grow in materials essential for the energy transition”

Source Rio’s 2023 Report and Accounts

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Rio’s ability:-

Ability to borrow and Free Cash flow -

With a low level of gearing (net debt to total equity of 7.5% and free cash flow over the last two years of US$ 7.7bn, and US$ 9.0bn, Rio appears to have plenty of fire power. However, it has returned all of its free cash flow to shareholders by way of dividends the last two years paying US$ 6.5bn and US$11.7bn. Shareholders will not wish their income to be disrupted.

What to expect. Rio can make debt financed acquisitions totalling several $bn without strain. It can also offer its shares, so I think it can move to implement its stated aims in critical minerals. Beyond that much depends on the price of iron Ore and Aluminium – key products for Rio. These appear to be rising nicely at the moment.. See

https://tradingeconomics.com/commodity/iron-ore

https://tradingeconomics.com/commodity/aluminum

If these prices continue to rise, Rio’s firepower will be enhanced.

A number of the explorer/developers in critical minerals are nearing production and may be tempting targets

... are strong risers in the stock markets today. Bid action is drawing attention their way.

Perhaps the date change reflects the closing of the period for public consultation and the start of the period for considering those submissions from the public, rather than an unexpected delay or an elongation of the period for public submissions.

My understanding is that TUN BoD have considered IRDH's ideas but have decided against.

Taronga (Australia) -low grade (about 0.17%) mine on surface, hoping to be in production in 2026 eventually producing 3500 tonnes tin in concentrate per annum.

Tellehauser Germany grade about 1%, underground mine hoping to be in production 2027, eventually producing 3000 tonnes tin in concentrate per annum. A large amount of re-hab work needed.

I prefer to support the companies with UK mines

Https://www.mining.com/web/china-cuts-first-2024-tungsten-mining-quota-1-6-from-year-ago/

Croissant

Where are you picking up that there has been a four week extension? Is it a reliable source? My understanding is that there would have to be new evidence which has not yet been considered to cause a delay.

Very good! An observation from a OS map study

With many explorers standing at 60-80% discounts to NBV (those NBVs made with conservative assumptions), and those discounts representing amongst other things worries over whether funding can be raised, it seems that the established miners who are sat on huge cash balances, have got their pick of a load of sitting ducks. Expect more action.........

Croissant:- "You'd expect more truck movements or some rather large trucks."

or a conveyor to rail sidings perhaps..........................

"There were other people looking at coming in to this deal.............." All boxes ticked.......................

At 8.45 on the VSA broadcast. That is very good news indeed. i.e. Large potential buyers of the shares who may also be strategic partners.

Also SP Angel broadcast

Https://www.youtube.com/watch?v=i-5J9R9E3_8

IES follows after CUSN comments

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.