Member Info for Valuation-it-is

Good morning MO. Nice to read your posts.
The majors have loads of cash due to the extreme price of oil at the moment. The point they are making to the UK government is, why should we invest in projects to produce oil and gas in the UK domain- onshore and offshore, -when you wish to take the majority (65%) of any profit we make? Furthermore, having been on the receiving end of the green agenda until recently, they are concerned that may come back and hit them if the Ukraine war ceases and demand for UK oil/gas drops again. They say better to leave it in the ground until taxes come down and the situation is clearer. Huge investment is on hold now because of Sunak' tax plans and price uncertainty. I read one company is holding back on a £15bn investment in the UK as a result. Political vote winning appears to have cost us many billions of investment, thousands of jobs and energy security.
This does mean the oil majors will be looking for other ways to utilise their cash. But again, why would they choose the UK when their profits are going to be confiscated?
If they wish to buy CUSN my guess is that they would set up an investment vehicle in a country with an acceptable tax regime, fund it with cash and debt, so that the profits from CUSN would be reported outside the UK.

By the way - its Cornish Lithium (not CUSN) that has the near 20% investment from TechMet.
CUSN have a large shareholder in Blue wave Resources, Sir Mick Davis's investment vehicle.

Just to be clear to those coming into the thread part way through, and to avoid any misunderstandings, the calculations are in the previous post of 10.57 were for Cornish Lithium ltd, in which CUSN has a stake. They are not CUSN figures.

548,581,339 shares were to be in issue following the recent capital reorganistion. This will have increased by 45,000,000 following the issue of shares to TechMet, to 593,581,339.
Tech Met, following the second issue of shares will now hold 111,666,666 shares (£9m at 13.5p= 66,666,666 shares
+ £9m at 20p = 45,000,000 shares)
So TechMet appears to have a holding of 18.812%
Its warrants would entitle it to buy at par a further 13.5m shares taking its holding to 125,166,666 shares and the total number in issue to 607,081,339 shares. Giving it a potential 20.618% stake in the company.

What buying the second tranche of shares means for TechMet/ Brian Mennell and US Dept of defense
The statement:-
"The Investment, which is subject to shareholder approval, will occur in two tranches raising up to £18 million at a weighted average subscription price of 16.12 pence per share. The Investment will be split as follows:
• Tranche One: TechMet will subscribe for £9 million of new ordinary shares in Cornish Lithium at a subscription price of 13.5 pence per share.

• Tranche Two: Following the publication of the scoping study for Trelavour, TechMet can elect, at its option, to subscribe for a further £9 million of new ordinary shares in Cornish Lithium at a subscription price of 20 pence per share.

• All new shares issued to TechMet will rank pari passu with existing ordinary shares in Cornish Lithium Ltd.

• Following the completion of Tranche Two, and for so long as TechMet maintains a shareholding of 15% or above, TechMet shall have a Right of First Offer to market lithium products from the Company’s projects. TechMet will work with Cornish Lithium to prioritise UK based customers, including UK battery and automotive manufacturers.

• Following TechMet’s Tranche Two subscription, Cornish Lithium shall issue TechMet 13,500,000 warrants to subscribe for shares at par value upon the sooner of: (i) Cornish Lithium listing on a public exchange; or (ii) the Company authorising the commencement of construction of one of its projects at a commercial scale. The warrants are designed to further incentivise TechMet to utilise the experience of its team and extensive industry networks to help Cornish Lithium raise the required finance to build its projects. "

Tech Met is building up a significant stake in CL, and has the possibility to increase it further by the exercise of its warrants. I will try to work out its current percentage holding . Tech Met also has some influence over the marketing of CL's production through its "Right of First Offer to market lithium products from the Company’s projects." The detail of this "Right" is unknown to me at present.

Given TechMet is buying more shares at 20p each, when it last bought at 13.5p, it appears to be very encouraging news for shareholders, amongst them CUSN. And as Pawgee said we must not forget the royalties.

Pawgee
Plus the new shares that were issued in January 2022 of 555,802, means the total = 6,713,940

Even better!

Pawgee
Plus the new shares that were issued in January 2022 of 555,802, means the total = 6,713,940

Even better!

I particularly liked the look of

.............the Scoping Study includes the required capital expenditure to produce a number of by-products such as caesium and rubidium, the study has not yet taken account of the additional revenue that could be generated from the sale of these by-products.... "

TechMet exercises its option to invest a further £9 million in Cornish Lithium following its review of the Trelavour Scoping Study

Cornish Lithium Ltd (the “Company” or “Cornish Lithium”), the innovative mineral exploration and development company based in Cornwall, UK, is pleased to announce that its major institutional shareholder, TechMet Limited (“TechMet”), a leading technology metals investment company, has exercised its option to invest a further £9 million at 20 pence per share (the “Option”).

The Option is the second tranche of an £18 million funding package provided by TechMet, which was announced by Cornish Lithium in November 2021. The Option became exercisable following the Company’s delivery of a Scoping Study for the Trelavour Hard Rock Lithium Project (the “Trelavour Project”) (the “Scoping Study”) to TechMet for its review.

Trelavour Project Update
TechMet has elected to exercise its Option following a full review of Cornish Lithium’s Trelavour Scoping Study, which sets out the design and economics of the Trelavour Project based upon the production of battery grade lithium hydroxide. The Trelavour Project comprises open pit mining of lithium enriched granite from a brownfield china clay pit, together with processing via comminution and flotation to a concentrate of lithium-bearing mica. Lithium hydroxide is then produced from the mica concentrate utilising the licensed Lepidico leaching process at an industrial site in close proximity to the mine.

Highlights from the results of the Scoping Study include:

1.25 million tonnes per annum (“Mtpa”) run of mine, with a 20-year mine life producing an average of 7,800 tpa of lithium hydroxide;
Robust economic result*:
Post-tax NPV (8%) of US$318.6 million and a post-tax IRR of 24.4%
Initial capital expenditure of US$243.8 million (including US$48.9m of contingency)
Payback expected within 3.8 years from first production
The Trelavour Project benefits from excellent logistics and close proximity to existing infrastructure, including power, rail, road and port facilities.


There are also areas for potential economic improvement from these base case values. One important example is that whilst the Scoping Study includes the required capital expenditure to produce a number of by-products such as caesium and rubidium, the study has not yet taken account of the additional revenue that could be generated from the sale of these by-products. Cornish Lithium is currently completing processing test work that will provide representative samples and specification of these by-products, allowing their potential value to be estimated. It is expected that the results of this work will be announced by the end of Q3 2022.

The Company is now progressing towards a Feasibility Study for the Trelavour Project. The next drilling programme will commence shortly, which will not only further expand the Trelavour Mineral Resource, but will also co

With the huge amount of drilling going on in Cornwall recently I think the analytical lab has been swamped. It s also possible holidays have intervened. I agree, we should be hearing something shortly though. I suspect the focus has now switched to SC from UD but I am with you, eager to hear the latest from UD.

Otherwise I saw this Reuters report on the Stellantis investment in Vulcan. Interesting to see they invested at a considerable 32.4% premium. That bodes well for CUSN's holding in Cornish Lithium and CL itself.

June 24 (Reuters) - Carmaker Stellantis (STLA.MI) will invest 50 million euros ($52 million) to buy a 8% stake in miner Vulcan Energy Resources (VUL.AX), becoming its second largest shareholder and extending to 10 years a supply agreement for climate-friendly lithium.

Vulcan, a German-Australian start-up, is one of a number of companies testing a direct lithium extraction (DLE) method that uses less land and groundwater, making it more sustainable than the most-common open-pit mines and brine evaporation ponds.
Stellantis Chief Executive Carlos Tavares said on Friday the deal was part of the automaker's strategy to form strong relationships with partners amid a collective effort to fight global warming and provide clean, safe and affordable transport.

"Making this highly strategic investment in a leading lithium company will help us create a resilient and sustainable value chain for our European electric vehicle battery production," he said in a statement.
Stellantis, the owner of brands including Jeep, Peugeot, Fiat, Citroen, Maserati and Opel, has a plan to for battery electric vehicles to make up 100% of its European passenger car sales by 2030.

In November last year, Vulcan and the Italian-French group had signed an initial binding deal to supply between 81,000 and 99,000 tonnes of battery-grade lithium hydroxide from Germany to Stellantis for five years from 2026.
Australia-headquartered Vulcan said in a statement it would issue about 8.5 million shares to Stellantis at A$6.622 per share, representing a 32.4% premium to the stock's Thursday closing price. Its shares closed Friday's session up 26.8%.

Vulcan, which now has lithium supply deals with French automaker Renault SA (RENA.PA), Belgian recycling group Umicore NV (UMI.BR) and South Korea's LG Chem Ltd (051910.KS), said it would use the proceeds to expand drilling at its lithium-extraction project in the Upper Rhine Valley, Germany."

With worries over a coming recession co-inciding with a sell down in tin stocks, company share prices have slid. But those involved with the big switch out of fossil fuels into Electricity (Cars, homes, ships etc.) can see the potential. So we see moves such as that made recently by Stellantis into battery materials. Here is a report from the FT:-

Stellantis will build a €50mn stake in Australian start-up Vulcan Energy Resources as it seeks to extract lithium from deposits in Germany and become the first European carmaker to make a substantial direct investment in the extraction of raw materials for batteries.
The move comes as carmakers are having to contend with soaring prices for key materials such as cobalt, nickel and lithium, adding pressure on the profitability of electric vehicles.
“Making this highly strategic investment in a leading lithium company will help us create a resilient and sustainable value chain for our European electric vehicle battery production,” said Stellantis boss Carlos Tavares.
The group, which includes Fiat and Peugeot brands, plans to sell a total of 5mn battery electric cars worldwide by 2030.
Stellantis’s investment will make it the second-largest shareholder in Vulcan after founder and managing director Francis Wedin. The company has also been backed by a group belonging to Australian billionaire Gina Rinehart.

Vulcan has been awarded eight exploration licenses in Germany’s Upper Rhine Valley, where it hopes to extract lithium from geothermal brines and bought a facility in Insheim with an existing production licence last year. It also has an exploration licence for a site in the Monti Sabatini volcanic region near Rome.

The company plans to start commercial deliveries of lithium by the middle of the decade, contingent on further approvals from local authorities in Germany and amid opposition from some residents near its sites.

Vulcan’s shares — listed both in Australia and Frankfurt — have fallen by more than 50 per cent this year, as part of a broader market sell-off, after soaring in 2021.

Several other carmakers, including Volkswagen and Renault, have signed procurement deals with Vulcan, but these have not included upfront investments. The company is using a technique known as direct lithium extraction that separates the metal from geothermal brines.

BMW invested last year in a rival company, Lilac Solutions, which claims to be able to efficiently extract lithium from saltwater brines. The company did not disclose how much it had spent on the start-up, but filings indicate the deal is worth a fraction of the one Stellantis has made.

Carmakers, which have been pummelled by persistent shortages of semiconductors and key components, are increasingly considering investments in technology and commodity companies to avoid supply bottlenecks after decades of relying on contractors for materials and parts.

Tesla boss Elon Musk in May told a Financial Times conference that it was “not out of the question” for his company to buy a mining group.

“It’s not that we wish to buy mining companies, but if that’s the only way to accelerate the transition” to electric vehicles, the possibility was on the table, he said.

Such an acquisition would only make sense, though, if Tesla were capable of changing that mining company’s trajectory, he added.

The price of battery-grade lithium hydroxide has risen sharply. It is currently trading at $75 a kilogramme, according to a price assessment from Fastmarkets, up 400 per cent from time a year ago.

Direct lithium extraction (DLE) differs from conventional evaporation based processes. Its supporters claim it has higher recovery rates and stronger environmental characteristics.

Rio Tinto agreed last year to pay $825mn for Salar del Rincon, an DLE project in Argentina, saying it had the potential to significantly increase lithium recoveries compared to solar evaporation ponds.

However not everyone is convinced small mining companies will be able to make the technology work. Only Livent, a big US lithium producer, can boast of using DLE

Within 30 months from the closing of the Offering, the Company’s plans are as follows:

Construct the Water Treatment Plant (“WTP”) in the first half of 2023 and thereafter complete the dewatering of the mine within 18 months;
Complete an underground drill program which is expected to commence in July 2022 in order to delineate a JORC compliant Measured and Indicated Mineral Resource and increase the Indicated and Inferred JORC Mineral Resource once access to the underground workings is obtained;
Complete a Feasibility Study using all reasonable commercial efforts on or before 31 December 2024;
Commence basic and detailed engineering studies, construction of the processing plant, refurbishment of underground facilities and other on-site early works; and
Evaluate downstream beneficiation opportunities in the UK and the rest of Europe.
Subject to the availability of financing, consideration will also be given to continuing with the Company’s exploration program at United Downs and evaluating other near-surface, high potential, exploration targets within transport distance of the planned processing plant site at South Crofty.

Would it not be more relevant for PHE to state the weight of syngas produced by 40 tonnes of waste plastic? The syngas can be split up further into 2 tonnes of hydrogen and x tonnes of other molecules.
Unfortunately or misleadingly, I am not sure which, Treehuggers is leaving us with the impression that 38 tonnes of CO2 is going into the atmosphere

https://www.dailymail.co.uk/money/investing/article-10929745/MIDAS-SHARE-TIPS-Tin-swell-wallet.html
CUSN appears to have better grades at South Crofty (1.6%) than Tellhauser (1.0%) and Taronga 0.16%) so perhaps the Daily Mail should have a look at CUSN too............................

https://www.dailymail.co.uk/money/investing/article-10929745/MIDAS-SHARE-TIPS-Tin-swell-wallet.html

Consider also Cornish Tin (CUSN), Tungsten West (TUN) and Strategic Minerals (SML)
CUSN appears to have better grades at South Crofty (1.6%) than Tellhauser (1.0%) and Taronga 0.16%)

https://www.telegraph.co.uk/world-news/2022/06/18/vladimir-putins-veiled-threat-ex-soviet-states-part-historic/

"Kazakhstan is a mineral-rich country. Many of its metal and rare earth deposits lie in the north of the country. One of its largest oil and gas projects, Karachaganak – in which Shell is a shareholder – is near Uralsk. The Kazakh army is poor and no match for Russia’s, even in a weakened state."

I understand the new plan for re-starting the mine is due to be divulged at the end of this month.

I agree, if you don't want an institution only raise, then don't vote away pre-emption rights.................... Force an underwritten rights issue.

I am certainly going to vote against disapplying statutory pre-emption rights. Is there not a vote on directors remuneration?

Without interdependencies? As PHE will be dealing with the waste that cannot be recycled, it sounds to me as if all the other parts of the site will have to be running before the DMG gets going. If the DMG was a stand alone, independent operation, it would not need to be at Protos and could have been built elsewhere, quickly.