The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
The MSYS collaboration does raise questions. The placing was only possible after GB and DVRG had shown interest in the company. Prior to that the company was valued at £1.5m and probably could have been acquired by DVRG at less than £2m. If the Modern Water model is anything to go by, then DVRG will eventually acquire MSYS for much more than £2m.
Comments have been made about the nods and winks by GB on Twitter. The question is - does this form of PR work? Many companies are now using Twitter to communicate with shareholders and it works well in highlighting news, facts and updates. Some might look at DVRG's share price and say it hasn't worked well enough.
What we are missing are clear planned actions, milestones and inflection points. For example as others have commented, I am still not clear on the Breathalyser. What were the trial phases? When did we move from one completed phase to the next phase? When is the expected completion date for Phase 3? Is it a medical device and if so what regulatory approvals are needed? What is their timescale? What markets is the company looking at? What are their sizes? What are the marketing priorities?
These are all valid questions and with other bio pharma/medical device companies there is no need to ask these questions as the answers already form part of company communication with shareholders.
The fact is we do not know where DVRG is going on some aspects of their business. We know more about what competitors have done/are doing in the area of covid. It is all too vague.
Oilplayer2009 on Twitter
@Oilplayer2009
#MTL (1.7p) looks outstanding value at current levels - on target to produce 80,000 oz of #GOLD this year - debt restructured - record production & revenues reported in Q4
Shares have been overlooked & under radar - fallen from 3.5p in October
#MTL are only valued at £35m
I can see both sides of some of the comments made on this site today but I cannot see any reason for filtering.
It is extremely unusual for a CEO to give daily updates on a well being drilled. Normally, wells are reported once they reach target depth and then after assays have been completed. The comments included results from the handheld XRF. These devices are about 80% accurate, i.e. results can be 20% out. No assays have yet been completed. Let's hope the assays confirm or exceed the results indicated by the XRF.
The interviews consist mostly of one question and then a long report by CB. I would prefer to hear a more rigorous Q&A session. I hope the reason for frequent reports is that he is genuinely excited by the well but there is the risk of disappointment - XRF versus assays.
On balance I prefer to have too much reporting rather than too little.
Whatever questions we may have about CB's reporting approach, he was extremely astute in acquiring optionality on these Bushranger tenements. He did something similar at Galileo Resources. He grabbed a once in a lifetime opportunity for Xtract shareholders. Also, he has started the drilling quickly and provided adequate finance for the project.
I decided to invest due to the Bushranger Project being in the Lachian Fold Belt, due to the existing resource and Anglo American's previous ownership and buyback option. Incidentally, CB previously worked for Anglo American.
So far I have no regrets and can see substantial upside.
Have just seen this summary posted 17 hours ago:
“Buy Metals Exploration - c50% upside
BY HOTSTOCKROCKETS
Operational and financial struggles have meant Metals Exploration (MTL) has been a long-term dog. That is why its shares are so cheap. But the world has changed. It has, the other day, now followed an October debt restructuring with an update boasting of record quarterly production and sales, which, as it becomes understood, suggests a dramatic share price recovery is on the cards.”
Source: https://www.*************.com/
Align research note says:
"Given the positive developments in the wider battery metals space it is high time that the stock market took a good look again at the large Mambare nickel/cobalt project. This could well lead to the historic £40m valuation number being brought back into investors’ awareness and focus. "
and
"The Mining Lease ........ is much, much bigger news to be granted a 20-year Mining Lease than the normal 2-year Exploration Licence extension, as it will open the door to begin unlocking the value at Mambare for everyone to see and likely attract the
interest of larger nickel entities."
On Friday Zak Mir commented on the Metals Exploration breakout and based on his analysis said “the share price is heading to 4p”.
https://www.share-talk.com/charting-multibaggers-characteristics-of-the-best-performing-stocks-17th-january-2020/#gs.r0u3d6
GLR1990, yes agree with you. I will try and check if seller is out tomorrow.
PS Good to see you here H5O
On re-reading Q4 results, one very important point was made. The gold recovery rate for Q4 2020 increased to 79.8%, a record high. But that’s not the point.
The feasibility study contained a recovery rate of 91.9%, which is the basis on which the mine was designed to operate.
At 91.9%, gold poured in Q4 would have been 22,925 oz whereas the actual gold poured was 19,907 oz. This is an additional 3,018 oz of gold for just the one quarter.
Assuming Q4 production levels, at 91.9% annual gold poured is 91,716 oz. This must be what the company is targeting and what we should look forward to.
If my understanding is correct, there is no addition cash cost to achieving 91.9% recovery. It flows straight through to the bottom line. It appears that plant improvements have already been made. Yearly production of 91,716 oz and gold at $1,900 produces an additional cash flow of $22.9m.
This gets better and better .
Neil, on 8th September RNS wording says · "There will be no set fixed principal and interest repayment schedule and there will be no requirement to repay any New Mezzanine Facility interest or principal until such time as the New Senior Facility is paid in full." I read "no requirement" as meaning that it is an option to pay interest if the company so wants. Given the interest rate it makes sense to make the payments.
Neil, good point about the mezz interest but the company has the option, but not the requirement, to pay Mezz interest. I will see if I can find out what has been paid.
Debt repayments will be paid out of future earnings that should show the progress intimated in the Q4 report. I will send you a copy of the updated model that illustrates future results and you can change the assumptions as you like.
CarefreeCarry, the Mezzanine Facility will convert into senior debt at 7% interest once the current senior debt is repaid. It will not be long with these results. We will probably be debt free in 2023.
I'm sure we cannot find another gold producer with the exciting prospects of Metals Exploration.
Phil, once the market realises this is a potential 8 bagger with a target price of 16p, it should move sharply higher . After all it's not blue sky exploration but a gold producer! It will probably be able to afford a dividend in 2023 equal to the current market capitalisation of £43m.
The results must be better than anyone could have expected.
Management have made tremendous achievements and some very important points.
“Whilst also looking to continue to build on this operational performance at Runruno for 2021 and beyond.”
This is a really good indication that further improvements are to come. Remember the mine is designed to produce 100,000 oz of gold annually. Indications are that we are heading towards this in 2021.
“Since the end of the quarter a further senior debt repayment of US$7.3 million has been made.
Should the Company generate sufficient cash resources, the Board may decide to make additional early repayments to minimise interest payments, in line with the terms of the restructured debt facilities.”
I had not expected early debt repayments.
This suggests:
1. gold production is going to be higher in 2021
2. cash flow is exceeding expectations
3. capital spending is going to be lower in 2021 now that the catch up in maintenance and plant improvement has been largely completed.
4. debt could be repaid during the next 2/3 years, subject to the gold price.
“Delays in the resettlement of the illegal miners have affected the 2021 head grade with high grade material from Stage 3 being pushed to the 2022 mining schedule.
The Company expects to have this access road completed during Q1 2021 and access to the higher grade ore by end Q4 2021.”
This indicates:
1. gold production could reach mine design of 100,000 oz in 2022.
2. cost of gold production will fall further to increase profits and cash flow. Cash cost of production in the feasibility study was $520.
3. debt could well be repaid quicker than we thought.
All very good news and a gold mining company excellently placed to benefit from any further increases in the gold price. Every $100 increase in the gold price should increase the share price by 1.5p.
For 2021 I’m looking for 88,000 oz gold production, an average gold price of $2000, cash cost of production down from $743 to $600. All this gives a present day share price (discounting future cash flows back to present day values) of 13p or 21p if you add in exploration potential.
Phil, like you I expect Q4 results in the next two weeks. DB runs a very efficient operation and now that the refinancing is behind us there are no distractions. We will see.
Good news about the website. Let's hope we see brokers research and some presentations/interviews as well this quarter.
By the way, I had my model reviewed by a geologist who incorporated a few improvements (if you want a copy let me know). These are extra costs but even so with gold at $1900, 80K gold production and $900 cash cost I still get a cautious NPV per share of 6p/8p depending on the discount %. Let's hope any brokers research reaches a similar conclusion.
Some chunky sells yesterday ahead of what is likely to be one the best quarterly results so far! The company has spent capex on the plant to raise productivity in Q3 and Q4, so I'm looking for higher gold output and falling cost of production.
QueensLandWinner, I can't see the drawdown facility being used if the current drilling continues to produce successful results. The reason being the conversion prices range from 1.45p to 1.85p. Upon success the company will find it fairly easy to make a placing at a much higher share price than 1.85p to fund further drilling.
Sorry for duplication - the first attempt didn't show up on my computer.
Turner Pope's excellent research note says
"Industry analysis suggests the global cruise line industry provides services to c.32m passengers annually with 1.1m full time employees. Based on onboard utilisation of both Microtox PD and Microtox BT and assuming one daily breath test for each individual (priced at £4.per test) plus five installed Microtox PD units installed on each ship for 24/7 monitoring, Deepverge calculates a prospective annual market opportunity equivalent to £2.6 billion. "
In the Daily Telegraph today it says that Carnival are to launch the full fleet by 2022. It puts this down to vaccines being rolled out worldwide and the development of low-cost testing that would influence the pace of recovery.
I wonder what part of the $2.6 billion will accrue to Deep Verge!
In Turner Pope's research note they commented
"Industry analysis suggests the global cruise line industry provides services to c.32m passengers annually with 1.1m full time employees. Based on onboard utilisation of both Microtox PD and Microtox BT and assuming one daily breath test for each individual (priced at £4 per test) plus five installed Microtox PD units installed on each ship for 24/7 monitoring, Deepverge calculates a prospective annual market opportunity equivalent to £2.6 billion."
DVRG's progress is confirmed today in The Telegraph. It says it expects to have all his ships back in action by the end of 2021, as vaccines rollout worldwide. It said the development of low-cost testing and vaccine distribution would influence the pace of recovery.
It looks to me that DVRG's plans for the cruise industry are coming to fruition in 2021. I wonder what part of the $2.6 billion will accrue to Deep Verge.