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More good news from Ascendant
http://www.ascendantresources.com/English/Investors/press-releases/press-release-details/2018/Ascendant-Resources-Reports-Expansion-PEA-for-Its-El-Mochito-Mine-That-Reduces-All-In-Sustaining-Costs-to-US096-Per-Pound-ZnEq-for-Life-of-Mine/default.aspx
Ok if they release a NAV update for September then it won't reflect the THC purchase so I've been running some numbers to calculate what the year end NAV update could come out with once the purchase of THCrestgate is factored in.
Taking the last published NAV as a base and then adjusting to allow for the purchase of THCrestgate and the Ascendant cash and share payment I get a NAV of GBP 4.386 Million or 12.52p per share.
Then adjusting that to reflect todays price of Ascendant shares (The price has moved somewhat from when the shares were issued) I still get a Minimum NAV of GBP 3.974 Million or 11.34p per share.
However when you take out the current investment to date in L.S. and instead use the Value of the 80% Earn in Agreement you get a potential NAV of GBP 7.892 Million or 22.52p per share.
Taking the 80% Earn in agreement and using that to calculate the book value of 100% of L.S. you get a potential NAV of GBP 9.529 Million or over 27p per share.
The quandary for MAFL will be how to value L.S. currrently for the NAV. The book cost up until Ascendant came on the scene was GBP 1.17 Million that obviously needs to increase to reflect the current 22 hole program. the Book Value of L.S. based on the Ascendant transaction is GBP 8.172 Million so it will be interesting to see what figure they settle on. No doubt they will clarify the basis for calculation with the NAV update.
The good news is whether they go purely for book cost or current value we will get a substantial uplift and as MAFL have basically a free carry and are already in profit on L.S. the whole project is essentially derisked.
Technically looking at the chart things also look positive. We have broken out of the downtrend channel that ended at 5.51p and we have broken through the 50 day M.A. Looking at the trades there is clearly a seller in the background who is unloading into the rise, so there should be opportunities to acquire shares in the range while the overhang is cleared but once the updated NAV is released I'm comfortable with an initial target of 10.9p (50% fib of the Oct 17 - Oct18) and substantially higher as book the Value of L.S. is firmed up.
https://uk.tradingview.com/chart/hzd9y6yX/
Its been a long time coming but I have to say the future looks really good.
Does anyone know when the next NAV update is due to be released? Is it quarterly or do we have to wait till February for the 6 months to december?
It has already been clarified Martin. MAFL own 75% of Redcorp, Ascendant own 25% of Redcorp.
Redcorp currently own 85% of L.S..
Redcorps ownership of L.S. will increase to 100% when the transfer of the 15% owned by E.D.M. is ratified by the Portugese Secretary of State which should be a formality.
So in essence MAFL own 75% of Lagoa Salgada
Without knowing the full details of the transaction between THC and MAFL its hard to come up with an accurate number. The next NAV update won't show the full details and we would need to see THC's closing accounts and balance sheet to price in all the information....plainly as that is market sensitive information MAFL won't provide it and as THC was a private company it won't be known to us until MAFL produce next years NAV update.
As I said before as an investor I'm more than happy with my current valuation of the NAV....so I'll be even happier if yours proves to be more accurate but if you want to chew over the details try.... Wizzy1962 at the hot place
Sorry 6Z was typing when you sent last msg..... No probs, I had mine when the transaction was announced :) It tastes nice
Just so we can draw this to a close for the avoidance of doubt....
When EDM is finalised, Ascendant who already own 25% of Redcorp will therefore also own 25% of Lagoa Salgada. The statements could have lead people to believe that MAFL own 75% of the 85% of L.S. currently held by Redcorp AND that MAFL will in addition also own the extra 15% when the EDM deal is approved. That is incorrect. When E.D.M. is finalised Ascendant will not own 21.25% of Lagoa, they will own 25% of it.
I realise it may have simply been a misunderstanding as Ascendant should really have added the EDM info into their RNS. I guess they should have said...... Ascendant own 25% of Redcorp who in turn own 85% of Lagoa Salgada which will increase to 100% once the EDM transaction is approved by the Portugese Secretary of State.
Anyway hopefully thats finalised the issue.
You really need to talk to J.V. as you are currently providing misleading information.
I refer you to MAFLS R.N.S. of the 8th of October.
"* Subject to Final Approval by Portuguese Secretary of State of EDM's sale of 15% of Lagoa Salgada to Redcorp;
**Current Redcorp Ownership: TH Crestgate 75%, Ascendant 25%"
Ascendcant have bought 25% of Redcorp. Redcorp are still awaiting finalisation of the deal which needs the approval of the Portugese Secretary of State for the 15% owned by E.D.M. MAFL currently own 75% of Redcorp and they will still only own 75% of Redcorp when the EDM deal is finalised. .
Once again if you are in any doubt over this talk to J.V. but PLEASE do that before commenting further as you risk falling foul of regs.
I'm afraid you are wrong, I'm not going to argue it here but remember this conversation :)
Anyway as far as the valuation is concerned look at it this way.... As an investor I'm very happy with my valuation, if i'm wrong as an investor i'll be even happier with your valuation but either way i'm happy...... so its all good.
Wizzy1962 at the hot place
I think you are wrong. I think the mention of 85% ownership on the Ascendant Resources RNS was a mistake. All the other RNS's recently have indicated that Redcorp owned 100% of L.S. and Ascendant have acquired 25% of Redcorp so they own 25% of L.S. I'd suggest that before speculating further on this 6Zeros or someone with a good rapport with MAFL seeks clarification.
As to valuation, MAFL have already indicated what the deal is worth to the NAV as it currently stands, an additional 900,000 USD so I currently put the NAV at around 9.4p. A 20% discount to NAV would take us to around 7.5p so we are still trading below where we should be but don't get carried away.
However that 9.4p is now substantially derisked as the unaudited costs of L.S. of CHF 1.9 million have now been recouped through the sale of the 25%. It therefore remains to be seen what value MAFL will attribute to their 75% of L.S. when the NAV update is released in December. If they are prudent they won't value it at anywhere near the 8.6 million as that is dependent on the drilling results and completion of the feasibility which is still 48 months away. I expect they will carry it at the value of the book cost to date. The difference now is that L.S. as a project is completely derisked as far as MAFL is concerned and so its far more likely that investors will be prepared to add a premium to the NAV for the L.S. potential rather than seeking a discount.
So all in all the future looks promising I think we will continue to trade in the range until the December update which will provide greater clarity but after that I fully expect MAFL to be trading in excess of 9.4p and my medium term target is 10.9p. To that end i've increased my exposure in recent days and currently hold 225,000 shares. Those of you who know my track record here might take that as a vote of confidence as I've always been conservative to say the least!
Hi Rasmus. I trade full time but generally I stay away from AIM, MAFL is my only AIM share. It started as a bottom draw stock from my early days of trading back in the days of Athol Gold. Then if you look back long enough in the history I did my best to expose the antics of the P&D brigade that attacked the stock early in 2017 and at the time I was challenged to say in advance when I would buy, when I would sell and why so although the people concerned have long since disappeared, I've kept it on my radar and stuck with my commitment to trade and comment on it as I went along. I thought it would be a breath of fresh air to simply give an honest opinion from a tech perspective so that's what I've tried to do. I think in that time I've traded it about 6 times and I guess its become something of a pet project but the profits I've made more than pay for the research time I've put in so I guess that's why I'm still here.... That and a degree of stubbornness as I'm sure some will testify :)
Hi ma5k, thanks, I appreciate the comments.
Glad to hear you're a convert to techs. Occasionally you get caught out by news but generally trading the price at support and resistance is the way to go.
There's a few reasons why I like it at this price. if you look at the chart it was always going to find some support between the 6.40 and 5.50 S & R lines but if you go back historically 6p had been both support and resistance so its a nice point for a pivot. From here the downside is limited, pure techies would be buyers at 5.50 anyway so that gives reassurance.
Simply looking at trading the price and chart from here I'm looking for a test of 9.26 followed by a movement back to the 50% line at 10.9. At that point I'll take my stake out and leave the rest for a free ride targeting 13p+ dependent on news. Having set my price driven targets I then consider what would drive the move as obviously you need to generate volume to give momentum so I then think about the fundamentals.
With the deal on L.S. I'm guessing that MAFL have recouped their investment already with the cash element of the first payment, so the share element should go straight onto the NAV pushing it to around 10p per share but that is with L.S. completely de-risked and if the earn in is fully exercised you have an unrisked potential of well over 16p on the NAV and still leaving them with 20% of L.S. and a completed feasibility study on the asset. That's quite a nice position to be in and gives good long term upside potential.
Then when you look at Ascendant resources and consider the viability of the project, they are profit making, their balance sheet looks healthy, they have funding in place and they should be in a position to finance L.S. from cash flow and reserves so I'm confident they can afford to complete the feasibility without having to raise further finance. Their share price had taken a hit with the movement in zinc prices but its moved back up nicely and its currently trading at around $0.80
Then you have the Zinc price itself, obviously its off its highs but its bounced nicely off 2,300 and its sitting at around 2,600 currently, it would be nice to see it moving back up further towards 3,000 again but i'm comfortable with it at this price.
So all in all I'm pretty happy with my punt. It may drift a bit between now and the next NAV update but I've got orders to buy further into any weakness it it does and I'm pretty comfortable with my risk to reward potential. So we'll see how it plays out in the next few months. Good luck x
https://uk.tradingview.com/chart/hzd9y6yX/
Maybe, but with Zinc back up knocking on 2.6 having bounced off 2.3 and ascendant resources having bounced back up to 8.1 on the ask it seems a reasonable value punt. I've got a couple of other orders placed if we get some more movement but this seems a nice first entry with a reasonable risk to reward
Hi chaps, hope you all had a good holidays. Thought I'd dip my toe back in the water again as we are at around 20% discount to NAV which sounds a nice safe bet so picked up 75000 at 6.04p. It could drop a bit lower but there is major support at 5.50p which should be the floor so I'm happy to take a punt at this level with a 5/1 risk to reward as it should be good for 9p+ with Zinc bouncing nicely off 2,300
I picked up two lots of 25,000 at 8.1 and 8.2 at the open but the rest of the orders didn't trigger, having said that the way its looking I may well be out again by lunch time! I almost feel guilty....almost :) Never the less, well done to you, I was wrong on my valuation but the instant profit makes the humble pie taste a bit sweeter
Wow I didn't see that coming, hats off to you. Well done, I'll have some tomato sauce with my hat for breakfast :)
6Zeros......Love the semantics but i'll give you that one :)
I forgot to add another positive for you.......your patience may well qualify you for sainthood, i'll have a chat with the pope next time i'm in Rome :)
Bonker99 Once we get to these levels it normally has to complete retracement back to where the move started so I thought I was being generous at 5.50p rather than 5.0p.
6Zeros and you love being the person that continually tells me I'm wrong only to see me being proved right even though all I've done is stated the blindingly obvious to anyone that can read a chart :)
Yes there are positives, just not at this price which is what I've said all along, but the possibility of realising those returns are increasingly looking further and further down the road and for most AIM investors the risk to reward ratio has to be far higher and far shorter term to risk their hard earned wedge on the roulette table that is AIM.
Well I did say the next stop would be testing support at it would test support at 6.38p.
Heres what I predicted months ago:-
https://uk.tradingview.com/chart/hzd9y6yX/
The three biggest problems now are:-
1) Because the assets are so low the operating costs still account for 4.76% of the NAV so they need to exceed that level of return each year just to stand still.
2) As far as the market is concerned there is still a sizable % of the assets in unquoted investments and consequently they will want to see a significant discount to the NAV before they consider MAFL as a value investment.
3) The biggest concern is that there doesn't appear to be any prospect of a short term return on their investment in THC so any hopes of a big returns on L.S. are being pushed further and further into the future.
So all in all I think we'll see minimal support as I predicted around the 6.4 level mainly from existing holders trying to average down but I still don't anticipate seeing any real value investors coming back until we get to the 5.50 level, but its not that far to go now so maybe autumn time it will start to look interesting.
Thanks Timmit so if they had added 2.6 mill to receivables for Mediapolis and they'll only get appx 1.8 million after costs then the balance sheet will take a hit of 860K I guess. any info on the 6.5 mil due from Sipiem?