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Well thats me done for the week. Its been good to have some proper debate. Thanks Quadrum and Lewis. Just from a TA perspective...nothing much to say :) Looking for a break of 13.5 for one direction or 11.98 for the other. We are sitting just below a 50% retracement on the last move and but it could easily go either way. I guess based on the frequency of the last few RNS's I don't expect any more news till next month so in the absence of anything substantive it'll probably continue to drift in the range for a while. Have a great weekend, catch you next week x
I agree Quadrum whilst THC's cash assets were limited (at the time of the purchase the cash injected my both MAFL and the owners of THC Maurer and Mopper amounted to appx �200k) don't forget they had the receipts from the sale of Toral of which �326k was in cash (the balance in shares) so THC has had an injection of cash on its balance sheet of around �500k in total. I imagine that should have been enough to fund the drilling and testing so far.
Hi Lewis. Those are correct but they represent zinc rich mining projects as a whole and include projects where the resource figures are based on proven and probable estimates not just those like Lagoa where the resource estimate is only indicated and inferred. The drilling program will not produce a JORC, it is simply targeting increasing the existing indicated and inferred resource by a maximum of 125% and consequently the Toral project is probably a suitable benchmark as the resources were in the same category. I also don't think THC are silly. They have secured an active partner that is helping them turn a asset valued at 100K into an asset that is valued in my opinion at �750k...an excellent outcome for both parties by any measure. What would identify them as crazy is the suggestion that they would have sold 49% of Lagoa for that price if it had the potential to resell for tens of millions and therefore why I think the tens of millions estimate is unrealistic. Also i think you'll find MAFL are not paying for all the drilling and re-estimations. THC pay these costs of which MAFL's own 49% and are therefore liable for 49%. One would imagine the proceeds from the sale of Toral and Lago are being used to fund the drilling and testing work though it was indicated that further funding may be needed in the future and that MAFL would announce at the time if they would inject more funds and how it would be structured. One would imagine it would probably be in the form of loan notes as I imagine they would want to keep their interest below 49%.
The problem is Lewis when we look at what they actually sold Toral for they only got �565,000. Toral had a resource estimate of 8.7m/t. The target for MAFL/THC is to increase the estimate on Lagoa to a maximum of 10.1 m/t. Therefore taking Toral as a pricing model you would expect to put a valuation on Lagoa of �655,000 but allowing for improvements in the market since Toral was sold I estimate we are talking probably more like �750,000 But in general when people are considering valuations please be realistic. Don't forget THC sold MAFL 49% of Toral, Lago and Lagoa for �148,000 looking at the estimated resources in place at the time. That means THC placed a valuation of no more than �50,000 on MAFL's share of Lagoa. To suggest that THC would have sold a 49% of Lagoa for �50,000 when you are now estimating that its worth tens of millions would be to suggest that THC are completely crazy....I don't think they are. People simply need to be realistic in their expectations of what Lagoa is really worth.
Look at my charts which you constantly complain about me publishing....It has my buy and sell lines shown in red and it always has. I buy at support and sell at resistance and I've been using the same chart for months as you well know......how many more times!
Thanks always good to chat.....we've probably done this one to death for now and you'll have to forgive me if I go back to T.A. later in the week as my focus is always really on what the share is going to do in the next two weeks rather than two years which is where you may well be looking x
You know very well the reasons I have chosen to comment on MAFL as we have had this debate again and again for the last 6 months. I spend most of my time trading in large caps and currencies which is why I use TA for most of my trading. When I've traded MAFL i've told every one what my buy and sell prices are and published my trading plan and rationale in advance. As I've said, at the moment if I decide to trade it for a fifth time, I'm looking for a test of 9.25p again but It will have to be a solid bounce before I'll commit funds this time as I think there's every chance it can fall further and the next two support lines are at 7.05 and 5p. As for not commenting when it rises if you look back last week I actually (for once) agreed with 6zeros when I thought it had turned and was about to rise just as the last spike started...........Anyway that's enough for tonight. If anyone wants to carry on the valuation debate i'll pick it up again but otherwise its back to TA probably later in the week. Nite x
LOL....Becuase they weren't...it was you who tried adding royalties to the valuation process. And as for not "not proving it just to sell to someone else" I think you will find that is exactly what they are intending to do.
Trust me Dave I have...don't forget I do this for a living. As for the royalties you will normally find where they are paid, it is a royalty paid by a miner to a government as part of a licence, not a royalty paid by company A who sells the asset to company B. Also MAFL's intention is not to take L.S. to a proven asset. There would need to be a substantial drilling program of the entire site in order to prove up a JORC to take L.S. to proven....their intention is simply to increase the indicated and inferred estimate as they said in the RNS ............"This drilling program is targeting expanding the resource by 75%-to-125% to between 8.0Mt and 10.0Mt
They received no royalty on the sale of Toral so what makes you think they will get a royalty on the sale of L.S.? And I can't think of a better way to establish a estimated value than looking at the actual figures achieved for the sale of a similar asset.
The trouble is Quadrum using those figures as a basis for valuation the Toral asset had over �2 billion in the ground and they sold it for �565,000 so what does that say for the value of L.S?
It will be nowhere near 5 million....but for the sake of debate even if it was 5 million, MAFLS 49% of that would be 2.45 million and therefore even using your own inflated estimate MAFL's Nav after the sale of L.S. would only be 13.5p. So even using your own figures, the valuations people are attributing to L.S. are crazy
Quadrum you need to look again at your numbers. The facts are all there in black and white in the RNS's issued by the board. But to keep things simple lets look at whats happened with THC and use Toral as the best example to place a value on Lagoa. When MAFL bought 49% of THC for �170k they had two assets Lagoa and Toral, both were Zind and Copper plays. At the time Lagoa had 4.5mt indicated and inferred and Toral had 8.7mt indicated and inferred but the estimated Zinc content of Toral was much higher than Lagoa. In september 2016 THC then decided to sold Toral to Ferrum...bearing in mind this was the larger and better quality of the two assets, they sold it to Ferrum for �565,000. Now the purpose of the drilling campaign at Lagoa is to quote the board in the last RNS.... "This drilling program is targeting expanding the resource by 75%-to-125% to between 8.0Mt and 10.0Mt" So if you consider that they sold Toral with a resource of 8.7mt which had shown far higher zinc grades than L.S. for �565,000 how much are they likely to sell L.S. for even if they do increase the estimate to 10mt....I can't see it selling for much more than �750,000 allowing for the increases in Zinc and copper prices and that gives you a NAV for MAFL of less than 9p. So I can't see where people getting their valuations from?
I have every respect for the board and I quote them from todays RNS........."This drilling program is targeting expanding the resource by 75%-to-125% to between 8.0Mt and 10.0Mt, although at this stage there can be no certainty that this can be achieved." So if it was valued at �170k when its was 4.5mt....then what will it be worth at 10mt even if it is achieved....come on even you can do the maths?.......Its not rocket science and its not my views....its your own Board of directors view that your arguing with!
I agree answer the fundemental question. The board paid �170k for their share of THC with an existing resource estimate on L.S. of 4.5mt. They have told us time and time gain that they hope to increase that estimate by upto 125%. So on that basis how are you justifying your multi million pound valuations on L.S.? Either the board is lying to us and actually intend to prove up a resource tens times what they have told us and are misleading the market or you are pulling your valuation figures out of thin air.....I wonder which one of those statements is likely to be correct!
Shaz I suggest you read back through the thread my dear, I simply responded to someone who wanted to ask me a question to which you chose to join in questioning my decision to sell, I simply responded. As for apologising for my track record here....do you really want me to remind you how much profit people would have made if they had followed my trades? Now thats funny....I most humbly apologise to people if they have made money LOL..... U69 it was more like 14.5p and it was because they were completely derisked and on a free carry or do you not understand trading, capital preservation and risk management? P.S. Instead of continuing with the silly comments you could try for once to be constructive and deal with the actual valuation question.
Keep up Shaz, I sold my remaining shares which were already on a free carry at the end of last week for more than the sell price is now. As to sensible valuations....here's a question for you.....MAFL's NAV with THC at cost is 7p. When MAFL bought their stake in THC it had an existing estimate on L.S. of 4.5mt and they valued MAFLs share of that at �170k. THC are hoping to increase the estimate on L.S. by 125% to around 10mt. If you take 125% return on MAFL's investment that gives you a value on their share of THC at around �382K. Now let�s be generous and say rather than realising a �200+K profit on THC, MAFL manage to achieve a �1 million profit.... a five fold return...excellent by any standards, what does that do to MAFLs NAV? To save you doing the maths the answer is it brings it out around 9.5p and that's IF they sell it for �1 million. So just how are you justifying a valuation far north of here? On top of that looking at the chart now....have a look at the stochastic and you wonder why I sold! https://uk.tradingview.com/chart/hzd9y6yX/
I've sold out all my holdings so I'm completely out at the moment Pinball buts its still on my watch list as I may trade it again when we see sensible valuations....what did you want to know?
Thats correct Gjh, It took a couple of attempts but for now i'm out completely now, but don't worry i'll pop back in again from time to time to see how your doing as I know you'll miss me and you never know..... i may even have a 5th go. Having said that if the familiar names continue to return I might stick around to watch it play out again and comment as we go as it was their shenanigans that prompted me to stay in the first place. TTFN x
Sorry mask, heres the chart you asked for. My rationale for selling again now being 1) I can't justify the rise. 2) 15.00 is a 50% fib retracement on the move from 12th of june to 26th july 3) It fells spikey....thats the technical term :) Anyway I'll stick it back on the watch list again and I'll see you if or when we get to value prices again x https://uk.tradingview.com/chart/hzd9y6yX/