Andrada Mining acquisition elevates the miner to emerging mid-tier status. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Any thoughts on the total DFS cost of $12.5m (from last RNS) and how we fund the gap ?
DFC $5m, SI $2.5m (hopefully) still leaves c$5m to find to complete DFS in next 6 months (as per timetable). Possible reduced slightly if have already self funded some of the 12.5m
I am wondering if this in part relates to the hold up on the prospectus as Bres want the SI to come in for more and at a higher SP. The original plan with the SI was for c20% of the business for only $2.5m; hence if they do need another $5m on top of this it would be giving away too much. Perhaps other plans to fund the gap therefore.
MR said during the FocusIR interview (when asked about the strategic investor, further funding etc) that there's 'a lot of interest, literally from all over Africa to be involved in a battery metals project in Africa'. I'm not overly concerned, he's well connected in Africa (with high net worth investors / syndicates - I think he implied during the interview) and keen to keep dilution to a minimum and has sufficient funds from the DFC to make good progress in the meantime. If I'm not mistaken he has an accountancy background?, I would imagine he's on top of funding and being very prudent, just my thoughts.
My understanding from the company is that they are looking at incorporating an additional strategic investor alongside the African investment fund which is one reason the publication of the prospectus has been delayed, I don’t think they have any problems raising any amount of cash they need, and as long as they aren’t having to offer large discounts I’m comfortable with more sticky hand strategic investment getting on board for the long term.
I trust that people are concluding the DFS is $12 based on the following comment (taken from half year report):
"This is a US$5 million grant awarded to Blencowe to assist with DFS costs and it is with pleasure I note that Blencowe is the first pre-production graphite company to receive such a grant from the US Government. Aside from the obvious advantages of having approximately 40% of our overall DFS costs being funded for free the credibility of both our Company and our Orom-Cross project are both significantly raised by having a partner of this calibre. Blencowe wishes to state once again our appreciation to DFC for this grant and all efforts will be made to deliver a first class DFS as a result".
Therefore, $12 x 0.4 = $5m
So that leaves $7m remaining, toi fund the whole DFS. What people arent grasping here, is that the DFS started in September 2022:
https://www.mining-journal.com/exploration-development/news/4072045/blencowe-starts-ugandan-orom-cross-graphite-dfs
Since September 2022, BRES has already invested a substantial amount into the DFS, including the 600 tonne shipment to China. We are potentially within 7 months of the DFS completing, and as such, I expect that there is only a reasonably nominal amount of additional capital to find, say $2.5m from BRES side.....queue Strategic Investor.
However, that said, MR has already spoken to a number of Korean banks (note, Korean banks, not Chinese banks), about funding. I think this is important as it will provide debt (not equity funding). I do expect that MR will raise further funds (with IIs) along the way, but dont expect these at lower than 5p and most likely at significantly higher (note warrants are at 8p), which would provide additional funding too. Also, MR got the funding terms at 5p when the SP was at 3.8p, so that reflects the appetite for those want wanting in.
I also think that some dont fully appreciate the nature of the first offtake. This is non-binding, of course it is, it has to be because BRES doesnt yet have a mine. Also, this agreement is likely to come into place in about 18 months time. So those suggesting that an agreed price or proce range should be set, are taking rubbish because BES doesnt have any control whatsoever on the price of graphite 18 months down the line. We have seen the erratic price of Lithium over the past 18 months, so why on earth would BRES comit to something that they have no idea about??
So what is the use of a non-binding offtake agreement and why is it so important?
Ju,p back to the funding question, what is the one thing that banks and financiers are likely to ask for when offering terms for finance? Erm......any orders in the bag? Well yes we already have a non-binding agreement in place with a huge graphite company for 15k tonnes pa. That would provide some comfort to me.
Secondly, it validates the product quality and the network that BRES has. I am a big holder of BRES, and I am very relaxed and looking to ad
Hey Guys
Seen some wild numbers in here so I had a chat with Mike on this
The DFS cost is not $12.5m
The cost will be $9m which is what they need to fund and then there is a further optional drill programme the company want to do to add significant JORC Resource roughly $2.5m but it is as I said optional when they are ready
the maths as I understand is as follows
$1m business had at DFS kickoff plus $0.5m African syndicate Feb and $5M from DFC = $6.5m so a shortfall of c$2m
Mikes own words are we will continue to raise along the way (as and when required which isn't right now) with the right parties "certainly not retail at a big discount"
Mike has said this multiple times and there are multiple parties who can fill the gap as and when BRES choose according to Mike and I recon this is because he thinks the SP is silly cheap and will likely do it higher
The drilling would only be $1.5m as the driller will accept BRES shares with a lock-in and again this is when BRES wish to do it
Lastly Mike has confirmed and (has on interviews) they are talking to multiple strategic parties - any of which could easily fill the $2m but Mike wants to onboard those at the right time and limit dilution
I hope this helps - I hold a decent amount of shares hence why I can get to chat to Mike - he's conscious of mis-information and sees the BB's !
Any questions I can certainly forward them!
Thanks for sharing that Mav.
To be fair it is not a case of misinformation as the company actually stated that the DFC $5m represents "40% of the overall DFS cost" hence the reality is the total DFS cost is indeed $12.5m based on this company statement in the half year report.
It is very useful however to get the further context to provide some clarity.
Maverick some of your numbers aren't adding up
All source funding DFS cost has been stated by the the DFC as $11M
https://www.dfc.gov/sites/default/files/media/documents/9000116316.pdf
According to mike the total cost with drilling (optional ) is $11.5m as $1.5m of that is paid to the driller in shares - the DFC quote also included drilling, this is optional bit so DFS = less the drilling costs
Hard to fathom how it's gone from prospectus will be ready in a month, to still not having it ready 4 months later. I mean are the delays at the FCA really this bad, or is there more to it?