Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone 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.
RNS: £500000 additional funding.
Have not read all of the RNS yet, couldn't find the conversion terms immediately. Could someone else clarify?
Lewis, it's a death spiral. No chance of them losing anything.
Robbie, you do not understand what death spiral financing is. The Cotec deal is not a death spiral.
Robbie, it is nothing like a death spiral agreement.
It is a conventional loan for £2m, with a 2-year term, paying a 5% coupon.
The only addendum is that Cotec can simply choose to be paid back in shares, at a fixed price of 27p per share (which happens to be a 130% premium to the current mid-price of 11.75p), rather than be paid back in cash. That would equate to 7,407,407 shares, excluding any potential rolled-up interest.
Robbie only knows how to be a rude and unpleasant character. His prediction of a placing fell flat on its face: “Dumbo, a placing is incoming as they are running out of cash.”
A much needed and comforting update, will be turning away from the chats today! A few that sold out might be a bit miffed.. expecting a lot of sulking
Not happy at all. Why couldn’t we raise £500k at 14p?
This shows to me they can’t because of huge internal and company issues. Cotec gambled £500k here to save their investment.
Something is not right at all. From going concern to convertible notes. Like wth.
My break even is 23p. Looking to exit at 17-18p
This is enough. If they didn’t get Cotec funding then what ? We hit 10p yesterday.
You guys do make me laugh :)
There could be all sorts of deals shaping up in the background that the BOD are working on to send this bagging+ from here.
Cotex are happy to continue to play ball and, no, it's not a death spiral otherwise nobody would be piling in at sub-teens :)
Cotex are likely aware of possible outcomes here, hence the 27p payback in shares clause and the 5% coupon isn't too hefty as these things go so it's all good from my perspective.
Let's see if some wow news drops in the coming months.
PS: Yes - wanting to be diluted at 14p instead of (maybe) 27p is an odd view ;)
5% is less than inflation !. no shares issued, it's not relevant whether the SP is 5, 10, or 20p. This is part of the earlier agreement announced in May and should be no surprise, disappointment or indeed excitement either--its just cash required to keep the dream progressing, when they run out of cash they will need more to keep going until such time as the project opens up, MDA and offtakes are agreed and the big digger starts scraping dirt. If we are all still alive by then then jolly good.
Instead of spinning your wheels Munch, recognise that Songwe alone is saleable tomorrow @ c60p following the July DFS.
Keep your eyes on the prize, the AIM mafia will keep the SP pinned as long as they can ...
Highlights
· US$559.0 million post-tax net present value ("NPV"), using a 10% nominal discount rate, with an internal rate of return ("IRR") of 31.5%, payback period of 2.5 years from full production (5 years from start of capital expenditure) and post-tax life-of-operations nominal cash flow of $2.1 billion.
· Songwe is now *****confirmed as one of the very few rare earths projects globally to have reached the DFS stage*****, with a full Environmental, Social, Health Impact Assessment ("ESHIA") completed in compliance with IFC Performance Standards and The Global Industry Standard for Tailings Management (2020) ("GISTM") adopted for design and management of the tailings storage facility.
· Long operating life of 18 years, with mining assumed to commence in February 2025, production ramping up from July 2025 and averaging 5,954 tonnes per year total rare earth oxides ("TREO") for the first five years of full production (September 2025 - August 2030), including 1,953 tonnes per year of neodymium and praseodymium oxides, and 56 tonnes per year of dysprosium and terbium oxides, in a mixed rare earth carbonate ("MREC") grading 55% TREO, generating nominal EBITDA of US$215 million per year.
· Neodymium, praseodymium, dysprosium and terbium are critical for the green transition, used in permanent magnets for electric vehicles, wind turbines and many electronic devices.
· Initial capital expenditure ("capex") of US$277 million (excluding a US$34 million contingency) for development of mine, mill, flotation and hydrometallurgy plants, tailings storage facility, and related project infrastructure in Malawi.
· The NPV excludes any value attributable to the proposed Pulawy Rare Earth Separation Project ("Pulawy") in Poland, which is expected to process MREC from Songwe, enabling Mkango to capture additional value via growing its integrated downstream business with a captive source of primary raw material feed from Songwe. The NPV also excludes any value attributable to Mkango's interests in rare earth magnet recycling.
· The results of the DFS for an integrated project, comprising both Songwe and Pulawy, are expected to be announced when both the Mine Development Agreement ("MDA") with the Malawi Government is completed for Songwe and the feasibility study is completed for Pulawy.
· In parallel, a major focus for the Company will be further optimisation of the Project with the objective of lowering capex and operating costs ("opex"), both of which have been negatively impacted by current market dislocations, creating the potential to reduce costs as markets stabilise.