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.
M£23.75. Once the electricity starts flowing, that capital value must at least double pending profits. Once making profits, even marginal, then 8p will only value our capital at less than M£100. Very doable IMO so long as we don't need another raise.
Fair enough point Olda on the market cap jumping upon delivery of first electricity - that the POC has been proved etc. A double to 4p is not such a huge stretch i reckon, but I suspect there will be significant sellers on the way to 8p.
As for another raise, again imo that is unavoidable - assuming TG and team want to scale up operations quickly. However i do think the bigger problem at this time for Tlou will be getting paid regularly and on time by BPC for the electricity sold to them. One aspect that most here are blissfully unawares is that cash is in desperately short supply in Botswana; that BPC is basically insolvent; that Govt has for many years been desperately cash strapped; that Botswana is a wonderful country but large land mass with incredibly small population and therefore small economy/GDP..... Economies of scale in Botswana are basically Ass about Face - think France economy v Botswana economy and work it through ...
Renewables is the way forward for the Energy mix in Namibia/ Botswana - refer the 5GW solar plan there being promoted by Power Africa being promoted by US Govt. And Namibia recently secured $150m or so funding from World Bank to help them figure out the infrastructure and detail around this project. Botswana has yet to secure similar funding - which means they are behind the curve (not leading on this). Which in turn means this project is moving just as slowly as CBM there - which is a shame because things there that obviously make economic and common sense to us all are simply struggling for traction etc.
And ' the struggle for traction' is what sadly defines Tlou / CBM / TG / early bird investors
The veracity of the statement about BPC payments, if true , is likely to be based on foreign countries experience.
South Africa for many years, but with Eskom is no longer the force it was - there are now others.
Eskom could not supply S.A. demand , and only exported to Botswana because they were prepared to pay more , a few carrots more? Eskom took the carrot!
We think BPC are paying up to $30 for the TG unit of power, and it may have reached $40 from a post on here.
I have little doubt that BPC was being ripped off by the supply and demand curve.
Contrast the position we hope to see this year!
TLOU , domestically placed in Botswana , supported by the locals who'll want the jobs they create, and the Govt for various reasons that improve their economy, businesses , and living conditions for the population in general.
Critically , TG has promised to undercut import prices whilst still making more profit than the same electricity would earn in Australia - originally somewhere in the range $12 to $30 per unit - you'd think both will be more now.
The goodwill is clearly likely to be mutual and BPC and Govt will not want to see TLOU struggle to expand until Botswana is self-sufficient on electricity. And if TLOU are compromised there is always the option to deal with SAPP network at a higher price no doubt.
Botswana is proud of its reputation abroad - many countries rate them highly against other African countries.
TG rated them highly in the first place. Current criticism of the Govt is unfair - everybody with an interest in TLOU know we have not reached a start point until the TX line is commissioned and electricity is being delivered to Serowe and the grid.
They are leaving it to TG bring that home in 2024 with respect! Once TG can demonstrate a live service, it will not surprise me if the Govt find money for Grants or Loans to TLOU to speed up the expansions. Until then , we all sit with crossed fingers that TG is still TG from ten years ago! Olda and wiser is my belief!
And , heaven forbid, news of earnings might attract the big boys to look at Botswana and our golden nuggets!
8p is likely by Xmas if TG meets the estimated times. If Serowe is connected to Orapa (don't think it is) the sponsorship from industry on the Botswana grid could follow. 2025 could be interesting - but lets get power to Serowe by Xmas first!
I think Bots is forgetting that if Botswana don’t pay their bills. Especially to a foreign company who have invested millions in a project that will ultimately benefit their country . What message does this send out to other potential foreign investment .. that the country is a bad payer and should be avoided … not the look they would want to promote surely !
I cannot remember which year it was, but I shared a ward with an old guy who had spent ll his working life in various parts of Africa. I think he was a hydro-electricity engineer.
He had nothing bad to say about Botswana.
The thing I remembered most was that at one time , the whole indigenous population of Botswana could live off the national wealth / income from diamonds. He was retired so when this was I dunno. He was almost surely in upper management or higher rather than a pick and shovel type. Botswana does not have the watercourses for Hydro , so I doubt he spent much time there workwise. If BPC can make a profit at TG prices , rather than a certain loss of the highest import prices - diamonds will have an ally in the economy to improve it.
Another reason why they'll want TLOU to accelerate production and reduce their reliance on imports?
Speculate to accumulate comes to mind. I'm expecting several years befor Botswana is self sufficient but TLOU will prosper in those years.
I guess you guys have all the answers and logic then. Tell me then why has Botswana proved to be so incredibly challenging for TG and team for so many years. I mean, by your logic, Botswana is a great place, efficient and pretty rich - so should all work swimmingly for all concerned.
Govt payments (which include BPC) is a nightmare there, has been for several years. Budget deficits have been increasing since covid, and now diamonds are well out of flavour. Anglo has announced it is selling De Beers which is a massive deal for Botswana. Elections are in October which is a massive deal for Govt there. We can pretty much write off the rest of the year now as Govt are preoccupied elsewhere yet again.
They don’t need any government input to et to first power they have all they need from the government now ! They will have to deal the a new goverment if that’s what happens when and if it happens .. I sure no government is going to turn their back on such an important project .. unless it’s run by you Bots .. but I think that would be difficult from a bedroom in Bradford ….even for you