Listen to our latest Investing Matters Podcast episode 'Uncovering opportunities with investment trusts' with The AIC's Richard Stone here.
I think sometimes we are all guilty of following too closely, it’s a bad thing to watch the sp constantly whilst it goes up and down. Best to just ignore intra day swings and rather make judgement on the key milestones direct with company timelines, I would say this company, when you stand back and evaluate what it has achieved, in the time it’s achieved it, is one of the best value investment opportunities available. So much more still to come. As they say, especially with good propositions, the stock market is a mechanism for transferring wealth from the impatient to the patient. GLA
So refreshing to see a business run properly. An actual value creation investment as opposed to the usual aim value trap.
I think it’s worth mentioning that when these assets are listed, in some cases, much of the initial exploration pain has been done, certainly enough to be getting on with, remember results expedited etc. It’s not like another exploration listing that drags on and on based on nothing but hope and hype. There is much more investor appetite for production phase than exploration phase and the investor pool will no longer be solely built on PI’s. These vehicles will contain large scale, exceptional grade metals.
The whole point of listing on aim to be able to raise finance. It’s a credit thus far there hasn’t been any. PJ has always said he would avoid raising UNLESS the opportunity was to good to miss. POW has many interests that could have been cashed if that was more beneficial. He feels the dilution more than anyone. He has hinted more than he probably should that the news flow is posit and will still be in 2021, he even commented the board were unable to take part due to information on hand. To raise at the current SP, and so quickly in this market is impressive, almost too impressive unless they no something we don’t.
It is now over PJ to deliver, you either buy into that or you don’t. Could be the usual aim hype or could be lucrative.
Tbf at this stage we have 30% of an unknown resource value and furthermore unlike with a normal minor whereby a forward valuation can be considered by either cash on hand and or placements which would thus allow a financial model to occur we are awaiting what the new vehicle will look like and potential perform.
longer term hold!
The other thing that’s worth mentioning is it was clear from the recent interview that TM was desperately trying to say without actually saying that maybe the monies due could be used for other things, there’s nothing binding that says it all has to be used for BKM, I took that to mean he didn’t believe it would take the full initial £10m to prove up BKM. Obviously the other phase specific monies will be focused to get revenue flowing.
I dont think so, doesn’t make much sense given they were simultaneously negotiating the 51% deal when they purchased the 15%, they just wouldn’t have bought them on such a short term basis- they don’t need the capital either. Even as a trade, at these prices it makes no sense for them to have tried but who knows. By having a percentage of the overall business it gives them security and exposure to all assets including future unproven resources for little money.
I think a lot of people are simply reducing holdings in search of shorter term gains.
Here in lies the problem and I have emailed PJ but have had no response. Obviously until there is a discovery of importance the market will naturally under value the company but the problem is any potential rise on discovery will also be hindered as it’s unclear as to what the next steps are, this is what the PR focus should now be as opposed to the broad overview of the company portfolio. Even very moderate forecasts/ projections based on different scenarios would help the market better understand and get behind the company- obviously without a discovery and or disposed vehicle thats hard
If companies are formed around an asset (s) and spun off they are valued via the shares in circulation, the percentage ownership is calculated via the number of shares in issue at that time, the whole point of their own listing is to raise their own finance and so dilution will have to happen thus diluting pow’s position unless pow take part in the raises which in any event reduces cash on hand, warrants as always mitigate that
If DOID own 15% of the company already, which is 290,550,000 of the 1,937,000,000 shares then for 2p a share, which given where this is isn’t unrealistic, £32,929,000 buys the lot?
Obviously back of fag packet but not to far off?
When I listen to TM interview recently whereby his pal Gupta had purchased AE stake I knew this was coming… when he said DOID was in no way preferred contractor/ partner it was bull then low and behold Gupta sells his stake to DOID. Basically there was only ever one option.
Anyway on the positive side this gives clear path forward for a junior company and hopefully future deals with Beutong can be done from a better position of strength.
I think the focus for PJ now from an investor relations point of view should be to explain the upside of the intended ipo’s as clearly many aren’t understanding it. It’s an uphill struggle as it is with resources market sentiment, RRR sell overhang combined with more proposed dilution.
Potential upside is huge.
Just for balance, the danger here is obviously the asset is evaluated and packaged and then relinquished in exchange for cash/ shares/ options. There won’t be much cash parted with initially if any and then the assigned corporate governance are charged with value creation, this can be positive or negative. The market will rightly value this cautiously. I hope POW cherry pick assets to maintain and develop further, obviously the ones with production licenses are better than those without and those further down the line would be better suited in house in terms of shareholder value with institutional investment.
Tbf there is truth to this, in terms of games being played- assuming they are game and not just poor data as there’s a good few trades in there from the morning session, if not the vast majority that show as sells when they were buys, I know this as I’m aware of several transactions. Anyway that’s nothing unusual and hopefully onward from here.