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|paul the octopus: 3 year on, no license, more funding needed, share price at lowest ever and heading to 0.1p placing or 1p placing after consolidation|
Thanks for your views, your post sums things up very well. I agree there will be an equity element to the funding as the CEO has already commented on funding discussions at a significant premium to the share price earlier in the year. As you suggest moving Togo to early production, permit, DFS, funding, will help advance Gabon and SA, neither of which are reflected in the share price. The coming sequence of events could be a game changer for the longer term future of FRX and its other sizeable assets.
|rec0very stock: Ed,
Normally the issue of a permit is just one stepping stone, it normally comes fairly early in the process, however because of all the delays to the permit issue, the other steps like completing the DFS, which was dependent upon the signing of the mining convention back in Mar as that is what sets tax and royalty rates and also what community project will need to be funded etc, once the DFS is completed which it was some time ago funding options can be finalised and all the papers drawn up - these will be conditional on the permit and may already be signed on that condition or are just waiting for the permit for final signature. Thus there is no reason not to expect that the ducks are already completely lined up.
We may get one RNS with everything in it, but they may decide to do the permit one day, the DFS release the next day and the funding the day after. That is the sort of timescale I would expect.
There was also that tantalizing throw away line in the interims regarding innovative funding for Gabon. I would not be surprised if some sort of update on that followed maybe a week after all the Togo news.
I do need to caveat all that by saying that things can fall apart at the last minute as happened with the Anglo deal for Gabon a year ago. It is about time the company had a bit of luck. Also we need to see the detail of the DFS and of the funding package to assess what a fair price for the shares are - the funding will not be by charitable donation, there will almost certainly be dilution either at project, but more likely at PLC level, there may be be interest to pay and there may also be some sort of life of project discount that is applied to the output in some form of off take all of which impacts the future cashflows to the company. At the moment the company is desperate for cash and I would expect that the funding package will come with some form of immediate cash injection - if it does not then some form of fundraising will be required, though that could then be done on the back of a significantly improved share price. There are plenty of other risks that could materialize as there always are with any small, early stage mining company. Thus whilst I think the potential upside is significant enough to make it worth taking the risk of investing, I am not over exposed and FRX remains a relatively small part of my overall portfolio, but it is currently my largest recovery play, having invested the proceeds of other recovery plays into it.|
Thanks for your posts, sounds interesting. We've been anticipating that the mining licence comes soon so your posts fit in with that. We've also seen what receiving a mining licence did to AMC and SXX recently and what anticipation of a mining licence has done to JLP and EUA. So if the management deliver on funding, DFS and mining permit we could get major share price boomage on our £6-7m cap. Listening to the inverview that the CEO back in feb gives the impression that many of these issues were covered back then. Ducks about to line up?
|rec0very stock: ct
Nope it is from someone in Togo who saw it on the telly.
There is also this post on LSE:
Unsolicited news from DR
Happy for me to share news from the ground that at the formal meeting of Ministers in Togo, Ferrex project was specifically mentioned in relation to Nayega Mine, after one of the Members requested more detail. PM responded along the lines of 'Discussions with company will complete soon with permit issued to allow mining'
DR clearly chuffed 'light at the end of a long tunnel'
You must take into account that the president has been promising DR a licence for ages, politicians in our own country cannot be trusted to actually do what they say they are going to do, it is even less the case in places like Togo.
The licence has not been awarded yet. All you should reed into it is that there is interest in the project amongst the politicians for the question to be asked and the answer to the question bodes well. There is plenty that could still go wrong - in some places in African even awarded licences have been revoked and given to others.
What is interesting is how a very small number of buys - came to just over £5k, moved the share price more than it has moved in quite a while.
It is up to you whether you buy on this - it does not actually say anything that has not already been said, ie when ministers are appointed they will get round to issuing the licence and that is expected to happen before end Sep.
It is entirely possible that the share price will drop back again if the wait for the licence drags on, however I am as convinced as anyone can be that once / if the licence is granted the genie will be released from the bottle.
I have all the FRX share I want. I would have bought at few more if I could have got them below 0.45, as my last top up was just below 0.5. It all comes down to what price you put on certainty. With early stage mining companies operating in places like Togo, there is no such thing as certainty only reduced or increased risk. From where I was before I learned of what the Prime Minister said in response to the question - it was not in his programme that he announced, it was in response to a question, this information represents a relatively small reduction in risk - I have always been over 90% confident that the permit would be awarded and it was just a question of when.
I hope the above enables you to assess the information provided in accordance with your own risk appetite and you can make your own investing decision accordingly.|
Nothing wrong with being cautious, its necessary on AIM. But as the management here hold 25% of the company I believe them that they're doing this for commercial purposes. We'll find out when the company release the economics of the mine in due course and at what price they secure funding. They previously hinted at a significant premium to the share price. But many will remain on the sidelines until they see the details. I don't mind being in before the details as its not a significant holding in these. Just a matter of time to see how aligned management and shareholder interests are here.
|liquid millionaire: By the by the placing was circa twice as large as initially sought by FRX due to demand basically backed by the exciting prospects here at FRX.
Remember that when the FRX share price picks up a head of steam it really starts to motor!|
|rec0very stock: Firstly another area where I agree and disagree with Daniel Miller. The track record of the management is all important, if you do not have faith in the guys running the show, then never ever buy. Here is where I disagree with Daniel, the guy running the show is Dave Reeves, he has an excellent track record of delivering for shareholders and he is the one putting big chunks of his own money in. Brian Morritz is a bit of an irrelevance really - he is a figurehead non-exec chairman, that is all. Daniel seems to really have it in for him, I have met Brian personally and he is a nice enough guy, albeit showing his advancing years. For that reason alone, I would not buy into a company where Brian was genuinely in charge. I know nothing about GDP and I am not really interested in it, anyone who is should do thorough research and make their own investing decision - I suspect Brian would be little more than a figurehead there these days.
So back to Ferrex and the question of when / if to buy. That is a totally personal question and depends entirely on your own risk appetite. I have checked everything I can, as thoroughly as I can and it all stacks up in theory to being a great investment at the current share price. The problem is converting theory into practice and FRX have had a lot of bad luck with doing this. The Gabon deal all stacked up to be a great investment in theory, until Anglo pulled out as the Iron Ore price crashed. Mn looks a lot sounder than IO and there is more than one funding offer on the table. The Togo govt seem to be committed, but have most certainly dragged their feet a hell of a lot in the past and could continue to do so and there is nothing FRX can do about that.
So the question put another way is how much do you want to pay for more certainty (nothing is ever absolutely certain in the mining game). FRX will remain a high risk investment for quite some time to come. It has had a lot of bad luck, is its luck finally changing? I am naturally very cautious, but I have decided to start accumulating small quantities when the offer price is sensible.|
|rec0very stock: A very useful Q&A which aligns with the research I have done on Manganese. There is a good chance that the project could be coming on line and then ramping up at just the right time to take full advantage of the predicted 2020 under supply situation.
Clearly it is too early to break out the bunting, that comes when the licence has been awarded, the DFS completed and capex funding secured.
The link to the Q&A is here:
"The manganese market is not related to the iron ore market. Manganese ore is much less abundant than iron ore and consequently the manganese price is significantly higher than the iron ore price (currently double the iron
ore price per tonne). In addition, a large amount of iron for steel production comes from recycled steel and this is expected to grow in coming decades as China begins to recycle more steel This will see iron ore useage taper off, however, recycled steel still needs additional manganese to be added to achieve the required chemical composition. As such, the manganese market is forecast to outperform the iron ore market due to increasing steel demand be it in new or recycled form."
Is important as it differentiates this project from all the Iron Ore Projects that are struggling at current IO price.
Given short term funding is in place I do not see the release of the Q&A as a cynical attempt to ramp the share price ahead of a mega diluting placing, far from it they are clearly ensuring the market understands the nature of the project properly in advance of the rest of the news coming out so the share price can react accordingly. If there is a small equity requirement to compliment what ever funding deal is done then this is the responsible way to ensure it gets done at a fair price to existing shareholders (including Dave Reeves himself, who put up his own collateral to get the short term loan).|
|simonparker5: Dropside you are dead right "buy the management". These have a fantastic track record and own a large % of the company. This isn't something you see everyday especially in resource stocks.
DR is a very shrewd guy and I wouldn't be surprised to see lots of news between now and Christmas.
It would be nice to see the FRX share price perform in the same way as MARL has done over the past 6 weeks. Here's hoping.|
Ferrex share price data is direct from the London Stock Exchange