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Real-Time news about Tengri (London Stock Exchange): 0 recent articles
|hedgehog 100: 12/04/2016 12:38 UKREG Tengri Resources Disposal of Talas Mining Interests
On the top losers list today, down nearly a sixth to 2.0p:
LSE % Losers
EPIC Name %
PFD Premier Foods
HCL Hellenic Carr.
FCR Ferrum Crescent
BZT Bezant Resources
URU Niger Uranium
TRP Tower Resources
|swizz: Very subjective and the below is also taken from the same report.......GL S
Recommendation - Read the full report from start to finish and establish your own conclusion!
"The formation of the Tengri subsidiary to hold the Kyrgyz assets will enable separate project funding from a London base. Andash could be the first gold-copper asset in production and ROL, with its Indonesian experience, is well placed to address local sensitivities."
"Valuation: Re-rating upside as projects rolled out
With no definite cash flow from projects, we have used the value of recent part divestments and acquisitions to determine a valuation of A$0.33, a small premium to the share price. We have also calculated indicative valuation scenarios on ROL's assets. However, based on early-stage assumptions, they do indicate ROL's project interests could be worth >A$400m (see Exhibit 17) once funded and developed. As the projects are rolled out, these will provide catalysts for re-ratings."
"In the Kyrgyz Republic, ROL acquired three gold-copper assets in 2013. Andash is located in the Tien Shan Gold Belt, which hosts a number of world class deposits. Andash has a proven and probable JORC resource and had a plan for mining that is now being reworked. A second acquisition, the Talas gold-copper project has concessions which border the Andash project. The third acquisition is an earn-in agreement at Bashkol within the Tien Shan Gold Belt."
"A key strength is its ability to operate in developing countries, with skills in negotiating and working sensitively with local groups and government. These skills are essential for the Andash project in the Kyrgyz Republic, where there was opposition to development under previous ownership.
The company has been a patient explorer on Romang Island and its persistence is now paying off with the discovery of a high grade VMS deposit, which has the potential to be developed into a substantial gold and base metal operation.
To provide diversification, the company's entry into the Kyrgyz Republic provides exposure to a new region that is very prospective for gold and copper."
"The acquisition of the Andash project in the Kyrgyz Republic offers potential for production in the medium term, with a proven and probable JORC reserve and two feasibility studies already carried out. Although the future development of Andash may pursue a different development strategy, a lot of the investigative work has already been done."
"Management has extensive experience in exploration, both overseas and Australia. It has particular skills in exploring in developing countries, particularly in South-East and Central Asia. Its experience in working in developing countries is a benefit when entering new jurisdictions such as the Kyrgyz Republic. Management also has experience of resource discoveries and their subsequent development into mining operations."
"The acquisition cost for the Andash project was US$15m. The development of this asset under its previous owners was hampered by local concerns over the mine design and its location, the site of the processing plant, water pollution and dust and other ecological and environmental issues."
"Talas was acquired by payments of US$2m cash and US$3m in ROL shares. Sales of metals from the Talas concessions are also subject to a 2% net smelter royalty. There is a right to repurchase half the royalty value (based on an NPV derived calculation using set assumptions) at the time that JORC ore reserves of at least 1.5Moz gold equivalent are reported.
The purchase also includes a contingent payment of US$20m in ROL shares on a decision to mine at Gold Fields' base line study rate of at least 15Mtpa to produce 4.8Moz of gold equivalent over a nine year mine life. As ROL is focusing on a smaller scale project, this contingent payment may not be triggered, unless there is a subsequent expansion to the base line threshold.
Talas includes the large Taldybulak resource, which has the potential to be developed in conjunction with the Andash deposit. Remodelling of the Taldybulak deposit with emphasis on the potential mining of its high-grade domains is a high priority. There are 21 recognised prospective mineralised targets and potential for clusters of porphyry gold-copper discoveries. The initial focus has been to ensure the handover of all technical and corporate data from Gold Fields."
ROL is earning a 51% interest by contributing initial expenditure of A$2m (by 31 December 2017) and can earn increase this to 70% by a further A$5m of expenditure (by 31 December 2021).
"The previous operators conducted greenfields exploration using geological and geochemical techniques. They identified a number of geological anomalies that defined a 15km-long mineralised trend, including the prospective Bekbulaktor prospect. Surface gold and copper mineralisation was traced over 3km2. At Bekbulaktor, a drilling camp was established in September 2013. Two gold mineralised zones, Bekbulaktor South and Bekbulaktor North, were defined using IP/resistivity, soil geochemistry, rock sampling and trenching over a 2km strike. Planned drilling will focus on the main south zone target where the mineralisation is believed to be stronger. There are no villages near the Bashkol project and infrastructure is well established."|
1) If warrants are issued at a premium, OF COURSE the holder will only convert when they're in the money.....at which point I'm also in the money! So saying this is a negative is nonsense It simply doesn't matter if they are a little dillutive when they're exercised as this implies that the share price will rise above the exercise price.....which doesn't bother me! You're also wrong to say that cash on the BS doesn't matter....It does if the company can make a return on it!
2) As I already pointed out to you, I realise the effect warrants have on EPS when exercised...But you give me an example of a company that's had warrants exercised all at once equal to or greater than 20% of the market cap......As I've already pointed out, this will not happen unless there is a ready market for the shares....Which will only be possible if the company progresses significantly from where it is today. Honestly, I've explained my veiw, and it comes down to valuing the company INCLUSIVE of any expected future dillution..I have done this above and demonstrated that the ONLY dillution we need worry about is the warrants ALREADY in issue at 5p....These, I accept, are very dillutive..
What you don't appreciate is that when you issue new shares, it is for the one and only reason of INCREASING EARNINGS. BR+JW will not want to exercise their warrants until a second fundraising has been completed that brings in investors at a higher price. They MUST stabalise the company before converting bucket loads of warrants. To do this they will seek to issue shares at the highest possible price, and I'm sure lots of deeply out-of-the-money warrants will help get the issue away OK! Once there's more money in the bank with the operational stability this brings, THEN they'll tentatively exercise a few warrants here and there...
Let me explain the two fold benefit of having more cash. A) Projects undertaken are in almost direct proportion to the company's cash resources. Up the balance, and you also increase the business volumes. B) It's already been said that the company will be extended credit by its UK suppliers once it is seen to be operationaly stable and have a decent cash reserve...thus for the equipment only contracts, business can be grown at almost NO extra cost..
This leaves us with a company capitalised at £10m, with over £2m cash, and a MASSIVE proven market which provides fat margins and lots of repeat business. Current projections of £500k (2002) and £1m (2003) don't assume new funds and they are already exceeding these targets. Privately I think they could smash 2002's forecast with just one or two major contracts (which IMO they are in a position to win). Look around at similar investments and this looks cheap.
Look, this is a risky investment, and all the warrants issued reflect the fact that the owners expect the business to be grown very quickly with NEW MONEY - NOT THEIRS!....With these warrants they ensure control in the foreseeable future, and new investors will have be convinced that the opportunity is suitably huge that they can tolerate the warrant issue. ALL they will look at is the expected fully-dilluted EPS in five years time, which IMO could make a mockery of the £10m market cap I outlined above. They could be EARNING £10m in five years..|
|bigt20: News you post:
'What YOU don't seem to understand is that shares are often issued at a premium and ARE NOT DILLUTIVE in terms of the extra cash they will bring the company.'
1) WHEN the shares are converted they are likely to be at a discount to the market. If the share is say on the full list and liquid (and I know PPI are on the Ofex) who would pay a premium greater than the cost of buying the share on the market ?
2) Dilution is about the effect on eps. and not cash coming onto the Balance Sheet. For a given earnings, if the number of (fully paid)shares overnight quadruples, then the earnings PER SHARE divides by four. Take that eps and multiply by the same p/e as used the day before and you will find that the
share price has become a quarter of the price the day before (all other factors being equal - a good old economist term !)
I'm not so bothered about what price the warrants are issued at, its the dilutive effect on eps WHEN they are converted that matters.|
Re Product Power
You miss the point, it doesnt matter WHEN the warrants are converted, it doesnt matter whether the shares are then sold. It doesnt matter whether Rowan sells or holds his converted shares. The simple fact is that when the warrants are converted the number of shares in issue would roughly quadruple and for a given capitalisation the share price would roughly divide by four. So if people are thinking about investing they need to consider this fact.
News you post:
'Of course I had words with JW about the sheer number in issue compared to market cap but the feeling is that after subsequent issues of cash shares at much higher prices it won't look as bad.....'
Well if more shares are issued then theres an even greater dilution effect
apart from the effect of the warrants.
So if people invest "today" how much dilution effect can they expect ?|
|news: Big 20;
Re Product Power, I know about the warrents but have been assured that they are unlikely to be exercised in the early part of the company's life. Bruce Rowan will look for a large fundraising to beef up the market cap before quietly exercising a few at a time...With the sorts of margins/profits/opportunity for growth we're looking at it doesn't matter anyway. BR is a hard bargainer and he got a good deal in the seed funding round, but he'll find it hard to line his pockets without lining mine in the process. He won't do anything to hurt the share price, and it'll keep climbing as the news/profit flows. This company could have a market cap of £50m in 3-5 years assuming 5-10m profit (which is a continuation of the company's own target growth rate, which it is currently exceeding).....
So, even if the shares hit £1 and BR converts ALL the warrants (it'll never happen!) it would give a market cap of only £25m. CURRENT PRICE 22P!!....up a penny today so far...only downside is the illiquidity and small free float..OFEX is very short of stock as they're so tightly held, so the price moves very quickly.|
|goatherd: I have four contributions to make – so I am afraid this post is quite long – but I hope will be rewarding.
1st . Proteome, PRM, 63p to buy, which two other posters have mentioned. 10 bagger in from 1 to 3 years – and then, possibly, much more. Some have compared it as the Microsoft of 4 bit programming – only better quality programming.
2nd. Minmet, MNT, 14p to buy, hated and loved on the BBs. At the AGM last April the Chairman gave a “conservative” estimate of the assets that they might well have on the first 8 of 69 sites, at $2.2b, with gold at $270. This gives an asset value [not share price] of over £3 per share. If one doesn’t trust the chairman – then don’t buy – but if one does . . . . Time range from 1 to 3 years.
3rd. Celtic Resources. CER, 10p to buy. A CEO statement based – but this time an interview – so perhaps not so reliable. At the time the market cap was £14m [now £10m]. He said he expects to be “north of $300m” within three years, say £200m.[using $250 per oz]. “We don’t really focus on exploration because we already have our assets”. Their impressive list of resources is adequate to achieve the three year targets – and progressively more ambitious plans for up to 20 years.
4th. Southernera Resources, SUF [Toronto], about C$2.80 to buy. Some very promising diamond mines [one is just starting a new JV, with De Beers, SUF are operator]. But most attractive is 70.4% of a PGM mine in South Africa, producing in August 2001 [partial] and fully by 2003. Expected to ramp up rapidly to 500k oz/year. Most PGM producers are valued at $2,000 per oz of annual production. This gives a pit value of $1b – or $700m to SUF; or $23 or C$35 per share. Some share dilution might occur. Expected onto AIM within a year. I research via www.stockhouse.ca. Time from 3 to 5 years.|
Tengri share price data is direct from the London Stock Exchange