Corcel Share Discussion Threads

[hedgehog 100] 13/4/2021 16:25

MAST IPO valuation disconnect reveals hidden value in Corcel (LON: CRCL)

By Alan Green in News and Views on 13th April 2021.

The way the UK generates its power is changing rapidly at present. The shift from fossil fuel plants to a lower carbon generation model is creating huge opportunities for the supply of continuous uninterrupted supply of base load electricity as well as trading electricity and capturing attractive spreads, all of which is being addressed by a number of UK companies.

One such company is MAST Energy Developments, a subsidiary of Kibo Energy, which is set to IPO on Wednesday 14th April with a £23m market cap. MAST has a portfolio of small-scale ‘Reserve Power’ generation assets that use low carbon sustainable gas, with their initial focus on the Bordesley site, near Birmingham. Once listed, MAST plans to develop at scale and pace, rather than on a project-by-project basis, and implies a larger portfolio is being prepared.

Currently MAST has a c.5 MW immediate production capacity, with plans to move to c.20 MW in production capacity within the first six months of listing followed by another c.20 MW in production capacity over the subsequent six months.

Surprisingly the considerable interest in the MAST IPO hasn’t, as of yet, definitively spread across to other companies in the sector. London-listed Corcel Plc (LON: CRCL) is already a key player in providing flexible grid solutions (FGS) to the UK grid as it transitions from coal/nuclear generated power to renewables backed by energy storage and gas peaking assets. The company’s initial 100MW energy storage at Burwell near Cambridge is already fairly advanced, and is strongly backed by a pipeline of additional projects in the space as well as strategic partnerships.

MAST is raising in excess of £5 million at IPO, more than the recent market cap of Corcel, to fund its expansion in the flexible energy sector. Yet the company is coming to market with what appears to be between just 5MW and 20MW of project capacity, compared to Corcel’s existing 100MW project at Burwell and their publicly stated efforts to assemble a pipeline of additional MWs and subsequent projects.

In addition to Burwell and its associated strategic partnerships, the Company’s foundation is its Mambare nickel laterite project in Papua New Guinea, which it has been developing for a number of years. This asset underpinned a historic valuation of over £40m at once stage, but with nickel having been out of favour, there was little activity. Nonetheless, with global interest in nickel reaching new highs, there is renewed interest in assets such as Mambare, with the project JV now moving aggressively forward towards a mining lease and looking to fill increasing demand for nickel use in batteries. For an asset that has been recently ignored by the markets, the upside here is significant and the timing appears very good.

Corcel also has exposure to a second nickel/cobalt interest at Wowo Gap, located 250km from Mambare and owned by Resource Mining Corporation (RMI). Corcel owns a A$4.76m senior debt position in RMI which is repayable within the next 12 months. The strategy here has been to take the initial debt position and then negotiate a transaction for the WoWo asset itself, doubling Corcel’s nickel/cobalt exposure at a very attractive entry price. Signfiicantly, RMI has also announced the acquisition of a second nickel project in Africa, which appears to provide a compelling backdrop for RMI to settle its Corcel debt via a project for debt swap. At a stroke, this move will make Corcel a major regional nickel player in Australasia.

Valuations per MW for MAST range from £3.6 million (5MW) to £0.9 million (20MW). Even taking the lowest figure and discounting it by 50%, to remain conservative, the Burwell project alone looks to be worth well over £40m to Corcel’s valuation.

Corcel raised £300k in February and at the same time put in place a debt facility, so appears to have no imminent cash requirement. With 321,381,614 shares in issue, if Corcel were valued in the same way as MAST, based on the most conservative estimate for MAST having control of 20MW of flexible assets, Corcel would immediately be valued at 18p. The math for a comparative valuation assuming MAST has only really secured its initial 5MW, Bordesley project, (and with the rest considered ‘pipeline projects’) isn’t hard to do, and would push Corcel’s valuation into the triple digits and the share price north of 60p.

And to remind again, this valuation analysis for Corcel does not take into account any allocation for the Mambare or Wowo Gap nickel / cobalt assets. Valuation disconnect perhaps? Likely not for long!

[rmart] 13/4/2021 16:13

Finishing on a high bodes well for tomorrow and the MAST listing. That article will close the gap further. Exciting times !

[rmart] 13/4/2021 15:58

Valuations per MW for MAST range from £3.6 million (5MW) to £0.9 million (20MW). Even taking the lowest figure and discounting it by 50%, to remain conservative, the Burwell project alone looks to be worth well over £40m to Corcel’s valuation.

[rmart] 13/4/2021 15:37

fantastic summary and shows why it will not be long before we are in double figures.

[bangbang1] 13/4/2021 15:17

interesting timing of the crcl independent article one day before mast IPO

[kemche] 13/4/2021 15:11

"For that reason I am in!"

[saw89] 13/4/2021 15:07

I’m not Intending to sound like Duncan Bannatyne but.....

[saw89] 13/4/2021 15:06

I like the story but how they going to pay for it is a big question mark ....
And drawing a comparison with MAST is pretty bad ramping, and IMO therefore we can’t expect to get any RNS about MAST IPO .... or perceived value gap

[hedgehog 100] 13/4/2021 15:00

Thanks to Stretchum on LSE for flagging up this useful article yesterday:

"Battery storage 30% cheaper than gas peaker plants for firming renewables

The contest is over. Faster, cheaper, more flexible than gas turbines – battery energy storage must be the future peaking energy service provider of choice, according to a new paper by Australia’s Clean Energy Council.

APRIL 12, 2021 NATALIE FILATOFF

Australia's Clean Energy Council (CEC) says in a newly published paper that large-scale battery energy storage has become the best way to spread energy generated by solar and wind throughout any day, and to instantly respond to peak energy needs in the National Electricity Market (NEM) for long and short durations.

The paper compares the levelized cost of energy delivered by a new 250 MW gas peaker plant with 250 MW four-hour and two-hour grid-scale batteries. It finds that overall – when various costs are calculated – that the batteries are 17% (two-hour) and 30% (four-hour) cheaper.

Improvements in battery-operating technology mean storage now outperforms gas-fired peaking plants on speed and reliability of response, which was the basis of gas technology’s biggest claim to a place in the future renewables-based electricity system.

Where gas plants can respond within 15 minutes, says the CEC report, battery solutions can discharge as “demand (and correspondingly prices) approach peak levels” and sustain output “to cover the typical daily peak duration.”

“Batteries can ramp up quickly, have zero start-up time and provide a better frequency response,” said CEC Chief Executive Kane Thornton."




Mast Energy Developments (MED) - KIBO's UK reserve power subsidiary - and has achieved a very positive price for its IPO tomorrow, proving the strong current investment demand for these types of assets.

In summary, MED has achieved a pre new money valuation of c. £18M. for c. 49MW of near term reserve power generation. Which approximates to their NPV.

KIBO suggests that these gas fired assets are "clean energy", but although the global warming emissions from natural gas are much lower than those from coal or oil it is still a fossil fuel.

In comparison, CRCL's Burwell energy project in Cambridgeshire is for battery storage and solar power, and is larger than MED's.

In summary, CRCL's Burwell battery-solar combo compared to MED's gas-fired assets is:
• Larger.
• Greener.
• Cheaper to run.
• Faster & more reliable.

[bangbang1] 13/4/2021 14:58

Glad to see third parties outlining the #CRCL value proposition on paper that we've been building over the past year in both battery metals and flexible energy projects; could not be a more exciting pathway forward #CRCL
@CorcelPlc
hxxps://branduk.net/mast-ipo-valuation-disconnect-reveals-hidden-value-in-corcel-lon-crcl/

[kemche] 13/4/2021 14:58

saw - I suspect that will earn a banning order on the BULL only thread.

[saw89] 13/4/2021 14:55

Ok so in conclusion. The only way this can REALLY multi bag is some miracle Uk grant to fund the energy storage / solar site development

[kemche] 13/4/2021 14:53

saw - sshhhh!
If CRCL was priced the same as RIO the we would be trading at £3.65. WOW!
And if the same as TESLA the £658.95 - WOWEEEE!

[saw89] 13/4/2021 14:50

To be fair, MAST is a very different beast .. gas powered reserve power with plans up to 300mw.

[bangbang1] 13/4/2021 14:50

The math for a comparative valuation assuming MAST has only really secured its initial 5MW, Bordesley project, (and with the rest considered ‘pipeline projects’) isn’t hard to do, and would push Corcel’s valuation into the triple digits and the share price north of 60p.

Full article

hxxps://www.branduk.net/mast-ipo-valuation-disconnect-reveals-hidden-value-in-corcel-lon-crcl

[mark10101] 13/4/2021 14:49

Bang agree, great day to be dealing with 2p, we can then put that behind us going forward.

[bangbang1] 13/4/2021 14:49

if Corcel were valued in the same way as MAST, based on the most conservative estimate for MAST having control of 20MW of flexible assets, Corcel would immediately be valued at 18p


WOW

[bangbang1] 13/4/2021 14:48

hxxps://www.branduk.net/mast-ipo-valuation-disconnect-reveals-hidden-value-in-corcel-lon-crcl/


MAST IPO valuation disconnect reveals hidden value in Corcel (LON: CRCL)
By Alan Green in News and Views on 13th April 2021

[kemche] 13/4/2021 14:37

Bye babble. See you soon. As with everyone else too.

[bangbang1] 13/4/2021 14:30

there should be a flurry of buys near close of play in anticipation for MAST IPO tomorrow

[babbler] 13/4/2021 14:29

My algorithm is blocking you. Bye.

[kemche] 13/4/2021 14:29

Please don't look at this BB.

LMFAO!

[helpfull] 13/4/2021 14:22

I will have to check if it is true. At present the algorithm is down. I think it is powered by that peaky blinder in Southport that was supposed to give Corcel its first revenues in December 2020. Or is that a dream? Some people say Southport doesn't exist. I think the algorithm will be down for a very long time. Be careful.