Ferro-alloy Resources Share Discussion Threads

[ttlance] 30/4/2023 21:23

Header, I never read broker notes and am always sceptical of stock recommendations. I’d rather do my own due diligence, being extra critical and cautious has served me well.

The stock price is reflecting the lack of optimism. Which has provided a massive opportunity buying at this price.

If FAR turns a profit in the next 6 months then I can see the stock flying.

[t_headder] 30/4/2023 20:51

Libernum note has the plant making 5.6M$ operating cash with which it forecasts a 50M$ financing (including warrant conversions I assume) and all the VB share rights to be executed @ 25p. Reckons ultimate share price of £1.66 is achievable with a current target price of 38p. It's on researchtree but you will need to start a free trial to view it. Not that brokers notes are super credible all the time but I like my chances here better than if I was in rockfire resources as a shot of making some serious gains over the next 7 years. Low share valuation has likely attracted a lot of speculators looking for a spike to sell into though......

[ttlance] 29/4/2023 12:50

Jailbird, I get what you are saying but we have been told in the past the company is operating profitably.

Last year I directly messaged NB about fcf, who confirmed “the plant has the capacity to generate $10m fcf”. To me that statement was quite telling in that there was room to attribute other reasons for not hitting positive fcf.

Sounds like the next issue they have is the conversion of the plant using gas from diesel, as long they now don’t use this as excuse for not achieving fcf. Not sure how long this will take to install.

What I find really bizarre is that many of the issues far is experiencing started from the outset of the Ukraine war which started over a year ago now, these issues particularly new supply contracts should have been resolved by now.

I’m sure MD is putting the pressure on NB to get things sorted, sharpish.

Anyway let’s hope the next 6 months brings profitability as detailed in the RNS. If not then let’s hope the next fund raise later in the year will be the last one.

[jailbird] 29/4/2023 09:09

TT and Mes,

The Group made an overall loss for the year of US$4.29m (2021: loss of US$2.83m).
This shows how bad this year it has been, considering it was supposed to be a profitable plant.

But lets put that aside now and look forward, and lets looks at the many statements about profitably and cashflow


The Group now has the facilities and capacity in place to operate profitably and although the amount of those profits available to fund the Stage 1 feasibility study
and investment programme may vary with metal prices and other factors, the Directors are confident that the Company has sufficient resources
to continue as a going concern for at least the next 12 months.

In order to ascertain market risk the Group has analysed the impact of different levels of vanadium pentoxide prices on profitability as well as closely monitoring the market conditions for other leading international organisations operating in the vanadium industry.
The sensitivity analysis shows that a price of US$4/lb for vanadium pentoxide is the minimum price that must be achieved by the Group in order to maintain operations.
The current level of vanadium pentoxide prices is sufficient to keep the Group at a stable future profitable level.

With the plant now fully developed and with concentrates expected to be in good supply, the Company believes that both the production and financial results for 2023 are likely to be significantly better than 2022 and result in the Company operating profitably because of:

- increased quantity of concentrates to be treated
- increased recoveries of vanadium, molybdenum and nickel from each tonne treated

"The existing operation has been impacted by supply difficulties during 2022 but the plant is now fully developed and, with concentrates in good supply,
we expect the existing plant to operate profitably from now on, producing a meaningful contribution to the development of the Balasausqandiq project.

With the plant now fully developed and with concentrates expected to be in good supply, the Group expects the existing plant to operate profitably,
producing a meaningful positive cash flow, for the remainder of 2023 and beyond.

I cannot see any issues with cash now with all these statements.

[ttlance] 28/4/2023 20:35

Having professional experience analysing RNS’, it’s quite telling when comparing today’s with previous ones.

This one doesn’t state in the first paragraph ‘we are pleased to announce’ like all others. This is on the back of the resource estimate being increased by over 30%.

Coupled with the fact sir MD reiterates the issues in his paragraph statement.

The loss is far worse than expected and it’s clear VBR aren’t happy with progress.

[ttlance] 28/4/2023 17:55

Having read the RNS in a little more detail, I’m estimating they only have $3m cash as of now. That leaves cash for 3 quarters of running operations based on 2022 performance, so are desperately in need to turn a profit in the next 6 months. Can NB pull a rabbit out of the hat, that is the question?

Companies always raise at least minimum of 3 months prior to running out of cash so thinking a raise will be around October at the latest (if the plant continues to be loss making).

[ttlance] 28/4/2023 15:08

The reports can be hundreds of pages long and they quite rightly want expert eyes over it prior to issuing a detailed RNS.

NB mentioned earlier in the year that if they are late issuing the report then it will be around late April so would have only just been received in the last couple days.

They wanted to get their final results out in April and with today being the last day.

[mesb48] 28/4/2023 13:10

intrigued a bit by the comment there will be another RNS on Tuesday after the bank holiday weekend. Obviously they only received the report yesterday and presumably they had to hastily change the planned results announcement to include reference to it. But now they have given the headlines, i'm wondering what's the rush to release more detailed info so soon after. Just have to wait and see, but not long to wait.

Realise the dfs is the main event here, but for me getting the existing business at least onto a breakeven basis is really important too, just to stop the bleeding of cash on overheads. I think today's RNS potentially does that, i think it's forward from here sticking my head out somewhat i realise to say that given past experience - will add to my starter position if the share price starts to gain some momentum.

[jailbird] 28/4/2023 12:50

Mes

thanks

[jailbird] 28/4/2023 12:50

This is why the DFS is such an important study

Much to de-risk here still, if they have stopped needing another cash raise, this may be the bottom

[ttlance] 28/4/2023 10:48

Well there’s certainly another fund raise happening as track record shows improvements at FAR aren’t swift when it comes to creating fcf. Let’s hope this will be the last fund raise with 2024 being profitable.

Disappointing as the fcf was to be used for favourable finance terms which need to be completed early next year, so not to delay the main project.

[jailbird] 28/4/2023 09:36

VBR has raised US$650 million to support companies


1

So Sir Mick's is raising money for his own vehicle fund...due to poor performance of one or two of the investments

He aint coming across such a smart cookie either

Remember the hype around him and his company early on...damp squib

Beginning to have respect for Nick B now, making a fool out these professionals..:-)

[mesb48] 28/4/2023 09:36

shore capital have just published a new note that is freely available on research tree.

[mesb48] 28/4/2023 09:35

Think you're being a bit harsh if this is the wording you are referring to?

"In order to prevent the recurrence of the concentrate supply problems of 2022 and early 2023, the Group has signed additional concentrate supply contracts. Supplies under previous contracts have resumed and are expected to continue, so the board of directors (“the Directors” or “the Board”) are optimistic that the historic supply problems have now been resolved."

Nobody can predict the future with certainty, especially in this type of jurisdiction. A more optimistic reading would be that in addition to the new supply contract, the original one is back on track.

The going concern statement is relevant too I think.

"The consolidated financial statements are prepared in accordance with IFRS on a going concern basis. The Directors have reviewed the Group’s cash flow forecasts for a period of at least 12 months from the date of approval of the financial statements, together with sensitivities and mitigating actions. In addition, the Directors have given specific consideration to the continued risks and uncertainties
associated with the geopolitical situation with respect to Russia and Ukraine.
The Group now has the facilities and capacity in place to operate profitably and although the amount of those profits available to fund the Stage 1 feasibility study and investment programme may vary with metal prices and other factors, the Directors are confident that the Company has sufficient resources to continue as a going concern for at least the next 12 months."

I think this is positive, hard to now soon do an emergency fund raise when this statement has just been made, especially also since in the post balance sheet events note they say they have just also repaid all the outstanding bonds.

In any event, someone this morning is still taking shares in the auctions at 10p.

[jailbird] 28/4/2023 09:31

Same old.

Already used up a chunk of the cash
Successful equity fundraising of US$10.0m (approximately GBP8.6m) in September 2022 to advance the feasibility study on the Balasausqandiq deposit

Cash in the bank of US$4.33m as at 31 December 2022

Need to re-evaluate the previous target prices i think.
Cost rises due to Inflation and dilution to due delays will previous valuations

[ttlance] 28/4/2023 09:06

Same old jam tomorrow…

Having read the RNS in detail, the tone is a lot less ultra positive. They state they are ‘optimistic217; that the supply issues will be resolved

[ttlance] 28/4/2023 08:04

It all hinges on profitability over the next 6 months now. Another year like 2022 which resulted in over £4m loss and there will be a fund raise in the next 7 months. The supply contracts weren’t resolved until late March so we can say q1 of 2023 resulted in a £1m loss

[mesb48] 28/4/2023 07:27

Haven’t spotted any new shockers yet, seems positive. We knew 2022 results would be a loss. Would have liked more info on YTD profitability but at face value this says 2023 has moved to profit.

[ttlance] 23/4/2023 18:56

Jailbird, if VB aren’t seeing progress, as in profitability of the pilot plant by end of 2023 then I’d imagine they will replace him or they will pull out. With the investment they have made so far I’d imagine it would be the former.

[ttlance] 23/4/2023 18:17

Yes I thought we would have heard something by now. We were expecting part of the drilling to have been completed with results due end March.

I’m surprised VBR haven’t put any operational senior management in apart from the South African (I forget his name) but he’s not looking at the day to day side of things.

[mesb48] 23/4/2023 17:40

Ok, that’s fine so it’s just based on past experiences which is understandable.

I do think one thing has changed vs two years ago which is now the board has more members with their necks on the line so there will be more scrutiny to what goes out in an RNS.

We’ll find out soon enough if there’s been progress with the annual results outlook comments which I expect soon.

looking at recent trades I do think someone is scooping up shares when anyone sells, and it isn’t me.

[ttlance] 23/4/2023 17:13

He’s certainly under pressure to deliver positive cash flow with the pilot plant. You can tell from his recent interview. For every 10% share dilution, sir mick Davis is handing back many millions of £’s worth of potential returns.

[ttlance] 23/4/2023 17:08

M48. NB has never delivered on his promises. What I find very strange is that the Ukraine war has been ongoing for over a year now and they haven’t still resolved the purchasing issues. Only positive will be the logistics costs being lower since the last update.

I’ve learnt from NB that he puts a positive spin on everything only to provide an excuse as to why it hasn’t been achieved. He touched on the fact that depending on the constituents of RMs they are buying in, this will impact the yield and hence revenue. This is unusual for NB to even mention a potential risk so I think he will use this as an excuse as to why revenues have been lower than expected.

[jailbird] 23/4/2023 15:43

Dread to think where this would be if he was BoD in an unfamiliar country He has taken VB for a foolAnd made millions Are VB so dependent on Bridgden now ?