Ferro-alloy Resources Share Discussion Threads

[jailbird] 20/1/2021 06:39

Some good posts Cyber Wait and see for me , but there is some momentum in trading recently

[cyberbub] 20/1/2021 01:10

To be honest IMO the main risk here is not technical or financial - assuming the BFS comes back confirming the previous data (which seems likely although not guaranteed...) then it's an amazing prospect and should easily get capex funding. There seems little risk of it being 'a hole with a liar on top' - the classic quote about smallcap miners. There's just too much data and evidence.

To me the main risk is management, and whether they can pick up the pace and execute properly going forward. Nick Bridgen clearly knows what he's talking about and is an old Kazakhstan hand. He didn't do a great job as Hamebledon CEO 10 years ago apparently (it's now listed as Altyn, ALTN) and struggled for capital to invest - there was also a serious environmental incident there, and he ended up being moved out when a local wealthy family took over the company. However I hope that he has learnt some lessons from that - he seems to have a local Director of Operations (Kuznetsov) which is helpful, although don't know much about him apart from the info in the listing prospectus, which includes a large gap. It's certainly the case that both of them have high incentive ('skin in the game') with a 20+% shareholding each.

Bridgen is no spring chicken and I would imagine that he is wanting to see this through to Stage 1 in operation (probably summer 2023?) and then sell his holding and retire. He will be wanting the share price as high as possible by then obviously, and *if* all goes to plan it could be as high as 150-200p.

Bridgen does also have to sell some shares to pay his divorce settlement sometime in 2021, but I see this as a red herring - *if* the company is making strong progress then selling a few million shares will be nothing but a blip.

He and Kuznetsov may hope that possibly when Stage 1 is in operation, if things are going well, the company may be bought out and they both sail off into the sunset.

Just my view, DYOR etc

[cyberbub] 20/1/2021 00:44

I think I might have found the precise location of the existing processing plant:



(from the Competent Person's Report)

Doesn't look like much - not clear when the satellite photo was taken, quite possibly years ago, somewhere remote like that!

[garth] 19/1/2021 23:14

Cyberbub, Jailbird,Just having a look here. Any thoughts on where Vanadium prices might be heading?Some question for me as to whether VF batteries are proving too expensive.Is that part of the reason behind falling prices? Or is it supply side increases?Novice question."Prices of vanadium pentoxide have been relatively stable in 2020, having fallen throughout 2019 from the peak of around $30/lb in late 2018. The current level of around US$5-6/lb is lower than historic averages."Thanks,G.

[cyberbub] 19/1/2021 23:00

Jailbird, have another listen to the Crux interview video. The interviewer does question NB why it's taken so long to get to the current position. NB says (as I had suspected) that raising capital as a private company was very difficult in Kazakhstan until recent years, and also they had to spend 2 years restructuring FAR into a stock-exchange-compliant and tax-efficient company.

So yes it's taken a long time, and perhaps the company could have (or should have) moved faster. But as I say I prefer to look forwards.

I like Crux interviews - they don't mind asking hard questions.

[cyberbub] 19/1/2021 22:42

Reviewing their RNSes again, they've raised more than I thought in the last 9 months: £1.25M from placings, $75k share issuance against director fees, and $600k from debt. So basically $2.3M. Surely that will have paid for much of the admin costs for that period, further money towards the power connection (as stated in the October progress RNS), and also to finish the BFS (which NB quoted at $1.3M in the Crux interview last January)?

That means the only major items left to fund are finish the power connection (quoted in Jan 2020 at $1.5M still to pay, probably now $1M still to pay) and then to buy the arc furnace, quoted by NB at $2M to buy. Total $3M still required, in my estimation.

The absolutely critical thing for me is that the company is now profit-making. Even if it were pessimistically only making a net cash inflow (after admin costs - there's no tax remember) of $2M p.a. *run-rate* today, and growing, that will surely be enough to raise enough debt to buy the arc furnace and complete the power connection? A $2M net income can support debt of at least $10M even at fairly high interest rates - so $3M debt should be easy. And of course once the arc furnace is in operation (perhaps by late summer?) the profits/income will jump substantially.

I really think the inflection point has been reached!

NAI DYOR

[cyberbub] 19/1/2021 21:03

PS I genuinely think the BFS will be with us soon. Remember it's only a review and gap-fill of detailed information and reports that the company already have - they've not started from scratch... NB said last Jan that it was due at the end of 2020, add in Covid delays, it's certainly taken longer than hoped but must surely be published soon?

NAI

[cyberbub] 19/1/2021 21:02

Yes. I'll be happy if it sees us through to 15p+ :-). And then follow up with some positive news for further rises! You see that's a glass-half-full view ;-))

[jailbird] 19/1/2021 20:20

Ah ok , that maybe used more for short term positions ? As a trading tool

[cyberbub] 19/1/2021 18:33

A 20-50 golden cross - both rising

[jailbird] 19/1/2021 18:07

* Not a rising 200MA

[jailbird] 19/1/2021 18:06

I do not see a golden cross todayJust checked the ADVFn charts I am using simple moving average However the 50Ma did cross over 200MA in December even though it was a riding 200MA

[cyberbub] 19/1/2021 17:47

A golden cross was made today, as I mentioned yesterday - a bullish chart signal. Plus the RSI is still below 70, so there is plenty of room to keep positive momentum.

NAI DYOR

[rmart] 19/1/2021 16:38

just about finished at a 10 month high. Tomorrow is going to be interesting.

[cyberbub] 19/1/2021 16:12

Let's see if it breaks the resistance of the last few months at 12p - 3rd time lucky??

[cyberbub] 19/1/2021 16:02

The market looks forward not backward, jailbird. But if you genuinely want to minimise risks and only buy in after the BFS is published that's absolutely fine - everyone makes their own decisions. Just don't expect it to be at 11p.NAI of course, I don't have a crystal ball...

[jailbird] 19/1/2021 16:02

On a positive note the share price is showing resilience and is surprising me .Maybe there is some good news on the way ?

[jailbird] 19/1/2021 16:01

Then Said this in Oct Covid-19 restrictions and until the new connection to the adjacent high-voltage power line is made, expected in Spring of 2021, which is expected to significantly reduce down-time caused by power outages and instability. Nevertheless, the impact on revenues and earnings will be significant in the context of the current processing operation.

[cyberbub] 19/1/2021 15:58

Have you read that production had doubled after the interim results period, and was expected to climb further?

[jailbird] 19/1/2021 15:44

Have you read the interim results on sep 2020?I think you will revise your figures downwards

[jailbird] 19/1/2021 15:38

Do not believe those figures . I have learned that .estimated $1.5M net profit for 2020..Def not happening , Covid has made sure of that .So do you ever ask yourself , why the Co just does not raise the required amount and get on with it ?It knows it needs more right now.Something is just not right The Co does not reply , since you have received a reply , maybe you can ask again

[cyberbub] 19/1/2021 14:45

Well they've raised £1M in placings and $300k in bonds last year. Plus they will be making actual cashflow from the plant even if it's not finished - the broker recently estimated $1.5M net profit for 2020.If they need to raise another £1-2M, fine let them get on with it. Hopefully at 15p! Another 5% dilution is hardly disastrous when the cap is £30-40M! Or maybe they can raise more bonds.You're very negative jailbird!

[jailbird] 19/1/2021 14:04

It is not simple to say it is undervalued based on those numbers . It need further derisking for me Power line in place and running and cash required for furnace and BFSIt will move up I am sure but not yet Bring on news update Other thing is There is no mention BFS will be completed in a few weeks . But there is statements or interview in jan 2020 it needs $5m to get to 1500t plant to run, power line and BFS . This has not been raised in total .BFS takes upto 2 years to be completed properly , but it could take less time here I agree .