Ironveld Share Discussion Threads

[al101uk] 18/7/2022 15:12

I'd argue that the more refined the product, the bigger the value add. You seem to be suggesting the opposite?

[al101uk] 18/7/2022 15:10

Classifying costs as opex improves cashflow.

The difference is in the ability to capitalise the spend on the balance sheet. So if Ironveld buy all of their equipment and use that to produce the ore, then that equipment cost would hit the balance sheet and be depreciated over it's lifetime. The cost is all upfront and converts the cash to a non-cash item (equipment).

If the cost goes to opex, then there will be a contract with a partner where a far smaller payment is made as work is completed. That money would be money that equates to the depreciation of the asset they would otherwise have bought. You're right, there may be a premium involved in that (over 10/20/50 years), but equally it could be cheaper depending on the market. It removes the need for an upfront cost and if, as the company has said, they will cover operational costs, that would include contracted equipment for mining.

Given that they have already completed a 10K commercial sample, I'd argue that they likely used contracted out resource and were covered operationally for that sample from payments recieved.

[rec0very stock] 18/7/2022 15:10

Thanks. They contracted out a bulk sample as expected. They had consent for small scale short term disruption to the locals. The company was delivering ore to the offtaker. We don't know how close to smelter ready it was, the offtaker might have washed it, crushed it, screened it and washed it again or maybe that was all done by the contractor who delivered it to the offtaker. The offtaker may well have paid for the sample (they would own the end product). I have always wondered why, when the smelter was such a problem, the company did not set up a Direct Ore Shipping operation to provide cashflow rather than relying on placing after placing to keep the lights on whilst they looked for a smelter.

[rec0very stock] 18/7/2022 14:54

al,

It all depends on how you do it whether it is CAPEX or OPEX. At the end of the day it does not matter because it is all just money. The Smelter CAPEX is covered and we can see that. Everything else does not seem to be covered, which is why there will be another placing somewhere down the line. As cash is extremely limitted I would expect it will be max OPEX (contract out) and minimal CAPEX. The up shot of that is cash flow will be significantly reduced as contracting it all out is expensive in the longer term. A proper DFS would explain it all and give the NPV based on the methods to be used. Without a proper DFS and a company that seems to be making it up as they go along there is a risk and a potential significant reduction to the expected reward.

There is also a big difference between saying to some nearby residents we will be blasting for the next 2 weeks but that is it and we will be blasting on and off for the next 100 years.

We don't know the background to the landowners' complaints, only that there are a group of them who really are not happy. Could it be what went on to get the bulk sample (a link to the RNS would be useful) that caused their upset?

[al101uk] 18/7/2022 14:37

RS, You've been arguing that capex isn't covered because they do not have the cash for equipment, set up etc. Now you've switched to Opex, saying they won't be able to pay the electricity bill!?!

You're right, I don't think the Opex cost of running the mine will have been ignored by ME. Using contractors for the work converts a chunk of that capex to opex, which I believe you well know.

So assuming that the capex requirements you have been talking about are now opex requirements and the company has stated that they will be able to "cover operational expenses" they can get to production with the funds raised.

There are many ways to skin a financial cat.

I actually agree with you that GC and ME mislead investors when putting their plans out there (that's why I have no skin in the game right now). But they don't lie directly, they are sins of omission. If they say directly that they can get to operational break even with the funds from the placing, that is in my view what they truly believe.

The 10K tonnes of product that they apparetnly shipped is far in excess of anything in the DFS and my point was that you would need some infrastructure in place to mine that amount of product. Possibly some explosives too which contradicts your argument around people who are resident in the area.

[rec0very stock] 18/7/2022 13:02

Al some bulk sampling work would have been done for 2014 DFS. It is easy enough to contract out the whole thing, you just have to be able to pay for it - once you have got the landowners relocated. Contracting the whole thing out to a turn key operator is a lot more expensive in the long run than doing things yourself. Doing things yourself requires CAPEX and OPEX. The smelter CAPEX is covered, however it too will have OPEX (electricity prices have gone through the roof, someone needs to operate it and there is the insurance premium on £30m insurance value). Unless ME is a total incompetent (possible but unlikely) he would have factored most if not all of these costs into the original £8m figure. ME just has a track record of misleading the market by ommiting key facts. (breach of AIM Rule 10 in case anyone cares about AIM rules)

[rec0very stock] 18/7/2022 12:58

Even if Align did come up with a robust and credible alternative (they have not so far, even before RJ crashed the share price by publically throwing his toys out of the cot when made an insider), it would still need another GM to approve which won't happen before 19th Aug.

PS I expect the circulars will be in my ii voting inbox tomorrow. I will let you know when I have voted for 1 Aug and asked to attend 12 Aug.

[tima441] 18/7/2022 12:07

If planning to vote... in reality most people will need to vote asap to get it counted for Aug 1st meeting. Some brokers are very inefficient!

For me to consider a vote against BoD... Align will need to show their alternative proposal asap.

That should include how they will finance to get to production and new proposed board so I can understand if its got prospects to succeed... or from frying pan to fire

If attending in person don't forget to get a "letter of representation" from your broker (arrange asap....well in advance) and take form of id

[rec0very stock] 18/7/2022 11:57

Oh dear LADESIDE. As Warren Buffett says: Don't invest in something you don't understand. I do understand mining and have made and lost a lot of money investing in it.

I don't accept any figure from any company unless they are in an independent DFS published in full (even then I am sceptical because the independent people who write DFSs get most of their info from the company and are paid by the company to produce it). I note inconsistencies in the figures the company provides and try to find independent evidence to assess them against - critical thinking is a key skill.

If you check any miner who has done or is planning to do mining on land where there are people living, you will see that they have to be relocated at the miner's expense - it is a requirement. What we know from Twitter is at least some of the landowners are not happy.

The first step in actual mining (once the people have been relocated) will be stripping the overburden (all that nice mud the farmers used to grow crops and graze cattle etc on). Then, as it is really solid stuff, will come blasting - need a nice big clear area because of all the noise and vibration. Then comes a load of other things you could look into and work out how much they might cost, which the company does not have the money to pay either to set it up themselves or contract the whole thing out as a turn key operation. There is a great line that Garth says in Wayne's World "It is as if people only do things because they get paid!". Do some research on basic mining and then you might know something about what you are investing in.

You like sentiment and how it impacts share prices. Ok fine, what sort of sentiment is there going to be towards the company from RJ and his supporters when they lose? I don't think it takes a rocket scientist to work out that they are not going to go back to being compliant little sheep buying on any BS the company puts out. Some of them might even know something about mining and might challenge the BS the company puts out far more vigourously than I do - where money is involved it is always personal.

[al101uk] 18/7/2022 11:01

I wrote a post, not sure I posted it, where I linked an RNS that was probably part of the deal for the offtake with with Glencore. They supplied 10,000 Tonnes of product for long term production testing. That would indicate to me that any other equipment that Ironveld may need is already on site or can be subcontracted in.

I'd be wary of assuming profitability following the smelter acquisition. I've yet to see a statement from the company that confirms that. They do say they will be able to "cover operational expenses". They have used that kind of terminology before at Amerisur.

I still think a company that is producing and selling product and is marginally profitable at the operating level will be worth several times what Ironveld is today. Having proved up the concept they may be a worthy purchase for someone with more capital for development.

Right now, I see that as the best outcome.

[al101uk] 18/7/2022 10:47

Align response:

Starts out by bashing what Align guess is a 5% arrangement fee, while in their own proposal, they were pocketing the same arrangement fee.

Goes on to how the directors are profiting from the dilution, which is true but the benefits to Align are a quatum larger in their proposal. Chosing between two theives, I chose the one that leaves the shirt on my back.

Point '1' has been covered, debt is dangerous and puts the companies assets at hugely greater risk (and therefore the investors). Equity may hold it's price better with Aligns proposal in the short term, but the longer term interests of shareholders and the business are not served by it.

In their example they point out the flaw in their proposal they "...leave shareholders better off until the debt was to be repaid".

"It can be thus seen that even under a disaster scenario where the stock had fallen back towards 0.3p and the smelter inception had not gone according to plan AND they had raised a further £2m that the TOTAL SHARE & WARRANT COUNT was still approaching 20% less under our proposal"

It really doens't matter at that point, because unlike under Ironvelds proposal, the company is bankrupt and the debt holder strips the assets.

"Again, holding a large proportion of the equity float then what interest would I/Align have in decimating this unless the debt completely swamped the equity worth?"

Ironveld provided an example of what would happen, Align would take the assts on the cheap and sell then at a huge profit.

Dismisses "Align acts in a “predatoryR21; way" but then goes on to compare himself favourably to BUCKET SHOPS! Don't set the bar too high.

I honestly don't understand point '3'. The price was 0.7p until Align decided to go public.

Point 4 is interesting in that GC didn't contribute a single penny to the Kazera placing... and now has stepped down quietly without a fight. Maybe Align should be looking more carefully in to what they are holding over there ;-)

Point 5, yes, it was a low blow, touche!

Second point '5' regarding Clarke being bullied and countering that Clarke is the bully ROTFL!

Point 6 can be argued either way, but "simple capitalism" precludes the idea that Align are protectors of the masses and there is nothing illegal about asset stripping, it's just capitalism.

Point 7 - We all know GC keeps his cards close to his chest and information that is revealed tends to raise more questions than it answers. Align obviously didn't do their research if they expected a straight bat on that front.

Paragraph on how GC is a bigger crook than Align.

"Ironveld’s Board were asked to put hard cash in as opposed to just salary conversions and they declined."

I guess the quantum of cash they were asked to put in is important here but generally, if this is true, just sell now.

Align don't go on to define any kind of plan, so pick you least worst solution. GC's placing seems like the only option to me, the debt would kill the company long term and Align have no plan.

[bigwavedave] 17/7/2022 16:31

Ace - that's a good enough reason to back GC!

[rec0very stock] 17/7/2022 16:30

Spot on tima. The real question you need to ask is do you really want to be a shareholder at all.

My view on the Broker Warrant special is it may get blocked as 75% of the vote is needed and only 8% from first placing is in play. However it does not stop the issue of the warrants, just the exercising of them (£1m to the company). If the special does get blocked, the BoD will add the authority to issue to a later GM when RJ has been diluted. Blocking it, which I will vote to do, just increases the probability that GC will incinerate the turkey.

[tima441] 17/7/2022 16:02

That's my main problem with Align.

They have expressed (with some reason?) their dissatisfaction.

But now:
1. No proposals for replacement board members
2. No proposals for fund raise (I doubt their previous proposals will fly now - even if it could have before?)
3. No strategy that involves the smelter?
4. No alternative strategy?

So Align seem to me voting for scorched earth policy - turkeys voting for Christmas!

I'm deeply unhappy with the Grosvenor deal being announced and failure to close. Also with low share price (part blame Align). Also with Directors conversion loans etc at placing price. Also with broker warrants (number, price, expiry)

But I'm also a pragmatic realist!

So despite my reservations I'm with the board at this time. Open to persuasion otherwise. But will need hard facts, firm proposals that I don't see now.

[rec0very stock] 17/7/2022 16:02

I had a lot of time for TW in my shareholder activism days. He taught me a lot about what not to buy. I even followed some of his picks, to my cost! DYOR is the only way. If you are not happy with the way the company is being run, vote with your feet and sell and do better research next time.

[rec0very stock] 17/7/2022 15:36

I now have access to my account info. I have a massive 27,475 shares at a book cost of £1,481,12 (what I got back from about £200k when I won the battle and got a CEO sacked, but lost the war in my shareholder activism days) currently valued at £98.85 (down 93.33%). Which I shall be voting for the placing on 1 Aug by proxy, and for the booting out of ME and GC (in person) on 12 Aug. Be worried, be very worried!

I note that the placing can't be stopped with a special, but the broker warrants can be stopped with a special. I will vote against the special.

Also note there is no opportunity to vote for the Align proposal. It is take it or leave it on the BoD's placing proposal.

I also note ME's middle name is Wentworth - definately needs to go for not having a proper middle name.

[tima441] 17/7/2022 12:01

#IRON @IronveldPLC
 Ironveld Placing GM Circular 1st Aug
& NOTICE OF GENERAL MEETING 12th Aug

[aceuk] 17/7/2022 11:57

I see John Wardle/Tracarta have not denied they are at least talking to Align

[tima441] 17/7/2022 11:52

I do not subscribe... so no idea what TW said... not a fan anyway!

[rec0very stock] 16/7/2022 20:02

I will tell you exactly how many shares I will be voting to sack ME and GC when I can access the account (it is down for upgrade this weekend). I am sure the figure won't have GC and ME shaking in their boots.