Ironveld Share Discussion Threads

[rec0very stock] 14/12/2022 08:43

My BEST case scenario for going forwards (very unlikely to happen)

GC is sacked / resigns without a big pay off. Happy to see counter argument, but Jennings was right, GC has screwed it up royally and the only way shareholders stand any chance is to get rid of him.

JW takes over and stops the refurbishment at 1 furnace to preserve cash. A small commissioning sample is done to produce enough HPI so that there can be confidence in the purity of it. If it seems pure enough get someone else to convert it into powder and market the powder so there is confidence in what it can go for. In the meantime do a proper DFS and on the back of that DFS look for a debt / equity funding package which includes the debt on the smelter (the creditors would need to be prepared to extend the exclusivity period until the DFS is done and the equity portion is in place).

A white knight could also come a long and make this happen, but they would probably want and need a controlling stake, which they could potentially use to take the whole company out cheaply.

[rec0very stock] 14/12/2022 08:28

The only parts of your BEST case I would challenge on a purely factual basis is:

"happy to stump up another couple of million quid if Ironveld can prove up the production"

It is £2.5m plus working capital - there are a whole raft of assumptions that would need to go into the working capital part and the last thing the shareholders would be happy about is running out of money yet again. Which leads to the second part:

"something in excess of their current market cap as profit" Current Market Cap is based on current shares in issue and there are going to be a lot more shares in issue to fund getting there. We don't know how many, but 6Bn is not an unreasonable guess. There is however a reward in this BEST case scenario.

BEST cases never happen and the presentation gives a range of prices and costs. The "worst" case is significantly less attractive but there is still a reward. A proper DFS would include a sensitivity analysis. And that would give a much better bounded potential for reward against which to balance the risks.

The key project risk in my view is the totally unproven nature of the HPIP's marketability. I covered that at post 7296 - It would however be good for others to do their own research and analysis and to post it so it can be discussed.

The key issue from a company perspective though is can they be trusted. I posted the 2019 saga, but there have been many other false dawns ever since 2014. I won't rehash the Grosvenor saga but yet again the company breached AIM rules 10 and 11 repeatedly then too. They massively diluted existing shareholders to raise far too little cash which will shortly run out and at no stage has the company been remotely honest about it.

[al101uk] 13/12/2022 23:25

Here's a best case from my point of view:

Ore processed: 40,000 Tonnes (From note and extrapolation from Iron recovery rate in slides)

Revenue: $32,000,000 (Page 16 of slide deck, best case Iron as HPIP)

Mining: 40K*$73 = $1,720,000 (Page 16 of slide deck)
Transport: 40k*$43 = $2,920,000 (Page 16 of slide deck)
Processing: 40k*$363 = $14,520,000 (Page 9 of Note, converted from Rands)

Total Cost: $19,160,000

Margin: $13,840,000

With admin costs at $2.5 million (note, page 11, converted from Rands), that gives them something in excess of their current market cap as profit, obviously they would have to pay down the debt with some of the proceeds and there is likely some additional overhead in doing the HPI to HPIP conversion.

On that basis it could be that potential investors are happy to stump up another couple of million quid if Ironveld can prove up the production. That kind of cashflow would enable them to develop their onsite smelting facilities and progress from there.

Does that potential make them undervalued? I think that depends on your attitude to risk and the probability you give them of success.

I'm in the happy position of having made the decision to sit on the sidelines until some more risks resolve, I don't care to do a valuation because I think the outcome is too binary and I'm not interested in that bet. As a result I don't have to value the company in it's current state, nor do I have to worry too much if things turn out as Ladeside expects or as RS expects.

For the record, I want Ladeside to win :-)

[rec0very stock] 13/12/2022 17:03

A bit of pointless time wasting research:



"High purity iron (HPI) powder is highly sought after in an array of industries including metallurgy, food and beverage, food packaging, electronics and pharmaceuticals. Different grades of high purity iron (HPI) powder include 99.9, 99.99%, and 99.999%."



"The Study confirms the Project's viability to deliver an exceptionally high grade iron product (99.5% Fe) called High Purity Iron ("HPI") which commands a premium to the pig iron price"

Is there any point in spending £2.5m to produce HPIP if the HPIP is not HP enough?

We already know, and finally even LADESIDE seems to agree, that the company will run out of money in the first part of next year and would just burn cash forever at full production because Gross Margins are somewhere between negligible and negative making Operating Margins heavily negative. Given how GC has obscured these facts, can we have any faith what so ever that if he did have the money (CAPEX and working capital) to produce HPIP instead, that the HPIP would be marketable at the prices in the note / presentation?

[rec0very stock] 13/12/2022 16:28

"why has nobody stated that with all that given that the share price is still materially undervalued at current levels and that 1p is the near term target price ??"

Fine for you to state it, but you need to back that up with a credible evidenced argument / counter argument.

Companies that run out of cash and have to raise just deliver more confetti and no products that make a profit which is what drives the share price up.

Please give us your analysis of how the company does go from the dire position it is in, to 1p based on fundamentals. I would love to hear it and discuss it. How many shares will be in issue by the time it makes it - 6Bn? so justify a £60m MCap company trading on a P/E of 8 in the near term.

[purchaseatthetop] 13/12/2022 16:15

Ladeside. It is a hobby. I am an NHS ambulance crew member and we spend hours waiting at A&E. Happily we have Wi-Fi and ADVFN. Glad to help.

[ladeside] 13/12/2022 16:11

Forensically dissecting every brokers note, RNS and using logic for the unanswered questions is all fine and well and of course it adds value to the discussion, however what I don't like about it is the cherry picking and snide insinuations by some.

Using the brokers note as an example, the perceived negatives are all there for us all to see regarding the tight margins, the possibility of another raise etc, etc, however to temper that why has nobody stated that with all that given that the share price is still materially undervalued at current levels and that 1p is the near term target price ?? Or do we only discuss negatives on here ??

Over and above this, the note takes known knowns and potential risks and hasn't priced in any unknown positives such as a cash injection from Grosvenor or anyone else ? Both of these scenarios are more than possible.

It also hasn't priced in the fact that once the infrastructure is in place and the company is producing (however tight the margin) that we then become a completely different proposition and ripe for a take out.

It also hasn't been discussed about how with a current MCAP of £9 Million that we're hugely undervalued in relation to our peers based on our resource / operating environment etc.

All these things add value as does things which can't be quantified such as sentiment, however all this appears to be overlooked by our resident commentators ??

I've said it on umpteen occasions previously but why do non holders spend so much time researching and posting about a company in which they have no financial interest and in fact like to talk down ? It makes no sense at all and surely if that bored with life then a wee bit of charity work might be a better use of all this spare time ??

Anyway, I'm happy with how things are going as are the Management and Board so that's good enough for me.......

[purchaseatthetop] 13/12/2022 06:29

It’s all a bit irrelevant what the figures say as nothing is actually ever going to happen without a DFS. Recession and voids in the operational and financial plan mean that IRON are not going to have the credibility and finances to complete a deal. All they are doing now with the refurb work of $300k is buying time. It is a sort of option. The owners are happy to play along because their asset is being improved. The only people it will cost are IRON PIs.

[al101uk] 12/12/2022 22:49

Thanks, edited. I want to be able to refer back and use the post when there is new information, also added what I had as capex spend (now edited) and the links to the note and the presentation, everything in one place :-)

If the capex can be fixed with the HPI to HPIP conversion costs, then that fixes the ongoing opex. I think I can get within a couple of million quid based on what I've written above.

Not sure the social costs are in in there at $250K

They do have a habbit of paying contractors and director salaries in equity at times.

[rec0very stock] 12/12/2022 17:06

Yep, except you have mining and transport the wrong way round, but it does not make any difference to the overall calculation. You have also used the best case figures for costs and revenue (noting the Ti is probably 10 times too high in the presentation). If you use the worst case or even the mid, the gross margin is negative!

Keep averaging down at these crazy prices!

[al101uk] 12/12/2022 16:50

Links:

Investor Slides


Analyst Note


Capex Summary from an earlier post for context (all data taken from the note). Now updated.

£4.5 million raised

£0.75 million Cost of FCF (Slide Deck and Note)
£2 million Refurb Costs (Slide Deck, page 7)
£2.72 million HPI Capex (Note)
£3.4 million working capital requirement first year (Note)
Alternative of £850K if delivered first quarter (divide by 4).

Ore processed: 40,000 Tonnes (From note and extrapolation from Iron recovery rate in slides)

Revenue: $20,000,000 (Page 16 of slide deck)

Mining: 40K*$73 = $1,720,000 (Page 16 of slide deck)
Transport: 40k*$43 = $2,920,000 (Page 16 of slide deck)
Processing: 40k*$363 = $14,520,000 (Page 9 of Note, converted from Rands)

Total Cost: $19,160,000

Margin: $840,000

With admin costs at $2.5 million (note, page 11, converted from Rands), the Opex numbers don't add up and I'm pretty certain there are other operational costs that haven't been included (there always are).

If they can't get to profitability on an ongoing basis without HPIP, then there is a capex blackhole that has to be filled for that conversion and an ongoing loss that needs to be supplemented while they get there. Squeezing the timescale, which I thought might be the plan, doesn't help.

I hope that by providing numbers and sources and not yelling the "end is nigh" someone can provide counter points/corrections?

[rec0very stock] 12/12/2022 16:16

al,

It was in the mate's rates note:



Table on Page 9

Smelting costs per
tonne processed
(Rands) --------------- 6300 (£315)

Given our friend above's view, yes £250,000 sells the locals well short. I said that when I first saw that in the presentation. As I said in my second question, it's SA law - not that GC gives a damn about laws and rules and he treats anyone who he thinks is beneath him like dirt. It may well be there's nothing the locals can do, but it won't stop them trying. They probably don't need to worry as the company runs out of cash after doing a tiny amount.

I thought the presentation was being very generous on the Ti and V Slag given the note said:

"HPIP is estimated to contribute 96% to the revenue stream with vanadium and titanium contributing 3.4% and 0.4% respectively" but the presentation says $1m for each. $1m for V seems about right Ti should be about $100k

Obviously what we all really need is a proper DFS rather than mate's rates notes and presentations which leave out key costs like the smelting and admin costs!

[ladeside] 12/12/2022 16:08

The Farmers, the Farmers, but what about the Farmers ???

Zulu, Zulu, Zulu !!!

[al101uk] 12/12/2022 15:12

RS,

Thumbed up post 7272, thanks.

Where did you source your processing costs?

You quote $20 million of revenue, which is what the company says on slide 12, so nothing to argue about there.

They also state $43 for mining and $73 for transport (page 16 of the slide deck), that leaves circa $284 for processing?

Page 16 also comments "Total mine establishment and commissioning costs (including all Social Commitments):£250,000". Any comments?

The slides clarify the Titanium and Vanadium revenues that I was substantialy overestimating by using the note rather than the presentation for numbers.

[rec0very stock] 12/12/2022 12:35

Come now my old friend, no need to be like that.

Surely we are both looking forward to the Annual Report coming out and I am looking forward to you admitting I got it right yet again.

You have always been there for me to buy the shares I sold, where would we be without you?

You have said, and I agreed, nothing posted makes any real difference to what happens. So keep calm and carry on averaging down at these crazy prices.

[rec0very stock] 12/12/2022 11:25

An Irate local? Surely not!

What was that second question I never got to ask at the GM? Oh yes here it is:



Question 2

It is a requirement under section 54 of MPRDA, which provides no explicit guidelines, that before any full-scale mining can take place on the farms under which the resource sits for those who live, work and derive their livelihood from it are relocated and compensated. There have been replies to both the Company's and Align's twitter feeds which indicate that at least some of those people will be resistant. Many of these tweets specifically cite grievances relating to those subject to today's resolutions. This social media activity will only increase in volume and most likely outrage. This issue poses a very obvious cost and time risk to our company achieving its business plan and there has been no mention of the situation in the most recent Annual Report or RNSs in the last 10 months, ie since full scale mining became a genuine near term prospect. The members and market in general urgently require a fully compliant update on this matter. As giving such an update here would require the release of inside information, the question those subject to today's resolutions must answer now is:
Can you provide an unequivocal commitment that a compliant RNS on this matter will be released to the market at the earliest possible opportunity next week and certainly no later than the end of next week?

As I did not even get to ask the second question and from the reaction to the first where the BoD made clear that they don't care which laws, regulations or guidance they ignore as it is entirely irrelevant to the running of the company, you can be sure the company won't tell you what is really going on.

[bakonebamatlala] 12/12/2022 10:11

Attention All Inronveld PLC Shareholders and Investors:

The Board and Management of Ironveld PLC are committing fraud on you. The company and its subsidiaries do not have duly approved mining rights in South Africa. The company will not be able to start mining in Q1 2023 as they have stated to you. Any new shares they plan to place with investors purportedly for working capital will be done so fraudulently.

We have previously warned you but you did not listen and look what has happened to your share price since (average share price of 3 pence 5 years ago to current levels of 0.3 pence). Good luck and enjoy your losses this Christmas.

[rec0very stock] 12/12/2022 07:55

JakNife,

The note obscures the issues deliberately, particularly in the way it uses a mix of currencies and starts at 2023 with a number of things assumed to have been done.

If you start with the net amount raised by the placing, as the pot was empty before it, of £4.25m. Take off £750k as the initial payment. Take off £2m (the minimum the smelter refurb was to cost), the London Admin costs (£80k per month) the SA Admin Costs (£100K) per month, there is not a huge amount left for mining. The presentation says £250k start up cost for mining. If you then add up the costs of mining, transport and smelting (the presentation gives a range of figures per tonne for mining and transport, you have to use what the note says for cost of smelting (£315 per tonne of ore - each tonne of ore produces 1/2 tonne of HPI, as it was conveniently left out of the presentation) you find that the costs are about what the presentation says they can sell it for. If you do best case on all figures given, the gross margin is negligible, if you do mid or worst case it is negative! Even at full production, best case, at PLC level the company makes an operating loss of £1.5m per year:

Bish bash bosh $20m revenue with $22m operating costs - your broker, assume it was TPI, forgot to mention that last bit how strange.

To dig themselves out of the hole they need £2.5m (ZAR 50m) of CAPEX (hidden in the text of the note and assumed to be debt funded so shown in additional debt payments spread over 10 years) and the extra working capital. I took a fairly crude approach to estimating the working capital requirement when the note first came out and it does all depend on how quickly they can actually genuinely become cash generative and on how valid any of the assumptions are in their figures (Mate of Peter plus some of their own work - how much faith would you put in any of them?).

The key issue though is will the HPI be pure enough to even be worth converting to HPIP? Previous announcements way back said they could achieve 99.5%, but that is not pure enough for any of the applications ramped on about in the presentation. Technically pure Iron starts at 99.6% but most applications need 99.8% the really high value HPIP is 99.95%. A proper study, rather than mates rates bish bash bosh, is needed to work it all out.

There can be no doubt that a placing is needed early in the new year. I strongly suspect the issue holding up the DPA is that it is obvious to the creditors, as it will already be obvious to the auditor working on the Annual Report due this month, that without a major injection of cash - £2.5m plus working capital, there is no chance that the debt repayments could be made.

Will the market fall for it a second time? GC clearly hopes those he has already screwed over in the placing and Mike Staten will follow their money. They might if the price is low enough and they can be convinced that it is properly worked out this time. But in the current climate, even that may not be enough. If it is not, then having spent all the placing money, suspension and administration beckons. By the time the administrators have sorted out the mess, the company will be fire selling the asset (the licence) just to pay the bills it has racked up and shareholders will get nothing. Bish Bash Bosh 0p.

[iceagefarmer] 11/12/2022 20:00

i suppose its a closed period now for director purchases but i expect to see more significant holding rns's soon

[iceagefarmer] 11/12/2022 19:55

i see the new director john wardle owns 8% of ironveld..alot are in sticky hands,be interesting to find out how many ordinary pi's hold?

i regard this as very significant..
John is the 100% beneficial owner of Tracarta Limited, which holds 237,046,901 ordinary shares in Ironveld representing 8.19 per cent. of the Company's issued share capital.

[iceagefarmer] 11/12/2022 14:41

and vanadium on the rise too now...everything coming together

European Ferrovanadium Prices Up
BEIJING (Asian Metal) 9 Dec 22 – As most consumers would add inventory before Christmas Holiday, but spot market saw tight supply, European ferrovanadium market mentality stayed positive during the past week. Currently, the mainstream prices of European ferrovanadium 80%min stay at USD33-33.5/kg V in warehouse Rotterdam, up by USD1/kg V from late last week. Considering that few suppliers have inventory pressure and the tight supply continues, insiders believe that the mainstream prices of European ferrovanadium 80%min would move up further in the coming week.

Please visit more information hxxps://www.asianmetal.com/news/1883207/European-ferrovanadium-prices-up/14