Ironveld Share Discussion Threads

[ladeside] 02/1/2023 18:48

UTTER NONSENSE.

They don't need to raise anything like £8 Million, so why have you said they do ??

[rec0very stock] 02/1/2023 11:17

patt,

The question is not what they need, but what they will actually be able to raise.

They need £4-£8m (CAPEX + Working Capital - they have run out of cash before getting to full production this time because they did not have the working capital to get there). With £4m, if they are really smart and do a lot of things to conserve cash then they will probably still fall short, but that shortfall could be made up through a variety of funding options which would not be too painful.

However, I think it is unlikely they will be able to raise enough and instead of being smart they will pump what they do raise into cashburning production and hit the same brick wall again.

Time will tell and that's the fun of watching things unfold, if you are not heavily invested and becoming more heavily invested because you have not worked it out for yourself.

Those who did work it out and have battened down the hatches early will be better off than those who continue to believe in the magic of GC.

[purchaseatthetop] 02/1/2023 10:58

Recovery. I originally looked at $1.5m but then doubled it because everything will cost far more than anticipated.
This is not a scam. Because that would be illegal. It is a legal fleecing.

[rec0very stock] 02/1/2023 10:49

Malcolm,

They have dug up small amounts in the past and it is almost certain they will dig up small amounts again and possible they already have. The question is whether they will ever dig up enough and process it in a manner which makes them cashflow positive at PLC level. I think there is a way they could achieve that, but unless there is a radical change of approach, all my experience and analysis tells me that it is unlikely that they will achieve it.

Is it another scam? It all depends on how you define scam. The resource is real and the smelter is real, though there is still an element of ambiguity over whether the transaction to acquire it has formally completed.

The company has repeatedly misled the market many times on many key issues, the Grosvenor SPA last year is just one example.

With respect to have they dug anything up:

"the Company was able to announce in early December 2022 that mining activities had commenced and that the smelter's first furnace (of three) would be in operation within weeks,"

The company may have been ABLE to announce mining activities had commenced, the fact is it did not announce mining activities had commenced. What it actually announced was:

"Site establishment and preparatory groundworks within the Lapon Licence area are now substantially complete and the mine will be delivering ore to the smelter as planned later this month."

It is possible that a small amount of ore has been delivered to enable commissioning of the furnace, which is nearing completion of refurbishment. However there is no confirmation. What is confirmed though is:

"Expansion of current activities or further development and production from the ore resources requires significant further capital expenditure and the Group will need to raise further finance."

Ie the company has rushed head long and as fast as possible into the brick wall which was entirely foreseeable and the company knew was there, when it raised the £4.5m gross back in August. Was that a smart approach? Arguably yes, but only if getting into full production was going to make the company cashflow positive at PLC level and coming back for the extra cash to get there could have been done BEFORE they had to admit they had hit the brick wall.

The company paid for a research note to be done by a mate of Peter Cox which appeared to say that it would:



"The successful capital raising and acquisition of Ferrochrome Furnaces (Pty) Ltd (“FCF”) will propel Ironveld into production and operating profit within the next year."

However proper analysis shows that at best the GROSS margins are negligible, but more likely negative.

The company produced an investor presentation:



Which claimed that at full production revenues would be $20m. However proper analysis shows that they fudged the revenue expected from the Ti slag, so it is only $19.1m and again that it a best case. The presentation omitted 2 key costs: admin and the smelting cost, which when added in give a best case minimum of $22m of costs.

The Annual Report has doubled down on maintaining the illusion that full production = cashflow positive at PLC level:

"the Company expects to rapidly increase production and revenues as all three furnaces at the smelter reach full production in the first half of 2023, which will see the business operating on a positive cash flow basis."

It can be argued that many AIM companies mislead the market in similar ways and I would not counter that argument. Indeed there are many examples of companies who have been even worse when it comes to deliberately misleading the market. They have all failed and gone to 0p, in many instances the amount realised on liquidation has not even covered the liquidator's fees! In some of these cases it has transpired that the "assets" were not real and the money was never really there - those are scams. However in the majority of the cases they were just poor projects that were poorly executed by people more interested in earning excessive remuneration paid for by repeated discounted placings, until the market finally called time on them and they could no longer raise enough money to keep the gravy train on the rails.

By my definition of a scam (assets not real and money never really there) IRON is not a scam. Which track IRON will go down remains to be seen. IF they raise enough and IF they are smart about how they spend what they raise, then it is possible that the company could one day become cash generative at PLC level. Whether the level of cash generation would make the juice worth the squeeze is another debate.

In the meantime read post 7369 and join the guess the parameters of the 2023 placing contest - it is just for fun.

I have 15/3/23, £1.5m and 0.1p

patt has 21/2/23, £3m and 0.14p

LADESIDE has no date, £2.2m and 0.2p

[malcolmmm] 01/1/2023 19:45

Is this another scam??????? will they ever dig anything up ??????? After many years they haven't produced anything and imo never will

[al101uk] 01/1/2023 19:17

RS,

I read the "operationally profitable" somewhere, but can't dig it out at the moment. I don't think I made it up :-/

[aceuk] 01/1/2023 18:56

Ladeside the characters you mention have no further need of reputation - whatever happens to Ironveld they will all have access to enough money to see them and theirs through retirement.

[rec0very stock] 01/1/2023 17:17

LADESIDE,

I have seen the argument you are making made just as passionately by posters on every BB of every AIM company that has gone to 0p.

You need to stop relying on trying to interpret the actions of others, particularly ones they have not actually made, and start doing your own critical analysis of the available information.

Try it, post it and we will peer review it for you. It will make you a better investor.

[rec0very stock] 01/1/2023 17:06

al,

"as all three furnaces at the smelter reach full production in the first half of 2023, which will see the business operating on a positive cash flow basis."

There is an art to reading RNSs and there is even more art to reading GC's RNSs. Mostly it is about what they don't say but should say.

Analysis of the note and the presentation shows that GROSS margins are at best negligible, but most likely negative. The big costs that were left out of the presentation were the smelting cost and the admin costs (London ie BoD and advisors & SA). The sales price for HPI used in the note was $900 per tonne, which is a significant premium on pig iron which is about $500 per tonne, the presentation gave a range of $800-900. The presentation also inflated the revenue from Ti slag by 700%

The note left out other reality factors, like recovery rates, but most crucially it took no account of the HPIP plant operating costs, which, given the HPIP plant consists of 2 furnaces and an atomiser, are likely to be quite significant. The note assumed a price for HPIP of $1500 but the presentation gave a range of $1250-$1500. It is still probable that HPIP at full production could achieve a low level of positive cashflow generation at PLC level, but it is by no means a certainty.

Those are all real world facts which if they are ignored guarantee a significantly wrong answer is arrived at.

[ladeside] 01/1/2023 16:47

Happy New Year guys.

The problem we have here is that everyone is attempting to put what they perceive as rational valuations and outcomes on the company based upon scenarios which are quite often worst case. We all know the market doesn't work like that and a share price is merely a snapshot in time and there are many fluctuations (both positive and negative along the way).

The news in the public domain is only ever half the story but actions tend to speak louder than words, so if our Directors and JW are prepared to lump on at 0.30 (whether there's another CHEAP placing or not) then it would seem that they all think there's money to be made at these levels.

I maintain that Ironveld are a safer bet now than at any other time in their existence and who knows there might be some positive news appears that nobody here has discussed (since we don't do positive news of course).

Let's be honest, what has GC, NH or JW got to gain by continuing to throw their own money at a project which is apparently doomed and that cannot possibly be made profitable ?

Why not just pull the plug months ago and try and sell off what they could ?

Or just pull the plug prior to the last placing and cut their losses ?

Why continue to put in their own cash and cash of their closest friends and associates to a doomed project ??

If the project does indeed fail (as a few on here are 100% sure about) then all their reputations will be in tatters along with losing a fair bit of cash and face, so again I'd ask WHY ???

[aceuk] 01/1/2023 15:05

Agree, but surely even an academic has some pride?

I know it's a difficult to believe that nowadays as every university lecturer seems to be an expert in something and gets their turn for 2 minutes of fame on BBC News!

[al101uk] 01/1/2023 14:54

Post 5651:

"Back in the Amerisur days when we were discussing the sometimes disgusting bonuses JW was being awarded I offered the theory that his large bonuses and the large investments he was making in Ironveld may not be unrelated. It all smelled damned rotten to me."

Just saying I don't put much faith in JW other than as an operational guy and geologist.

[al101uk] 01/1/2023 14:14

Happy new year Ace and everyone else :-)

GC doesn't claim that they are profitable when producing HPI, he claims HPI production is profitable at an operational level. He used similar metrics when talking about Amerisur to artificially inflate expected profits (in my view). I'd guess "operational" removes all admin costs at the very least, at Amerisur his terminology also removed all maintenance required at the oil field, including day to day operational maintenance.

Nothing else there I disagree with, you even talk about £4 to £8 million for the funds required, which I think is a fair range.

[rec0very stock] 01/1/2023 13:54

Indeed and it is more than just money as he also has a reputation to protect. As I intimated in my best case scenario (7300), JW could have a key role to play in rescuing this from the disaster GC's incompetence and arrogance has delivered so far.

[aceuk] 01/1/2023 12:48

I reckon one of the biggest questions is how much money without results is Dr John Wardle prepared to lose before he does a SunkJavid?

[rec0very stock] 01/1/2023 12:10

The plain English meaning of:

"Material uncertainty related to going concern"

"there is a material uncertainty in relation to the company’s funding arrangements that may cast significant doubt on the group’s and company’s ability to continue as a going concern."

Is the company goes bust if it cannot raise more cash. The company is close to being out of cash. Those are indisputable facts.

We are all pretty much agreed that it is highly unlikely that Grosvenor will provide the cash. Debt is clearly not an option. A discounted placing is an option and historically is GC's preferred option. Death spirals are also an option. Failing to raise more cash would mean suspension followed by administration. As there are no readily realisable assets, which the administrators could sell to return the company to a position where the suspension could be lifted, liquidation is the only route from there.

The above outlines all the credible scenarios the most likely of which is a discounted placing, followed by a death spiral.

There are 2 key questions.

How much needs to be raised so that IRON is not in exactly the same position next year or indeed later in 2023?

There are a lot of variables and scenarios but my best guess based on a reasonably detailed and reliable model, which has been fed by data provided by the company is £6m +/- 2m.

How much will GC be able to raise in the placing?

Hopefully it is obvious that if he does not raise enough there will need to be some form of rinse and repeat or the company will run out of money yet again.

It also appears likely that GC will continue the pretence that getting to full HPI production makes the company cashflow positive - we know this is not true.

The smart way forward therefore would be to minimise all costs and focus all effort on getting HPIP in place and then ramping up production. Given the likelihood that the pretence will be maintained, it is highly unlikely the smart route would be followed and therefore extremely likely that the company will run out of money again, possibly without achieving any of the HPIP CAPEX spend.

[aceuk] 01/1/2023 11:46

Happy New Year al101 - agree completely with your balance but have respect for the others, particularly Rec who I'm aware is developing something entirely different using his hard work and analysis here.

Happy New Year to all 🌞

[al101uk] 01/1/2023 00:33

Ladeside,

"We're in a far better position as a business right now than at any other time in the company's history"

I agree, operationally they are further along the path to production and profitability than they have ever been. I still believe if they can properly exploit the resource they have then they can be very profitable and a very good business going forward. My issue is with how they get there and if current shareholders can profit from it.

I think GC admitted that more cash was needed than just the HPI to HPIP capex requirement with these results. Grosevenor is just a handy way of admitting it without actually saying that they weren't entirely transparent when they were in the battle with Align. He didn't come out and say it directly, but it's intimated in several areas of the results.

You can look at the losses incurred in 2023 in the note to find a quantum for the amount of money needed. I still think RS is doing his best to paint the absolute worst picture and there are things they can do to mitigate costs, so we're still on a sliding scale, albeit starting from a worse best case.

What I object to is that any further placing before Ironveld actually get to profitable production is partially based on the companies credibility and by claiming "Grosvenor money is still imminent" they are eroding that credibility, by insinuating that the company may not need another placing beyond the £4.5 million, they were eroding that credibility. Each time they obfuscate the truth they erode their credibility even if the obfuscation should be obvious to most investors.

You can see the problem I have, I think Ironveld need more than £2.2 million, maybe twice that number, maybe more. I think 0.2p would be more than achievable with respected management, but I'm not sure how much respect GC and co have any longer and they seem intent, with these results, on damaging it further.

The number of shares in issue quickly multiplies if you discount your placing price by 25% and multiply the required dollar amount by 2 or 3 and the chance for any meaningful value for current sharehodlers quickly disappears.

I think talking of the company becoming insolvent is a stretch, but they have to be able to repay their debt obligations in 12 months or risk something damned close to terminal.

[ladeside] 31/12/2022 16:55

They have ZERO chance of going bust and you know that.

I've already posted my realistic but negative leaning outlook, however any number of more positive outcomes could easily come off here, so I'm sorry, your presentation of guaranteed failure needs stuck in the bin right now and you know it.

Anyway,I'm happy and that's all that matters.

Bye now.

[rec0very stock] 31/12/2022 16:03

Do the figures properly yourself, post what you get and let's see who is talking utter garbage.

Cherry picking facts eh:

"you were obviously taken in yourself, as by your own admission you were an investor at MUCH HIGHER PRICES, so what does that say about you ??"

But I also sold at much higher prices when I realised I had been deliberately misled. Yes I probably should have done better research before taking that extra little punt. Fool me once shame on you, fool me twice shame on me. I have learned my lesson and have called it right ever since. Try to deny that.

You have fooled yourself time and time again and have dug a deeper and deeper hole for yourself. Your version of cherry picked reality, which leaves out all the real world factors (Recovery rates, operating costs of plant, realistic sales prices, working capital - yes true of all miners on AIM and everywhere else, because they are the reality) is purely there to convince yourself you have not made a total fool of yourself. You are the only person you are convincing.

Those who did work it out and have battened down the hatches early will be better off than those who continue to believe in the magic of GC.

Those who sold ahead of the Annual Report are by your own fantasy 0.2p placing price better off than those who continued to bury their heads in the sand and deny reality and average down at previous crazy prices. Again you cannot deny that.

You love sentiment. What impact on sentiment do you think having to admit that if they don't raise significant cash and very soon the company goes bust? Or do you deny the reality of "Expansion of current activities or further development and production from the ore resources requires significant further capital expenditure and the Group will need to raise further finance."

How exactly does posting well researched, experienced analysis that exposes the realities of the illusion GC has created make me "want to see people lose their money and you seem to take great delight in watching ordinary people lose."?

I would have thought it fairly obvious that the reverse is true and it is you, who by trying to obscure reality with your utter garbage, that is trying to encourage others to lose money alongside yourself. Now that really is sick.

[ladeside] 31/12/2022 15:31

Honestly, you can cherry pick bits all you like and you can take bits to believe from reports when it suits but ignore other bits when it doesn't, really it's just a pile of utter garbage that you post which can be used against ANY company listed on AIM and actually quite a few on the main market.

You have an agenda, you want to see people lose their money and you seem to take great delight in watching ordinary people lose.

I'd call that sick !!

For all your wonderful and in depth research and cries of righteousness you were obviously taken in yourself, as by your own admission you were an investor at MUCH HIGHER PRICES, so what does that say about you ??

Don't worry pal we all have your number.....

[rec0very stock] 31/12/2022 15:00

"The reality is that if we want to be making money and decent money, we will require the additional £1.5m - £2m spend as quoted in the results, in order to bring online the HPI[P] technology."

Peter's mate said £2.5m to buy and install. There are 2 furnaces and an atomiser to buy and install. Where has this revised figure come from? Made up off the top of GC's head as it is better than what Peter's mate said? There is no evidence at all that it has been worked out properly.

What are the operating costs of those 2 furnaces and atomiser? What are the recovery rates from each stage? Ore dilution (how careful will turn key miners paid by the tonne delivered be about screening to just get the best stuff?) What is the HPI recovery rate from the smelter? - it is not the over 100% Peter's mate assumed. How much HPIP gets produced from each tonne of HPI - it is not 100%. What purity will the HPIP be? What is a realistic price for the HPIP that does get produced?

These are all real world questions which would need to be answered before you can start any sentence with "The reality is that if we want to be making money and decent money".

What we know as FACT is the company burns cash even at full HPI production - 3 separate people have done the figures and all agree. Do the figures for yourself to see if you can come up with a different answer.

"So lets' look at this realistically, I've decided to write out Grosvenor and have picked a pretty fair and realistic placing price of 0.20 (40%- 50% discount of recent prices) which would require around 1.1 Billion shares being placed which would give us around £2.2 Million, which after fees should be more than enough to fully fund us into full operation and leave us a little extra in the Bank."

Again where is the realism here? Writing out Grosvenor is the only realistic part of it. The reality is all the last placing money will have gone very soon. The reality is that as more people read the Annual Report recent share prices will be a distant memory and the discount will need to be against the new recent prices. Where is the working capital coming from to mine enough to get into full production (3300 tonnes a month times how many months?)? This is real world stuff which cannot be ignored. How much credit are the various suppliers going to extend to a company that everyone now knows has a massive cashflow problem? There is no offtake agreement for HPIP and only some woolly "marketing agreement" for HPI. It will take months and buyers will want samples before committing to any form of offtake - that's reality and that's why working capital is key. When all the reality is taken into account the company makes a GROSS LOSS on just HPI so it would be better to stockpile it ready for the day when the HPIP facility is online - how long will that take?

"Well, we'd now have 4 Billion shares in issue, however more importantly we'd be in full operation with all the infrastructure in place, take off agreements in place and from here on the company will be transformed to a producer and with all the groundwork and start up costs already taken care of, any further expansion would be huge profit and of course put us on the radar of the big boys who don't like to get their hands dirty but who have the funds to walk in and ramp us right up."

None of this is actually true, but it is a nice fantasy and no doubt will form the basis of the illusion GC will be trying to create to get those he has mugged already to follow their money (fool me once shame on you, fool me twice shame on me).

I will put you down for 0.2p, £2.2m in the contest, do you want to give a date when the first tranche is admitted to trading. Just for fun.

I take it you won't be averaging down anymore until after the placing has produced some new crazy prices.

When are you going to learn to do some proper research rather than fantasise about getting your money back? The definition of insanity is doing the same thing over and over again and expecting to get a different result. You forgot to admit that yet again I was absolutely right about the funding black hole and the impact it would have and that they would not be able to hide it from the auditors.

Those who did work it out and have battened down the hatches early will be better off than those who continue to believe in the magic of GC.