Ironveld Share Discussion Threads

[purchaseatthetop] 19/9/2023 14:03

I love the part in the RNS where an institution introduced by Grosvenor are in direct talks with the company. Now, if the institution were not willing to lend to Grosvenor what chance to IRON?

They discuss about Boeing and Apple but for some reason fail to mention what the cash generative contract is worth. Is it profitable? Who knows.

And all spending £2.5m in the nearly nine months since the last accounts. The £500k gives them another maybe two months.

[aceuk] 19/9/2023 13:48

I suppose one can only say, if Giles was any good at this business lark he'd have realised what was coming a couple of years ago and locked in a nice Bank loan at 3.5%!

[rec0very stock] 19/9/2023 13:35

Burnt through all the cash yet again! I seem to recall someone saying exactly that would happen when they came up so far short on the last placing.

CAPEX required to get to HPIP almost doubled from what they said before and debt repayments on the smelter start in 2024, which is not so far away now. In short a big injection of cash required or it will be yet another going concern emphasis of matter in the annual report in December

[ladeside] 19/9/2023 11:05

As I've stated on numerous occasions, it's pretty obvious that the project is huge and that the real prize is the economy of scale, as such we simply don't have the funds or the time to get the best out of it which tells me that this is all about getting the company up and running, proving up the infrastructure and grades and then it will undoubtedly be taken out by one of the big boys.

The only question is how much and my guess remains at the £30 - £35 Million area (in current terms). This of course will change if we proceed with the HPI powder and some sort of funding deal.

[al101uk] 18/9/2023 19:23

All of that said, you could wait 12 months and a DCF using the assumptions above could be completely legitimate and the valuation perfectly reasonable. That may or may not be a good result for shareholders depending on the financing Ironveld use to get there.

I'd still go with a 10% discount rate though.

[al101uk] 18/9/2023 19:21

Turner Popes Assumptions:

1) "Taking into account the Group’s available cash resources, including the net proceeds of the £2.0 million Placing announced on 23 February 2023 plus anticipated smelter/mining cash flows, Ironveld’s Board expects to have sufficient cash resources to fund its operations on an ongoing basis."

This turned out to be a bad assumption.

2) "c.20,000 tons of High Purity Iron Powder, price range US$1,300 - US$1,500 per tonne"

The "fully funded operations on an ongoing basis" comment was only in relation to HPI, HPIP needs £3.5 million of capex, so everything else is way out!

3) Uses a discount rate of 8%.

This is not "prudent"

4) Uses a terminal growth rate of 2%. The terminal growth rate is the constant rate at which a firm’s expected free cash flows are assumed to grow indefinitely, beyond the projected DCF period.

Hard to say if this ok or not, it might be fine, don't know when they end projections.

5) The Group will generate a positive gross return during the first year (i.e., 2023E) of joint mining and smelting operations, followed by the generation of a positive attributable post-tax profit the following year.

Absolutely no chance without further funding and even with funding, not this year.

You have to remember that the projection of profit in the first year, rather than the second makes a huge difference to the DCF because the discount rate on future cashflow hasn't had chance to bite yet.

[purchaseatthetop] 18/9/2023 15:42

You can say that again. Mind you I bought more today. Might be mad.

[theaccountant2] 18/9/2023 15:36

Enet looks even worse Patt, was 60p and today is 1pTalk about a scam!

[ladeside] 18/9/2023 13:22

Yes, You could say that !!

[purchaseatthetop] 18/9/2023 13:07

I think Grosvenor could be described as a complex funding deal….

[ladeside] 18/9/2023 12:58

Looking at it, there may indeed be some sort of complex funding deal appearing soon but as long as we get back above 0.80 (coincidentally the warrant strike price) then who cares ??

I've already given up on my 2p+ dreams but again who knows what could happen if the right deal came through and everything took off as planned ???

[ladeside] 18/9/2023 12:53

TPI retains its £30.7m DCF valuation for Ironveld

Having surmounted all major technical challenges at Rustenburg, with on-site feedstock stockpiling underway and
sale prices guaranteed through existing offtake agreements amid firm markets for both HPI and HPIP, overall
project risks have clearly now substantially reduced. Today’s announcement not only lends additional support to
the expectation that Ironveld will become cash generative within its first full year of production, but also continues
to build credibility into the Board’s ambitious medium to longer-term vision of building a much larger, scaled-up
production facility. Having taken this news on board TPI will not, at this time, be revising its existing prudent
financial model for the overall project, although it considers there may be an opportunity to move it upward once
the plant has been fully commissioned and its prospective economic benefits formally detailed. In the meantime,
based solely on the smelter’s first phase of proposed commercial expansion and utilisation only of existing wholly
owned plant, TPI derives a £30.7m DCF valuation for Ironveld, which remains over two-and-a-half times the Group’s
current market capitalisation.

[aceuk] 18/9/2023 12:44

I don't see the point of comment, especially the usual dead duck posters - not much money to be made one way or t'other for now.

[purchaseatthetop] 18/9/2023 12:42

But what about the cash burn? At £2.5m maybe in less than nine months that is nearly £300k a month. How long will that extra £500k last? Gotta be a placing soon.

[ladeside] 18/9/2023 12:38

I would also say that the fact the warrants are priced at 0.80 surely has to be seen as a positive.

Personally I'm in no rush, so as long as I clear my 0.60 average at some point then all will be fine for me and I'll no doubt keep adding at anything under 0.40, so in for a penny in for a pound as they say.....

[ladeside] 18/9/2023 12:25

Yes, far from transparent and basically a complete reversal from what they'd previously told us in the recent webinar.

I'm now convinced that the whole lot will be taken out and probably a low ball offer which will see the BOD all right.

I hope I'm wrong but I can see £25 - £30 Million taking us out which while it's a premium to today's price it's hugely under what most of us would expect and what the true value obviously is.

If I was being positive, then all we can hope for is some sort of positive funding deal which will cut down on dilution (but also cut down on future profits) to get the HPI powder up and running along with the smelter at full capacity.

Despite today's News, there's no need to panic as we have zero debt which requires servicing and the Directors Loan ensures that we will be seen through to full production so while disappointing it's not exactly terminal.

[dead duck resources] 18/9/2023 11:57

With this lot you have to be careful reading their words. The update on SEAM, "already advanced funding" sounds like progress, but with Ironveld that sentence will likely mean a small portion of the funding only, to clear the site, and plant build will require SEAM to raise more funds. As a reference point they're a tiny cash shell (with no cash) and share price -90% in 2 months. Questionable logic to go with such a shaky partner.

[aceuk] 18/9/2023 11:54

Makes nice reading though ;-)

[al101uk] 18/9/2023 10:34

The good things I can extract:

"SEAM has already advanced funding as envisaged by the agreements. At the mine site, ground works and civil works for the DMS Magnetite JV are progressing well"

Awesome.

And I guess the directors forking out £500K is a sign that they believe the company has the ability to pay them back :-/

[paulhopeful] 18/9/2023 08:26

Please note: Purchaseatthetop, posts on many boards, using multiple names.

[dead duck resources] 18/9/2023 08:01

I like the part where they talk about Apple and 3D printing and ensure they don't talk about their no-doubt pitiful output from operations (in an operations update). Weak!

[purchaseatthetop] 18/9/2023 07:24

Ladeside. You don’t have to think the UK is screwed. It is. I work for the NHS as ambulance crew and everything there is broken and screwed up.

[purchaseatthetop] 18/9/2023 07:14

So, they had £779k of cash at 31/12/22 per interims
They raised £2m placing Feb 23 and now have to get more cash
So they have burned over £2.5m in less than nine months.
Placing coming as soon as they can pump the share price up!

[al101uk] 13/9/2023 20:05

https://tradingeconomics.com/country-list/corruption-index