Pembridge Resources Share Discussion Threads

[bigboots] 16/7/2018 15:05

and the warrant money, will add to the bank balance

[inthepub] 16/7/2018 13:54

encarter
I hope everything you say is correct sounds great.

[soulsauce] 16/7/2018 11:52

Doesn't say much :-/

[encarter] 14/7/2018 09:26

I'm sure that they will have no problem raising the funds at 50p a share as that is a good price for the stock, I expect it to be over subscribed. The share price should rise over the coming weeks but I'm not sure how the first few days will go if some of those in below 5p decide to take their profits. After studying the mine I have decided to keep all of my stock and will top up if I can get more below the placing price though it may open well above 50p.

We have a quality board of directors who are putting 5m of their own money in. We are paying around £37m for the mine and will have around £34m cash available which totals about £71m. We are raising around £30m in the placing at 50p so 60m new shares. Following the conversion we will already have 22m shares so about 82m shares in total. 50p a share values the company at £41m which is cheap. Just taking account of the money we are putting in and not the potential of future operation the shares should be valued at 86p. A fair value should be around 100p imho.

[uknighted] 13/7/2018 22:05

Viv, the board seemed very confident when they issued the RNS on 21/06/18.
Interesting times for sure.

[vivgav] 13/7/2018 20:55

Just had same e-mail from my broker unknighted.

Do we assume required funds have been raised then?

[uknighted] 13/7/2018 17:15

Just as an aide memoir.
The following was received from my nominee brokers today:

The Board of Pembridge Resources plc has announced a reorganisation of the Company's Share Capital. Shareholders as at the close of business on 16 July 2018 will have their holding consolidated, receiving 1 new Share in place of every 10 Shares previously held. The new consolidated Shares are expected on 17 July 2018.

Please note, we will credit the Shares to your Account upon receipt from the Registrar which may not be before 8.00am on 17 July 2018.

[jamdan1] 10/7/2018 22:56

25 p were my purchases so not good at all. Live and learn

[escapetohome] 10/7/2018 22:47

You only lost on n4p if you sold.

I bought some sub 10p , and sold at 10p on this latest bad news.

I calculate ive made a small loss on n4p so far.

I did not buy any above 25p.

[jamdan1] 10/7/2018 22:20

Any profit I make is going into the wife's isa to make up for the loss on N4p

[escapetohome] 10/7/2018 21:42

I made very sure i didnt just have aim, approx 70 % of my portfolio is in INvest trusts and solid blue chips which pay an income, the rest in dodgy aim gambles.

[nick rubens] 10/7/2018 21:27

Hopefully the few shares I have here will help pay for the many losses i'm experiencing on AIM. Investing is like snakes and ladders, though too many snakes creep around and it makes it hard to find a decent ladder.

[susiebe] 10/7/2018 11:57

Im really pleased to have some PERE tucked away.Have forgotten about them for a while but good to see a bright future coming soon.

[inthepub] 10/7/2018 10:21

Thanks Mirabeau
Much appreciated it does read very well for the future.

[mirabeau] 09/7/2018 20:17

inthepub

thanks to Dan Flynn - I hope he doesn't mind this C & P

below :-

There is a lot to come’: Pembridge Resources’ Linsley speaks ahead of firm’s return to market (PERE)
by ValueTheMarkets • July 9, 2018

Pembridge Resources (LSE:PERE) plans to make its much-anticipated return to trading on the London market later this month following a planned $40m fundraise to support its acquisition of the Minto mine in Canada. The company is currently on the road in support of the placing, hot on the heels of announcing a significant offtake agreement for the mine with a Japanese trading house, which will see it receive $30m in pre-payment plus another $30 million in working capital. Here, chief executive David Linsley tells us why he believes Minto’s prospects and the healthy state of the global copper market make Pembridge’s placing a great value opportunity for investors.

Formerly a cash shell, Pembridge announced its $37.5m purchase of the Minto mine from Capstone Mining in February, delivering on its promise to acquire a mining project where management could add value. Capstone, listed on the Toronto Stock Exchange, will also be granted a 9.9pc stake in Pembridge as part of the deal.

Minto is underground copper-gold-silver mine located in the Yukon region of Canada with a 10-year production history and all critical infrastructure, facilities and operating teams in place. Capstone’ current mine plan for Minto supports operations to 2021 with a large total resource base of 23Mt at 1.42pc copper, containing 708Mlbs. Capstone’s plans anticipated production of 15,000t (33Mlbs) of copper in concentrate with gold and silver by-products.
Key agreement

Last month saw Pembridge announce that it had signed heads of terms with a ‘leading global Japanese trading house’ for a major offtake agreement. Under this agreement, the un-named Japanese firm will be granted three-year exclusivity to buy copper concentrate from Minto up to a maximum of 125,000 tonnes. To secure the deal, the trading house has agreed to pay Pembridge US$30m in cash as an up-front partial pre-payment plus a working capital facility for another $30 million. Linsley tells us there had been a lot of third-party interest in Minto throughout the months leading up to the agreement:

Minto produces a high-quality concentrate, meaning we had strong demand for an offtake agreement. We ran a competitive process that saw us receive offers from a number of traders, but we decided to go with the Japanese trading house.’

Minto has averaged around $100m per annum in revenue from its copper production over the last three years. On this basis, the $30m pre-payment corresponds to roughly four months of production, and over the three-year offtake, one might expect Pembridge to receive in the order of $300m in total revenue.

Importantly, the agreement allows Pembridge to sell concentrate from Minto at the mine gate. Minto is on the West side of the Yukon River which means that for approximately 6 weeks, twice a year, it isn’t possible to ship concentrate from the site while the river alternately freezes and thaws. This is a subtle but critical point, as it means that Pembridge will continue to receive revenue even when the concentrate has to wait before shipment at the port of Skagway. Historically, Capstone has had to keep a substantial working capital reserve was required to cover the production of any concentrate during this period. As Linsley put it to us:

‘What we have managed to do with our partner is to be paid at the mine gate, which eliminates the working capital problems that one might have. I think shows that we have taken the time and effort to fundamentally change how things have been done in the past for the better.’

The two firms have also agreed a strategic alliance that will see them work together on Pembridge’s planned further development of the Minto site and its ongoing expansion in the Yukon. The details of this alliance are yet to be specified but could hint at future financing options. If Pembridge can use the Japanese trading house as a cornerstone financier, then it is less likely to have to dilute shareholder as it expands.

‘We have plans to do a lot of work in the region, so to have a strategic partner is great. We wanted to get that done and put away before we started the equity roadshow so the markets could see that some serious groups have done a lot of due diligence on the project, like it, and are backing it,’ Linsley told us.
On the road

Since announcing the offtake agreement, Pembridge has also launched a roadshow to secure some $40m to support the acquisition of Minto. Management, board of directors and connected parties will contribute at least $5m towards the placing, which is due to take place this month.

Pembridge has also convened a general meeting and prepared a prospectus for the placing to re-admit its shares for trading on the official list of the LSE by the end of July. It saw its shares suspended upon announcing the deal in February because the terms constituted a reverse takeover. Investors have been eagerly awaiting the company readmission price ever since.

Post acquisition, Pembridge plans to get to work with doubling Minto’s four-year mine life. The immediate focus, starting in Q3 this year, shall be on converting the existing 23Mt global resource base into reserves, with a US$4.1m in-fill drilling programme. In addition, it has identified multiple untested targets at depth that shall be targeted with a US$4.7m step out exploration programme.

There are also a number of initiatives targeted at reducing cash costs, with studies on optimising the underground mining method, as well as the crushing circuit, which could remove up to $10m in annual costs. Finally, it will spend $2m on mill automation and building its workforce to boost recoveries. Linsley told us that these developments are likely to be positive catalysts for Pembridge’s shares once trading has resumed:

‘The money from the agreement and the money raised goes into the general pool where it can go towards anything from the acquisition to our working capital or exploration budget. We are already doing a lot of work at Minto, with plenty more in the works. We have a strong exploration programme on the cards, and I think you will see a lot of news coming out. This delivery is important because you can’t just raise money and then go dark. There will be news as we make the changes we want to make, explore, do the infill drilling to increase the mine life. There is a lot to come.’
Value opportunity

So why should investors get involved in the upcoming placing? Linsley tells us the primary reason is that the company looks ‘very, very cheap’ at its placing price, given Minto’s prospects.

As can be seen in the chart below, Pembridge’s purchase price multiple for Minto looks cheap against 2017 EBITDA and forecast 2018 EBITDA when compared to peers. Using its $37.5m acquisition price for Minto, Pembridge says it has paid just $0.06 for each lb of the mine’s total copper resource, comfortably below the average paid by similar players.

Additionally, as we have previously pointed out, Capstone’s existing plan for Minto supports annual production of 18,000 tonnes of copper with gold and silver as by-products. In 2017, the mine produced 16,332 tonnes of copper and production guidance from Capstone for 2018 is 15,000 tonnes, with all-in sustaining costs of $2.55 to $2.65 per lb. At current copper prices of around $3/lb and costs of $2.65, 15,000 tonnes of production would generate a profit of roughly $14.7m (£11.2m). (15,000 tonnes = 33,069,339lbs) ((33,069,339 X (3.00 – 2.65)) = $11,574,269).

As Linsley put it to us: ‘We are going out at a very low level compared to our peers. Investors have the opportunity to invest in an operating, permitted, cash-flow producing asset in a safe jurisdiction. This isn’t like many other exploration plays, where investors hand over their cash with the hope of management finding something. There are not many other – or indeed any – offers like this on the London market.’
Copper opportunity

Beyond Minto’s merits, healthy global copper market conditions at present mean Pembridge could not have picked a much better time to resume trading. Despite a recent dip, copper prices continue to be boosted by industrial unrest at BHP’s giant Escondida mine in Chile. Steady growth in global demand for the metal, which is essential to all things electrical from air conditioning units to electric vehicles, has also helped. There is a shortage of new copper projects to meet this projected demand and, as a result, the London market is somewhat starved of listed copper plays.

Linsley explains: ‘Copper is a bellwether commodity. I think it is extremely cheap at current levels. Pretty much everyone I have spoken to who studies the market agrees that we are going into a solid phase, so we should see some healthy gains from here. If people want to dabble in that market, then I would say that now is exactly the right time to do it.’

Away from the diversified majors such as BHP, options are limited to a small number of mid-tiers (notably the two Kazakhstan-focused producers Kaz Minerals (KAZ, £4.5bn market cap) and Central Asia Metals (LSE:CAML, £500m), and new Spanish producer Atalaya (LSE:ATYM, £350m). Exploration and development plays include Georgian Mining (LSE:GEO, £12m), Metal Tiger (LSE:MTR, £30m) and AIM darling Asiamet Resources (LSE:ARS, £113m).

Alongside these established copper names Pembridge is the new kid on the copper block, led by president and industry veteran Peter Bojtos, who will be familiar to many as the chairman of Asiamet Resources until 2013, and, of course, Linsley, formerly of global mining advisory firm Behre Dolbear. In addition, Pembridge’s chairman is Frank McAllister, former CEO and chairman of Stillwater Mining and former CEO and chairman of ASARCO.
Time to buy?

So far, Pembridge has done precisely what it has said on the tin, purchasing in Minto a mine that already has infrastructure in place and can develop through investment in exploration and efficiency. Alongside this, the company boasts a seasoned management team and is operating in a copper market that looks well primed for further gains.

Pembridge’s ability to secure such favourable terms for its offtake agreement demonstrates a great deal of promise and is no doubt a major coup for a cash shell with a sub-£3m market cap. With that in mind, its placing price could represent a decent opportunity to get involved right at the get-go.

Author: Daniel Flynn
The author of this piece does not hold a position in the company covered in this article

[soulsauce] 09/7/2018 16:54

I hear you bazz it has been a long hard road but I can't help thinking may be it might be best to hold on to some if not all for the ride.

This owes me about 2.8p or 28p in new money so if they can get a 50p placing away I will be surely tempted.

Nice decision to have though after all the nail biting of the last 18months.

[bazzerhino] 09/7/2018 15:11

I really hope the share price rockets, as my average is 3.5p I just want out of this terrible share. Lol

[inthepub] 09/7/2018 14:54

What exactly does it say I can't open link on phone Thank you

[soulsauce] 09/7/2018 14:50

Cheers Mirabeau

[mirabeau] 09/7/2018 14:08

--

excellent article, thanks to Dan Flynn

[soulsauce] 05/7/2018 23:14

In old money yes but will actually be 50p after 1 for 10 consolidation.

[jamdan1] 05/7/2018 20:34

Looks like it

[piefacefrank] 05/7/2018 18:40

Will this relist at 5p when suspension is lifted?