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Share Name Share Symbol Market Type Share ISIN Share Description
Pensana Plc LSE:PRE London Ordinary Share GB00BKM0ZJ18 ORD �0.001
  Price Change % Change Share Price Bid Price Offer Price High Price Low Price Open Price Shares Traded Last Trade
  0.20 0.37% 54.95 54.00 55.90 55.00 51.40 53.50 221,349 16:35:18
Industry Sector Turnover (m) Profit (m) EPS - Basic PE Ratio Market Cap (m)
Alternative Energy - - - - 135

Pensana Share Discussion Threads

Showing 67301 to 67323 of 67625 messages
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DateSubjectAuthorDiscuss
16/11/2022
12:14
Looking good today and ALK in focus also doing well.
sirmark
16/11/2022
11:26
Yes, but they started the bond partnership and financing 12 months ago let's not forget. Delay, delay, delay.
lewis winthorpe
16/11/2022
10:41
Looks like a big delayed sale gone through which had dragged us down the last few days?
cyberbub
16/11/2022
10:40
Yes fair point Mwj, the bond funders don't get the IRR as such. However as you say, if the huge IRR attracts 30% equity funders it will de-risk the bond funders (as well as helping to ensure success of the project overall = bond funders get their interest and capital returned)
cyberbub
16/11/2022
09:07
Agree with OAP's comments. Whatever the many merits of this project PA is still trying to raise an awful lot of money from various sources and the backdrop for doing so is a lot tougher than it was 12 months ago. Getting all the different parts squared off always takes time. Fingers crossed that it all works out and in a timely manner, but that's why I haven't taken a massive position in this company. The upside is clear to see, but getting there is the challenge.
mwj1959
16/11/2022
07:17
You would think if they are funding Saltend via the bond market those providing initial funding will want to know what's feeding Saltend, when, and for how long.
oapknob1
16/11/2022
00:09
OAP, surely the finance deal would only be delayed to review something that could be *bad* news? The recent Coola RNS can only be good (or neutral at worst) news, given that Longonjo already has a 20-year mine life?
cyberbub
15/11/2022
21:53
I sincerely hope so. But I am disappointed with his pumpy vagueness during his interview. Appreciate he has maintained everything is in place but that then begs the question, why has there been no RNS confirmation of initial funding.My view is the funding is delayed for due diligence re recent Coola Exploration Licence RNS, before final decision.
oapknob1
15/11/2022
16:40
What's your view on any problems financing OAP? I can't see any issues with an IRR of 60%, just a matter of waiting (and what terms we get) IMO. I hope that any equity component is not below 50p.It's true that Atherley comes across as a bit of a salesman, but I suppose that's his job. Setting aside the salesmanship, he specifically stated that the funders' decisions had been made, and that they were going to be "finishing off the paperwork within a few weeks", a few weeks ago. I am expecting the announcement well this side of Xmas, personally.
cyberbub
15/11/2022
16:25
Finance. Finance. Finance. After CEO video pump, nothing about Finance. Weeks. How many. 4, 8, 12, 52, 100 ? Time for specifics rather than pumpy video interviews.
oapknob1
14/11/2022
21:57
PS the point I'm making is that, for anyone taking a 3-year view (rather than a 3-day or 3-week view!), the *downside* from 56p seems limited to disaster scenarios??Sometimes in the stock market having a good certainty that at least you're not going to *lose* money is good enough...!
cyberbub
14/11/2022
18:38
Yes I was wondering a bit about the alternative feedstocks that Atherley mentioned in that video....To me getting the funding is low risk given the project's economic case, we will get it even at the cost of some dilution. I am working on the basis of 'effectively' 500M shares, whether that's the actual number in PRE or not. If the project meets its targets then 56p will be an unbelievable memory. Even if NdPr prices drop by 50% (highly unlikely IMO) the company will still be well profitable at their stated cost of $15k/ton, and 56p will have become a modest multi-bagger when in production.Just my view of course, I don't have a crystal ball!
cyberbub
14/11/2022
17:57
A collapse in NdPr prices is clearly a potential risk, but one that seems unlikely for now given the forecasted supply shortfall. Liberum's bear case for the stock is threefold: financing, alternative feedstock providers to Longonjo are unknown and global supply chain constraints and inflation pressures (impacting costs?). The first is the critical one in my opinion. I will sleep better when it is out of the way!
mwj1959
14/11/2022
17:18
Mwj, so in effect if the interest can't be accrued and they still have to pay out before first production, they need to source an extra 20% capital than they need, as effectively 10% per year will be paid back in interest?

You're right to be cautious, the stock market is littered with disasters from overconfident investors. But the company seems to have everything going for it: very supportive and reasonably stable governments (we need to check that in the UK these days too!!), very experienced and credible BOD and management, all permits and resources in place, industry partners and offtakes in place, strong marketplace for their products which is likely to get stronger still, long term... And not forgetting comparator companies like MP which are valued at 40x Pensana today, with a broadly similar economic case and development position.

Who knows, we could see some share price weakness still short term, but in my view when the finance closes and assuming the terms aren't seriously poor (why would they be?), we should see a substantial rerating here. 150-200p doesn't seem unreasonable to me IMVHO, even after some dilution.

Once the money is agreed, there seems little risk to getting Saltend built (barring execution risk / acts of god). I will accept that Longonjo is riskier, but with the Angolan govt owning a big chunk of the equity, it's in their interest to smooth the way.

Am I missing any other significant risks?

NAI of course

cyberbub
14/11/2022
17:00
Corporate bonds normally pay their coupons on a half-yearly basis, so the first payment would not be until mid year 2023, if they raise the capital now. But some do pay annually, which would mean first payment would be end of 2023. Liberum have the cost of debt at 9.5% and net financing costs of $36m a year, so while they won't have cashflow to cover that in 23 and 24 they will have more than enough to cover from 25 onwards. Interest won't be allowed to accrue until they're cashflow positive.
I think that you're being optimistic on the dividend front. First thing they'll have to do is pay off all the debt (Liberum look like they're factoring in 5 year debt in their model), but that won't be a problem if the cashflow projections are anywhere near correct.
And let's not get carried away or too greedy. This project only starts delivering in 2025, so over two years away, even if financing / clear development progress will likely see the jam tomorrow increasingly getting discounted in the share price.

mwj1959
14/11/2022
16:09
Cheers Mjw. I have bought a few on Friday and today.I find it hard to believe that a project with such attractive economics will fail to get funding, even in the current market. They could easily return 50% or more of that money in divis from 2026, imagine £200M+ in divis with 500M shares issued? That's 40p a share divis! Or a 70% ROI for people who buy today - make your money back in a couple of years and the rest is jam.What I'd be interested to know is if they raise the money in corporate bonds, will the interest be payable immediately? Or will the lenders allow the interest to accrue until cashflow starts? Obviously hopefully the latter...
cyberbub
14/11/2022
15:59
On Liberum's base case numbers the company will be generating revenues of $470m in 25 and then + or - $1bn in the following 6 years, which in turn will generate PBT of $101m in 25 and then $602m in 26, dropping to a range of $450 - 600m p.a. thereafter. FCF, which is what I normally focus on, will be $63m in 25, $450m in 26 and then + or - $400m thereafter. So clearly very attractive if delivered. Whether that will be the case only time will tell. But that's all jam tomorrow. What matters for now is that financing is raised and the project is delivered on in line with the expected timeline. Then we can start to worry about how much jam there is for shareholders!
mwj1959
14/11/2022
15:01
I repeat that whatever form it takes is still dilution. If we get an extra 50% shares at the TopCo (PRE) level through direct dilution, or if we give away 33% of the operating companies in return for the funding gap needed, it's essentially the same thing.Personally I have no problem at all with a 50%+ dilution, that's what the stock markets are for - raising money! I repeat that *if* the $450M is correct and achieved, anyone investing at these levels will be very well rewarded by 2025 or so.Are we confident of the projected post-tax profits?
cyberbub
14/11/2022
14:15
In their recent initiation on the stock Liberum, their corporate broker, see up to 80% of the estimated $494m needed to be raised being done so via the bond / debt market, which leaves at the 80% level around $100m to be raised elsewhere ($75m for Saltend, $25m for Longonjo?). If that were done via the equity market at say 50p share that would require 175m new shares to be issued, which would take shares in issue to around 425m. That would be a serious dilution. Interestingly Liberum only has a very limited dilution (247m to 252m)in their risked valuation of £2, so clearly don't think that will be the case (I presume that is what the company has told them). But if that is correct it still remains a bit of a mystery as to in what form this $100m would take if it is not equity.
mwj1959
14/11/2022
13:00
Yes that's my understanding. I reiterate my point though that whether it's taking a stake in the project-level company, royalties, whatever, it's still 'effectively' the same as TopCo dilution.... someone else pays some money to get part of PRE's cake...If PRE need to raise $75M = say £65M then that implies a little over 100M shares at the current share price Personally I have no problem with that at all. And the same again for Longonjo. If the company ends up with 'effectively' 500M shares that's absolutely fine. $450M/p.a. after tax on a conservative p/e of 10, even with 500M shares, gives an share price of 800p (plus some very nice divis).Are my admittedly rough calculations reasonable, do LTHs think?
cyberbub
14/11/2022
11:36
Not sure this RNS has a lot to do with getting funding.
I've re-listened to PA's Crux interview. I agree that it is not entirely clear (the interviewer was equally uncertain at times as to the exact structure of the financing too). Re Saltend $175m of the $250m required will come from the bond market (hopefully!!) with the remaining (hopefully!!) coming from a strategic investor ($50m) and institutions / shareholders that the company already knows ($25m). A similar type profile for Longonjo, but with no specific numbers, but the expectation that most of this will come from the debt markets. If there is any equity issued there will be dilution to most existing shareholders, other than those who are able to maintain their existing % shareholding through participation in the equity raise. But PA does say that they would like to avoid any dilution (but no guarantees here) and that there are ways in which the various other investors outside the debt markets can participate without there being dilution at the PRE topco level. Not entirely clear what these might be, but royalties might be one of them, particularly in the case of Angola.

mwj1959
14/11/2022
10:56
may be some negotiations over terms for this size of borrowing
mikethebike4
14/11/2022
10:52
I don't think listed companies are allowed to hold back news, if the results came back they had to release them.If you take Atherley's Crux interview at face value then the bonds should be easy to source (perhaps they're waiting for interest rates to settle a bit) but maybe the equity portion is taking a bit longer. But if it's true that the company will be making $450M p.a. after tax in 3-4 years time, I can't see there's any risk of not getting financed!
cyberbub
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