Savannah Resources Share Discussion Threads

[seagullsslimjim] 09/8/2016 08:08

healthy start to today - Moz news now in the cross hairs !

[broncowarrior] 08/8/2016 17:22

Seemed to rise or fall for no apparent reason at the moment. Hopefully the Moz news is round the corner, think that will be a game changer. Not sure why the Moz government would not want it to happen, I suppose DA has to prove that SAV have the resources to prove it up and mine it.

[broncowarrior] 04/8/2016 08:45

See the word delay triggered some algo trades very early this morning. doesn't look a big deal.

[inbrackets] 03/8/2016 17:40

BW, hi. Long time, little contact. We have both tracked this one for long enough now. At outset I had been taking a 4-5 year view on the assumption that progress was being made. Seem to have had an impasse delay in moz which has been a bit of a pity, otherwise there has been a good flow of positive news from Oman and I am fairly positive on th eFinnish assets.We shall get to wherever it lands, whenever it does.

[broncowarrior] 02/8/2016 09:39

Just checked the broker forecasts on this and there are 5 different names following it, quite amazing for a small stock. Mirabaud has a 125p target(!)

Just bought some more.

[seagullsslimjim] 01/8/2016 12:22

well they had the £1.75m odd injection earlier this year and any project money will come through off take agreements and other sources so I don't think a placing is on the cards

Just a bit of a breather in my eyes and clearing out impatient traders who raced it up over the last couple of weeks.

[broncowarrior] 29/7/2016 14:16

Strange drop off. Maybe anticipating a placing?

Lots going on so they will need some more cash soon.

[dice1950] 28/7/2016 21:25

SP Angel
Today's Market View - Anglo American, BHP Billiton, Caledonia Mining, Herencia Resources, Gemfields, Savannah Resources
28 Jul 2016


Anglo American (LON:AAL) – Interim Report highlights stronger balance sheet
BHP Billiton (LON:BLT) 977 pence, Mkt Cap £57.3bn – Samarco update
Caledonia Mining (LON:CMCL) – Increased ore resource at the Blanket mine
Herencia Resources (LON:HER) – Herencia complete sale of Paguanta in nick of time
Gemfields (LON:GEM) BUY, Target 82p – shares look good value following pullback in stock
Savannah Resources (LON:SAV) – Exploration underway at lithium projects in Finland

[seagullsslimjim] 28/7/2016 12:45

expected re-trace today but will sideways trade between 4-6p until moz news

can be seen in the main chart above

[broncowarrior] 28/7/2016 10:06

If we can get this Moz permit sorting we will really be flying.

[dice1950] 28/7/2016 09:10

Northland Capital Partners View on the City - Savannah Resources, Keras Resources, Premier African Minerals, Octagonal, ValiRx, Sunrise Resources
Share
08:18 28 Jul 2016

[broncowarrior] 28/7/2016 08:11

No objections, that's what I like to hear!

[seagullsslimjim] 28/7/2016 08:03

Nice Finland RNS on the hottest thing at the moment - Lithium. No hanging around on that front

Add to that the impending Moz confirmation news and things could get even more tasty here over the coming weeks.

[seagullsslimjim] 27/7/2016 10:37

Bronco - normally they come into the public domain after a while

[broncowarrior] 27/7/2016 10:12

Indeed a great find. Would love to see an in depth note as to how they come to that valuation.

[seagullsslimjim] 27/7/2016 09:29

paleje - that's a great find and does confirm that it is us and not SAV petroleum

Feeble attempt at a tree shake this morning with no one panicking.

More rises to come.

[paleje] 26/7/2016 21:13

Looks like Panmure were just as bullish in May and the surrounding blurb matches SAV so maybe it's not a typo after all, just Panmure taking a long view:) or they know something we don't. Or they're on something we're not on.

[broncowarrior] 26/7/2016 17:25

Must be a typo no? Pretty ballsy move to put a 70p price on a 4.5p company.

Savannah petroleum at 30p with no volume, still sounds quite punchy.

[paleje] 26/7/2016 15:56

I saw it on Money Mail too, they did say Savannah Resources, I thought it was a typo but its on other media as well:-

[seagullsslimjim] 26/7/2016 13:27

Think that may refer to Sav petroleum

[fillipe] 26/7/2016 12:34

Today, there is a 70p tp showing as from Panmure Gordon "Resumes", on This is Money - broker views.

Seems a bit excessive to me, being someone would would be more than happy with half of that!

gl

f

[seagullsslimjim] 25/7/2016 20:17

BORROWED FROM THE OTEHR BOARD - A Great Summary of SAV for newbies looking in and its undeniable potential in the short, medium and long term !.........

"I have been scouting investment ideas in Natural resources companies for weeks/months now and I can't find companies with solid fundamentals and great upside from current share prices.

There are a few listed minnows trading below cash value (or equivalents), which is attractive, but the liquidity is often very poor and the upside is limited to that cash amount (which happens to burn fast due to directors salaries and other admin costs and lack of growth prospects).

So where do we stand with SAV?

First the subjective/qualitative part:

I have met David Archer several times and I think he is the right type of executive. Calm, humble but focused on the objective. His past record suggests he's been successful multiple times thanks to those attributes. For more info on DA, check out the article from 2008 in The Australian website. The title of the article is �wine hills overflow with miners�.

His technical director Dale Ferguson is also top quality with proven successes in the past and a great attitude.

Btw, all this talk above might sound abstract or too subjective to be taken seriously but this matters enormously in the end (notice how warren buffett insist on the quality of his managers). So many CEOs & directors in small listed companies only do their job to afford a decent lifestyle and enjoy the upside if the macro momentum helps their share prices (I don't actually blame them as long as they do it legally but for investors, this is often painful).
DA is a genuine company builder with a personal interest in generating wealth for himself over the medium term.

Now to the objective/quantitative part:
HMS in Mozambique:

To put it simply: this is potentially huge. A bit of history:

Dale Ferguson noticed this company Matilda struggling for cash, seating on this virgin field, adjacent to RioTinto world class Mutamba deposit. He realizes that it is very likely some of the Mutamba deposit might extend into the Jangamo tenement. So he alerts David and they quickly make an approach. After a few surveys and drills, they realize they do indeed sit on a potentially major deposit of their own.

As promised, they published a JORC resource before year end 2014 (which due to misunderstanding on the part of some private investors/bloggers disappointed the market),

To prove that the Jangamo tenement and the small JORC defined were the real deal, David managed to get Rio Tinto to sign a JV agreement (yet to be approved by the government I know) to join their combined deposit and let Savannah take care of the project. The reason Rio did this deal is to avoid losing their licence after having spent dozen of millions of $ (one needs to keep progressing/spending to maintain ownership of the licence) while focusing on other commodities (iron ore, copper..) for the time being. Note that Rio, at anytime, can kick SAV out of the deal if they wish to.but at a cost. This works as follows (assuming the JV is approved by the govt..could be any time now):

Right now, SAV would own 10% of the joint deposit. At this stage Rio can decide to cancel the JV and pay a multiple of the costs we incurred on our Jangamo tenement. My understanding is that it could be worth a few millions USD. To be honest, this would be a very disappointing scenario but I think its almost impossible this happens and if it were to happen, so SAV is left with their Jangamo tenement (as per the current situation) with a few millions USD in the bank account. So we could progress our tenement further (without Rio) or focus the cash on our Omani activities. So it would still be decent situation for SAV to be in but I much prefer staying in the JV for the time being.

The reason why I think its almost impossible we get kicked out at 10% stage is because the point of this JV is for Rio to not be involved in the project in the short term. What I think is more likely to happen is that Rio starts to wake up when the nascent recovery in HMS prices materialize further and the project starts to take shape (PFS or DFS stage). And in that case, im OK with SAV getting kicked out !

Heres why:

Once we have the government approval, SAV is gonna rush to get a scoping study out. This is likely to take a few months only. At that stage, SAV gains 20% of the JV and the kick-out terms becomes the payback of the NPV of the SAVs share of the JV. My understanding from David is that he wants to focus on developing a mine plan for the first 200mln tonne of very high grade deposit. We are talking about 10%+ grades for the first 100-200mln tonnes. If you have a look at Base resources and the research reports, this is exactly how they did it and this create NPV (net of capex) around $ 400mln. So 20% of $400mln is approx worth 15p/share. I believe this is the worst case scenario !

After the scoping study, we get 35% ownership of the JV once we publish a PFS and then 51% with a DFS. This takes you to a value of 26p/share and 38p/share respectively net to SAV.

And this is for the first 200mln tone mine plan. Don't forget the JV has billions of tones at 3-5% grade (as per Rios published data).
The entire JV has the potential (very long term) for multi-billion NPVs.

Onto copper in Oman:

So here is a very different approach, more in line with David and Dales past experience: small, high grade, low capex, quick payback, high IRR.
To be clear the Oman copper project is unlikely to ever attract a major mining company. And this is because the total size of the project is irrelevant for the multibillion mcap majors.

However, this is amazing economics for the small and medium size companies. And the payback is very quick.

As David mentioned several times, he plans to produce before year-end 2017, that is less than 18 months away. We are still waiting for further results from the drilling campaign but David and Dale feel very confident they have enough deposit to produce over 300k tonnes of copper over time (with gold upside).
This kind of project can easily generate 50-100mln $ of cash flow per year. SAV retains on average 65% of the ownership of the licences across the blocks. So those cash flows can be quite meaningful to SAV once they kick in (starting end 2017). By assuming the mine will generate $75mln/year and that SAV will lose another third of the project due to dilutive financing (I have good news there too) and that the mine produces for only 7 years, this project would be worth over 20p/share to SAV.

Now comes the good news:
Since we plan to produce by yearend 2017, it means we need the money for Capex very soon and start developing the mine. We have one major investor in the name of Al Marjan. Now that we have the board members RNS, we realize that those guys are uber influential in Oman business (former minister for industry and former head of chamber of commerce, board member of large commercial bank).
I would like to think that they will plan a key role in helping SAV getting the financing for the capex in Oman. This could be in the form of MDO, the new agency in charge of developing non-oil projects to boost the economy or a loan from a commercial bank. This means it is very likely we DON'T lose another third of the project economics. This would make the above numbers (20p./share NPV Oman) too conservative.

All the number above assume 400mln Shares (TVR is currently 385mln but there are some warrants/options that would be exercised if we keep rallying).
You could be very conservative and round up the share count to 500mln shares (20% extra dilution at Co level). This would make the numbers mentioned above still very attractive(like 17p/share instead of 20p for oman copper and 12p/21p/31p for the first 200mn tone in Moz @ 20%/35%/51% respectively).

So as you can imagine I believe the current share price of 4.5p (£17mn mcap) offers amazing value."

[seagullsslimjim] 25/7/2016 16:25

Consumer Eagle reporting a short term target of 10.69 for SAV.l. Up trending bullish. Advice: stay long. Once 10p is reached, it will move quickly upwards. Given sentiment, new members of board in Oman - this will continue to rise quite quickly. share price moves up quickly on small buys. It doesn't take much, hence while 10p short term target is easily manageable, especially as fundamental strong. One of only a few miners that is about to start to production so there will be a lot of interest in this.

[seagullsslimjim] 25/7/2016 11:21

With the large buys of this morning and little selling, then 5p should be odds on this week.

Add to that the Moz RNS dropping anytime (now upto 2 months max) and things are looking rosy as SAV receives its long awaited re-evaluation.

Chart wise, then 6p may be the next short term ceiling, but the Moz confirmation RNS would breach that easily from these levels.

[seagullsslimjim] 22/7/2016 14:55

BORROWED FROM THE OTHER BOARD......

I've done some checking on Base Resources (AIM/ASX:BSE) - a company I know DA comes back to when talking about HMS and a company that recently has had some very bullish analyst reports released, coupled with investor meetings. The main take from the reports are the analysts view that the Mcap should be double.

So, to brake it down a bit.

What do BSE have?
- One producing HMS asset in Kenya
- Very similar to ours (coastal dune etc)
- Same grades but much smaller.
- JORC of 140mln tonnes at 4-5 %
- EV of £180mln
- 13 year mine life with no potential for growth
- The NPV of their asset is about $350mln (calculated on a $100/tonne margin in the reports)

So above - according to analysts should be worth double (mcap 100mln)

What do we have?

- Joint Venture with RT

- Off take agreement wit the same

- RT has surely invested a lot of time and money on Mutamba (they grade it a high impact resource)

- A starting focuss on very high grade, 200mln tonnes (I am putting these 200 as our future JORC which should be released sometime after the approval)

- Huge potential for growth (we have 7-12 BILLION tonnes exploration at 3-4,5 % according to RT)

Taking the above metrics for BSE into account and applying them on SAV

140 mln tonnes (without growth) = 350mln NPV --> 2,5mNPV / 1mln tonnes

Our 200 mln tonnes should have an NPV of 200 * 2,5 = $500mln

We will increase our share of the joint tenenment gradually, my personal feeling is that we will be at 20 % rather quickly since I believe that a lot of work may have been done behind the scenes while waiting for approval.

But we first have 10 % of this = $50mln

BSE EV/NPV = 1/2 - Analysts see this should be doubled (and again, BSE doesn't have the same growth potential or even close the relation to a major as we do plus I see Kenya as higher risk than Moz). 1/1 bc they are producing.

Taking this metric 1/2 - our first JORC, with our first 10 % should add 50/2 = $25mln or approx 5p SAV

Given the analyst view that BSE should be worth double and given that our growth potential etc is HUGE - I would suggest that the minimum value for this FIRST part of the JV gives us 5-7p.

The 10 % will swiftly move to 20 % (5p more) and then on - hopefully to 51 % if we're not taken out before…

At 51 % we have come so far that our valuation / mcap should be closer to 1.. and by then I believe the 200mln tonnes have been upgraded to billions!

For clarity - I used a JORC of 200mln tonnes here. We have 7-12bn tonnes exploration. So maybe the metrics for BSE are not that relevant and we should be higher valued. Less risk, strong partner etc. On the other hand, BSE are producing.

All in all - as STRONG BUY as it can get. WOW.

When news land and we get some numbers, I see analysts covering us and as me doing peer valuations.