40p bid. Softly, softly - but looking as though they make take a jump forward...
free stock charts from uk.advfn.com |
Up circa 6.5% overnight in Australia, to equivalent of circa 40.25p here, hopefully we'll do the same! Be nice to break 40p again. |
The steady rise following the Optimised PFS continues this morning. One would imagine that on the back of this excellent progress, which could lead to a bid at any time, we will see this rise continue. The first target is the 52 week closing high of 42p set on the 21st November. It should then keep climbing in anticipation of the bid and we all know the higher the share price goes,the higher the bid will have to be. |
Big numbers here - Jim's summary https://mining.beehiiv.com/p/jim-s-mining-letter-january-23-2025Worth reading |
Rick Rule who is a large shareholder thinks Rio will take it over although he would prefer the larger gains that would be made if SVML retained ownership. The comment from Alan Green about Glencore is one I have flagged before on the back of Rick Rule saying other large miners would like this Tier 1 deposit. Let’s hope Glencore do make a bid as a bidding war with Rio would push up the price. Interesting weeks ahead as agreements with Rio kick in on publication of the PFS with a 90 day timeframe if memory serves. |
888IB that is a view also put forward by Alan Green, who says that as Rio and the committee recommend Kasiya run as an owner-operated mine with leased equipment, could be a full blown bid from Rio, or possibly from a 3rd party? |
A very impressive Optimised PFC that fires the starting gun on deciding who is going to build the mine and will Rio make a bid for the whole company. |
Had my beady eye on this graphite and rutile company for a while. A big update project economics massively improved, overseen by Sovereign and Rio Tinto technical committee. In Malawi and the largest and lowest cost of production rutile graphite project in the world |
Things going along at pace. Surely the price will rise considerably this year. |
Graphite: It's time to look at Graphite HTTPS://smallcappix.com/blogdetail?id=65 |
 Thanks beeezzz:
1.Sovereign Metals (SVML): 36p Target 100p
Shares of SVML are up nearly 40% so far this year, but if this was not the London market in 2024, one would imagine that this £219m market cap company would be trading at multiples of this valuation. The reason for this judgement is that the company has clearly made significant operational progress in the past year, with rather less appreciation than is deserved for a company set to be one of international significance.
For instance, the market still behaves as if SVML does not have a Tier 1 Kasiya Rutile-Graphite Project in Malawi, does not have Rio Tinto (RIO) as a strategic investor, and will not be the world’s largest, lowest cost and lowest-emissions producer of two critical minerals – titanium and graphite. However, it has been progressing towards the latter goal, with frequent, solid newsflow in recent months.
Of late the company announced that it has started backfilling the pit at Kasiya, following successful mining trials stage at the programme, and reminded us that its cash position has been bolstered by an additional AUD19 million invested by Rio Tinto PLC, as the mining giant now has a 20% stake in the company. One would expect all of this to sink in well before the end of 2025, and for the 100p target to be fulfilled in consequence. |
SVML gets a mention... |
I hope that we can get more than £1.50 per share from Rio because it will be worth many multiples of that when it goes into production. My view is that Rio have a a first mover advantage as due to their close involvement in the day to day running of SVML they know more about this project than anyone else. They don’t need the DFS which will make a lot of information available to the market. Rio isn’t the only large mining company that will want to acquire this Tier 1 Rutile and Graphite company. In my opinion Rio will want to strike early to acquire full control before the Other large miners such as Glencore have the detailed information about the project that Rio already have. So the likelyhood of other bidders can potentially be leveraged to get a higher price this year. |
downside however is:
No mining heritage in Malawi/potential African politics.
Trouble and unrest in adjacent Mozambique, preferred rail corridor
titanium/graphite price volatility and possibility of titanium substitution in some high value applications
cost of establishing the mine
need to upgrade the railway link in Malawi
Deposit does however hold enormous potential and rutile sought after resource. |
SVML in 2025
I will start with a little background to what I am about to post which appeared on the Metal Tiger ADVFN thread last September. Metal Tiger became Strata Holdings when it moved its listing to Australia. In August 2024:
“ STRATA INVESTMENT HOLDINGS PLC TO ACQUIRE SCP RESOURCE FINANCE
hxxps://www.listcorp.com/asx/srt/strata-investment-holdings-plc/news/acquisition-of-scp-resource-finance-3073880.html
The Company's securities are currently suspended from quotation on ASX and, subject to shareholder approval being obtained, will remain suspended until the Company has re-complied with Chapters 1 and 2 of the ASX Listing Rules and the Acquisition has been completed”. The suspension is due to end this month.
Then on 13/9/24 I noticed the following in an SVML RNS:
“ Sovereign Metals Limited (ASX: SVM, AIM: SVML, OTCQX: SVMLF) (Sovereign or the Company) advises that it has issued 2,326,880 fully paid ordinary shares (Shares) in the capital of the Company, comprising of 1,290,392 Shares issued to Rio Tinto Mining and Exploration Limited (Rio Tinto) and 1,036,488 Shares issued to SCP Resource Finance, as an advisory fee of 3% on the amount of Rio Tinto's option investment in July 2024 (refer to Company announcement on 3 July 2024).
An application will be made for the Shares to be admitted to trading on AIM (Admission) and it is expected that Admission will become effective on or around 19 September 2024.”
Rick Rule is a shareholder in Strata and the largest shareholder in Sprott. Sprott is a large shareholder in SVML.Rick Rule is only interested in 10 bagger probabilities. This Strata aquisition looks very promising and as a holder of Strata and SVML I am feeling confident that both will do well.
Having established that Rick Rule is involved in all 3 companies this takes me to a valuation of SVLP that was contained in a report by Charles Archer in September 2024:
“ “ Third, while SVML retains the operational competence to build the mine and is therefore itself the competitive tension with Rio Tinto, this pilot plant is very clearly the due diligence the major needs to see completed on the deposit before making an outright offer.
While Sovereign may protest that this is all simply to accelerate and improve their own DFS, Rio’s version of a DFS will be in a different class to the junior, and it will want to take the reins before we get to this stage.
My prediction is that Rio Tinto will make a full takeover offer within the next 12 months. I think it's worth finishing with a quote from legendary resource investor Rick Rule, in a recent interview with the company's Chief Commercial Officer:
'What you need to understand, is that ultimately, a deposit this size acquires strategic value. If it sells, it will sell at a premium to net present value because the users understand the critical importance of a deposit of this size and scale.'
The net present value, before any improvements, stands at a little over $1.6 billion”
If Rick Rule is right,which he usually is SVML is at least a 5 bagger on a takeover. So if we say SCP’s shares in SVML are currently worth circa £300000, on a takeover by Rio they would be worth £1.5 million. The share price of SCML in September 2024 was in the low 30p range which would price a Rio bid this year at north of £1.50. This would be a good return but if SVML went it alone, which seems unlikely in view of the current agreements in place with Rio, we would be looking at a 10 bagger in a few years time on production. |
Joined you for a few after listening to Rick Rule on Sunday Roast: |
china places restrictions on exports to USA of various elements, gallium, germanium and slaps NVDA with monopoly probe, and tries to restrict graphite exports(FT). |
I agree that in the long term we will make a lot of money and I would be happy to do so. However I don’t think we will be given that opportunity as Rio will want to fully own the project at the point when the main mine is going to be built and will need financing. This deposit will be very attractive to other majors and it would seem prudent for Rio with their 20% to take it out early based on the detailed knowledge they have now, which is not currently available to other bidders. The longer they leave the higher the bid will have to be. |
Excellent progress continues. I am sure if we stay in for the long term we will make a lot of money. We don't want too early a bid from RTZ. |
Up 5.84% in Australia and rising again here after yesterday’s strong performance. The share is making new all time highs on a regular basis as the project is fully validated by the pilot mine. Rio must be close to having the information they need (or already have it) to make a full bid before another major decides to have a go at securing this largest in the world Tier 1 deposit. In the meantime I am very happy to see the strong rise in the share price continue as this may well trigger the bid. We know Rio is very keen on this project and having gone to 19.9% they cannot buy any more without making a full bid. |
Another very positive RNS takes SVML Up 6.4% to a new high of 41.5p. This company continues to tick off its milestones on time and on budget. |
Up circa 4 percent in Australia overnight, trading at equivalent of about 42.25p here. UK line got a bit of catching up to do! |
RNS Quarterly Update
The shares are up 11.97% in Australia on the back of the Quarterly Report. The report reminds us of the excellent progress this company continues to make. |
Not massive volume, but most days it's seems about 500k-700k in Australia, so about double. |
australian volume is 1.45m, is that unusual? |
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