 Extract from Charles Archer’s March Small Cap Mining Review:
Sovereign Metals remains the best stock on the AIM market. I could wax lyrical once again about the first rutile find in decades, or the magical graphite that’s apparently been designed by an intelligent creator, but the share price is doing the talking for us.
We’re up to 44.7p, a 15.8% rise this month - and 19.2% year-to-date. Three key things to note here:
The market cap is still well below the NPV of Kasiya, which has been effectively certified by Rio Tinto in the optimised PFS - you’re still early (though I recognise this is easy for me to say with a 22p average).
SVML shares on the ASX are constantly trading at a premium to the UK, even as we reach all-time-highs. While it’s tricky to take advantage of the possible arbitrage, this does mean you can get the shares ‘on sale’ at times.
As things stand, the DFS is out in the not too distant future and then Rio will need to play its hand. There may well be dips and volatility, but when the portals open, only the Avengers who heed the call are going to enjoy the profits.“
There is also an interview with the CCO on the Sunday Roast reviewing last weeks news and some discussions on valuation as the boxes are ticked on the way to production. |
Finished overnight in Australia up over 8% , having second good session in a row. That's the equivalent of circa 46.75p ! Hopefully another good catch up session here too |
free stock charts from uk.advfn.com |
Yes it was what? Up 13% or down 0.5c.
Whatever - better day again today on that RNS; looks to be on the move... |
Personally I think there is zero chance this will remain independent, with Rio taking a big stake while these guys prove up the resources, no brainer, bid incoming but when and what price is the question here |
Yes it was. |
No it wasn't - actually down 0.25c. ASX:SVM closed at 8.25c - 4.3p! |
The story continues to get better and better. I am even hoping we don't get a bid. |
it was up almost 13% in Australia for reasons unknown. Could we have a good day today?
Just seen the RNS for the reason. |
Close to 52 week High
SVML was Up 5.49% in Australia very close to its 52 week high. It is moving Up here this morning currently at 42p which is the 52 week closing high set on 22nd November 2024. The intra day 52 week high of 43.80 was also set on that day. The latest trade this morning was at 43p so we may set a new closing high today if the UK volume picks up. Australia is the main market and today’s rise there is very encouraging that SVML will rerate higher to reflect the continuing excellent news flow.
The higher the share price can move prior to a bid, the higher the bid will have to be! |
Corporate Update (DEC'24)
"Sovereign remains in a strong financial position with cash at bank of approximately A$34 million and no debt."
# Like the fact that we don't need to raise cash anytime soon
# Hate the fact that the deposit is situated in politically toxic Africa
# Like the steady accumulation shown in the chart
# Like the talk of possible interest from mining majors; though with every passing day that talk becomes less credible
# Overall, worth a small speculative allocation - 2% of SIPP seems about right; so added a few more at 41.7p today. |
This morning’s RNS ticks another big box as they can start to discuss oftake agreements. This is a very well run company that keeps hitting its milestones on time and on budget. Every box ticked increases the likelihood of a near term bid. |
SVML is producing the highest quality graphite. Refractory market is the second biggest end user of graphite |
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... |
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