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Battery Energy Storage Is A $1 Trillion Opportunity As Costs Continue To Crash – Forbes

Companies such as Sweden’s Box of Energy, which recycles lithium-ion car and bus batteries for use in energy storage, is among the companies likely to profit from the growth of the sector. Photographer: Mikael Sjoberg/Bloomberg

Article by Mike Scott, Forbes

Large-scale energy storage used to be part of the future of energy. But it’s here now, and it’s going to become increasingly important in the years to come.

Clean energy researchers at Bloomberg NEF (BNEF) find that more than $1 trillion will be invested in the sector between now and 2040. The group’s latest Long-Term Energy Storage Outlook says that the “tumbling costs of utility-scale lithium-ion battery storage systems will transform the economic case for batteries in both the vehicle and the electricity sector”, predicting that prices will fall by 52% between 2018 and 2030, adding to the steep declines already experienced this decade.

This will lead to $1.2 trillion of investment flowing to the sector in the next 22 years, creating a cumulative capacity of 942GW, BNEF said. In the near term, the market will be dominated by South Korea and the US, but China will be the driving force from the 2020s onward.

Energy storage is key to helping governments decarbonize their economies by using more renewable energy because the dominant sources, wind and solar, are intermittent and do not provide constant power. “ Cheap batteries mean that wind and solar will increasingly be able to run when the wind isn’t blowing and the sun isn’t shining ,” the report says.

 Yayoi Sekine, energy storage analyst for BNEF and co-author of the report, said: “We have become much more bullish about storage deployments since our last forecast a year ago. This is partly due to faster-than-expected falls in storage system costs, and partly to a greater focus on two emerging applications for the technology – electric vehicle charging, and energy access in remote regions.”

Logan Goldie-Scot, head of energy storage at BNEF, added: “We see energy storage growing to a point where it is equivalent to 7% of the total installed power capacity globally in 2040. The majority of storage capacity will be utility-scale until the mid-2030s, when behind the meter applications overtake.”

Behind-the-meter, or BTM, applications will be installed in business and industrial premises, and in millions of homes. For their owners, they will perform a variety of tasks, including shifting grid demand in order to reduce electricity costs, storing excess rooftop solar output, improving power quality and reliability, and earning fees for helping to smooth voltage on the grid.

Two thirds of installed capacity in 2040 will be in just nine markets – China, the US, India, Japan, Germany, France, Australia, South Korea and the UK, the Outlook says. However, there will also be rapid growth in other markets, especially emerging markets in Africa. Utilities are likely to “recognize increasingly that isolated assets combining solar, diesel and batteries are cheaper in far flung sites than either an extension of the main grid or a fossil-only generator,” the report says.

Energy storage can play a number of roles in the electricity system, helping to balance variable supply and demand, helping the grid operate more efficiently and allowing individual customers to cut their bills by cutting peak-time use . Eventually, it may be possible to aggregate lots of behind-the-meter projects to provide a viable alternative to utility-scale for many applications but it will take years before regulatory frameworks in some countries fully allow this, BNEF says.

Nonetheless, energy storage will become a practical alternative to new-build generation or network reinforcement, the analysts say.

But even with this rapid growth in the market, BNEF says that stationary storage sector will make up only 7% of total battery demand in 2040. “It will be dwarfed by the electrical vehicle market, which will more materially impact the supply-demand balance and prices for metals such as lithium and cobalt,” the Outlook concludes.

Salt Lake Potash (SO4) – The upside of Emmerson plus the quality of Danakali! via Cube Investments

Article via Cube Investments Nov 10th

Salt Lake Potash (SO4) is an AIM/ASX listed-potash company looking to produce sulphate of potash (SOP) from nine salt lakes in Western Australia which total over 3,300km² (latest share price: 26p ask, market cap £53million).

The company recently appointed a new CEO and raised money to “fund construction of the Williamson Ponds and dewatering of the Williamson Pit, as well as ongoing development of on-lake infrastructure, exploration and feasibility studies, and general working capital”

SOP is a premium, environmentally-friendly product. I have previously discussed the benefits of SOP on this website.

The nine salt lakes are close to infrastructure and two shipping ports.

Fundraising – A$13m at 23p equivalent

Salt Lake have just raised A$13m at a price of 23p equivalent. The cornerstone investor is a “significant international investment fund” while management are taking over 7% of the new shares. My hunch is that the institutional investor doesn’t want to be named because they either want to purchase more shares or be involved with any future raises before the valuation starts to more accurately reflect the potential. See the fundraising RNS.

Director Holdings – yes, they do hold!

It’s a bit difficult to find out that directors hold shares. Unhelpfully, their names do not appear on the share register – the companies they hold the shares through do. Prior to the recent raise, directors owned over 10% of the shares. I have asked the company to show director holdings more clearly on their website.

Country Risk – Western Australia

Western Australia is both mining friendly and first world. I prefer investments in stable countries as financing in a stable jurisdiction is simpler and rule of law is more likely to be followed. Salt Lake already has approval to construct ponds at Lake Way.

New CEO – Tony Swiericzuk

Mr Swiericzuk was previously Director of Business Development and Exploration at Fortescue Metals (Australian ticker FMG, market cap A$13bn). He has overseen the construction and optimisation of one of the world’s lowest-cost iron projects.

Upon his appointment, he stated:

“A deep dive into Salt Lake Potash’s high quality technical work, business model and relationships has convinced me that it is easily the best company to lead the development of the sector in Australia. Its multi-lake holdings in proximity to the Goldfields infrastructure is paramount and offers great potential to achieve cost savings and economies of scale, as we did in the iron ore sector.”

Tony is no doubt well connected, technically capable and well-placed to accelerate the development of Salt Lake into a leading potash producer.

Salt Lake brine extraction

Salt Lake brine extraction is very simple – dig a trench, let it fill with brine, allow mother nature to evaporate the water content, harvest and process:

(Source: Salt Lake Potash. The presentation also includes the chemical processing information for those interested.)

Salt Lake have de-risked the process by digging demonstration trenches and analysing the product:

(Source: Salt Lake Potash.)

Offtake agreements

Salt lake has two memoranda of understanding that set out the basis for offtake agreements. Mitsubishi and Sinofert each have offtake rights for up to 50% of SOP production from the 50ktpa demonstration plant. Corporate executive Jo Battershill discussed the MOU’s and company progress recently here.

Development Plan

In order to de-risk financing, minimise dilution and reduce risk, Salt Lake has a multi-stage approach to becoming a globally significant SOP producer:

Stage 1 – Lake Way 50ktpa Demonstration Plant

Salt lake plans to build a 50ktpa demonstration plant to validate the technical and commercial viability of the project which will de-risk the project and allow for larger fundraising in the future to decrease capital costs. A feasibility study is due by year end which will facilitate debt funding. Note that all NPVs are calculated using a 10% discount rate.

Scoping study assumptions:

  • Capex cost A$49m
  • Cash costs per tonne A$387
  • SOP price A$667/t

Projections:

  • Pre-tax NPV A$71m (£39 million at A$1 = 56p)
  • IRR 28%
  • EBITDA A$14m (EBITDA £8m)

Or using the current SOP price A$820:

  • Pre-tax NPV A$134m (£75 million)
  • IRR 44%
  • EBITDA A$21.65m (EBITDA £12m)
Stage 2 – Lake Way 200ktpa

Once the demonstration plant is proven successful, the company will be well-placed to raise funds for a larger operation.

Scoping study assumptions:

  • Capex cost A$191m
  • Cash costs per tonne A$241

At current SOP price A$820:

  • Pre-tax NPV A$781 million (£435 million)
  • IRR 61%
  • EBITDA A$115 million (EBITDA £64m)
Stage 2.5 – Lake Way 400ktpa

Once stage 2 capex is repaid, a modest amount of incremental capital will double production. I have used stage 1 calculations and once capex is paid off, deducted $39m capex required in the third year. From the fourth year, I’ve used the 400ktpa figures.

Scoping study assumptions:

  • Stage 2.5 cash costs per tonne A$185
  • SOP price A$667/t:

At current SOP price A$820:

  • Pre-tax NPV A$1562m (£850 million)
  • IRR 70%
  • EBITDA A$115m in Stage 2 (£64 million) followed by A$254m in Stage 2.5 (£141 million).
Stage 3 – Other Lakes

Once Salt Lake has proven the process, its ability to pay back debt and the project economics, then raising funds to develop from the eight other lakes should be straightforward. In aggregate, these should be able to sustain millions of tonnes of SOP production.

Investment thesis

At current prices SOP prices, Salt Lake trades at less than 10% of NPV from one 400ktpa operation supports a pre-tax NPV of £660m which means that SO4 trades at more than a 90% discount to one of many possible operations. The projects are attractive from both a financial and environmental position. The green credentials should help with fundraising. The company has always had incredible prospects but hasn’t been in a position to capitalise upon them. With a feasibility study soon to be released, equity raise out of the way, offtake agreements and a new CEO I believe firmly that the next 3 – 6 months will be transformational for Salt Lake.

Bonus Reading – Peer comparisons

In making my investment into Salt Lake Potash I have also evaluated other companies listed in London:

Sirius Minerals (SXX) – market cap £1.1bn, Polyhalite product (similar to MOP), UK

Sirius minerals is developing a huge polyhalite project in North Yorkshire. The project is incredibly capitally intensive for example they recently announced another $400m – $600m was required. The internal rate of return is likely to be below 20% now (they haven’t announced updated figures). The project would not be built were it not for government support. Such is my dislike for the project economics I’d almost go as far as to suggest it as a shorting opportunity.

Kore Potash (KP2) – market cap £49m, MOP product, Democratic Republic of Congo

I have not analysed Kore Potash in sufficient detail to have an opinion on it as an investment. I do however prefer investing int Western Australia and believe that Salt Lake will more easily obtain financing for its project for three reasons – country risk, MOU’s and construction permits.

Emmerson (EML) – market cap £22m, MOP product, Morocco

I believe Emmerson to be a good investment, particularly around the current price, for the reasons outlined previously. Why pay more than twice Emmerson’s market cap for Salt Lake? Emmerson is at the beginning of its journey and so there is no scoping study, no MOU’s, and no life of mine available. Given that Salt Lake has a world class resource and will be finance-ready by year-end, and trades at a huge discount to NPV, paying more than twice for Salt Lake is justified.

Danakali (DNK) – market cap £110m, SOP product, Eritrea

Danakali has an incredible project but the market cap reflects that, as covered here. As well as trading at a fraction of NPV, Salt Lake’s project is much easier to finance due to lower country risk, whether or not that is justified.

At the time of publication, the author holds a long position in SO4.

 

Share Talk Q&A with Craig Brown – Chief Executive Officer of ECR Minerals plc

We wanted to cover your Strategic Business Update released on 6 November 2018, but firstly should ask about your thoughts on market conditions?

How you feel about market conditions depends on positioning. 

For private and institutional investors conditions are pretty awful although there is evidently a keen search by investors for stocks to acquire that could be positive performers even in present market conditions.

We have to demonstrate that ECR is in that category through our work and communications about our progress.

For resource companies on the markets, those with established businesses and cash can keep working through the downturn phase and make ready for the upturn.

ECR raised money in July and as a result, has the working capital to run until Q3 2019 as previously publicised.  We are in a strong position operationally and financially and that makes us a positive investment proposition, in my view, at this time.

 

On the gold side of your business, Australia seems the focus right now.  Why is that?

The Victoria region has been a stunning producer of gold over the years and was the location of one of the great nineteenth-century gold rushes. What’s better is that we believe there is considerable gold still to be discovered, and we are exploring for it right now.

We are greatly heartened by the exceptional success of the Fosterville mine in Victoria, which has produced more than a million ounces of gold to date and has ramped up production significantly of late, announcing record quarterly gold production of 90,000 ounces in Q3 2018.  The mine is also notable for the discovery of significant bonanza grade mineralisation at depth in recent years.  Fosterville is located in the same district as ECR’s Bailieston and Moormbool gold projects.

Our strategic and well-publicised objective is to find a substantial multi-million ounce gold deposit in the region and we are on an exciting pathway.  We have published exploration results across a number of our many targets in the last few months and the results have been very exciting for the team.

We have already identified a gold system at the Blue Moon target and a large gold system at the Creswick target and more work is underway across the portfolio that will bring further updates to market.

In summation, we have multiple targets, very positive initial exploration results and our ongoing campaign is in full swing.  There is a lot to aim for here and we have the resources and capable in-country team to get the work done.

 

You have mentioned Argentina and opportunities there in respect of “corporate avenues”. Can you elaborate?

I can’t be too specific, but we are pro-active in the background in Argentina and are reviewing a number of project opportunities and corporate options that may have the potential to add value.

Adding value is one thing, but we appreciate crystallisation of value is paramount for shareholders and we are very switched on to that.

Argentina is a resource-rich country and largely supportive of mineral exploration and development.  We have strong and growing local relationships and there are increasingly more opportunities and more avenues we could pursue.  We are active in moving initiatives forward and will update shareholders as soon as we have material progress.

 

The Iceberg due diligence is taking some time, in fact, more than originally planned, why is that?

We have been presented with a lot of data and are going through all the information.

One thing is key, acquisitions should be structured well and project due diligence conducted very carefully.  If it takes more time to do a thorough job, all companies should do that and not be afraid to extend option periods. You protect shareholders that way.

Also, in the challenging conditions working capital is a scarce resource and there are a number of high potential projects available.  Our job is to apply working capital to the best options and the process of due diligence ensures we do just that.

 

What other gold opportunities are you considering?

We have a good pipeline of Australian gold opportunities mainly in Victoria, Western Australia and the Northern Territory.

Whether we will pursue any additional projects depends on multiple factors including a project’s fit within the Company alongside our other gold interests; whether the project costs are comfortably within our management and financial resources; and whether we can see a value crystallisation route for shareholders.

We are looking at early stage exploration and projects with existing resources.

 

Turning to energy metals and minerals can you explain what you mean by “interest from third parties”?

As a Company, we are very excited by gold as a commodity focus, and we know our current and potential investors are too.  That should not mean that we turn off to other opportunities and it has become increasingly clear to us that there is considerable interest in the energy metals and minerals segment.

The general interest of investors is a good thing and we need to be aware of that.  However, there are also a number of organisations external to ECR who are keen to build a pipeline in energy metals and minerals.

In fact, the evident strategic drive to build this pipeline is demonstrated by the potential offer of capital to finance new ventures should the company be able to identify suitably meritable projects.

What is particularly appealing is the interest in ECR to act as a vehicle for new opportunities in respect of gold and energy metals & minerals.

Market conditions may be difficult but that is giving us a real opportunity to stand apart from the crowd by building our business in this downturn phase. The cash at bank and potential third party engagement helps of course.

 

Can you give us an indication of the type of energy metal or mineral project you are looking for?

Again, its difficult to answer too specifically as that information should be centred on market announcements. However, we have identified through our network various interesting projects in Australia and elsewhere.  These are across multiple commodity categories including cobalt, copper, lithium, uranium and vanadium.

We want projects that our shareholders will appreciate and that can also engage the interest of new potential investors. We also want projects that can attract external finance with an emphasis on project level financing helping to reduce dilution at corporate plc level, something we know is very important to shareholders.

 

You seem very positive about the ECR business at the moment.  What excites you the most about the business?

The work that goes into the Company is relentless at times, especially now with so much underway.  So you need the excitement to keep you buoyed up.

I am delighted to be working closely with our Chairman David Tang, who apart from being very commercially minded, has an extensive network across many Asian countries and is able to bring ECR to the attention of that network.  We have plenty of support provided we build our business with projects of real merit and potential.

It feels like it is ECR’s time but an intensive amount of effort is going in to make that happen.

Reiterate buy Concurrent Technologies #CNC says VectorVest. Significant growth potential as fundamentals continue to improve.

Colchester-based Concurrent Technologies Plc (CNC.L) develops and manufactures high-end embedded computer products for use in a wide range of high performance applications within the telecommunications, defence, security, telemetry, scientific and aerospace markets. Using mainly Intel® processors, including the latest generation Intel® Core™ i7 processors, Intel® Xeon® and Intel® Atom™ processors, the Company offers a wide range of computer products which are designed to be compliant with industry specifications including those for products used in extremely harsh environments. Other processors now include NVIDIA® Tegra® K1 devices.

Examine this trading opportunity and a host of other similar stocks. A single payment of £5.95 gives access to the VectorVest Risk Free 30-day trial. More here

On September 12th 2018, CNC published interim results for the six months to 30 June 2018. Turnover rose slightly to £7.9m (H1 2017: £7.8m), PBT fell slightly to £1.1m (H1 2017: £1.4m) and EPS fell to 1.50 pence (H1 2017: 1.84 pence). The Company reported a cash balance (including cash deposits) at 30 June 2018 of £7.8m (H1 2017: £7.9m), and raised the interim dividend to 0.95p per share (H1 2017: 0.90p). CNC said its global customer base continues to expand with exports generating 88% of Group revenues (H1 2017: 84%), while Chairman Michael Collins said CNC’s specialised product ranges, processes and excellent customer relationships “all demonstrate that Concurrent Technologies is well placed for the future.” Separately, on October 8th 2018, CNC launched a new CompactPCI product featuring the latest 8th generation Intel® processor and designed to support existing customer base with enhanced security features.

VectorVest published an article on CNC in April 2018 (read here), where we noted that the nascent value within the company triggered an RV (Relative Value) charting move in December 2017, which has continued to build during Q1 2018 on the back of multiple product launches. RV is an indicator of long-term price appreciation potential where CNC still scores 1.19, which is good on a scale of 0.00 to 2.00. CNC also scores very good GRT (Earnings Growth Rate) of 19%, and while the RS (Relative Safety) metric only registers a fair rating of 0.87 (scale of 0.00 to 2.00), trading at 77p the stock still offers some upside against the current VectorVest valuation of 86p per share.

A weekly chart of CNC.L is shown above over a period of 5 years. Over this period the share price has made a series of rising lows where previous resistance has become support. Over the last few weeks the share price pulled back to the last old high made in 2016 and to important long-term support shown by the upsloping trend line on the chart.  The share is currently on a hold recommendation on VectorVest. When this changes to a Buy, traders should carefully consider the opportunity. The technical target from classic charting techniques is over 100p.

We noted in our April note that CNC offered significant growth potential, following a raft of product launches during Q1 and an increase in FY dividend. While the group has delivered a relatively indifferent first half, comments from the Chairman, a further increase in the interim dividend and the recent new product launch indicate that there is more to come from this niche computer product manufacturer. We reiterate our view that CNC is a company in steady rather than spectacular growth mode, but nonetheless still offers significant growth potential.

Dr David Paul

October 24th 2018

Readers can examine trading opportunities on IGAS and a host of other similar stocks for a single payment of £5.95. This gives access to the VectorVest Risk Free 30-day trial, where members enjoy unlimited access to VectorVest UK & U.S., plus VectorVest University for on-demand strategies and training. Link here to view.

VectorVest Unisearch

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Link here for more info and to set up a trial. 

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Poland’s JSW eyes controlling stake in Prairie Mining – CEO

WARSAW, Nov 7 (Reuters) – Poland’s JSW is interested in taking over Australia’s Prairie

Mining, Chief Executive Daniel Ozon confirmed on Wednesday.

Sources told Reuters in September that JSW, the European Union’s biggest coking coal miner, wanted a controlling stake in Prairie Mining.

“We are now working on internal approvals so that we could start a final stage of talks. We would like to build such a structure that we take control over Prairie Mining,” Ozon told reporters.

Zak Mir: Small Cap Highlight ECR Minerals #ECR – Gold back in the spotlight as slowing global economic growth spikes renewed appetite


By Zak Mir, Financial Journalist

  • Positive forecast for gold prices
  • Australia Gold production ramp-up
  • MicroCap Australian Gold explorer focus

Positive forecast for gold prices

Sharp declines in global stock markets over the past few weeks saw Gold hit a three month high as political uncertainty continues to grow across the world.

In August prices for the precious metal fell below $1,200 per troy ounce mark for the first time in more than two and a half years’, down 12% since April. The turn largely caused by the US Dollars unexpected performance and aggressive monetary policy marked it’s worst losing streak since 2013.

However, October has seen a marked turnaround in the Gold price: the yellow metal grew by 3.3% in October, and continuing into November saw $1,233 per ounce as investors and hedge funds continue selling off global equities in search of reduced risk amidst geopolitical and economic uncertainty. Safe haven demand for gold has been driven by ongoing fears of a trade war between the US and China, growth concerns in China and the ongoing Brexit saga amongst a number of other issues.

Observers have been universal in their support. Mark O’Byrne, research director at Dublin-based GoldCore said: “Safe-haven gold is again acting as a hedge and safe-haven asset, exactly when investors need one.” “Throughout its history, Gold has served as a stable, safe haven investment during times of economic slowdown and following the International Monetary Fund (IMF) downward revision of the global economic growth for next year we might see more investors buying up the commodity.”

Others have noted how the nature of intra-year seasonal cycles may are likely to lead to increase in the price of gold. The Street says “massive washouts like the one we’re experiencing in gold right now are the fathers of subsequent rallies”.

Speaking on the Bloomberg Markets podcast Ruth Crowell CEO of the London Bullion Market Association discussed how the groups Annual Gathering this year predicted the most bullish forecast since 2012 with a forecast of $1,585 per ounce for next October. Ruth explains that this years price is reflected by ‘the macroeconomic outlook, ultimately talking about a lot of concerns’. Meanwhile a poll conducted by Reuters this month they found that of the 39 analysts and traders polled they expected gold prices to average $1,300 an ounce in 2019.

Australia Production Ramp Up

On the supply front, according to Bloomberg the world’s largest miners look set to increase spending for the first time since 2013 while the value of sector M&A activity has hit the highest levels in six years.

As a result, Gold production looks to set for further ramp ups through the end of 2018 and into 2019.

In particular production in Australia, the world’s second-largest Gold producer, may rise to a record this year and next as a stream of new projects come on line. Comments from Australian mining consultancy Surbiton Associates in the Sydney Morning Herald highlighted how Australian gold miners, among the lowest cost globally, have enjoyed high margins in recent years, with output boosted by the strengthening US dollar, which has in turn ‘supercharged’ Australian dollar prices.

MicroCap Australian Gold explorer focus – ECR Minerals

While the giants such as Newcrest Mining, AngloGold, Newmont Mining and Barrick Gold Corp tend to dominate the headlines, this upturn in sector activity has seen a marked increase in funding for small and microcap Gold exploration companies. Following a strategic financing round in July 2018, microcap Gold exploration company ECR Minerals has delivered a steady stream of exploration news updates, which has resonated among institutional and retail investors during Q3. ECR are conducting exploration activities across their numerous projects in Victoria, which is by far the most accessible and productive area of gold in Australia. In the 70 or so years from the 1850’s until the 1920’s, approximately 2,100 tons of officially recorded gold was recovered from Victoria and today it continues to be a favourite area for metal detector prospecting.

Listed on London’s AIM market, ECR’s exploration projects underway include Avoca, Bailieston, Moormbool and Timor gold projects in Central Victoria.

In mid September, ECR announced that it had ‘identified eight principle targets within the Company’s five exploration licence areas’ and had developed an exploration programme ‘designed to test surface gold mineralisation across the licence areas.’

At the end of September the Company confirmed gold mineralisation, with 22 samples from 76 containing gold grades ranging from 0.5 g/t to 67.4 g/t (2.17 ounces per ton). Their second assay results proved positive too, with 29 samples delivering gold mineralisation ranging from 0.56 g/t Au to 22.9 g/t Au;

ECR’s next rock chip sampling results will come from the Creswick area, where prior mapping has revealed a large gold system. Sounds promising.

So whether you’re buying bullion, investing into Gold majors as a proxy for the yellow metal or speculating on Microcap Gold explorers, the shiny near term outlook for Gold, and in particular Gold explorers operating in Australia looks unlikely to be tarnished

 

 

 

Alan Green CEO of Brand Communications talks about: Regal Petroleum #RPT Bluefield Solar Income Fund #BSIF Sativa Investments #SATI Catennae Innovation #CTEA IMC Exploration #IMCP

Alan Green CEO of Brand Communications talks about: Regal Petroleum #RPT Bluefield Solar Income Fund #BSIF Sativa Investments #SATI Catennae Innovation #CTEA IMC Exploration #IMCP with Justin Waite on the Vox Podcast

Salt Lake Potash (SO4) – ASX Trading Halt

Salt Lake Potash Limited (“Salt Lake” or “Company”) advises that trading in the shares of the Company have been halted on the Australian Securities Exchange (“ASX”) effective from Wednesday 7 November 2018. The halt was requested by the Company pending an announcement regarding a capital raising.

The trading halt will remain until the earlier of an announcement to the market regarding the above or the opening of trade on ASX on 9 November 2018.

Trading in the Company’s ordinary securities will continue on AIM during this period.

For further information please visit www.saltlakepotash.com.au or contact:

 

Clint McGhie

Salt Lake Potash Limited

Tel: +61 8 9322 6322

Colin Aaronson/Richard Tonthat/Ben Roberts

Grant Thornton UK LLP (Nominated Adviser)

Tel: +44 (0)207 383 5100

Align Research: Catenae Innovation (CTEA) Strategic turnaround provides exposure to high value, high growth, blockchain driven products

Catenae Innovation, formerly Milestone Group, is an AIM listed media and technology group which has recently completed a major restructuring under a new senior management team. The refocused strategy concentrates on the areas of media and fintech, delivered via a portfolio of synergous products, via subsidiaries and partnerships which take advantage of blockchain and distributed ledger technology.

View the original report here

  • Strategic change focusses on high growth blockchain driven industries

    In September last year Catenae commenced a major restructuring under interim CEO Tony Sanders. Along with the cessation of its previous social activities, several contracts in the fintech area deemed unable to deliver satisfactory results were also terminated. The new strategy concentrates on the areas of media and fintech, with the company set to launch a suite of products which use blockchain technology in the coming months.

  • Joint venture with music industry veteran leads new approach

    In March 2018, Catenae signed a joint-venture agreement with a company majority owned by music and technology industry specialist Martin Heath. The JV, named Trust in Media, will produce payment processing and intellectual property solutions, initially within the media industry, using a combination of private and public blockchain technologies.

  • Fintech division provides further opportunities

    Catenae is also launching a range of virtual banking and KYC/AML products. Since the company’s review and subsequent cancellation of an agreement with Nasdaq listed Black Cactus Global, Catenae has identified alternative partners to ensure it can provide solutions in this area on a best of breed approach.

  • Valuation suggests 107% upside

    On a near term EV/EBITDA valuation basis we set an initial target price of 0.28p per share, in excess of X2 the current share price. Recent management stock conversions of accrued fees at a premium to the current stock price underpins further our confidence in prospects for the immediate term. We therefore initiate coverage with a stance of Conviction Buy.

  • RISK WARNING & DISCLAIMER

    Catenae Innovation is a research client of Align Research. Align Research & a Director of Align Research own shares in Catenae Innovation. For full disclaimer information please refer to the last page of the full document. This investment may not be suitable for your personal circumstances. If you are in any doubt as to its suitability you should seek professional advice. This note does not constitute advice and your capital is at risk. This is a marketing communication and cannot be considered independent research.

View the full research note here

Regal Petroleum (RPT.L) offers excellent value across all key metrics. VectorVest rates as buy with an 82p price target.

Regal Petroleum plc (RPT.L) is an independent oil and gas exploration and production company with three gas and condensate fields in NE Ukraine. These fields comprise the Mekhediviska-Golotvschinska (MEX-GOL) and Svyrydivske (SV) fields, which are adjacent and operated and managed as one field, and the Vasyschevskoye (VAS) field. Each field is held under a 100% owned and operated production licence. RPT is a public company, based in London, with its shares quoted on the AIM Market.

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On September 21st 2018, RPT announced unaudited results for the six month period ended 30 June 2018. Revenues nigh on doubled to $24.6m (1H 2017: $12.4m), while gross profits rocketed to $11.9m (1H 2017: $3.2m). RPT reported strong cash generated from operations of $13.1m (1H 2017: $5.5m), ending the period with cash and cash equivalents at 19 September 2018 of $46.8m, held as $22.5m equivalent in Ukrainian Hryvnia and the balance of $24.3m equivalent predominately in US Dollars and Pounds Sterling. A busy second half of investments into facilities, new projects and acquisitions will be funded from existing cash resources and operational cash flow. Chairman Chris Hopkinson said that after the operational successes during the first half of 2018 and the increased production output during July 2018. . .”we are looking forward to achieving further successes in the development activities planned for the remainder of 2018 and delivering a steadily increasing production and revenue stream in the future.”

RPT stock started climbing steadily toward the end of July 2018, flagging an opportunity to VectorVest members, and since that time has retained an excellent Relative Timing (RT) (stock price trend) metric of 1.73, (on a scale of 0.00 to 2.00). RPT also logs an excellent Relative Value (RV – indicator of long-term price appreciation) rating at 1.62 – again excellent on a scale of 0.0 – 2.0, and along with an excellent GRT (Earnings Growth Rate) of 39% presents a comprehensively compelling investment opportunity. Even so, trading today at 52p and with a good RS (Relative Safety) rating of 1.12 (scale of 0.00 to 2.00), RPT is still a long way below the current VectorVest valuation of 82p.

The chart of RPT.L is shown above in my normal format. Recently as Earnings Per Share (EPS) increased the share was revalued (the green line study) upwards by VectorVest. Technically the share has broken out and tested a ascending triangle formation and is on a BUY recommendation on the VectorVest program.

Summary: The turnaround in RPT stock since July is no less remarkable that the prior increase from year lows of 4.25p at the start of 2018. Even so, this well managed and run oil and gas company has delivered spectacular revenue and profit growth, and with a raft of excellent VectorVest metrics, also offers a decent degree of safety for the more cautious investor. Oil and gas stocks rarely go up in a straight line, but with a bullish charting configuration and good forward visibility, this is, in the view of VectorVest, one to back.

Dr David Paul

October 24th 2018

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