FRB, an E25 Option?

I found something interesting that Phuket Guy wrote about FRB on a club I'm in, seeing it as an E25 option. Here's what he wrote

"With FRB, I’m starting to refer to them as an E25 option

If (as I predict) E25 go to $3, $4 or $5 they will drag FRB along with them all the way.

So if you’re looking for leverage with a bit more risk, FRB is a buy around here and $2.00 remains as our ten-bag price target

Wattomagic has just summed up why we called FRB a Disallowed in a few words However here’s a longer explanation of FRB.

FRB has a market cap of A$24 million and just 50 million shares out- and they are quite tightly held amongst the top 20 shareholders.

The successful promoter and investor Tolga Kumova is the biggest shareholder with over 10% of the shares then directors Evan Cranston, Ashley Pattinson and Peter Allen are all well known in Perth for making successful mines from resources before, so they have a good track record.

So it fits the bill for us in tight shareholding and good proven management.- which is very important in calling a potential ten-bag-er

Next comes the asset.

It’s manganese and its tenements sit directly in the East Pilbara Manganese Province just over 100Kms north east of E25's Butcherbird site.

Their tenements are known to host Manganese.

Their main Oakover site has already had over A$4 million spent on its exploration - and in 2012 produced a JORC with an inferred resource of 64 million tons of Mn @ 10% Mn.

This is similar to E25 who now have proven reserves (better than inferred resource) of 50 million tons on Mn. E25 (as it has done more work and is more advanced) has a market cap of A$325 million - FRB market cap is currently only A$25 million.

FRB has A$4 million cash now. They are going to use that this month to go and drill out the site and hopefully confirm a scoping study that can confirm a drillable reserve around 35-40 mill tons of MN- this should be completed by September/October. (And remember the risk of it not being provable is very low as it’s all been drilled and jorced already in 2012)

Proving this up will make it around 70-80% the size of E25's reserve - so logically they should trade at around 70-80% of e25's market cap?

No- because E25 has done more work and is more advanced and just now in production - so let’s half its resource value-to be conservative -to around 35-45% of E25's market cap.

With E25's market cap now at 325 mill - we see that by September /October when the new SS is confirmed FRB should reach a market cap of almost A$130 million- if we conservatively reduce that again it to A$100 million - with 50 mill shares out - that should be $2.00 per share.

As we called it in March at just 20 cents a share - that means it could become a ten-bag-er within about 6-8 months.

That’s why we called it. I hope that’s clear enough?

So far as far as we hear all is going as planned and there are so far no real potholes visible on this road to $2 in our opinion.

The biggest ones would be a general stock market collapse or a collapse in the price of MN- that could reduce the market cap of e25 and therefore FRB won’t go so high in comparison to e25's share price.

That’s really the main risk we see, But we don't expect MN price to collapse - Indeed and here comes the real sexy part of this story.

We actually expect Mn price to rise due to increasing EV use and steel use post covid.

Moreover - because, as you well know, we fully expect E25 share price to rise to $3-5 soon enough - plus, if/when they do a deal with a large int'l co for high purity Mn, we see the E25 share price going towards 10$ eventually.

Therefore, due to FRB's similar resource and its proximity to E25 the FRB shareprice will be most likely be sucked up on the back of E25's rise - but with more gearing - hence Wattomagic is calling it a geared "option on e25".

By "more gearing" we mean- if FRB should later trade at say 40% of the market cap of E25 and E25 goes to 4.50$- E25 shares will have risen 100% from here ($2.25).

But FRB shares should logically then go to $1.80? with 50 mill shares out that would be $3.60 per share - or up 600% from here (50cents)

Lastly for the real sex! - if E25 shares reach $10 (a 400% rise from here) as we expect/hope they can - then FRB shares would trade roughly at 4$? (unless more diluted by then) so that’s up 900% from here- and moreover up 3,900%. since we called it in March.

Now do you understand why we called FRB as a potential 10-bag-er.??

This is not pie in the sky stuff.

It’s the same sort of results that happened to our earlier calls in DEG and CHN and is currently happening to E25.

Just wait. Not many of you saw DEG all the way through as it was our first call and we didn't have so many members then.

But many of you have seen it happening in front of your eyes in CHN this year - and also watching it occur in E25 (hopefully), with many of you in it - so this stuff is real.

This is what the 10-bag-er club does. This is how we live our free lives, and hopefully this is why you joined.

So don't pussy-foot around -if you believe in the EV story and the manganese battery story as Elon Musk and Volkswagen and Toyota etc are saying then start collecting more FRB (collect slowly as it’s a very thinly traded stock.

We believe most holders have figured out what we’re saying too and are not sellers) Then sit back and enjoy the ride. This is what we do. So fingers crossed and wait for the big move

Lastly this is not risk free stuff. DYOR and keep your fingers crossed"