WTM (ASX) Next Steps

Originally posted by chibrown: ↑

Hey hot copper
been a while since I posted on this forum
not really sure if I should post this but I wrote a letter to David Flanagan discussing my concerns about the deal
It seems so far it has a disaster with the share losing a third in value this week
I am very sad but what can you do
i think this letter that he returned to me gives the company’s point of view
maybe it’s all spin but it’s worth a read
make it what you will and love to hear your thoughts
enjoy

Rob, Thanks for the email outlining your views. It’s helpful to get them so well articulated. Basically the intention of this agreement is to trade our graphite projects for TPG shares and get exposure through those shares. At todays (TPG) share price the value of the shares is ~$12.5M in shares plus $1.5M in cash plus any recoverable VAT. With an outstanding vat balance of about $1.5M collectively bat shareholders will receive the benefit of $15.5M in cash and shares. With current cash reserves ~$4M plus a $0.5M grant from the Vic government for drilling the EV of our company is only ~$10M. This company is amazingly cheap. Amazing. Tirupati have made it clear they have the capacity to compete with China. Through the 40 years of experience in the market, leading IP and the strength of their balance sheet and cashflow generated from existing operations they have a significant earlier mover advantage. Shareholders will retain 100% of the Kimberley copper project and 100% of the Stawell-Stavely gold/copper project. With copper surface samples up to 30% as well as 25 high priority drill targets in Victoria we think we have a very high likelihood of successful discovery. Having visited many minor capital markets to raise funds as well as grant organizations and various broking houses we have considered every concievable funding options. Debt, equity, pre-pay, jv literally everythingy. We even executed a term sheet in 2018 which spectacularly failed soon after coincidently with the insurgency in northern Mozambique. Even though they have not directly impacted any part of our project Covid19, >1200 deaths from violent insurgents, access to site to complete due diligence has been prevented by an international travel ban, suspension of the gas projects and exit of those companies as well the massive perceived over supply from Syrah. All of this presents a challenge which has directed us to the current funding solution. Normal debt/equity financing is now very expensive to the point where a normal capital market solution isn’t apparent and in the absence of a downstream processing solution, it is difficult to ensure access to the high value potential. We appointed four difference advisors to examine all areas of the market as well as end users for funding and we also approached various national finance corporations, foundations and parts of the UN seeking various grants. This included very high level meetings and participation in strategic round tables. Through this deal we are bringing 100% of the project finance plus a $15M benefit plus a free carry plus a sense of urgency to start production quickly plus the benefit of access to the full suite of downstream processing. We also engaged with urbix and considered downstream processing in a JV but financing process remained prohibitive in Mozambique. Right now the largest graphite project in the world is losing money and they haven’t made money since they started. On balance we will work to communicate much of this to the market in the lead up to the shareholders meeting but most of the last two years my team have worked tirelessly for the benefit of shareholders looking to extract the very best for them at every turn. Things haven’t gone completely to plan over the last three years but right now we have awesome projects, a strong cash balance, terrific prospects of discovery and and awesome partner in Tirupati focused on value creation in the battery minerals sector. In summary sharholders will have circa $20 in cash and liquid assets.A massive under explored gold/copper project adjacent to a 6m oz stawell gold mine, along strike from the morning bill and cayley lode discoveries. There has been no exploration here since the 90’s and the total recorded drill holes come to 1003 with average depth of 36m. This is nothing.4 tenements in the Kimberley with super high grade copper outcrop. The tenement group has only had 13 holes, which isn’t even scratching the surface.We have an awesome team doing terrific work in the field in sometimes challenging conditionsOn top of all that the strategic shareholding as the biggest shareholder outside the Tirupati founders means if the share price goes up it matters for us and their skills match the moz graphite assets perfectly. Hopefully you don’t think we have all our eggs in one basket. This is a great deal. Cheers David

Expand

Thanks mate - now why did the co not articulate some of that along the way and keep s/h's fully informed?

No.	Vol.	Price($)
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Price($)	Vol.	No.
0.385	45255	3
0.390	20000	1
0.395	64881	2
0.400	6667	1
0.405	11688	1

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(20min delay)
Last 38.0¢		Change 0.010(2.70%)		Mkt cap ! $70.24M

Open	High	Low	Value	Volume
37.0¢	38.5¢	36.0¢	$195.4K	524.0K

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