Penny stocks on the move

7 years 3 months ago #23668 by pine
Replied by pine on topic Penny stocks on the move
Business Times Singapore

ALLIANCE Mineral Assets is in a hurry like no other. The Australian mining group, which is on the trail of a commodity that some say is hotter than gold, is working at full speed to start production by the end of this year.

The commodity in question: lithium, a key ingredient in lithium-ion batteries used in electric vehicles and energy-storage systems which are expected to become more prevalent over the next decade.

Alliance Mineral is now working to complete its resource estimate, which is expected to be released in early April. After that, it will be all systems go.

With it, the firm will be able to complete its feasibility study for the production of lithium and tantalum, and award the engineering, procurement and construction (EPC) contract for mine infrastructure. It can then also finalise offtake agreements with potential partners that it is already in discussion with.

" Once we come out with the proper reserve (estimate), the project will run," said its CEO Tjandra Pramoko in an interview with The Business Times.

Alliance Mineral first turned to lithium in April last year, after prices for tantalum - a rare metal used in electronic devices which it began producing in December 2015 - fell some 50 per cent from two years ago. Instead of continuing to mine tantalum at a loss, the company decided to pause and look at other options.

At that point in time, the only two minerals in Australia that were doing well were gold and lithium. While the group had previously found lithium in its exploration work for tantalum, it did not produce lithium as the prices were low. With lithium prices having more than doubled from the end of December, it now made sense.

" (It was) only in the last few years that people started to notice that Australia is the world' s largest pegmatite producer," said Mr Pramoko. " So now we' re going back in time, pulling out all the drill results and re-checking everything."

After a few months, the group entered into a joint venture agreement with a company called Lithco 2, which was acquired by Australia-listed Tawana Resources in December last year. Tawana has since been drilling at Alliance Mineral' s Bald Hill project to test for lithium resources.

" The drilling has been incredible - the numbers are very good," said Mr Pramoko. Initial test results have shown that at a crush size of 6.3mm, 93.7 per cent of the spodumene - from which lithium is extracted - has a relatively high grade concentration of 5.08 per cent of lithium oxide before cleaning.

With further refinement through a process known as beneficiation, this can be further improved up to 6.73 per cent. Mr Pramoko said that the industry standard for concentrate is 5.5-6 per cent.

Lithium is produced from two main sources: brine and hard rock. In the first, lithium-rich brine concentrate is extracted from beneath salt lakes found mainly in South America in a capital-intensive process that is slow to respond to market conditions but generally lower cost.

In the second, which is dominated by Australia, spodumene is mined and processed to extract lithium in a process that can be started faster than brine but is more costly to operate.

While there are some 60 companies on the Australian Securities Exchange with lithium projects or lithium exploration plans, according to an Australian Finance Review article, Alliance Mineral bills itself as the only lithium company on the Singapore Exchange. With the lithium discovery last year, its share price has tripled from a low of 5.7 Singapore cents in June last year.

By producing both lithium and tantalum, the firm hopes to cushion itself from volatile prices. It also allows the group to capture more revenue. " You' re mining on the same rock, so the cost of mining is actually only one cost but you get two products," said Mr Pramoko. But to be able to also produce lithium, the group has to build a density media separation (DMS) circuit, which separates the minerals through a spinning process akin to that in a washing machine. Money for the DMS system will come from Tawana' s committed expenditure under the earn-in agreement.

Under the agreement, Tawana is required to spend a minimum of A$7.5 million (S$8 million) on exploration, evaluation and feasibility by the end of this year. Upon completion of this, it is entitled to half of all rights to lithium minerals in the project.

Tawana also has to spend A$12.5 million in capital spending for upgrading and converting the plant to process ore from the project by the end of 2019. With this, it will be entitled to a 50 per cent interest in the project, including all minerals from the tenements, the processing plant and other infrastructure.

Given that Tawana is the one forking out the funds required for Alliance Mineral to progress, the latter is " sitting in a very good position because we still have cash in the bank with a very small burn rate" , said Mr Pramoko.

The group, which posted a loss of of A$2.26 million for the six months ended December 31, has A$3.34 million in cash as at the same date.

If all goes according to plan, Alliance Mineral will commission the DMS system in October, and start lithium production by the end of this year.

Alliance Mineral will sell rough lithium concentrate to China, but process the fine concentrate with its existing plant previously used for only tantalum. The company is still in discussion with possible lithium offtake companies ranging from battery producers and converters to end users. " We are choosing now which one we want to go with," said Mr Pramoko.

With a tenement portfolio of 59,000 hectares - an area slightly smaller than Singapore - the company believes it is only at the start of its journey. " Right now we' re only touching less than one per cent of our tenement," said Mr Pramoko' s wife Simone Suen, who is also executive director of the company. " There' s still a lot to go."

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7 years 3 months ago #23712 by Kapitan
Replied by Kapitan on topic Penny stocks on the move
Avi-Tech Electronics is trading at 42 cents. I like its steady growth and it enables me to sleep well at night. Dividend is attractive at around 6% still and the icing on the cake is M&A, hopefully a solid one.

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7 years 3 months ago #23757 by Joes
Replied by Joes on topic Penny stocks on the move
AEM HOLDINGS 2016 annual report :

"with clear visibility of growth into the next few years,
we intend to adopt a dividend policy to pay annual dividends,
including interim dividends, of not less than 25% of profit after
tax excluding non-recurring, one-off and exceptional items.

We at AEM are excited with our prospects in the coming
and I would like to thank our shareholders and
customers for their patience and confidence in AEM.

Non-Executive Chairman

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7 years 2 weeks ago #23877 by Joes
Replied by Joes on topic Penny stocks on the move
AEM : $2.70 was purchase price of institutional investors who bought from Novo Tellus.

Now $2.07. What a bargain.

Assuming $17 m net profit for this year, AEM trades at about 8x PE only.

On 2018 earnings,,.... PE goes down to ...? 6X ? 5X?
What a bargain.

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7 years 1 week ago #23880 by Joes
Replied by Joes on topic Penny stocks on the move
AEM HOLDINGS: Fair value S$3.35 (10x FY18F PE)

Now only $2.20 (after correction).


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