Fabled Silver Gold Corp T.FCO

RE:RE:RE:RE: Trentosmentos

[Trentosmentos]

• Ugandan projects: only rocks chip samples to date and a 20 year old refinery -> unproven value IMO

JRV's Uganda is a very underdeveloped asset but has shown strong indications of being a replica to the next door proven Kilemba mine which had produced for 20 years. The granting of Kilemba to JRV is very likely and they will probably focus on its reopening instead when the gov't grants the license to JRV. 

• Tanzanian projects: application license for Kabanga -> good asset but until granted, unproven value IMO plus the previous owners are Glencore and Barrick… do you believe they will just give up without a fight and what about other contenders who could be majors with strong balances? Plus with the recent change in Tanzanian mining laws, the sovereign risk has increased IMO
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I can't comment much on Kabanga, but JRV's management intimately knows Kabanga and this, along with M2 Cobalt assets and management, will provide them with strong leverage. It is also easier for the Tanzanian gov't to work with a smaller company with less layers. There should be good reason why they suspended Glencore's licenses. As for sovereign risk, management is not foreign to working with this type of risk. 

• The African projects have no apparent synergies to Idaho and to say that JRV doesn’t need ECS is disingenuous, especially when A$5m of the recent JRV raise is contingent on the ECS merger.

They're raising to show ECS and the Ugandan+Tanzanian gov't that raising for them is NOT an issue. This raise goes to show that JRV can easily find the funds for Idaho in a severely dry capital market, a precursor to the success of Idaho mine while cobalt prices are depressed. Neither FCC nor ECS can raise funds.

• IMO the African assets are likely to increase future dilution via their exploration expense/capex if they are pursued to their full potential

This doesn't really matter does it? The share price will be supported by progress/derisking. The market is forward looking. JRV did not form their board to have small ambitions; these guys are looking to become a global player. If they get either Kilemba or Kabanga, I see the share price doubling immediately.

• Cash balance: ~US$18m post raise – a short term tick from me but clearly to cover the Idaho capex of $124m, more dilution will be required

Not an issue. Debt financing will likely be done mostly by offtake partners when Idaho is ready. As for now there are still a few pre-construction things that need to be ticked off, along with the DFS, which all require capital. In short, dilution is inevitable, but I believe JRV will be prudent in this regard. 

Also, if JRV’s African assets are as tier 1 as you suggest, wouldn’t there just be 3 sets of potential capex burden (Idaho, Uganda and Tanzania) and hence massive further dilution down the track? Most juniors struggle to get one project going, you are confident that JRV can potentially manage up to 3 successfully?   

Again, JRV's management was not formed with small ambitions. These guys are hard hitters with extreme reach that will underpin the success of these world class assets.