Obviously this years price action is bound to make investors unhappy, frustrated etc. It does appear that the price may have bottomed and it is currently a very illiquid sell side back to the raise price of 3c.
Whilst I think this is seriously undervalued, I'm not expecting a massive rerate out of nowhere. Management just need to execute the very clear plan from the recent presentation.
-First shipment (due very soon)
-Cashflow (very soon after)
-Drilling other targets to increase mine life (very soon after cashflow)
-Mining said targets
The other things to keep an eye on
-Zinc price (looks to be heading up), at current prices 12 month cashflow is basically our current market cap. Low costs here will result in this still being profitable at even lower prices, many other mines and operations will be forced to close before this. The zinc price can't be sustained at lower prices based on current demand and stockpiles are continuing to drop.
-Acquisitions, based on the presentation/anns, once we are cash flow positive and proving up other targets I would start to expect something related to this as they have been mentioning it for a while.
The progress they have made here to date (even if the price doesn't agree currently) will put SL1 in a very commanding position over coming months. Proving we can get stuff out of the ground and make money will put us in a very strong position to negotiate JV's or even acquire other assets with minimal dilution.
From memory not many mining licences have been awarded of late in Nigeria and this management teams ability to have gotten this done plus the relationships and reputations formed are the key here IMO, but it isn't exactly reasonable to attribute a price to this yet until they can execute more of the plan.
They have a goal to become a mid tier mining company, the market cap at the moment is $12m. There is no point putting much effort into promoting the company at this stage, there is no point promoting this to insto's to get them interested, just yet. The only thing they need to do is follow the plan they have set.
Management hold 40% of the company, there is every financial incentive for them to make this happen, they are making progress, as frustrating as the wait is it will take time for value to be realised as the way they have gone about it is unconventional compared to other exploration companies. This unconventional process could prove to be very advantageous with lower exploration/operational risk, and near term cashflows with the potential to expand on these rapidly.
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