ATC- Altech HPA

[Joshuatree]

Scroll down to chart, a few years orphaned and going nowhere maybe, until production.
url

I fluked a top and sold around 23.5c last dec. I posted this orphan chart showing a co relation with stages of development. Accurate enough for me. havnt bought back in atp.

[BlackPeter]

You have a count, i excluded the mining and loading parts as wells the water adding tanks and added only one of the acid tanks, got 33 processes. Only one has to underperform to affect the whole quality and through put.

Still less complicated than the processes currently used to produce the 4N-HPA the industry requires. But absolutely - there is risk as in any other activity, even staying in bed .

That's what the markets are all about. If the markets overrate the risks you can buy bargains ... and we only know with the benefit of hindsight whether the risks have been under- or overrated;

BTW - congratulations to selling into end of last years funding announcement peak. I wouldn't call this investing, but it certainly was great timing!

[Joshuatree]

I did fluke it near /at a top no skill there. Am keeping a watch on this, good luck in the meantime.

[BlackPeter]

Came yesterday evening across a webinar which Iggy gave for the German market (Saturday 10 am in Germany, 9 pm in NZ) - and linked myself in.

https://www.wallstreet-online.de/nac...gen-investoren

I guess the company presentation was quite standard (though a bit more in depth than what I've seen so far in the publications) - though probably just due to his comments and explanations including a quite detailed walk through the process steps.

Quite interesting - but honestly - I have heard from him nothing outrageously complicated when he went through the process. Mainly cleaning of input material (first filtering), than putting the aluminium into solution, removal of the residuals and afterwards regeneration of the solvent. Didn't sounded like rocketscience to me ...

Admittedly - my background is electrical (and not chemical) engineering, but I have seen factories operating with similar materials and temperatures. No red light started flashing in my head when I listened to his explanations ;

Other points of interest:

There was some question re the recently published patent (actually asked by myself ...) and he explained that there are still a number of other patents pending, most of them "ordinary" patents (i.e. not innovation). He said as well that there are some patents pending abroad (e.g. Malaysia), but that the national patent would be already protection for ATC's IP. 

There have been (not surprisingly) questions related to future capital rises. He said that the final capital need is not yet clear (depending on the final finance package), but yes, there will be further capital rises. He indicated that in projects like that typically 30 to 40% of the total are financed with equity. Do your sums ...

Responding to another question he stated that all money spent now for site preparation are part of the $280m funding budget (i.e. not additional cost).

Timeschedule:
They are currently finalising the application for a building permit (should be done in the next 3 weeks or so) and he said that "hopefully in November there will be much more activity on the site" (whatever this means).

His indication for first production: early 2021;

Commenting on the share price he said that the ATC share price is sort of linked to the Lithium shares, which lost as well roughly 40% over this year. Nothing the company can do about that - the market giveth and taketh (my words ...).

Overall - good presentation. If you have an opportunity to join one of his investor seminars - I do recommend to take it. Ah yes ... and he will be November 9th in Munich - nice city, great beer and I am sure another interesting presentation - though probably appalling weather - but hey, you can't have everything ...!

[silu]

Thanks for sharing.

[Carpenterjoe]

Nobody said that they started to build. They are clearing the site and did some ground tests they need to determine the fundament and to get the building consent.



Not sure I understand your position. If you are so scared I assume you are not holding. But if you are not holding, than why are you scared? Confused.

Looking at the details - they had recently a CR to fund the site clearance and preparation ... and that's what they are currently doing. What other works have they charged to investors?

Sorry about the delay BP.

Busy building houses.

Small holding, very interested, but until they secure their finance I have no interest in giving more funds to a business awaiting "financial close". Far to many risks.

I Believe the first CR included substantial Foundation works inc piling, Tanks, Maintenance workshop, a lot more than Site Clarence and prep. In NSW consent is needed to undertake these works. And usually foundation works are never fixed price.

I must have mis understood the golden shovels and the website when it announced "works begin". more like "works await consent"

Can someone clarify the fixed price for this project and how the 30-40% shareholder fits the funding process. USD currency effects. Currently completely confused how much shareholder funding is needed? and why it is needed.

I do not understand how Altech can have any legal/financial recourse if this plant does not work to optimal levels, so the "turn key" sales pitch really annoys me. monies get paid during the process, not on turning a key.

Sorry to be the glass half full man.

[BlackPeter]

Sorry about the delay BP.

Busy building houses.

Small holding, very interested, but until they secure their finance I have no interest in giving more funds to a business awaiting "financial close". Far to many risks.

I Believe the first CR included substantial Foundation works inc piling, Tanks, Maintenance workshop, a lot more than Site Clarence and prep. In NSW consent is needed to undertake these works. And usually foundation works are never fixed price.

I must have mis understood the golden shovels and the website when it announced "works begin". more like "works await consent"

Can someone clarify the fixed price for this project and how the 30-40% shareholder fits the funding process. USD currency effects. Currently completely confused how much shareholder funding is needed? and why it is needed.

I do not understand how Altech can have any legal/financial recourse if this plant does not work to optimal levels, so the "turn key" sales pitch really annoys me. monies get paid during the process, not on turning a key.

Sorry to be the glass half full man.

No need to appologize for having second thoughts - and clearly, this is - until the factory is up, running and proven - a high risk investment.

I hold a medium sized package which is in my books less than 5% of my portfolio.

So - why am I reasonable optimistic?

The German contractor (SMS) does have previous experience with the process, and they guaranteed in the contract with ATC as well the production parameters ... I suppose this is the reason the business case is that conservative (to make it not too hard on SMS to comply).

SMS is a cornerstone shareholder in ATC (https://thewest.com.au/business/publ...-ng-b88655925z) and indicated they are prepared to put more money into it. Would you do that as contractor if you don't believe in the outcome?

I guess the discussions about when building preparations stop and when building begins is more a semantic one. I assume however that you have with your background a better grasp of the lingo - if I expressed myself not to Australian builder standards, than I ask for forgiveness. We do know that they cleared the section, did the tests and I thought hearing Iggy saying that piling started. Pretty sure that they work within their consent ... the rules in Malaysia might be different than in Australia.

Iggy said that any work undertaken now is part of the budgeted sum. He made however some allowance for changes to price of building materials (he mentioned steel price) - and yes, I guess if the USD goes up (pretty sure the contract is in USD), than it will be dearer. On the other hand - pretty sure that HPA is charged in USD as well. So I guess we do have some sort of hedge here ...

Not sure about the usefulness of guarantees if the parties see themselves in court and SMS would play hardball ... however - do you really believe a German industry giant like SMS would risk their brand (and the invested capital) without doing anything they can to make this happen? I do trust in German engineering and I think they are motivated enough;

Iggy was himself not yet sure about the funding ... i.e. all we could do is making uneducated guesses. I didn't keep a tally so far of the CR's (and am too lazy to do the numbers now), but if we take the marketcap as a representation of shareholders input and assume the project and maintenance is (roughly) USD 300m, the market cap at current is roughly $68m AUD - say $50m USD, than it would be fair to assume that they need to raise the same order of magnitude of money they did raise so far until the project is complete.

And yes - sh*t happens.

I take it if the HPA price stays where it is (or goes higher), than there shouldn't be any issues, but if the industry finds out they don't need HPA anymore (or it is cheap like chips due to oversupply), than the deal might look less attractive.

Not too worried about building consents and SMS not being able to deliver to spec.

[Carpenterjoe]

No need to appologize for having second thoughts - and clearly, this is - until the factory is up, running and proven - a high risk investment.

I hold a medium sized package which is in my books less than 5% of my portfolio.

So - why am I reasonable optimistic?

The German contractor (SMS) does have previous experience with the process, and they guaranteed in the contract with ATC as well the production parameters ... I suppose this is the reason the business case is that conservative (to make it not too hard on SMS to comply).

SMS is a cornerstone shareholder in ATC (https://thewest.com.au/business/publ...-ng-b88655925z) and indicated they are prepared to put more money into it. Would you do that as contractor if you don't believe in the outcome?

I guess the discussions about when building preparations stop and when building begins is more a semantic one. I assume however that you have with your background a better grasp of the lingo - if I expressed myself not to Australian builder standards, than I ask for forgiveness. We do know that they cleared the section, did the tests and I thought hearing Iggy saying that piling started. Pretty sure that they work within their consent ... the rules in Malaysia might be different than in Australia.

Iggy said that any work undertaken now is part of the budgeted sum. He made however some allowance for changes to price of building materials (he mentioned steel price) - and yes, I guess if the USD goes up (pretty sure the contract is in USD), than it will be dearer. On the other hand - pretty sure that HPA is charged in USD as well. So I guess we do have some sort of hedge here ...

Not sure about the usefulness of guarantees if the parties see themselves in court and SMS would play hardball ... however - do you really believe a German industry giant like SMS would risk their brand (and the invested capital) without doing anything they can to make this happen? I do trust in German engineering and I think they are motivated enough;

Iggy was himself not yet sure about the funding ... i.e. all we could do is making uneducated guesses. I didn't keep a tally so far of the CR's (and am too lazy to do the numbers now), but if we take the marketcap as a representation of shareholders input and assume the project and maintenance is (roughly) USD 300m, the market cap at current is roughly $68m AUD - say $50m USD, than it would be fair to assume that they need to raise the same order of magnitude of money they did raise so far until the project is complete.

And yes - sh*t happens.

I take it if the HPA price stays where it is (or goes higher), than there shouldn't be any issues, but if the industry finds out they don't need HPA anymore (or it is cheap like chips due to oversupply), than the deal might look less attractive.

Not too worried about building consents and SMS not being able to deliver to spec.

Thanks BP, I appreciate a detailed response . Give me a little time to think about your points.

I need to spend time projecting

MC
All the future capital raising
Project value
possible debt structure
and apply it to currency rates.

At the moment my gut tells me, current capital raising are funding the companies going concern. This makes me very nervous.

[Carpenterjoe]

No need to appologize for having second thoughts - and clearly, this is - until the factory is up, running and proven - a high risk investment.

I hold a medium sized package which is in my books less than 5% of my portfolio.

So - why am I reasonable optimistic?

The German contractor (SMS) does have previous experience with the process, and they guaranteed in the contract with ATC as well the production parameters ... I suppose this is the reason the business case is that conservative (to make it not too hard on SMS to comply).

SMS is a cornerstone shareholder in ATC (https://thewest.com.au/business/publ...-ng-b88655925z) and indicated they are prepared to put more money into it. Would you do that as contractor if you don't believe in the outcome?

I guess the discussions about when building preparations stop and when building begins is more a semantic one. I assume however that you have with your background a better grasp of the lingo - if I expressed myself not to Australian builder standards, than I ask for forgiveness. We do know that they cleared the section, did the tests and I thought hearing Iggy saying that piling started. Pretty sure that they work within their consent ... the rules in Malaysia might be different than in Australia.

Iggy said that any work undertaken now is part of the budgeted sum. He made however some allowance for changes to price of building materials (he mentioned steel price) - and yes, I guess if the USD goes up (pretty sure the contract is in USD), than it will be dearer. On the other hand - pretty sure that HPA is charged in USD as well. So I guess we do have some sort of hedge here ...

Not sure about the usefulness of guarantees if the parties see themselves in court and SMS would play hardball ... however - do you really believe a German industry giant like SMS would risk their brand (and the invested capital) without doing anything they can to make this happen? I do trust in German engineering and I think they are motivated enough;

Iggy was himself not yet sure about the funding ... i.e. all we could do is making uneducated guesses. I didn't keep a tally so far of the CR's (and am too lazy to do the numbers now), but if we take the marketcap as a representation of shareholders input and assume the project and maintenance is (roughly) USD 300m, the market cap at current is roughly $68m AUD - say $50m USD, than it would be fair to assume that they need to raise the same order of magnitude of money they did raise so far until the project is complete.

And yes - sh*t happens.

I take it if the HPA price stays where it is (or goes higher), than there shouldn't be any issues, but if the industry finds out they don't need HPA anymore (or it is cheap like chips due to oversupply), than the deal might look less attractive.

Not too worried about building consents and SMS not being able to deliver to spec.

Soooooo still trying to figure this one out, so appreciate any clarification,

SMS group only becomes a cornerstone shareholder once finance is approved. Once finance is approved SMS takes a 15 million dollar holding at a much diluted price (maybe 2cents). This is done after Altech have spent shareholder funds to progress the site and paid SMS from shareholder funds? wtf? Very smart from SMS. (So silly Iggy).

I feel SMS group have factored this into their construction costs and is likely to get a free holding from the situation. So SMS have best intentions, but at the end of the day they have zero risk)

Thinking construction will not start this year.

I think the latest market release should read, once our development order is approved then stage one can commence. Again read between the lines to time your investment.

Thinking share price will continue to get slammed while the company continues the blurry worded jargon.

Sorry out of time to share more thoughts.

[BlackPeter]

Soooooo still trying to figure this one out, so appreciate any clarification,

SMS group only becomes a cornerstone shareholder once finance is approved. Once finance is approved SMS takes a 15 million dollar holding at a much diluted price (maybe 2cents). This is done after Altech have spent shareholder funds to progress the site and paid SMS from shareholder funds? wtf? Very smart from SMS. (So silly Iggy).

I feel SMS group have factored this into their construction costs and is likely to get a free holding from the situation. So SMS have best intentions, but at the end of the day they have zero risk)

Thinking construction will not start this year.

I think the latest market release should read, once our development order is approved then stage one can commence. Again read between the lines to time your investment.

Thinking share price will continue to get slammed while the company continues the blurry worded jargon.

Sorry out of time to share more thoughts.

Nice story. Only issue is - SMS group is currently already the largest shareholder! They do hold nearly 39 million shares (close to 7%).

https://www.altechchemicals.com/top-20-shareholders

No matter what games will be played with the shareprice - they certainly want the project to succeed. And yes - they committed to put another $15 million or so in the pot when finance is approved.

As well - I don't think that any committed stakeholder will be interested to see the SP drop close to or below NTA - which is around 6 cents per share. This would be a takeover target too juicy for any of the competitors chasing ATC to ignore. Just imagine - if your 2 cent would be anywhere close to reality than they could buy the company, the process (including IP), the resources, all consents and a well planned and consented factory at 1/3rd of bookvalue. Yeah - right.