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A genuine question, so I'll try & give a genuine answer! KAV have some projects which are potentially of huge commercial value. They have been investigating these for three years, but have not yet drilled economic mineralisation. There are three types of investors in mining stocks. 1. Institutional Investors, who will not (or are not allowed to) invest in companies that do not yet have a defined resource. They do not hold KAV stock 2. Average private investors who are looking for a quick high return, the mythical ten-bagger, whose investment decisions are driven largely by 'tips'. They have tried investing in KAV, but have lost patience when they do not see instant returns - see for example the behaviour after the drill narrowly missed the B1 target earlier this year. 3. Serious / semi-professional private investors who specialise in resources companies. They understand that ten-baggers normally take a few years, carefully research companies, looking for those with potential world-class projects, stable jurisdictions & good management, then simply hold for 2-5 years.
KAV is unusual among exploration microcaps in that it releases very detailed (and often very technical) information. This will encourage Group 3 and discourage Group 2 investors. The company appears to have an unusually high proportion of shares in very sticky hands, be they directors, insiders, associated companies or group 3 investors.
The problem is that these sticky-handed folk already hold a lot of shares, and are not in line to buy many more since that is likely to over-risk their portfolios. At the same time, we are in one of the worst risk-off investment environments for many years. On the other hand, this is an opportunity, in that if/when a potentially economic or hopefully transformational discovery is made, there will be a mad scramble for the very small number of shares freely available.
I would be interested to hear other folks' opinions on this issue.
This is a genuine question. Why isn’t there more interest in KAV?
I recently bought back in and after seeing some pretty (what I thought were) positive RNSs the price is still stagnant. I’m not necessarily guided by money, I like learning in tandem with my investments.
I have been doing my own research, mostly based on some very detailed analysis from members on this board, which feel very informed, credible and not at all rampy, or otherwise.
Just curious about what I’m missing?
I’m going to stay invested, I have a low entry, like Ben’s approach to public relations and communication and think maybe it’s just market sentiment hindering prospective investments?
Yes JP but the strike price for the initial 60mil to POW is 3p. With the warrants being much higher. So the initial sum cost of 60mill at 3p is okay at only £1.8 million.
Especially as the other warrants will generate kav cash and POW will only reasonably exercise if they'll be in the money. Therefore I'm happy with the deal. Worse case we got it at reasonable level given the independent value assigned to it, and given the current share price is much lower than the deal. Also the 3p shares are tied in for 12 months. Even if POW sold the 60million in 12 months to buy the warrants it'll still cost then more on net as the strike price is much higher.
Obviously if they did sell it would cause an overhang but like I say for the full dilution to be applicable the KAV price will be much higher than today anyway for us shareholders
POW not got a pot to **** in so if the warrants get converted while that's good for Ben collecting cash, the PIs/share price gets shafted because the new shares get immediately sold or worse dripped into the market over 6 months.
If POW were basically getting back their investment then the deal is fine but has their investment created any real value, not really.
Publishing the valuation was the right thing to do. It gives those who may have been ever so slightly sceptical about the Kanye deal something to chew on. Much better than BT or PJ trying to defend their positions. Kopore have planned some work, this quarter, on the licence area between KAV's 2 blocks so will be interesting to see the results. Now, any chance of seeing some more compelling data for the KSZ?
Yes this isn't the KSZ report it's announcing the extra two targets in addition to the known high priority B1. KSZ report will be more detailed and as per interview is awaiting a nickel specialist report to be incorporated. Regarding a JV I'm certaintly not expecting a major JV at this stage, based on interviews to date. While BT is clearly in discussions with parties I think these are a work in progress and tbh in terms of negotiating the best outcomes for KAV and shareholders I personally hope no JV occurs just yet. Run some more TDEM and hopefully a drill into the centre of the more defined B1 conductor first at least would be my preference.
I hope no JV happens soon as I'd expect we don't yet have enough selling points to act as leverage for a really good deal. A deal with poor or just OK terms would strangle investor enthusiasm IMO especially in this market. We need more exploration and mineralisation hits for real 'proof of concept' first.
The obvious question which the KSZ report should start to answer is how many priority and high priority targets have been identified (its very early days and they are running extensive surveys). Drill B1, bank a proper discovery and then announce a dozen high priorities and KAV will get it's mojo back.
"we are now also actively exploring how we can roll out a much-more expansive reconnaissance campaign across our 8,800km2 property." Sounds like a partner of somekind IS in the offing. Deal with a major? Keith, AA riding in shortly? :-)
Happy to see that B1 is modelled as being 500m x 200m. I recall that when the company did DHEM at the time they said it was “smaller” than previously modelled but they never said how much smaller. I had a nagging concern that if it was too small that would affect economics given the location etc. However, it seems they meant a bit smaller but still very large. So that’s good
My theory on KSZ report is they’ve had external experts contributing, KAV wants a particular outcome but they’ve only drilled 4 holes and perhaps the assay results and core analysis only support a limited conclusion i.e sitting on the fence. That said I’d refer anyone to drill Tad 2 and BT’s post market close announcement and presentations, although the conundrum is why given the former BT sat on the assay results for at least 6 months.
You called it Keith :-) I love Ben's intro line "These are some of the most outstanding exploration results Kavango has delivered". I know he's prone to hyperbole, but I'm feeling more and more confident as time progresses.