The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
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"...........then the buys were definitely from insiders. "
I very much doubt it. If the Chairman is putting in his own money ($150,000) many investors take this as a good time to buy (i.e. the Chairman is the "insider"). FYI - I bought 500k yesterday on that logic.
Agreed Driving.
We are getting closer and closer, and if today's buys were not directors taking up the new shares (which I don't think would be reported here), then the buys were definitely from insiders.
KP2 has always leaked like the proverbial sieve, and I don't think that stopped when Brad was disposed of.
If I might get to add @ same price as insiders..now that would be nice for a change!
Gla.
Not long now..
They have 5 weeks to deliver the signed EPC, then 6 weeks max for the finance. Let's see how the Mkt reacts then.
IMHO - There are lots of good things that make this project unique
The quality of the Potash
The distance from the coast
The pedigree of the partner
The full funding
The cost guarantee
etc. etc.
Keeping to forecast dates is not (unfortunately) something you could see as a positive (like most AIM) stocks.
It's positive then, that 6 weeks have elapsed since the last "extension", without any more delays announced!
RNS January 18th - Expected EPC signing by the end of February
RNS February 9th (3 weeks later) Expected EPC signing by the end of April.
That too, sure, given that they expected the EPC signing by end January and now it's expected at April end.
IMHO - It just means that when they raised $2.5 million at 0.38p in October 2023, they should have raised $3 million, so they have gone back to the same investors for more (at the same 0.38p).
IMO, this is very positive; the Broker marked the SP down as a precaution, it will recover by next week. We knew that the Co has to raise more funds as a condition of the deal with the Chinese, anyway, so this is not a surprise. Also, the big holders are investing more cash in preparation for the EPC signing, this has to be a plus. Some key points from the RNS:
1. "The net proceeds from the CLNs will be used to further advance work that is expected to lead to the signing of an EPC contract for the Kola Potash Project, as announced by the Company on 9 February 2024, and provide working capital for Kore Potash."
2."There are no broking fees incurred in respect of this Fundraise."
3."Company will issue 109,865,053 new Ordinary Shares"; on 4.12 bln, this is a 2% dilution!
4. "it is the intention of David Hathorn, Chairman, to subscribe for new ordinary shares of the Company for a consideration of US$ 150,000 as soon as practicable following the notification of the Results on the same terms as the Fundraise"
5."Harlequin Investments Ltd ("Harlequin") is a substantial shareholder of the Company, holding 12.33% of the Company's issued share capital prior to the Fundraise, and has agreed to subscribe for CLNS to the value of US$ 200,000,"
FWIW - Given the timing, it looks like the funding was needed to satisfy the "going concern" aspects of the accounts.
I suppose it could be seen as positive. If insiders are willing to invest, albeit at 0.38, to keep the lights on, it does at least mean that they still have some expectation of an EPC and mine funding.
This explains the gradual drop to 0.50p; More news, hopefully on the 28th March. At least we know that the Shareholders are willing to put their money in.
Align assumed at 12% interest rate on the loads (in the May 2021 valuation). However, the NPV is not sensitive to this assumption.
LIBOR was 2 % 6 years ago. Now it's 5 1/2%. This may have a bearing on funding cost and thus the present value of the project.
Good one, 99.
Exactly, if it happens, it's de-risked so all target prices are conservative. Plus, Mkt cap was 100mln6 years ago, just on the potential of the Kola concession.
IMHO - these valuations mean little unless you agree with how they adjust for risk.
In July 2022 SP Angel came up with a "Risked Valuation" of 5p because they assumed that Kore might need to double their shares to get the funding.
In May 2021 Align had an 11p "Risked Valuation" because they assumed funding was provided without significant dilution.
Then we have the "Risked Valuation" basically you value the project then you say (for example) this has a 50% chance of occurring, so our Risked Valuation is 50% of the Projects Unrisked Valuation. In the case of the Align valuation it means it becomes 22p if it happens (and 10p for SP Angel if it happens after the issue of many more shares).
Lastly we have the NPV discount rate which is another way of adjusting for risk. Kore used NPV(12) in May 2021. NPV(10) would be 40% higher (15.5p Risked / 31p Unrisked).
Contrast the following. Emmerson (EML) use NPV(8) in their Potash project in Morocco. Horizonte (HZM) also used NPV(8) for their Nickel project in Brazil.
So even NPV(10) is conservative when you consider that Kore will have the parent guarantees in place c.f. HZM where costs have been revised dramatically up on two occasions.
The below extract is from a June 2020 Research Note on KORE, by ALIGN; obviously things are different now but the extract I copy assumed that DX would be financed first, making then things easier for KOLA (you can find it on KORE's website, under Research Notes).
"It has to be pointed out that once the finance has been successfully raised for getting DX into production, then our valuation for the company is likely to change substantially. With DX going into production we would substantially reduce our risking of the project from 65% to just 10%. DX is seen to unlock the whole district play and make the financing of Kola then possible, allowing us to consequently reduce our risking of this project from 85% to 55% which more befits a project at the DFS stage which is development ready. Using the attributable NPV(12) figures employed earlier, the valuation for the company on this basis would be US$500.33 million. We estimate that at that stage there is likely to be 4,686,361,624 shares in issue on a fully diluted basis post raising the equity portion of the funding for the pre-production capital expenditure at DX and which would equate to 8.41p per share."
So, 4 years ago they almost got the Shares' number correct; for me, more important is the valuation at USD500mln or GBP400mln (appx) WHEN KOLA is up and running; even at a 50% risk discounting, that would still give a £200 mln valuation (roughly equal to all the money spent so far on developing Kola). Maybe this is wishful thinking, but I think everyone understands the potential, IF things proceed smoothly.
All IMO, we will know in a few more weeks if optimism is justified.
LT.... If your right x10 soon...
Tnx for the correction, even better! at £0.11 it means the mkt cap was almost £100mln i.e. 5x today's. Book value is even higher, about 8-9x. April-May will be interesting months, if things fall into place.
Kore listed at A$ 0.20 per share (= £ 0.11 at the time).
6 Years exactly !
Plus, since 2018, another $20mln (appx) has been added onto capitalised exploration expenses - so, further Value added.
Just to liven the BB up, back in March 2018, when the Co was floated (5 years exactly!), the SP was 10p and no of shares 860mln appx; therefore the Mkt Cap was 86 million. The EPC was supposedly 1 year away (or so). Today, 5 years later, with EPC almost done, + extra Optimisation Study done, +further engineering design works by POWERCHINA, why is the Mkt cap just 20mln?
The EPC is 6 weeks away, should we expect an SP uplift when announced? And if yes, to how much? Would going back to 86mln be unreasonable to expect i.e. 4-5x uplift?
All comments welcome! GLA