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Good start with a 51/49 JV. He understands control
Trouble is the Chinese like to control resources not just buy them so many small cheap resources become a takeover target and it takes a very good and non-corrupt BoD to get the right deal....
Just watch the Chinese Lithium prices, that will tell anyone how keen the recent investors here are! It's just a matter of time to get that online and reap the rewards and that's just one arm of Kazera. It's a far better investment case here these days.
An update on the diamond pan plant element would go down nicely in the short term i feel, they should have a good idea of how that's running by now!
GLA
Reading the last few RNS updates would suggest an mcap of just £8M undervalues the company. Future prospects look very good even in testing market conditions...
A good question: is Align's involvement 'putting people off'?
Possibly, but there are other factors.
The shares are rather illiquid because of the large shareholdings by long term investors like Align, and others with smaller stakes like myself. This is not an obvious a trader's share.
There have also been serious issues in the past about Kazera over-promising and under-delivering.
But perhaps more important, the sector and markets are plagued with uncertainty about the world in general.
As for Align, their 'about us' website page states their ethical approach. They have an experienced team, and of course promote their own interests like the rest of us. I think that Align's interests are presently aligned with mine, but that is my opinion.
The spat with IRON was in line with their ethical approach, but maybe perceived as 'not cricket' by others less in tune with historical trends.
As for Kazera, Align have been and still are hugely supportive of Kazera, and with good reason. It is my view that the company should be worth many times more than it is now, certainly more than Align's target of 5.3p.
The AIM market is being flooded with money into the most speculative ventures in the search for scarce minerals. Who would have thought that another AIM company, whose major claim to fame is a lithium discovery in Mali (Mali, for goodness sake) is worth 5X more than Kazara.
By contrast Kazera has built a superb portfolio of mining interests in solid jurisdictions. Not just lithium and tantalum, but diamonds, heavy sands and REE. It has off-take agreements and is already shipping product.
Kazera has a new and bold management team in place. It is productive and becoming a profitable company with great assets and sound expansion plans. A company like this is not going to stand still.
This of course is my own opinion, I am an investor in Kazera, so obviouly I am optimistic about its future. But don't take my word for it!
From my understanding and again this is just my view, align not have greatest reputation among many smaller investors, many of his investments not great success rate, mayb his got it right on this stock, all will be revealed in next 10 months.
Cheers TheBasher, I think I get the idea now. I suppose the one thing that should at least console the market is that the current CEO seems to have somewhat more integrity and drive to progress things. Oh well, time will tell, fingers crossed.
The thing is with shares like this, the screw ups and non-events have gone on so long the market starts to look to the old 'proof of the pudding' theory ie until they do something concrete and very good they will not be taken seriously. To my mind something like the serious sale of Ta might do it, but even the finance didnt do much because it is just more cash to burn as far as the market are concerned. And one thing I have learned from AIM junior miners is no matter how much people bang on about resources or NAV, until you ship or get an offtake agreement nobody much listens.
@infinite
KZG had the same BOD as IRONVELD until very recently.
Check out all the chat on IRONVELD and the Align Research posts about IRONVELD on their blog site.
http://www.alignresearch.co.uk/blog/
It’s been a s**t show..
Hey steven49, seeing the (lack of) market reaction to the really great developments at KZG recently, especially an utter lack of market response on confirmation of the second tranche of $400k I am intrigued by your question about Align's involvement putting investors off. As I can't fathom why now, with new management and much better prospects, things aren't picking up in terms of SP or volume.
Can you (or anyone here) explain for relative newcomers to KZG like me why you would ask this question about Align putting people off? Thanks in advance.
Great work Agricore. Wish every contribution on LSE had this quality.. Hope you get repaid in share value. I’m confident that you will.
Thanks Agricore, great post.
I'll be studying in more detail later.
Sub 1p looks a bargain.
Great analysis, Agricore - the best of LSE right there
With the recent news in mind and the current market valuation with SP still below 1p I will take that as continuing opportunity to add few more when funds available,...with anticipation for further positive updates regarding licenses production and shipments it's a no brainer for where the price is moving towards the end of this year and beyond.
:)
GLA.
NB: Apologies I didn't include the $7.5m (payment for 49% of Lithium) as a part of profit. I pondered this one and then forgot about it. This would sit as deferred income and let's assume the life of the lithium mining will be 10 years then we would recognise $0.75m GP over those 10 years. So please add a further $0.75 (£0.62m) to my 2022 and 2023 estimates. The 49% profit share more or less offsets the release of deferred income, at least in the early years.
Mac agreed, even an eeyore like me is struggling to see a negative. Patience should be rewarded
(Continued) ... Bringing it together for 2023:
WHM Mineral Sands/Diamonds = $9.45m GP
Inland Diamonds = $12m
Tantalum/Lithium = $4.8m
Overheads assume grow 40% = -$2.8m
PBT = $23.45m
PE ratio of >0.5 (at current share price of sub 1p)
These are best estimates out of publicly available information and I've sought to use conservative estimates for calculations or have followed other analysts methodologies.
GLA
My revised estimate of KZG (as at 17/08/22) is:
1.Whale Head Sands (WHM) Heavy Mineral Sands (HMS) @ Walkiskorp:
a/ Predicted to generate a GP of $300K per month of Garnet 30.29%, Ilmenite 27.54% also Zircon and Rutile. Also monthly GP $225k Coastal Diamonds (@$750/carat)
b/ Walviskop 3.1MT of 62% minerals. The point should be made however that through tidal activity the beach gets replenished like a magic porridge pot from mineral sands out to sea.
c/ Future: Neighbouring Beach also permitted it seems and has 34x the potential i.e. potentially 105.4MT?
d/ Future: Building a separation plant would mean 6x Revenue i.e. $1.8m/month gross profit.
2022 modelling: 5 months @ $525k = $2.62m GP
2023 modelling: 6 months @ $525k plus separation plant mid 2023 6 months @ $1050k = $9.45m GP
2. Inland Diamond Mining
a/ 1000 carats a month @ $250/Carat should generate at least $1m GP/month
b/ There is a build up of plant feed which was accumulated during the down times. This work in progress should mean a higher GP which I've not included in my 40% margin calculation.
2022 modelling: 7 months @ $500k plus 5 months @ $1m GP = $5.5m (less repayments on fixed asset Pan Plant $1.5m pay as you go) = $4m GP
2023 modelling: 12 months @$1m/month = $12m
3. Tantalum / Lithium Mining
a/ 3 Tonnes a month (volume is just a guess) at $160/Kg generates around $0.2m GP
b/ No lithium in 2022.
2022 modelling: 5 months @ $0.2m = $1m
2023 modelling: 12 months @ $0.3m Tantalum plus 51% of $0.2m GP
4. Bringing it together for 2022:
Overheads 2021 were $1m. New appointments and new costs assume this doubles in 2022 ($2m). I've factored in costs of production to each of the above 3 areas.
Gross Profit should be $2.6m + $4m + $1m = $7.6m
Assume Jan - July 2022 we only achieve what revenue we know ($0.24m) plus 5 months ($7.6m) = $7.84m less the admin $2m = $5.84m PBT
This equates to a PE ratio of 2.0
Badsterman, Look at at my post from the 21st June "Feeling Aligned?" where I did a best estimate calculation. I might revisit it based on what we now know 2 months on.
GLA
"that means we may well get $400k each month" - That seems highly likely, or, it could all come sooner depending on just how keen Xinjian are to get it all going.
$500k in cash in the account is like 4.6% of the current £9m MCAP, by the time the full $2.5m arrives it's 23% of the MCAP. But, the deal isn't structured like that is it, the full value of the deal is $7.5m from various assets including cash which is 69% of the current MCAP approx -
"· Non-dilutive investment of US$7.5 million in cash, machinery and services"
The MM's will have to factor the value in the more it progresses due to the percentage of MCAP the deal warrants.
That's just the Lithium side of things as well. The other Kazera arms could bring positive news at any point, 4 weeks of pan plant operation now so they'll know what difference it has made to the financials of that project also imo.
There isn't any downside to be seen now that Xinjian and the pan plant has arrived here, it's just a matter of waiting for the value to materialise imho
GLA
Thanks fella,
The Align report states;
"At the moment we are working on a full updated research report where we will be revaluating all the recent developments at Kazera."
I'm looking forward to that!
Have a read of this if you haven’t already!
http://www.alignresearch.co.uk/kazera-global/kazera-global-long-awaited-award-of-hms-licence-adds-another-company-maker-string-to-its-growing-portfolio-of-assets-buy/
Does anyone here, with a mining background, care to take a stab at likely revenue, say at year end?
We've;
Diamonds
Tantalum
Heavy sands
Lithium
Given the sizeable machinery investment and the production increases quoted in the RNS's, should I be anticipating a big uplift in revenue?
Given all the new variables, commodity prices, increased costs etc - it's quite a task to even have a guess!!
Does anyone care to post an educated estimate?
Thanks in advance.
Think we are but we are also forgetting the number of warrants and shares issued under 1p - this isn’t going to move up until there is decent volume 20m + a day
A further $2 mill due in instalments over the next few months. Final instalment to be paid by end Jan....
I think we’re all forgetting this....that we’ve got plenty more on the way.
If, in instalments that gives us around 5 months... that means we may well get $400k each month....
That’s awesome! Ka...ching!