RE: Cheap shares…26 Apr 2024 17:10
Hi Stringer, a few variables will come into play - including the gold price, volume of trading, stale bulls selling and the remaining warrants. The latter matter might hold it back as a proportion will sell at say 1.8p to 2p to raise funds to exercise 1.6p warrants if Kefi starts to trade around that level. At 2p it would still only be about 30% of an NPV that is artificially low given Saudi assets for some reason have only been valued at a gold price of US$1,650/oz. We know as well that the Saudi resource is set for an increase and plenty of scope for TK uplifts.
Going forward there are other share price drivers - junior miners may well come off a decade of depressed levels and Kefi plans to list on the planned Ethiopia stock market. A Saudi listing would have dictated the price rather than AIM so it is a pity that's not planned just yet. It's more uncertain with the Ethiopian listing but there will be relatively few listed stocks and a fair amount of cash looking to invest so that could bring a pleasant surprise.
In short, it could trade above 2p short-term but there will be headwinds and holders will have to consider whether to take the money, hold for a takeover or re-rating after short-term trading settles at say 3p to 4p or hold even longer term for a potential double-digit share price. I think what we can say is that it will be the most significant news in the Company's history and the share price should reflect that very positively.