focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
For those doubting the Hinda mine financing and go-ahead is imminent..from last month news 26 April 2023.. Google translated. (**Note: Cominco is 90% owned by Kropz, ie a subsidiary, RoC government has 10% share**).
"Congolese President Denis Sassou Nguesso received in audience on April 25, a delegation of investors led by South African billionaire Patrice Motsepe. The discussions focused in particular on the progress of the Hinda phosphate project in the Kouilou department. It is an area known for its high concentration of nitrogen and potassium, two elements that go into the composition of phosphate.  Â
Through COMINCO SA, the local subsidiary of Africa Rainbow Capital (ARC), the investment company in which he is the majority shareholder, the businessman is expected to invest just over 600 million dollars, or approximately 356.5 billion FCFA, to develop this project for an annual production of 4 million tons, with the key to the creation of 600 direct jobs for the Congolese. The related mining agreement was signed in 2018 with the Congolese authorities. Â
"We have come to present to the President of the Republic the progress of the work that we are currently carrying out on the ground. We are going to provide 600 million dollars in terms of investments for this project. Our objective is to be able to start the operation as quickly as possible," said Patrice Motsepe, who is also president of the Confederation of African Football.
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COMINCO is in fact at the stage of the definitive feasibility study, the report of which will be submitted to the government with a view to obtaining a license to exploit this deposit for 26 years.
It should be noted that phosphate is a natural resource with multiple uses, notably used to produce fertilizers."
https://www.sikafinance.com/marches/congo-patrice-motsepe-va-investir-600-millions-de-dollars-dans-un-projet-minier_40388
Plus there is a YouTube video of Motsepe chatting to the President Nguesso on this visit.
https://youtu.be/5xTmlFWNSFA
This woul be the corrected header, for my assumptions as set out previously.
Hands up from me! I have just noticed I made a fundamental error in my initial back of envelope calc. Kropz only has 74% of Elandsfontein (BEE partner ARC fund has other 26%). So potential initial £100m pa free cash flow should be £74m pa only. Plus once any accrued tax losses are used up another chunk will go to tax. That calc was for 60kt pm production which is still less than planned full 83ktpm production (ie 1m tpa).
Production ramping up and,...
Waiting for big announcement on Hinda mine financing and go ahead.
This is way undervalued!!!
Waiting for next quarterly production update in July (should show cash positive self sustaining production for first time?) . Likely Hinda mine go ahead and funding to be announced soon ($600m plus in Republic of Congo).
This could could easily go 20p plus on good production results and 40-60p on mine go ahead? In my opinion! DYOR!
Https://www.france24.com/en/live-news/20230511-iraq-to-resume-kurdish-oil-exports-to-turkey-saturday-statement
"Baghdad (AFP) – Iraq's oil minister said Thursday that crude exports from the autonomous Kurdistan region to Turkey would resume on Saturday, hours after a deal was finalised following years of dispute."
"On Thursday the Kurdish authorities said in a statement that "the Kurdistan regional government and the federal authorities have reached a (final) deal on the resumption of oil exports".
Hours later, Iraqi Oil Minister Hayan Abdel Ghani said crude exports would resume from Saturday.
Baghdad's State Oil Marketing Organization (SOMO) "informed the Turkish company Botas of the resumption of export operations... as of Saturday May 13", Abdel Ghani said in a statement."
BOOM. Is everybody asleep here?
Lol, touchy crowd here. Just a simple observation, I stand by what I said. Otherwise don't give rat's arz about this.
Just happened to read this while browsing..
"Following discussions with buyers of Ironveld's high purity iron product, it has become clear that a granulated final product, rather than a cast product, will command materially higher selling prices. This led to an assessment of the existing Granulator plant at the smelter and a project to bring this back into production was initiated,"
Seriously? Bunch of amateurs, should do their research properly before spending any money on equipment. Shambolic.
So the suspect has the motive, has the means and was seen in the area at the time in question. Will the arrest happen soon?
Yes, you are correct, thanks. I have been looking at it more from the short term point of view, ie one year ahead. Tax will reduce FCF at some point going forward. Also remains to be seen if this gets to full 1mtpa capacity . Income could be very much higher at that level.Also, electricity load shedding is an issue they have not really mentioned.
Good point Starbright, potential accumulated tax losses coul be very handy! Don't see why not?
Debt? There is morass of borrowings and bridge loans in last year plus historical debt. Having had a quick tot up of recent debt announcements and the last 2021 results, I estimate total debt could be in order of £80-120m? I would not put much reliability on this figure. The upcoming 2022 results will make this a lot clearer. Anyhow, at very worst it would probably take 2 years max to clear the debt and could be as quick as one year?
Hi Extrader, with regard to your statement..
“KRPZ might be worth a flutter , on the 'rising tide' principle"
,>>No, it is worth a flutter as it may be starting to generate free cash flow cash at existing Elandsfontein mine, potential initial £100m per annum with an mcap of 32m. The current debt pile could be paid off very rapidly? The RoC Hinda- mine financing and go ahead would simply be icing on the cake!
Further info available at https://www.lse.co.uk/ShareChat.html?ShareTicker=KRPZ&share=Kropz-Plc
According to lse site current mcap around £32m.
Seriously?
From September 2021 presentation
Elandsfontein LOM cash costs (FOB) $86/t.
Let's use $110 pt to be conservative with all the recent issues.
From the recent RNS monthly production was around 43,000tpm. About half of planned full production. Let's day they can intially stabilise that at 60000t pm with good quality.
Current rock phosphate concentrate price around $345 per tonne. Let's use $300 to be conservative.
So revenue: 60000tpm x $300. = $18m pm
Less costs: 60000tpm x $119= $7.14m pm
Total "profit" / free cash flow= $10.86m pm ($130m per annum, circa £103m per year)
(any corrections of my calcs gladly welcome)
So a conservative £100m per year would certainly keep this boat afloat and pay off debt rapidly. Will have better idea of total debt in June when 2022 annual results are released.
So this is looking very good if production is stabilized with no quality issues. We will know end of this quarter at next production update. Throw in the carrot of HINDA go ahead and this starts to look seriously (!!) undervalued.
Note: Patrice Motsepe, CEO of ARC Fund owns 83.2% of KROPZ. Hence the obvious relationship between KROPZ - Hinda- Investment by ARC & others.
It was a rhetorical device, that is all bread and butter info,thanks :-)
Another link and write up for Patrice Motsepe's recent visit to meet the president of the RoC, Denis Sassou- N'guesso. The article says in August 2022 the investment project was set in motion " in the Hinda area". This is it, KROPZ is set on its new Mining project! $600 investment!
"Patrice Motsepe offers a sustainable revival of the phosphate sector in Congo
April 26, 2023
Pointe-Noire (© 2023 Afriquinfos) - His hat as President of the Confederation of African Football (CAF) aside, it is the CEO of African Rainbow Minerals (ARC) who was received in audience on Tuesday April 25 in Pointe-Noire by the Congolese Head of State, Denis Sassou-N'guesso. The development of the phosphate sector in Congo was at the heart of discussions between Patrice Motsepe and Congolese officials.
At the head of a delegation of several businessmen, Patrice Motsepe was received in audience by Denis Sassou-N'Guesso. Most of the discussions focused on the restructuring of the phosphate sector in the Republic of Congo. It was for the wealthy South African businessman to update the Congolese president on the progress of a project launched in the country several months ago.
In August 2022, the boss of the ARC had set in motion an investment project in phosphates and other fertilizers, in the Hinda area, in the Kouilou department. It is an area known for its high concentration of nitrogen and potassium, two elements that go into the composition of phosphate.
'' We came to give more information about the project we are implementing here in Congo. We have brought in other partners who will contribute to the development of the sector. We took the opportunity to reassure the President about the quality of the phosphate that we are going to produce in Congo,'' explained Patrice Motsepe when he left the audience. The businessman specifies that no less than 600 million dollars will be invested in the said project located about 40 km north of Pointe-Noire."
https://afriquinfos.com/economie/patrice-motsepe-offre-une-restructuration-du-secteur-phosphatier-au-congo/
Here's the link
https://www.africaintelligence.com/central-africa/2023/05/02/mbz-and-tshisekedi-finalise-arms-and-mines-deals,109950987-eve
..UAE is very active. Strategic locking in of resources by middle east countries awash in oil money.
"02/05/2023
MbZ and Tshisekedi finalise arms and mines deals
Kinshasa and Abu Dhabi are secretly finalising an unprecedented deal that would include major mining projects and may also have a military component."