The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
If I was the customer for 100% of the butchers meat, already owned 51% and could claim back all of the money I invested at any point I’d think my chances of a takeover at a price I want would be one of the easiest deals I’ve ever completed
You’ve just shown your complete lack of knowledge Lav and is a worry that so many follow your posts and opinion. Check the details in the 19 jan 2023 RNS. ‘Hainan will acquire a 51% shareholding in KMUK by way of a $94.34m share subscription’. Limited companies can and do have shares but not publicly traded shares, Hainan are the controlling partner in the limited company.
The fact it’s limited rather than public limited company means KMUK shares aren’t tradeable on the public stockmarket. It doesn’t change the fact that under the JV agreement Hainan took 51% share of KMUK which gives it control
As Hainan have a controlling stake in KMUK, full control of future outputs and the right to reclaim the $100m at any point as the licence hasn’t been transferred then Kodal aren’t in a strong position to negotiate a high price.
Laverda, it’s never been an issue before because it’s a new mining code yet to be implemented. The large mining companies operating in Mali are concerned for their future projects and how it will be imposed so it would be daft for Bernard to not be.
Sleepy you shouldn’t get too concerned about their debate about what is a royalty, if Laverda is wrong they simply accuse the other of being a troll.
The new mining code gives the Malian government a minimum of a 10% shareholding in a company, this case KMUK, with the option to purchase 20% more at commercial valuation plus transfer a further 5% to local Malian investors. Essentially the state has an option to acquire a minimum of 35% of KMUK.
That is all to do with ownership whereas royalties will be paid as a percentage of the value of what is mined by KMUK and paid to the Malian government directly, regardless of how much of the company the government owns.
Trax, are you just inventing numbers to make things more positive? The C1 cash costs were $362/tonne and further costs of $474/tonne, so in 2022 the costs were estimated at $836/tonne. Global inflation will have increased this in the 18months since they were calculated. At current prices this leaves a very small profit compared to what the financials of the mine were calculated on.
To be accurate elcobbledore, Kod have £11.2m in the bank and the revenue figures were based on $2080/tonne. As well as the fall in Spod prices the costs will have increased in the time since those numbers were calculated.
It should be of concern as the deal is not yet secure as the licence transfer hasn’t happened therefore Hainan can still pull out of the deal and request their money back. If prices continue to fall it changes the economic viability of the mine and they will know they can get the resource cheaper as Kod will be in a very weak position.
Interesting part of the RNS is cash balance of £1.7m on 30th September, since then received $17.75m(£14m) and the cash balance is a now £11.2m. £4.5m seems to have been spent outside of KMUK and hence not in Bougouni, seems a high cash burn for operations outside of KMUK and hence Bougouni.
Nobby, the dilution is already occurred so not sure why you are saying it doesn’t exist. Another 3bn shares is dilution regardless of debt and I don’t have an issue with that. If you are investing you should learn the basics of market cap and shares in issue.
No JV?? A joint venture is exactly what KMUK is, two companies joining together to work on a project and not a bad thing.
$100m is performance based warranties? Where have you got that from, think everyone will agree with me that that isn’t the case and you have just made that up.
I think you need to spend a few more years gaining experience before you question the understanding of others!
For the record the deal in January was good, it is just the adjustment in November that is of concern.
I can see you are fully convinced that Hainan have handed over $100m with the chance they will fund the construction of a functioning mine and potentially get no return, just their money back in two years with no interest. If only big businesses were that stupid and if you believe that we will have to agree to disagree. Hopefully we will never find out as the transfer could be completed anytime soon.
Nobby, it is not a loan but they have to repay the money if Hainan make a claim at any point in the next 2 years if the licences haven’t been transferred. It is a dilution because there are more shares in issue, not a bad dilution but you shouldn’t see it as no dlution.
Daz, I chastised him for a complete misunderstanding of the RNS and several other false claims based on fantasy. It seems s fact they can claim the $100m at any point if the licences haven’t been transferred.
I’m not saying it will happen and hope it doesn’t, just outlining the risks that others have overlooked