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My point was it should be viewed as a loan until licences are transferred as opposed to people claiming zero debt, this is a point you seem to agree on. I didn’t say they haven’t got the $100m but that it is in KMUK not Kodal so the cash balance is not higher than the market cap, as you suggested. It’s a simple point but one people seem to miss.
The company haven’t made clear the full details on the warrants and indemnities so you cannot assume repayment of the $100m will be allowed over several years from revenue, Hainan would be in a very strong position. There is no reason for the transfer to not occur so it should be a moot point, but there is a risk and is why the share price is not booming. If they can get the transfer sorted quickly and the DMS plant ordered then we could see a higher base for the share price. There’s no point in these discussion boards being an echo chamber for the super positive.
Lav, at no point did I say the cash was in Kodal, I’ve repeatedly said it was in KMUK. Your post at 9.58 states the cash was higher than market cap. For you to believe this you would have to think the $100m was in Kod’s account. Are you now agreeing with me that the market cap is double the cash and your earlier post was misleading?
I am invested here but find it amusing when people are confused by the share price and think the market is wrong!
Why do people take issue with discussing a share rather than being overly positive. That link is wrong on two points; Kod’s cash balance is not $100m, that is KMUK of which 49% is Kod’s. Also, the $100m is a debt until the licence transfer is complete. You might want to work on your research methods and material, that link is not something you should base an investment on.
I usually find resorting to insults is an accurate reflection of one’s intelligence.
Lav, you stated that Kod have a market cap less than their cash balance. This just isn’t true and you either fail to grasp this or are intentionally misleading.
I wasn’t saying that the conditions on the $100m were bad or putting a negative spin on it, simply pointing out the reality that it can’t be viewed as an asset until things are sorted. If you think these facts are negative then maybe the market does too which explains the share price.
The market cap is twice the cash in the bank as the $100m has been paid to KMUK not Kodal. Also until the licence transfer is complete it is a liability as there are warrants and indemnities against it should things go awry. They have 2 years to complete the transfer but hopefully will be done sooner.
Lab, I agree it has been a great investment over the last 4 years I have held. I just find it useful to reassess after a material change in the company and consider the possible outcomes. It’s not always the most positive outcome that comes to fruition and you must have some reservations.
I am aware the funding for drilling is plentiful and should enhance value in KMUK and hope that feeds through to Kod, just seems some on here think the $100m is in Kod’s bank account to do as they wish! Which is where this all started, people confused by the lack of short term share price gains and wanting share buybacks. £100m market cap is still significant for where Kod currently is.
Lab, in your 14.29 post you did suggest a 10 fold increase in current share price which would be ridiculous as Kod would have £1bn market cap.
Daz, I would like to see it funded from DMS cash flow and it is possible. It’s the extra injection of cash from Hainan to speed up the process that worries me as they will not do that for nothing. $100m got them 51% of the asset $154m would easily cover the remaining 49%. As a wise man once said ‘you don’t get owt for nowt’!
I’m not being intentionally negative, this should be what a share discussion should be rather than pipe dreams of fortunes.
My business knowledge is quite adequate thank you. I don’t think Kodal ‘lost’ anything as so many explorers fail to finance anything and others buy the asset on the cheap. Explorers used to be able to develop into producers but finance houses are now so risk averse and costs so high these deals are the only way forward. I am simply pointing out why the share price isn’t where people expected it to be.
I agree with all your points and they highlight why Hainan may end up with all of KMUK. Hainan aren’t going to finance the flotation plant without getting a larger slice of the pie, which is why them wanting to fast track it is a negative rather than funding it through DMS profits in a few years. Kodal do not control KMUK so are at the mercy of Hainan’s wishes. They won’t spend the money to increase Kodal’s profits with no loss to Kodal.
There are numerous examples of shares on Aim over the years that have huge NAV not reflected in the market cap, it is naive to expect it to be any different for Kodal and even more so to expect a 10 fold increase.
I wasn’t saying they have control over Kodal but control over KMUK, which is control over the most valuable assets. The Chinese want to control the worlds resources, they don’t care about UK listed company share prices. If they want a flotation plant quickly they will finance it and want more/all of KMUK. Their percentage of Kodal will allow them to repeat the process as other areas get developed and resources confirmed.
To get a £20m capital increase from a £2m spend on share buyback would require a massive collapse in the share price and at that point there wouldn’t be enough market confidence to drive the share price. £2m would currently buy 2% of Kodal and that isn’t going to get a 20% uplift.
They actually have 58.5% of it as they own 15% of Kodal, which is another 7.5% of KMUK. They very much control the future and we can only hope Kodal is allowed an off take agreement when they take the rest in return for financing the flotation plant.
I was saying it shouldn’t be from the 17.5 m Kodal received either. This was for shares at 0.49 so makes no sense to buy them back at 0.53. The 3bn shares are in fairly sticky hands as doubt Hainan are going to sell them in 12months, it’s chicken feed to them.
$100m went into KMUK and is for the DMS plant (65m) and exploration, not share buybacks. Buybacks could only be funded from Kodal cash flow outside if KMUK. The profits from DMS should be going towards the $154million required for flotation plant (cost has likely increased since 2022 plan) to avoid Hainan putting up all the money for it and taking a larger share of the company in return.
I’m not doubting the company is in a better position, just doubting how much we will benefit as shareholders.