Member Info for Caposoka

7 min interview with Base Resources. https://www.youtube.com/watch?v=lfMFr4JB-vE

Possible relevance to KMR is from 4:25 where he talks about market outlook/prices,and is similar to KMR's .

AUD 3.5c which is ~1.95p +/-

Went ex-dividend North of 17p so at the time, more than 11%.

https://twitter.com/KenmareRes/status/1305822680059465728/photo/1

Morning all. Can anyone refer me to any past TLOU info on expected construction period for the connection. If they reach tender stage by Y20 end, is a period of 12-18 months reasonable? Strikes me that if connection and first sales are still two years ahead, all these issues about flow rates, water ingress etc are a bit of a side show to the main event of funding and connection to grid.

Yup, also a lot of June shipments meant that payments carried over into next reporting period.

Within the Q&A, someone asked for a projected net debt position at year end. KMR would not provide guidance but referred to consensus estimates of 75M. Not a major increase considering development capex is H2 weighted (83M vs H1 59M). That said, some sustaining capex shunted into H1 2021.

Also, H2 grades will improve. WCP A was also in a low grade area in H1 but will move on to a better area. WCP C is mining smaller, higher grade areas but will contribute over the full H2 period.

On balance, think there are positives tucked away in the detail.

Under the old financing package to 2022, they were always due to have gross debt of 52M + a bit in interest at H1/20 end.
Throw in grade drop off and reducton in production of over 100kt at ave FOB, that's a 25M+ hit at least
With new finance they have undertaken extra capex - MSP upgrade was added at15M. Monazite was 6M.
Jetty and vessels next.
Corvid 19 has direct cost 10M in mitigation, plus increase in operating costs (trucks, generators), plus what has it cost in mining low grades for longer?
May not explain all but think it does for a decent chunk.
Things are dynamic so not sure looking back is the best approach. As of today, is the future half full or half empty.

For those who did not tune in to the presentation of H1 results, it is now available with this link...

https://youtu.be/FZnWBZuoB3s

I missed it and wrote to IR who gave their normal excellent service and provided the link - I'm sure they won't mind me sharing...

Yup. AUD 3.5c is 1.92p ~ 14% !!

This was one of your suggestions years back and when I invested pre-raise at 3p so effective dividend now is over 60% !! Remain appreciative of this and others you gave at the time.

Off my own back, added more at 15.1p which was not quite so smart.....!!

Video - good find Greeno. (Used to seeing bookcases in background rather than a bedroom !! but overall message was positive)

See that Base have announced their maiden dividend today, with SP up 15%. Hopefully shows confidence in outlook which may spill over here.

ObservantKen, I have empathy for your grumblings - I started with a 20k+ investment North of 30p (equivalent to £60) and invested multiples more before rock bottom in Dec 2015, all bad investments never to return - but equally, the bottom was nearly five years ago and what have you done since? Your issues are no longer relevant. Those disuaded from ever investing have been replaced by others and things have moved on. I kept investing, using the accumulator principle over time and reached breakeven (counting from Day 1) initially at 360 and then at 260 and now need only a marginal increase from here to get back to breakeven a 3rd time. I have no grumblings and am looking forward to a positive future once this WCP B is done and dusted.

After so many years invested I thought you would be better informed than your posts indicate today.

Dividend policy of min 20% net profit until 2021 was maintained. In this enivronment, why expect more. If they had maintained the absolute figure in USD terms, it would still be different in Euro / GBP terms, it would be a deviation from the expected policy creating uncertainty for little benefit and although only a small amount, it would all be from borrowed cash. Debt will be repaid over 63 months to early 2025 at 5.4% + Libor so any extra payment would accumulate ~30% in interest costs over the full lifetime of the loan. Some may consider it in shareholders interests to keep the cash in the company.

Net profit lower at 12.7M. Again what else were you expecting? Production for year was set to be lower than last year, then it was dropped by 100kt earlier this year as grades drop off ans WCP B is at the end of it's mine path with a pre C19 6 month contingency area now being partially used. The increase in ilmenite y-o-y of 28% kept them in profit which some may regard as a positive rather than considering it negative on a direct comparison it was lower than last time.

These items have been clearly flagged for months so not surprising the positive elements of the update generated a positive movement today.

Interesting they are increasing the jetty and vessel loading capacity. Something a few of us discussed a while back as being a potential bottle-neck. Obv a financial benefit to be had long term.

Main objective for 2020 for KMR was to get the WCP B move done. Everything else a sideshow this year. Move gets us to the other side of the capex, increased production, margin and profits. Being on track for Q4 1st production at Pilivili with no further C19 slippage is the real positive in this update.

Financials - profit after tax down to 12.7M. Think we should be happy it remained in the black after the grade drop off and guidance was previously reduced by 100kt for the year. Profit supported by 28% increase in ilmenite sales prices. As expected, Zircon weaker but will be more than offset by ilmentie increase. Great news for when higher Pilivili production kicks in.

My cup is half full with this update.

They will retain the dividend policy. Profits will be nominal at best and dividend at 20% profit will be a rounding error in the accounts, so best to maintain face and keep the policy running.

The options will have no effect on the SP so long as the SP remains below the exercise price. The options remain effectively worthless as no-one will take them up.

If the SP rises above the exercise price then any reasonable investor should assume that the options will be exercised and make their investment decision based on the total number of possible shares (existing + options) and offset the negative of having a larger share base by the positive of the cash raised from the options increasing the value of the company.

I very much doubt most PIs will take the time to make these type of calculations and will simply invest on where TLOU's got to by then and future prospects.

Shares now issued on AIM.

Were due to be admitted to AIM yesterday. Showing in my account but still unable to trade them.... Expecting it to be finalised during today, esp if shares have been issued already on ASX .

Yes - we are getting full amount requested - entitlement plus any excess shares requested. Already showing in my account but not tradeable until 8am BST on 21 July.

Company now seeking placees for the remaining amount - I guess for the keenest amongst us and if you are quick enough, you could contact the company Brokers and offer to buy a few more...! but they will all be placed.

My initial ‘not good’ comment appears to have caused some unintended angst. KMR are battling through and there is no criticism on my part. The basic fact is that Corvid 19 and it’s consequences are not good.

The update cannot be considered good. Expected production for the year has dropped by 100kt, so revenue will be down by 25-30M.

Power lines and HMC pipelines are delayed. Risk of further delays. Mitigation costs 10M.

Interim dividend is 20% of profits. This will be nominal at best this autumn.

Gross debt up. KMR refinanced at end of last year. Smart move not recognised by all at the time.

I remain cup half full. 6 months of muddling through will be forgotten in time. I am having fun investing elsewhere at present as have high hopes with a couple of crackers. As soon as I free up some cash I will accumulate more once again, at these levels or lower. Think I can afford to wait a bit longer to see how this all develops as my view is the risk is to the downside at present.

A few thoughts.
Q1 grade was a record low but Q2 dropped further. Need for WCP B's move clear to see. Only positives here - good production allowed them to run to stand still and through the rainy season unscathed.
WCP B move is delayed and yet the new power lines and HMC pipeline are delayed by longer. KMR appear to have been let down by their supply chain. Diesel generators and trucking of HMC will push up costs by USD 10M. A short term pain that will be forgotten in the mists of time but still a 10M hit.
Moz (like similar countries) has created a loophole to have closed borders but allow key people in. This is important. KMR contributes 5% of Moz exports so have a path to get their people in for the move. In my view this was the biggest risk they faced as other issues can be mitigated but entry to a country could not.
In short, not good, another 6 months of muddling through but light at the end of the WCP B move tunnel.