Member Info for CaveatEmptor

Hello Mogbear,

I have been thinking about it and have come to the conclusion that the deal is a form of risk limitation. There are several hurdles to be jumped before the first commercially produced copper comes out of the ground, so from the buyer's perspective, better to pay £6M further down the line for a sure thing than £4-5M up front for a possible 'pig in a poke'.

Good morning H5O,
I agree on all counts - let"s hope we are right. Only time will tell...

Perhaps another innovative deal from CB?

On the other hand, maybe not as two deals in the same month would just be showing off...

Over three months later and still no placing - where has the money come from that has kept the company going? That 69k at the end of June would scarcely have covered July.

Something going on behind the scenes?

I am nor surprised at the reduction is SP, to be honest, as the company is about to issue about 20M shares at about 0.85p in order to pay for the Kalengwa option.

Whilst the shares can not be sold immediately and will have an enforced maximum disposal period of between 6 and 24 months that will limit the number of shares coming onto the market, AIM, being what it is, will probably still react by dropping the SP - maybe even to 0.8p? - Unless, of course, there is other good news that will balance this out, but that would have to be very good news in deed.
Under normal circumstances I would say that, as we have known about the deal for 3 months, the dilution ( only about 4%) would already be priced-in - but as I say above - you never know with AIM?

On the other hand there may be news any day now on the initial copper production by hand sorting or, more likely IMO, commencement of gravity processing of the hard rock at Manica, in which case all bets are off and the SP could soar?

Decisions, decisions...

My guess is that there will be no restrictions on the sale of shares, but they will probably be in the entity that operates Mankayan so BZT keeping the shares will effectively expose us to a bigger upside of the copper production once mining is under way and that will potentially be worth a lot more in the long run.

Although, it does make you wonder why they would pay £6M for 80% of Mankayan when they could probably buy the whole company on the open market for £4 or £5 million?

- Something to think about?

I think that I posted a week or two ago that CB is known for coming up with innovative deals, just when most people have given up for lost. I think that it was Sage that asked whether or not any of these deals had been of benefit to LTHs?

Well, providing this deal does come off, then that would put the SP somewhere between 1p and 2p. Then once income starts to be generated by the 20% stake, that could well put the SP somewhere between 5p and 10p - Not a fantastic result for some LTHs here, but a darn site better than the recent 0.1p!

We shall see...

I was pleased to see that RNS this morning. While it will take time generate cash for the company, I welcome it with guarded optimism - the retention of 20% without having to pay out anything in exploration/feasibility studies is a big plus for me as the deal gives actual value to the asset as well as ongoing income from it -so we may be able to raise cash against it?

:-)

Hello Andrew,

CB often told me that he would do his best to limit any dilution and only go ahead with whatever was absolutely necessary .

My point was that, even when being over optimistic or saying something that later proved to misleading, I think he was probably speaking what he thought to be the truth at he time.

Just as, I am sure CB would not have gone for a £1M placing if he had initiated it - I am sure we could have made do with £400,000 to £600,000 until the company eventually breaks even by going down the slower organic growth he has often mentioned. Unexpectedly, being confronted with the offer of £1M on a plate ( and low broker costs as they did not have to find investors to take up the offer?), I should think that he grabbed at the opportunity be able to fast track some of the projects and, hopefully, bring the date of the re-rate forward so as to more quickly create shareholder value. I do not think this means that he was lying when he told me he would limit dilution, just that he reacted to an opportunity that presented itself, and if that means the re-rate starts in the next month or two then I will certainly forgive him for that...

For clarity, the RNS I refer to is for the 20M+ shares not already RNSed - so 14% already on an RNS and 5% still to come to make up the full 19% purchased.

Hello Andrew,

You are not the only one that has confidence of making money at the current level - It would appear that the II that recently invested £1.0M is of the same opinion.

Being a single Institution that put up the cash means that there is only one 'seller' to worry about and as most IIs want to make a good profit on their investments I suspect we will not get the usual overhang of selling that comes with multiple investors, many of whom are happy to take a 10%+ return. As the II made the approach to XTR, rather than the other way around shows a great deal of confidence in the company IMO and indicates to me that they are in for the long haul ( all the way to 6p, perhaps?)

I know that CB said that he was not planning any dilution any time soon and I believe that he was being honest at the time.
But, when it comes down to it, if somebody approaches you and says please take this £1M that is burning a hole in my pocket, and you know that amount of cash would cover all currently planned expenditure and put the company on a very sound financial footing for the foreseeable future - could you really say "No"?

I guess what I am trying to say is that CB may be a lot more honest than many give him credit for, but he is also able to adapt to changing circumstances and this may sometimes appear to be a contradiction.

Maybe the TR-1 that I presume will have to appear at some time ( after all, it is 19% of company) will help to move the SP?

ATB

Hello Lucky,

I would not be surprised to get an update on Kalengwa this month as due diligence was already well down the line early in September. I am actually hoping for first income from the hand-sorting during October/November with production ramping up into the new year. The last I heard, CB was very impressed by the short term potential here. I just hope it turns out to be jam today rather than jam tomorrow as commercial hard rock production at Manica is likely to take a few more months to get started and it would be nice to have something to talk about whilst we are waiting...

Did you ask about the VAT refund? You may have had more luck with that question
...

Well, I guess there had to be a sell at some point. A bit of good news would be very welcome just about now, to help keep the momentum going...

Is low level but consistent at the moment giving regular pick-ups without any spikes. Long may it continue...

I had considered that possibility, but why would the trade have gone through at those prices?
The first trade has to be a sell and the second a buy, so looking at the trading pattern of the day the first trade would have been just under 1.35p and the buy just over 1.35p. This is the one reason that I went for buys, but of course I could be wrong.

However, in recent days there have been many sizeable sells, right down to 1.3p, without the SP dropping. This would tend to indicate a large buy being worked in the background and this is the second reason for my decision. As I said above, I could be wrong. The only way to find out for sure is to wait until tomorrow...

I also know for a fact that CB considers Kalengwa to be, potentially, a company-maker - so we shall see...

I think that CB mentioned in a recent podcast that XTR was in the final stages of due diligence for Kalengwa and that first income would be almost immediate following completion of the formalities - so an update on that front may be on the cards?