Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
fbrj
I don't think that's totally correct, as F79 has also pointed out. The number of total shares is fixed within the middle band, that's right. But I don't think the top and bottom values you've outlined is correct.
The total number of shares that will be issued when VWAP is above the Higher Price or below the Lower Price is not fixed, but will depend on transaction value / divided by VWAP; e.g. Shares issued = £1.1875m / VWAP Higher Price or Shares issued = £1.17m / VWAP Lower Price.
F79
Great thanks, got it! Really does make a big difference the outcome of the KSZ. Note that if we have to pay £1.17m with VWAP at 3p, that's almost 9.5% of total shares in issue --- so about 19% dilution if the 1:1 warrants are taken into account. With VWAP at 10p, £1.1875m worth of shares is about 4.5% of KAV's total shares (9% with warrants). So, as has been mentioned, outcome of KSZ makes enormous difference to value Molopo might add to the project.
Good perspective BB on all going on. Agree that it's really in POW's interests to have KAV on board for MFC. Perhaps why PJ was happy for POW to give up some of its equity stake.
Hi all, thanks for the great discussion! Clarification question, people are saying that share issue number for Molopo is fixed, but we have this:
"- If at the time of exercising the Option, the Kavango share price has traded below 5p on a 10-day Volume Weighted Average Price ("VWAP") (the "Lower Price"), then Kavango will issue £1,170,000 worth of shares at the Lower Price to the Vending Shareholders."
Is Lower Price referring to 5p or to the 10-day VWAP? If the latter, then seems clear that number of shares issued will depend on what the sp is. If much lower, we'll need to issue many more to reach £1.17mil. Sorry if I've missed something, but not sure where it says anything about fixed number of shares.
Also, 10-day VWAP with option ending next week interestingly means that the longer we wait for news, the less "time" or weighting a change in the sp will have to influence the VWAP. e.g. if news lands middle of next week, only 2 or3 days of the sp being at higher /lower price will be factored into the VWAP!
British Mike, I was in He1 as well and remember the same feeling... I think there's a lot of leeway as to when companies can report news, good or bad. Especially if it's not leaky, as seems to be the case here. Though, KAV are on LSE main exchange so reporting might need to be tighter / less leeway than AIM.
Re secret JV, I'm not a corporate governance expert but I can't see how they would be able to act in shareholders' interests and not only those with inside knowledge by conducting negotiations while key news hasn't been released to the market. Can't see that passing any sort of negotiating in good faith check, when the share price could be much much higher than it is now and KAVs bargaining position much stronger, so better terms could be reached (obvs only in the case of us striking - the other scenario of a failed drill wouldn't apply because we obviously wouldn't be talking to any other companies!). Just my opinion
Thanks for sharing these Ella, also very interesting to see their share price action over the course of the initial discoveries and subsequent assay testing results.
Thanks for doing that research Tray!
Just to note, as pointed out on the KAV board, Molopo will involve quite a chunky dilution for KAV shareholders circa 10% (all in, shares + warrants). So will need to be very attractive, plus if KAV miss on this current drill I think there will be a SP drop and dilution will be even higher, given need to issue more shares to make the MFC purchase.
Just one or two points why KAV might not exercise.
Fukurokuju, great points. I hadn't taken into account full dilution, including shares approx 21m + warrants 21m -- it's substantial, almost 10% if both fully exercised.
I wonder how much of the decision will be determined by current drill results; if it fails or if it's underwhelming and share price dips down then dilution will be much higher, given the share price thresholds and payments; e.g. if our SP drops to 3p, the dilution % would almost double (still needing to pay £1,170,000 worth of shares). Can't see that being prudent then. If we hit home and SP rockets, we pay more to KKME but I'd imagine dilution quite a bit less, depending on how much it rockets.
Agree that Ben will need to explain in detail how this benefits existing KAV shareholders.
Hi all
Thanks for the insights an explanations.
MoneyM, KAT is indeed a good example as it's failed spectacularly from what it promised to do. I think it shows how wrong it can go: I'm not sure if the Blyvoor tailings were originally part of it but it's that project that has undermined capacity to drill Haneti, two very different projects. But main reason I see that as failing is the poor KAT leadership; Coetzee is now perhaps one of the least trusted/respected CEOs out there! With good leadership and a better directed strategy I think the results can be different ((and if Haneti hits LC will be laughing very hard)).
As for Kanye, if it has the resources to drill Ditau / KCB then there's no logic to IPOing first imo. And that seems to be what's happening now, which is great. I don't recall PJ at POW saying Kanye should be IPOd before any drilling takes place at all.
As for Molopo, I personally think it's a great opportunity for KAV and not just doing PJ a favour. I do think POW will get the better end of the bargain by being able to use KAV's exploration tech, teams and know how. But Molopo could be massive, so the potential upside for KAV is also big, and KKME have also done quite a bit of previous exploration on the area too, so KAV would be picking up further down the line.
FWIW, take a look at the website of Kalahari Key Mineral Expl and see how strong the overlap and thinking is with the KSZ... https://www.kalaharikey.co.uk/mopo-farms-project/the-exlporation-focus/
e.g. "A second type of target is massive or disseminated Ni-sulphide deposits at the base of, or within the ultramafic zone of the MFC. Major nickel deposits occur in major structural conduits that link into the roots of large igneous provinces near the edges of old cratons i.e. in similar settings to the shear/feeder zone of the MFC."
Moneymaker, slight illogic to what you're saying. You're saying that there's dilution through IPO and "even more so when project requires more funding" (which I agree is correct). But then you say that KAV would be better off drilling first then looking for a potential buyer down the line. But this misses the point that that drilling would itself require fundraising and thus dilution for KAV shareholders... bit too much like eating your cake and having it in my eyes. If you're anti IPO then you have to accept dilution as KAV fundraises.
I think POW spinouts will be interesting for KAV holders to watch, lucky there are several that look to take place before Kanye might happen, so if you're a KAV holder you can watch from the stands!
I know this is a bigger discussion, and I'm not sure what process is more effective, IPO or internal dilution, but a credible discussion has to pay mind to both.
Caveat: I hold (and believe in) both POW and KAV business models!
Remember on one of the first drills when Ben was silent for a long time, everyone was panicking and it turned out he just had COVID. Not saying it's anything like that, and I know it's a sensitive time, but really is good for the anxiety to just ignore his tweets, just don't check them, or this board for that matter if it's continuing to make you anxious. We'll know when an RNS appears and remember the KAV story is much bigger than this single drill hole -- a range of company-making projects await. We're going to be waiting for a lot of drill outcomes over the course of 2022 so we're going to have to get used to periods of silence and waiting. Take care all!
I believe DHEM is particularly useful for identifying strong conductors like nickel or other massive sulphide ore bodies, perhaps as some have suggested they might be using this for confirmation; purely speculative? Another question, is DHEM useful for identifying disseminated sulphides as well?
I think the whole point is that people's overinvestment is causing them to emotionally panic about no news + read unnecessarily into tweets based on personal emotions alone... Which that tweet doesn't seem to have stopped ;)
BCB,
The moneyback element is good, though we're looking for multiples here, rather than smaller steady income - as PJ said in AG interview, FDR has been valued (in shares for purchase of Selta) at around £2.5m, on an investment there of approx £700k. That's a great return, no doubt, but not what PJ's warriors are after!
What will be very interesting in first IPO is to see what stake POW retain. My hope is it's quite a bit higher than 30-40%, but perhaps it's difficult to raise in the market if one shareholder (e.g. POW) has a majority stake -- people are wary! It's all quite blue sky, but the projects are good and the potential is enormous. Agreed that might be better to wait till Q1 22 to list -- I think FCM are already doing that, despite early indications they were going to list this year, and they seemed quite well ahead in terms of prep.
Also shudder at the thought of not having PJ in charge ... that being said, I'd be keen to see the rest of the excellent broader team that he keeps saying he's surrounded by. Oliver is obviously sharp and on the ball, who else is behind the scenes??
Could be RRR, could be recent large placee investors who swapped out existing shares for new shares at same price + tasty warrants, could be forward selling by holders of warrants expiring next month (circa 37 mill, according to knowledgeable telegrammer). Can't really know for sure. All I know is that the last few weeks have seen these consistent 500k / 1 mill blocks being sold, which is keeping the SP down, but whichever of these (or even others) this doesn't change my belief in the company's potential, I'm just seeing someone's need to offload at year low prices as an opportunity for me to pick some up at what I see as a bargain.
First two posts and diving straight into the "PJ's a mess" sludge pool!
felix55 filtered straight into the green box
Yep, likewise, happy for critical insight, not going to spend time on a flash flood of poorly thought out and purposely divisive posts. Happy weekend all!
ART123, I understand your frustration, though I don't feel it personally (perhaps not having been as long a term holder as you) as I think this new project makes the FDR spinout even more attractive for when its said to take place Q1 22 next year.
This quote from you makes me think you don't understand or have chosen not to meaningfully engage at all with what the POW business model is about:
"Eventually there will be so many prospects to drill that the costs will be enormous and there will be a lot of dilution - and even then there is no guarantee of finding the monster asset(s) that might shift the SP upwards by any significant amount."
The entire purpose of the spinout model is exactly so POW don't have to raise money to drill each of the projects! i.e. POW doesn't have to have any of the dilution you're talking about, each project is packaged and operates (raises cash, spends it) on its own steam. So I'm not sure what large dilution you're foreseeing, if you'd care to explain?
Not long now to see how the market reacts to the IPO spinout model! I'm happy to wait to see what this will bring.
Thanks Worzel, I'll keep an eye over there for the future.
Tbh wherever the seller's coming from, without them I wouldn't have this opportunity to get in a little more at these prices --- both bittersweet having prices staying low, can't have it both ways! Looking forward to volume here and across junior resources keeping steady.
My loss :)