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"Bougouni Lithium Project Funding Package - Further Extension of Long Stop Date to 31 August 2023"
The rainy season is about to get into full swing in Mali until September so extending till August is a realistic move as non-paperwork tasks become very difficult due to weather conditions between June-Sep especially in August.
"Kodal has made significant progress with the re-structure of the subsidiary companies in the UK and Mali. However, certain condition precedents, as outlined in the Company's announcement on 31 May 2023, remain to be completed in Mali. Kodal remains in regular contact with the local Government to satisfy these outstanding condition precedents."
I would infer from this part that KOD is as far along as they can be at present and the ball is firmly on the mail government side of the court. I'm sure that the Mali government moves as quickly as any government and that they will want to make certain that the country of Mali benefits from the process. Which is a reasonable expectation.
"Hainan and Xinmao have confirmed that all approvals obtained from the Chinese Government authorities remain valid and are ready to complete the transaction as and when the outstanding condition precedents are satisfied."
No change from the Chinese. Because of how China is governed and how non-china investment is controlled centrally keeping these approvals is vital.
"Kodal and Hainan remain firmly committed to completing the transaction and are working together towards the completion of all condition precedents. Kodal has continued to work with Hainan and its team in the review and planning of the proposed development of the Company's Bougouni Lithium Project located in southern Mali and are preparing for the rapid development of the project following completion of the transaction."
Both parties are now working on how the development should proceed after the transaction. After September we can hit the ground running.
So all in all a very positive RNS it shows that all involved are in this for the right reason, namely making as much money as quickly as is possible.
Hi Daz, do you or anyone else on here know when hainan completes their trade port in china and when their processing facility completes? Just trying to think on the next couple of years and how the timing would go.
Until news I would expect us to move up and down in the 0.58 to 0.72 range. There has been a downward trend the last 7 days or so which has caused churn on the boards. I began building a position back in 2021 and don`t expect a real pay off till after 2025.
If you trade in KOD then I would think that the current price is a good point if you're looking for your standard 10-20% return. This stock can and has repeatedly moved that fast quickly many times.
If you are LTH, then honestly when you're buying shares you are looking past the point when we get to full production and to what sort of share price you hope this could reach when that is the case.
I have been working on my sock tan line this week I swear my feet just don`t tan :(
As far as news goes I would be disappointed if it was left till the end of the month (positive or negative) although I think its more likely we get an RNS with more results (updated JORC pretty please) first with the main RNS regarding asset transfers coming later.
I have never moved 100 million plus between continents but I imagine that the actual money transfer once approved could also take a week or 2.
Many thanks for the links. I will give it a good read tonight :)
Hi Mercedes is the presentation free to view? could you post a link if possible.
1.08p currently would be nice, also in latest RNS there was an indication given on an increased Jorc figure in the near future which would further increase this price.
There is definitely a psychological aspect to consolidations in that many investors would see it as a positive for no other reason than the numbers sound more impressive even though the actual math stays the same.
It could also lead to more people selling their shares meaning fewer shareholders remaining which would streamline the company. It could be something that bigger share holders push for in the future once they have secured their positions as it would most likely then lead to a share price increases if the shares remained in demand.
AIM (kOD`s exchange) is very sentiment driven.With the increase in new smaller investors through online platforms over the last few years you could find people investing for no other reason than the stock went up 1000 times in value on the daily increases boards and you would find many people would not understand what a consolidation was.
Shhhh toptiger cross your fingers with me that people sell down to this figure after funding ;)
Sorry if my post wasnt clear :(
If KOD`s PB value drops below 1 at any point after funding is received I would buy more. PB is currently around 8 so I doubt the SP will drop that much unfortunately.
0.5p after funds recieved would be a dream, fully funded with production on the horizon and the share price at less than book value. I dont think a sell off would push it down that low but if it did I would lookto buy more.
1 - 1.2p would be great post funds. Hopefully afterwards it's a steady stream of good news over the next 12 months leading up to production to increase our visibility to the market which may lead to larger investors taking positions.
Anything north of 2p is the icing on the cake for me, over any time frame.
HI Daz, thank you for the link. Do you know/ best guess what specific criteria fund managers use to calculate the risk discount rate? Is it standardised for the industry or different per firm?
All this is fairly new to me and Kodal is the only stock I hold which has not got high analyst coverage. So the more I can learn about smaller/emerging stocks the better.
Ran out of time before work this morning. I looked at the data set used a bit more closely hope this is of use for people when trying to judge the value of their estimates.
AIM:KOD DCF 1st Stage: Next 10 years cash flow forecast
Levered FCF (GBP, Millions) Source Present Value
Discounted (@ 8.69%)
2023 -3.4 Analyst x1 -3.13
2024 1 Analyst x1 0.85
2025 26.7 Analyst x1 20.79
2026 46.9 Est @ 75.67% 33.61
2027 71.92 Est @ 53.34% 47.41
2028 99.04 Est @ 37.71% 60.07
2029 125.55 Est @ 26.77% 70.06
2030 149.55 Est @ 19.11% 76.77
2031 170.11 Est @ 13.75% 80.35
2032 187.11 Est @ 10.00% 81.31
Present value of next 10 years cash flows £468.09
Terminal Value FCF2032 × (1 + g) ÷ (Discount Rate – g)
= £187.114 x (1 + 1.24%) ÷ (8.69% - 1.24% ) £2,542.23
Present Value of Terminal Value = Terminal Value ÷ (1 + r)10
£2,542 ÷ (1 + 8.69%)10 £1,104.74
Total Equity Value = Present value of next 10 years cash flows + Terminal Value
= £468 + £1,105 £1,572.83
Equity Value per Share
(GBP) = Total value / Shares Outstanding
= £1,573 / 17,022
=£0.092
For me 5p would be a dream scenario and would be my sell point, i guess it would all depend on the speed that any rise in price happens. I don't imagine 9p near term, but no reason why we couldn't reach 1p and stay above that by the end of the year.
I'm not sure if this link will work as it may be behind a paywall, it definitely says 0.092 (9p). They dont give a reason for the increase as far as i can see based off the one analysis which recons EPS to be 0.01 in 2025 then 0.02 in 2026 (which remains unchanged) but that's as far as the forward projection chart shows me.
[url]https://simplywall.st/stocks/gb/materials/aim-kod/kodal-minerals-shares/valuation[/url]
Simplywall.st just upgraded KOD`s estimate - based on discounted cash flow model from 0.0074 to 0.092 which would mean were currently about 93% undervalued. That's a pretty big estimate jump :)
Current SP is irrelevant, IMO analysts will care much more about the drilling results. The mention of JORC updates coming soon is a big reason to smile. Institutional Investment wont care until the numbers allow them to invest.
" the parties remain committed to the transaction and are working together on the preliminary engineering and development processes required to ensure we move quickly into development upon completion and receipt of funds"
This was the most important point for me, glad to hear that work is going into the steps needed once the current stage is completed. Shows both parties are pushing for the overall objective of going operational asap, hopefully before rainy season 2024.