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Thanks Lav,
Yep that makes sense, Bernie's March presentation stated cumulative cash flows of $2bn after 4 years of DMS, before updated drilling results and still assuming $2k per tonne. Like Bernie, I like to be conservative, but the SP will no doubt fly this summer as results come out. Will then fly again on production next April, then again when the flotation tank is set up. Happy days!
Hi Daz, Lav et al.
I’ve been looking at the total Li volumes at Bougouni and trying to quantify the value of the DMS operation, based on the investor presentation in March 2023, when Bernie said:
DMS operation revenue forecast to exceed US$1.05 billion in less than 4 years, based on prevailing broker consensus pricing averaging US$2,080 per tonne (FOB basis), US$420 million profit post-tax.
1. With recent drilling showing higher than expected Li deposits (esp. at Boumou) would you expect the amount of lithium extracted each year to go up, or simply an increase in the life of mine?
2. With the Li price forecast to be around $3,4,00 per tonne, would you expect any increase in costs?
By Apr 24 (when DMS is operational) I’d have thought KOD’s market cap to be in excess of £400m (2.3p per share), but with the larger deposits and a likely 50% premium on Li prices, could market cap be fairly judged at £700m (4p per share).
What do you think? Obvs, these numbers will become clearer when additional drilling results are published...
Hi Big Boris, I'm struggling to see the sense in selling an asset when they don't need the money. Is it that the land just isn't viable for mining? The drilling results for Boumou were outstanding, but what's the benefit in selling the land if you're about to get £100m, £35m of which is for further exploration. Still haven't figured that one out, but I do trust Bernie, as an excellent geologist, so presume he saw little benefit in exploring that land, and could see plenty of imminent work to be getting on with. The fact that KOD made a handsome profit on that sale and will reap additional profits, if a mine ever materialises, means that we have our bases covered. At the end of the day I trust Bernie to steer us right on this, but maybe there is some quid pro quo going on that we can't see?
I like the idea of a Hainan buyout, but we do have significant gold assets too. I suspect Hainan would be specifically interested in buying our various lithium sites, but not until they have been accurately quantified. I'd take 4-5p today.
With regard people profit taking, can't say I blame them, who would want to turn down a 100% rise in just a few weeks? Having said that, I invested in KOD because it was significantly undervalued and remains so. Why get out now? I do wonder if we will see a fall back once the money hits our account, buy on rumour, sell on news and all that. I'm certainly not brave enough to try to call the top though. I'm happy to hold for a couple of years, give Bernie et al time to figure out exactly what we've got in the ground.
Take a look at the London Stock Exchange site for the trades over the past few months, you'll see the volume building considerably since January, from less than 200m shares traded before 4th April to over 600m a few days ago, then 800m shares traded yesterday. With a spike like this you can imagine that there's a big old order in the pipeline.
Several commentators have mentioned that their buy appeared as a sell. Interesting to see that after an 8% rise we're apparently seeing more sales than buys.
# of Trades 2,106
Vol Sold 229,173,245
Vol Bought 141,937,985
Treat the red and blue with a pinch of salt, esp. early on where the price may drop in the hope of triggering more sales, enabling MMs to pick up shares cheap to sell at a higher price an hour later...
Two weeks ago you could pick these up for well under 0.4p, now up 40%. I suspect we'll see a similar rise over the next two weeks. 10 years ago I used to enjoy the thrill of day trading, but never made as much as simply sitting back and watching a good investment continue to rise. With such positive news in the pipeline I'd hate to be out overnight, it will be just that time the RNS comes out and you'll miss out on another 10%+ hike. My other rookie mistake was always selling too early too. I intend to sit on these until at least 2026. It times well with a milestone where I can cash in 25% of my SIPP. Having said that, I'd be sorely tempted to cash out if it gets anywhere near 4p!
Glad I managed to top up yesterday, hesitated, fearing a pull back, but anything under 0.005 is a bargain. good to see 5m and 4m shares being purchased. At this rate the MMs will run out of shares. The graph also looks ready for a break out.
I'd not be out of this share over the next few weeks, looking less and less likely that we'll see sub 0.004 again.
I've been in KOD for about 18 months now, it can be a little disheartening to see such price fluctuations, but I've done my research, trust the Directors and am happy to keep buying at these levels. Every penny helps when this could easily be a 10x bagger over the next few years.
Good piece on the need for various metals in the coming decade...
They see a trebling of lithium prices from today, as mines typically take around 7 years to come on line. Kodal's DMS strategy will get our lithium to market next year...
https://www.iom3.org/resource/metal-madness-exploring-the-commodities-supercycle.html
ghoti
Mr008, your last message doesn’t make sense…
Investors in kodal should now change the concept of "equity" as soon as possible. The bougouni project is no longer a project and asset of kodal. The bougouni project is now the project and property of Les Mines de Lithium de Bougouni S.A, an independent non-listed company. Kodal only owns 39% (or 29%) of the company.
Kodal ‘only’ owns 39% of the company, this is more than double typical arrangements, as others on this board have noted.
Kodal company spent more than 10 years continuously financing from kodal shareholders, spent a huge amount of money, explored the resources of the bougouni project, and finally proved the existing lithium resource reserves.
That’s right, 1.94 million tonnes at Bougouni alone. There are five other sites mentioned nearby, which will be further developed in the coming years. Clearly, there's no shortage of lithium.
Before preparing to produce lithium, the bougouni lithium mine was Sold cheaply to Hainan Corporation.
They paid US$65m to set up the processing plant and a further US$35m to develop and expand the site, plus a further US$17m to develop various prospects across West Africa.
Isn't this a loss-making business?
It’s going to be making US$100m per year for four years from next April. That’s around US$160m in the next four years. With no dilution of shares. And those numbers are based on US$2,080 per tonne, when spot prices are still in excess of US$5,000 per tonne.
When an investor cheers for this transaction, it means that the investor himself has been sold, and he is helping the buyer to count the money!
I don’t believe you’re an idiot, so you’re purposefully sowing pessimism on this board, one can only presume because you’ve done something silly like shorting this share!
Mr008,
Interesting post, but in exchange for 51% of ownership of KMUK, Hainian Group have provided all the funding to get the stuff out of the ground (US$65m), plus US$35m for development of Bougouni and a further US$17m to develop other assets. All for the 2.9bn additional shares in KOD.
I can't think that your post is anything other than sour grapes. What do you have against KOD, and why, when everyone else is praising Bernie's decision making, you've decided to belittle the company's prospects as much as possible?
Long term holder, pleased with the RNS, but finally having a chance to read it properly I had two thoughts:
1. US$35m to fund development of Bougouni site. KOD are putting ownership of Bougouni into KMUK, but own lots of adjacent land and other sites in the area. Does this mean that KMUK now owns these sites too - as Hainan Group are 51% shareholders in KMUK, so will walk away with half the profits. For US$100m I think that fair enough, but I didn't se it spelled out anywhere.
2. If KMUK lists in London will they require sign-off because of majority Chinese ownership?
Other than that, it sounds like we have all the cash we need, no dilution of shares and will be profitable from launch in April 2024, to the tune of US$100m per year for 4 years whilst we develop other sites. As others have mentioned, a market cap of £66m can't be on the cards for much longer. I'm happy to wait for another 4 years and see where we are then.
Lav, is this the site you are thinking of?
https://mali.revenuedev.org/owner/103243
It lists the licences held by all companies.
Future minerals is the local subsidiary of KOD in Mali.