Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
He did get very emotional re kids who live in Sweden with the mother and that he was intending to move to Zimbabwe. All sounded a bit far fetched as not many mzungu outside of Harare/Vic Falls, would you really put job before family.
For explorers its about the pay day when they create & sell an asset not production and a revenue stream. Explorers are generally only interested in part of the value chain.
Mines are very expensive to build, this signals massive dilution well beyond the current £6m which apparently is going to last until 2024.
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Lets hypothetically say B1 hits metal sulphides and the bounce is initially worth £10m, that's now shared between 1300m shares not 700m so 0.78p vs 1.42p additional value. If B1 fails share price goes to 0.5p if successful it goes to 2p so thats a huge risk for limited upside. in reality there will be 704m+140m shares in issue at the time B1 reaches terminal depth but unless shareholders block Stage 2, da facto any gains are shared between 1300m shares (assuming no warrants converted).
IMO its not an investment for existing or new shareholders, latter should not touch KAV with a barge pole.
The context of Keith's posting was:
KSZ TA2DD002 just clipped conductor
KSZ KSZDD002 missed "by meters"
PL082 where analysis failed to spot a syncline
POW MFC (mostly a duster as per historical 40 year drilling)
The common themes are Mindea drilling & Sprectral Geophys.
B1 target has now had the benefit of down hole EM, TDEM, CSAMT and gravity survey. None of this can negate geological risks it could be 100% worthless Pyrrhotite, but pentlandite (Nickel) is associated with pyrrhotite with the proposed geological model. KAV should know the preliminary result by end June/first week July and assays c3 months (end of Sept).
They spent a minimum $1.2m for Nov/Dec excluding any existing funds. My gut feel is they were negative cash in Oct, PL082 took a lot longer, BT paid himself 100k bonus and they’re employing c60 people + consultants/contractors not shown in Annual Report.
Liquid: the raise is £1.4m + £4.6m . Cash in the bank $2.2m 31st Dec, cash burn varies but will average c$400-500/mth across the year. Current cash position likely $1-1.5m. Lets just say the burn rate is significantly higher than envisaged in the Nov prospectus.
1) Is there a poison pill to shareholders in blocking Stage 2 because you'd be bonkers to accept 1p when the underlying value was >2p? That said the threat of massive dilution is going to cap the share price for the next 6 months.
2) We've seen other prospective shareholders unable/unwilling to buy at 1.8p. Litigation is a theoretical route but not practically feasible
Don't forget warrants.
For valuation purposes, back of an envelope valuation is 10% of the project NPV so assuming £130m for KAV is a mighty end valuation for the project.
Then you only get top dollar for JORC reserves and this is expensive anywhere $20-50m for a KAV project so you need another cash raise (hopefully at a premium) so your actual return might be 5p post dilution.
Bitcoin: this is grotesque abuse of existing shareholders. If you thought KAV might 10 bag its now 1 or 2 max. You can get better odds buying easyJet or Persimmon without the Turney BS factor.
Upside is now severely limited even if KAV made a discovery tomorrow because of the threat of massive dilution. I thought the strategy from 2-3 months ago was to drill three main licence areas and then agree JVs so this blows that strategy out of the window.
They’ve taken a recent decision i.e KSZ first.
I don’t definitively know if a drill contractor has been appointed because this has not been announced but it must be close given the twitter posts with Brett looking at the site.
I based the estimate on the basis the drill site and accommodation camp could take several weeks to set up from scratch.
There was some reference on Twitter about data interpretation and drill plan, a bit odd given they’ve had 12 months to prepare.
2-4 weeks would seem a reasonable estimate based on the noises coming out of Kavango inc ‘summer of drilling’, it’s unlikely to be next week, you would hope it’s not the back end of June (but always possible).
If you’ve sold your KAV shares then politely jog on. The cynical campaign to trash the share price has been going on for the last 18 months.
If you hold KAV shares then you’re doing so for a reason;
In 2-4 weeks KAV commences KSZ drilling. DHEM has identified a 28,000 Siemens target likely to be pyrrhotite bearing massive sulphide. It’s a medium depth 400-550m drill in difficult ground conditions, but they will have learnt from last year. Success opens up further Area B targets, a stacked IOCG, additions northern KSZ targets, shallower exploration in south KSZ and of course a joint venture. KSZDD003 is a major value inflection point for Kavango, should have completed by the end of June with assays cSept.
Ditau has gone from REEs to lode gold, yes the initial assays were disappointing in absolute terms but they must have significant information to be getting this excited. This drills in about 3 months time.
KCB Karakubis is surrounded by Sandfire, Rio Tinto & ENERG. Kavango have engaged Dave Catterall the regional expert and interestingly he preferred Karakubis to PL036/2020 which was more advanced. In theory it should be drilled Oct/Nov.
There is imminent news on two early stage acquisitions, likely lithium or nickel in Zimbabwe or Namibia.
I’ve previously called for Turney to resign or be sacked. The share options, warrants, massive dilution, 2022 bonus and placing, the current cash position, the PL082 shambles, the failure to make a discovery in 2022, all this is true and deeply irritating to the point where a committee of shareholders could produce a more coherent strategy. But we are where we are, its priced in at 1p and there are half a dozen inflection points which could see a major re-rate.
It turns out the reference to KSZ drilling in the annual report was true!
https://twitter.com/KavangoRes/status/1652260381732093958