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Groover: "Terrified of their own shadows/death most of the time and here we go again. In contrast FTSE dropped 275."
Lol, do you wanna look at the percentage change instead of absolute values?
My knowledge of KIBO can be summarised in two sentences:
- It's headed up by LC
- KIBO has a 55% (ish?) stake in Katoro
So I can't really comment too much on what's going on there. I hope you didn't get stung by it though.
As for Katoro, while a placing is possible and I'd be an idiot to rule it out entirely, I don't expect it to be anywhere near as bad as the situation you described at KIBO if it was to happen.
My reasoning:
- They've already secured to tranches of CLNs to fund the initial stages of the project when they could have gone down the placing route just as easily. Obviously we don't know the terms of those CLNs at this point in time and there could be some element of dilution
- LC has explicitly stated that he expects to receive debt funding for the project with no dilution at the Katoro level. (I take that as he knows people won't want to trust him after KIBO and will need reassurance he won't be diluting existing shareholders down to insignificance).
- How much will it cost to get the processing plant fully up and running?
The RNS states the following:
" The initial production capacity that is targeted as the first phase of the production ramp-up must be capable of processing at least 120,000tpm of material from the Tailings, which the Board estimates will cost approximately US$11.0 million ('the Initial Project Funding'). The Board anticipates that the Initial Project Funding will likely be in the form of debt funding secured at the JV level."
So roughly £8.5m.
Combined with debt funding, even if they had to raise any funds through a placing, I can't imagine the initial funding would be extremely dilutive.
Slightly more concerning is the $30m total capex required to get to 500k tpm, but that's probably beyond my investment horizon.
Following this one as of today, having seen it show up on the BBH video.
Not invested yet, just keeping an eye on it for now.
If anyone wants to offer a summary of what to expect from the company over the next few weeks / months, that would be appreciated.
bcl, yes, dilution is a risk; been stung by that one multiple times over in TOM.
So let's take an extremely dilutive assumption: 150%
Current shares in issue: 184,355,462
After 150% dilution: 460,888,655
Pre dilution: £5,384,615 / 184,355,462 = 29.2p
Post dilution: £5,384,615 / 460,888,655 = 11.6p
Heck, you could go to 300% dilution and still get a bag and change from today's price
5,384,615 / 737,421,848 = 7.3p
(Caveat: P/E assumed at 10).
Two RNS's
First: increase from 500,000 shares to 900,000, with 900,000 voting rights
Second: remained at 900,000 shares, but voting rights increased to 1,500,000, with no financial instruments.
Can someone explain how tf you add 600,000 voting rights without buying more shares?
That's a good question and one I'd love to know the answer to.
I can only speculate, but I see three possibilities:
1) An overabundance of caution. They've already shown that they'll be taking a cautious approach with the forecasted gold price at $1300, perhaps they're being cautious with the production forecast too.
2) Misinterpretation. By my calculation (0.3*500,000)=150kg=5291oz pm = 63,492oz pa. That's not far off double the estimate 35koz. The wording of the RNS states "the Project is targeted to produce approximately 35,000 ounces of gold per annum". All of us have interpreted that to mean 35koz = 100% annual production, but there's a(n extremely slim) possibility that they meant to say 35k net to KAT. In that case, happy days.
3) Efficiency. This is the most probable explanation. The process isn't going to be 100% efficient and capable of extracting all 0.3g/t from the raw material. It could be that the process can only extract roughly half of it given current technology, therefore the end result is only 35koz pa instead of 63koz pa.
If this is the case, which I believe it will be, there's an interesting prospect as technology advances over the next 35 years. Perhaps by that time, could the tailings be reprocessed again with newer technology that will be able to extract even more gold from it?
Kai
A word of caution for anyone new to the stock regarding Sonic's figures:
The 35k oz pa only comes after they ramp up to 500k tpm processing, which is expected "within two years", meaning that the SP target is what we can expect in 2022.
If you're coming in new and looking for a 25-bag within the next six months, you'll be sorely disappointed when you only get a ten-bag because they're only processing 250k tpm this year.
In all seriousness though, of my three holdings, this is the one I have most confidence in and I'm glad to be in at the moment. I expect the AISC to be higher than the $664/oz for the first year at least, because they'll only be processing half of the target figure so they won't have the full benefit of economies of scale. To pull a figure out of the air, let's say $800/oz until they ramp up.
First year:
8750 oz to KAT
AISC = $800/oz
Profit margin with Au at $1600 = $800/oz
Profit = 8750*800 = $7,000,000
USD/GBP @1.3 = £5,384,615
£5,384,615 / 184,355,462
SP = 29.2p
Still a ten bag from current buy price at 2.8.
COPL is a short term punt made with play money for me. Had I managed to get a quote at 0.16 on Friday, I'd have been out already, but for better or worse, I'm still here.
So I openly admit that I'm not nearly as heavily invested - financially or emotionally - as many of the long term holders here, but the r/r profile is attractive enough that I'll stay in for now.
But I really can't tell whether I should be amused by or to feel sorry for the bunch of you desperately arguing over the tiniest details in the RNS and how it's worded; seems like you're giving it far more thought than the PR person who scripted it in the first place.
Good luck all. But some of you could probably do with a taking a night off.
Mohh, I'm not attacking you.
I'm saying it's nice to hear well articulated opinions like the last two you posted, in contrast to your usual style which is - if I may be so blunt - akin to that of a spoilt 8 year old who didn't get to go to Disneyland. I've seen your post history, I've watched the discourse between Suhail and yourself across multiple boards, and you really don't do yourself any favours with how you pitch yourself.
If your intentions are truly to counter people you consider to be rampers, then you need to work on your image and your presentation. The way you present yourself has a massive impact on how trustworthy you appear to people. And right now, your credibility is in the dumps.
You might respond to this and say that you don't care what people think of you. That may be true. But if it is, then you're wasting your own time and effort in trying to discourage people from investing in a company that you don't believe is worthwhile investing in, because unless someone thinks of you as a reputable source of well reasoned arguments for and against a company, your efforts are worthless.
All the best,
Kai
Purp, I saw that, I think I replied to the chap there too.
While I do agree that the company has not been managed properly and shareholder value has been massively eroded due to it, there's an element of personal responsibility too; if you're losing more money than you're comfortable with losing, get out of the trade.
My own perspective has changed dramatically over the last few years. I've been in and out of here a fair few times, but I've given up investing based on "this company is going to do good and I should support it", and turned my focus purely to an admittedly selfish "Will this make me money?"
It's all about the opportunity, and there have been countless opportunities to grab double and triple digit returns along the way over the last few years here even through the falling price.
I just checked the chart history.
Last time the 20DMA crossed up and over the 50DMA, it shot up from 2.5p to a peak of 8p over the following few weeks.
The 20DMA crossed up and over the 50DMA again last week.
https://www.tradingview.com/x/AT9nOjYz/
GLA.