Member Info for Legalwolf

I guess GCAT is turning into a multi-blagger?

Okay just had a look. Says he has been told there is to be a FCA enquiry following his correspondence to them and that he doesn’t have a position in the stock. I believe GCAT’s prospectus is awaiting approval by the FCA. Would the company have to RNS if there was an investigation or only if there were any adverse findings?

Does anyone have a link to this TW website? If it states that there is to be a FCA investigation is that likely to be correct whatever their motives?

They must still think it has the potential to be a commercial deposit as they are continuing to drill it?

If there was to be an investigation, it should definitely look at what was actually agreed with OCIM/Philaro and comms with them, against what was communicated in RNS and interviews. The funding was presented as a done deal even to the point where people were thinking even as of today that the Philaro money had been received already? All imo

The FCA are currently considering the approval of the prospectus. Also, the company itself is saying it has initiated an internal review, and will be taking advice from solicitors. I’m still unsure at how they have repeatedly agreed payback terms with successive creditors in excess of their authority to issue shares. Nevermind 20%, they owe nearer 100% if you tot them all up. How has that ended up happening? Seems like a total basket case situation. All imo

Really good post. We were all lth here based largely on RMs bullish interviews. Yes, maybe some warning signs might have revealed themselves if we had done more due diligence and research (eg reading admission prospectus and recent financial statement) but this is a company listed on the LSE where we should be able to take some reliance on that and what we were being told by the BOD. All imo

Yes, definitely lots of risks and I think they are clear for all to see. The company has depleting cash, depleting production, increasing debts (when you factor in interest payable on existing liabilities and ongoing opex) and decreasing time to sort out a funding solution (which I would measure in weeks rather than months), before dilution will be required. Not really a recipe for investment just right now, unless you have a very high risk appetite, equally strong confidence in the BOD being able to sort this mess out with minimal damage, or are already invested here and so have different considerations to factor in.

We definitely need an interview from RM because there are MAJOR questions that have been left unanswered by that RNS, including:
- is the mine profitable at these lower levels of production, and will it continue to operate whilst funding is secured?
- do they have enough cash to sustain the business until funding is secured?
- are creditors 'happy' to continue to defer their payments until the above?
- are they still expecting funding to be "non dilutive"?
- how is the company going to address the deferred share payments outstanding v what shares they can legally issue?
- do they have any concerns about the FCA's approval of the prospectus in light of such matters?
Until these questions are satisfactorily addressed, and we know what kind of GCAT emerges from this mess (in terms of getting its prospectus approved, any dilution required, and its new figure for shares outstanding) this is not an investment for me, and I would have to agree with Trek and others, more a trader's playground. All imo

They spent over a year or so on target optimisation work at the KCB, which delayed the commencement of drilling. As I've said before, what is the point of having all these innovative and promising sounding geological methods, if it doesn't reduce the timescale to making a discovery?
Still, it is important to always keep in mind that the current share price is as much to do with sector performance, as it is to do with KAV's own performance. Sector sentiment and market conditions were much stronger when the share price rose to 6.5p here off the back of the B1 drilling. If you're going to be a long term investor here, then you have to patiently (and painfully) endure these periods. If you're a trader (like Cox et al?), then you shouldn't be moaning about it in the first place. The fault is not BT's or KAV's, but yours, in mistiming your trade entry and exit. Unless the moaning is being done to secure a better entry? All imo and not having a go at anyone. It's all fair game.

Will they even get the chance to sell it? As I understand it, they haven't actually completed the payments for either Kili or TZ?

Whilst the RNS mentions the loan from Mill End, do we not also need to know what is happening with the other liabilities that were set out in the Financial Statement from last year, and which I believe are still owing (but happy to be corrected if I have got this wrong):
-£482k cash, and £1.5 million in shares, that are still due to Tyacks for the acquisition of Nyakafuru?
- £2 million loan (plus 8% interest) taken from Koenig in July 2022?
- £1.5 million in deferred consideration shares from the original acquisition of Kilimapesa owed to Mayflower Capital(£1 million on recommencing production at Kili, and £500k on achieving 5000oz sales)
- £2 million owed to Orca Capital for shares paid but still to be issued (can someone confirm what this payment related to in the first place?)

The RNS doesn't cover any of these liabilities. Undoubtedly, any cash owed would have been paid out from the OCIM/Philoro funding, but how were/are they planning on making the deferred share payments, if they had already issued their maximum allocation for 2022, and can't dilute by more than 20% in any year? Therefore, have they not acted ultra vires here in agreeing payment terms that they could not meet? And what about basic due diligence on the part of the creditors regarding this as well?
In any case, does the market not need to know which of these creditors are calling in their payments like Mill End, and which ones are 'happy' to continue deferring their payments, or renegotiating them, until funding is sorted out? Surely, they are not going to leave it to the market to guess. IMO, we need a clear statement of the position from GCAT about any and all liabilities, and not just the Mill End one. All imo and DYOR

ID78 - if Plants 2 and 3 are offline, than hard to see how current production is going to any better. However, I'd rather wait to hear from APR about this, as he has a much better handle on production and plants.

"Plant 2 was stopped on 1 August 2022 as the project of washing fines in the circuit proved to be uneconomic. Major factors were the low tons washed to the CIL and the insignificant upgrading of the fines... The heap leach pads reach design capacity and therefore Plant 3 was stopped in December 2022."

They haven't said which Plants are currently operational and what current production levels are likely to be. How are we supposed to work out the finances etc without such information?

It doesn't make sense. This must mean that the Philoro funding was conditional on the OCIM funding, which isn't what was RNSd? Also, why did Philoro not advance the funding by 31 December 2022, if OCIM did not pull out until 10 January 2023.

They haven't said anything about the Koenig loan. It was taken AFTER the Mill End Capital Loan. If they are having to renegotiate the Mill End one, then what about Koenig one? Or do they have a much longer payment period for this one? Otherwise, I can't imagine that Koenig are going to sit idly by whilst Mill End sort their repayment out?

"On 18 July 2022, the Company entered into a Convertible Loan Note Instrument with (“Koenig”), a company incorporated
and registered in Germany, for £2 million at an interest rate of 8% per annum. The conversion price being agreed as £0.06 per Ordinary share, save that where the price per ordinary share falls below £0.06, the conversion price shall be 90% of the 10 day VWAP price of an ordinary share. 266m warrants were also issued to Koenig, at an exercise price of £0.0085 and are exercisable for 2 years from the date of grant."

Watcher36 - I'm not sure that is correct? At least one of the CLN allows for conversion at 20% VWAP discount to the share price. I don't know how these things work, is the discounted price calculated at the point that the creditor elects to convert their loan into shares, or is it on the day that they receive their converted shares? Either way, if GCAT announced this conversion before the price of conversion was fixed, would it not negatively impact on the share price and hence the discounted conversion price? All imo
As I said, I don't know how these things work, but it just had me thinking. Happy to hear from others who maybe have more experience/knowledge of CLNs.

Zan TM - with the funding falling through, it has left them in between a rock and a hard place. In terms of trying to manage the fallout and consequences of this situation, the discussion in the boardroom is going to be different to the discussion amongst shareholders. If they appease our very understandable need for newsflow and answers, and that is detrimental to the share price, then they are NOT acting in our best interests or the company's?
As difficult as it might be for us to comprehend the silence, and it all feeling like a continuing smelly show, it could be that they are doing things in the necessary and 'right' way. And we will probably only be able to understand their actions once all the information is out and with the benefit of hindsight. All imo

As I understand it, today's AGM Resolution 9 was for authority to issue £1.65 million of new shares, and AGM Resolution 10 was to disapply statutory pre-emption for the same amount. This authority expires after 15 months or the next AGM. According to today's RNS, these Resolutions have been passed.

In our very understandable anxiety for news flow on this bb, are we maybe not giving enough thought to how dilution/conversion would (necessarily have to) work? Put differently, IF anyone here has ever thought that dilution MIGHT be a possibility here, then what makes you think that they would announce such dilution before it has taken place? If they did that, would it not just negatively impact the share price and result in more dilution and hence be counter productive?

I don't know, but genuine questions/thoughts on my part? All imo

We have all acknowledged the possibility that the company might need to dilute. IF that is so, then a) would you expect them to announce that dilution before or after the event? and b) would they not need today's Resolution passed to complete any dilution, because they have already used up last year's authority to issue new shares (when they issued $1.5 million to Tyacks)?
Therefore, I am wondering whether things have to be done/announced in a particular order, starting with the AGM Resolutions?