Member Info for LTbeliever

Wow!

Just to add to the below, this fund raise was flagged a couple of weeks ago in any case, hence the small rise in the end (despite the initial fall, by more than the dilution); also, the new investors are buying shares at 1.10p hence they are already sitting on a paper profit of 35%; however, as rightly pointed out, they could still be subject to a big capital loss IF the EPC does not proceed etc, hence -- IMO, it is a big vote of confidence (albeit assisted by the Co providing some information/ reassurances we are not privy too) in KP2's prospects and the EPC finally coming to fruition.

Mitch, Placing Shares are always "issued" directly by the Co - against cash - into the Shareholders' Broker Accounts, not bought in the open market; in the RNS, 2 categories of new shares are mentioned; "Unconditional", which will be issued and be tradable on 5th July, and the Chairman's Conditional shares, whose issue needs to be approved at a later GM, as per below:

"Participation by the trusts will be deemed as a related party transaction for the purposes of AIM Rule 13 and ASX Listing Rule 10.11.1, and accordingly require relevant shareholder approvals at a General Meeting, the details of which will be advised in due course;"

A vote of confidence? A screaming BUY?

Barravelli, we have to wait for the EPC and then the financing proposal, to know exactly who pays for what, when, and how (i.e. the banks, the offtake partners and the Co itself); Now the Mkt cap is 50mln+, if it goes - just saying - to 250mln, and the Co needs to raise - say - 25 mln for construction works, then that would be a 10% dilution on the post-EPC-finance update SP.

Good point Mitch, the Co must have reassured them that the EPC - one way or another -will be signed soon - IMO

I guess all the "bad news" are now out, we just have to wait for July's updates (Q2 operating update, EPC meeting and Chinese offer to operate the mine); hopefully, next RNS will be a positive one!

GLA

So, in conclusion, the 2ndary A2X listing cost nothing to KP2 but it'd make - in theory - the shares more liquid, hence lower spreads, hence more attractive to existing and new investors; in the short term it changes nothing (until EPC is signed) but it shows the medium term thinking (and hopes?) of Mgt, FWIW.

Hrdz, to answer;

https://www.a2x.co.za/listing-on-a2x/

A secondary listing on A2X complements a company’s primary listing by providing its investors with a choice of venue to transact. A2X is authorised to secondary list Shares, as well as to inward list shares with a foreign primary listing. A secondary listing comes with limited additional regulation and no cost for Issuers due to the nature of such listing.

Hrdz, no idea, I can only speculate that the timing is more important; why now? why use precious cash and mgt resources, if the Co doesn't believe that the EPC will be signed soon? RNS was out on 7 May i.e. around time of China trip but of course decision to list should have been taken earlier. Maybe the Co expects more trading/liquidity from Australian holders too, or just did it to allow them to "exit" when the SP rises; or, it might raise cash on ASX2 when the financing is wrapped up; thre must be a valid reason, definitely.

MItch, just to add/clarify a couple of points; the Omanis' last NE Director resigned in Dec.2022 (21st - see RNS), and the long period without a replacement indicated the mothballing of the whole project, at least to their eyes; now, Finace expertise is clearly needed so they duly provided.

Secondly, the Omanis and the Chileans are already committed to offtake of 1mln tonnes of potash (from a possible total of 2.2mln) so the financing would have covered the difference; but if the Chinese will want another big chunk of the remaining production, as offtake, plus operate the mine (we will know this in July too), then the risk to a bank/external financier is heavily reduced (as the LTV will go down, but also as the mine's proper operation will be legally guaranteed through the operating agreement) - all IMO, GLA.

Last year's Trading Update was on the 4th July (Tuesday), so just 2 working days after the FY23 end. I think they will issue an Update soon, as they issued in February and May.

In Jan.24 they had Revenues of 300k and signed deals of 1.4 mln; for end H2 24, they should have around 2.5mln of signed deals and Advanced stage 3mln (so, starting FY25 with potential Revenues of 4-5mln); so the question the Mkt will want answered is, what Revenues they cashed from processing of the signed deals (ie completed)? if they have processed/cashed all 1.4mln pending at Jan end 24, and some more from the pot, between February-June, then we could be looking at Revenues of 2-2.5mln for FY 24; at a margin of 60%, that's cash of appx 1.5mln i.e. a 5 month cash runway extension - to Jan.2025.

So, this Update could be - potentially - very uplifting; with the SP at these levels then - IMO - more upside than downside is the likely scenario.

GLA

Last day of FY2024, we should be getting a trading Update (especially if things are good) in the next few trading days (next 1-2 weeks).

If you are right, then we will know in 2-3 weeks when - IMO - we should get a H1 Trading Update. Although I think that it might not be needed now - it could be needed in a few months, when Trading picks up more and there could be a need for short term Working Capital.

99, yes, good point; remember that the Omanis and Chileans want 40-50% of the production, as a minimum offtake, so it's quite reasonable for PowerChina to ask for as much of the rest as possible.

"...the discussions involved many specialist engineers, financiers and lawyers..."; it is quite possible that - if the Dubai meeting is successful - then the financing will be open and shut in no time, as it seems that the consortium is providing its knowhow to KP2 for these negotiations (because only the CFO is the finance-related person at KP2, but who is not necessarily an expect on mine construction financing) - IMO

Last, but not least, is that Dubai (at Omanis' behest?) is even being considered by the Chinese, who are holding most of the cards ; it's less formal than Beijing and things can be done more quickly;

Most mining operations never get off the ground due to cost overruns, contract disputes etc (look at Sirius mine); The Board is trying to eliminate most unknowns, so a delay is to KP2's interest if it means a better contract; and if the Chinese want to operate the mine too, it means a better incentive for them to finish it on time and within budget IMO

Baldmark, they mean funds for the next 2-3 months (up to 500k?); it will be raised internally, by the Chairman etc. On a mkt cap of 50mln+, that's 1% dilution.

Agree Rekash, about short term players exiting; those who bought recently at these, or higher SP levels, will return and average down, now that there is clarity; all parties are focusing on closure and the Chinese seem to have become an entrenched party, interested in building and operating (big +). Nothing about the Minister, which implies RoC is in the loop.