Clear as --
Profits being taken because the experienced know this is but a opening gambit - which could take many months to play out - during when buying pressure will tail off and the shares will drift. Happens all the time. As they say 'when you see a fork in the road, - take it'.' 'When you see a short term profit - take it' No investment advice intended !
I'm sorry to say that even after five years no one will make 'real money in Kibo. The reason, with all the maths, has been posted here and on the other place for at least a year past. Power stations are relatively low return businesses, and Kibo will end up only with minority stakes and not necessarily any dividend from them. It might be a little (not much) asset rich and able to show a 'share' of earnings, but without a cash income those earnings will be very cheaply valued by the market. ie Kibo will be permanently cash poor. At least the business model for mining envisaged cashing in on any successful find by selling to a developer. The 'business model of acquiring minority stakes in power stations, which will be of little interest to other investors except at a big discount, - is hardly worth the name. The Med venture might be a partial answer but has a very long way to go to prove itself, and meanwhile Kibo's cash will continue to drain and its issued shares to balloon. As for Sepco taking a stake, it will merely be to protect its position as supplier of the kit - a much more profitable business than investing in power stations. You may be 'kitchen table' investors. But I' sure you don't want to keep on losing your dosh.
Mr Smellymore ! - The shares won't rise again - except in brief spikes - because more and more (not you of course) are realising the snags and risks behind LC's 'strategy' . Up to now most have believed the happy clappie's absurd share value predictions, and those who know they're ignorant fantasy, happy to ride on whatever spikes they might produce.
As for the FCA they are already observing this board for the share manipulation caused by whoever deletes the only posts from professional analysts who know what they're saying. Pathetic, as ever, that you never make a reasoned reply, or show that you know anything at all of the points being raised.
Here it is again. It's comment based on fact. If LSE allows it to be 'removed' by some inadequate, they'll be reported to the FCA
More on MED (not MAST) and Dilution, and a slight apology
Apologies for describing MED as one man and a dog. It's actually two men, and possibly a dog, with, also possibly, friends in Africa.
As a 'micro' company, Companies House info is limited, but MED is related to MAST Energy Ltd, whose latest accounts showed £535,000 of 'fixed assets' (MED has no assets) which might, or might not, indicate some sort of energy asset or contract. With MAST seemingly having links with investment companies in Africa catering for private investors and interests including niche energy generation, and which might be more profitable than in the UK, Kibo's first project might be there.
But it is hard to see any track record in the UK for the reserve energy plants Kibo is suggesting, in a highly developed and probably competitive market, beyond a plan associated with MED's and MAST's CEO Darrel Krowitz for a 6MW plant in Wales generating from waste oil, but which failed to get planning permission.
Apart from that, I've slightly refined my estimates for Mast Energy Developments's cash flows to show possibly £1.7m pa for each 20MW plant, which means Kibo's 60% share might deliver £1m pa towards its £2m pa cash drain, and so reduce numbers of plants required to two, with Kibo's 60% share of capex reduced to perhaps £12m. That could possibly be part-financed by borrowing, but which would reduce cash flow and so need more than two plants.
Assuming a 50% loan, perhaps 3 plants will be needed, costing Kibo £9m up front cash, or 180m shares at 5p if Sepco buys in - taking the total issued to 820m compared with 395m in Jan 2017 only 20 months ago. That reduces the per share contribution expected then from MCPP by 52%, and is before counting any shares issued to fund Kibo's share of MCPP itself.
So its not surprising Kibo's RNS merely says MED offers "a realistic possibility of near-term revenue generating assets". Near term means at least a year, so there'll be more cash drain to plug, explaining why Kibo merely says "will greatly assist the Company's working capital requirements"
With its other developments, I can see rather more share issues, and if Sepco wants more than its stated 10-25% of authorised capital, Kibo is going to have to come to shareholders for permission to exceed its current 1bn share limit. Given the essential part MED might play in plugging Kibo's large cash drain, shareholders should use their boasted large holdings to deny permission unless Kibo comes up with much more information and projections (as Sepco certainly will)
Will those 'major shareholders with their pension funds' (and being so close to LC's ear ) have the wit (or the organisation) to do so from the comfort of their 'closed' (appropriate description) Twitter group ? Let's see !
Aerial What are you doing on here if you haven't heard of Companies House and don't know anything about the world-wide power sector ?
Mr MM - Do please explain where I'm wrong. So Kind ! And make it now, because my opinions are based on what (little) we know now. Again, so kind !
The clappies should think about this.
LC has obviously (and belatedly) realised that the minority stakes it will end up with in his power projects won't give Kibo any income, until the majority shareholders declare a dividend - which is likely won't be for many years and might be not at all until project loans are repaid. Meanwhile Kibo's outgoing cash just to keep the lights on and LC being paid - apart from costs for yet more projects - is some £2m pa.
So - Bright idea - How about MAST ? A Quick Quid Cash Cow !
Going by UK Power Reserve's operating companies, (similar to proposed by MAST) capex for a 20MW plant is around £8-£10m, on which it might earn £1.5m pa revenue with an operating profit up to £1m. After tax therefore Kibo's 60% share wouldn't be more than £0.4m pa from each project. So we're looking for at least five of them.
That's if MAST's projects are as attractive as UKPR's - unlikely because UKPR has been growing fast (and isn't the only key player) with over 40 projects and is backed by major corporations, so is likely to have snapped up all the best ones. Against that MAST might have promised connections, but has no contracts (otherwise Kibo would have paid a lot more than £300k) and appears to be run by one man (a mate of Louis' from S Africa with no discernible experience in the industry) and a dog.
As ever, LC has given few clues to enable investors to work out whether a viable idea or not. The 18% 'potential' irr's look about right, but his quoted NPV's seem to depend on using a low discount rate. Knowing that a 20MW plant is likely to cost at least £8m to £10m, where is Kibo's 60% share of a total £50m going to come from ?
UKPR seems able to borrow quite heavily against its plants. But they have attractive forward contracts from guaranteed take-offs at good tariffs. We have to assume MAST will be signing something similar. LC should say when.
Heavy borrowing will, of course detract from the plants' cash generation, so Kibo will need more than five, and without it Kibo is going to have to issue a lot more shares to fund even half its £30m plus share of the cost !
I could draw even more conclusions (even assuming a Sepco cash injection, which in my view is problematic). But the clappies would be even more upset.
If they don't want to be, they could use the tremendous leverage their boasted enormous shareholdings should have with LC to demand much more clarity about his future cash flow problems, and his plans including MAST (including their 'positive feasibility studies') and Sepco to deal with them. Either way, there's going to be a lot more dilution.
A pathetic reply. Like any inadequate, you resort to insults when you can't understand the point being made. As for a higher gold price, Hum only gets the benefit of slightly more than half after tax, royalties, and the 20% minority.
Mr Boycott - If I thought you were capable of spotting for what they are, the idiocies spouted on here by the clappies over the years about Kibo's value, and you gave me a contact address, I'd be happy to give you details of all the reccs I've made over the last few years, whether buys or sells. And those I made for fund managers in the preceding 35 or so. But I'm not convinced you are.
SYM - Having invested more in time - and cash on and off - than probably most here, you'll have the benefit of my continuing opinions I'm afraid ! - just as those did who took my advice and left ! So Sorry to disturb your own slumbers !
Bearing in mind his last RNS on the subject 26 Sept referred to 'the on-going PPA negs", the least our zipped up CEO could do is reassure that negs are still "on-going". If not, he should have RNS's the fact.
TbT - PS To look at it another way. For a normal, permanent lived project you can use 1) P/E. But not appropriate for 7 years, so massive discount needed on 55p. Or (not And) 2) use an EV/EBITDA mutiple. But, again, only valid for peers who are long lived. So discount again on 45p. Or (not And) 3) Use an NPV. But NPV's never approached in practice. My research covering over 70 junior miners in 2011 mining boom showed few reached even 1/3rd their theoretical NPV. Net result, how therefore does Canacc justify its 50p, which would have been massively discounted on any of the 3 measures ?
TbT Top table pge 30. He's effectively (on average) taking 100% of one of those valuations. Not one of them is valid. Taking them separately as would be logical, would need to have the appropriate discount you're talking about. He's effectively adding three valuations instead of choosing one of them. Muddled thinking !
Drop inM - You haven't noticed that to get his NAV (I'm perfectly well aware what that is) Canacc has added up three mutually incompatible metrics (none of which on their own are valid for Yanfolila, or eg for NPV would not be valued at 100% anyway) and then, to make it seem conservative, have taken 33% of the total That is a complete nonsense. The only valid measure is one or the other, and in this case NPV (but take your pick for discount rate) - which in reality would never be approached. Its an example of analysts turning themselves inside-out to find a nice looking 'target' to lure in the naive. Its what they're paid to do. ! The share price tells the true story. HUM will only advance if gold shoots decidedly (+25%) up, or when it spells out costs and benefits of any future expansion or Dugbe. ie it will have to start again to convince re higher value than current. I would rather say "cautious" hold.
That Cannacord note merely repeats the previous Do!fort note. Its valuation method is nonsense - trying to amalgamate verious metrics that are incompatible - eg PE ratio totally inappropriate for a short life project - NPV is never ever even approached in practice because it is a conceptual illogicality. Its used only because analysts can't think of anything else, and because (conveniently) it produces a high 'target' share price that pleases its corporate client and draws in the unsuspecting.. The only valid method would be to project forward HUM's balance sheet a few years - ite taking in cash flow to then, debt repayments to then, capex and running costs to then., which will show how much the current market cap is discounting the future net asset value (Not forgetting the present large fixed assets figure will have been depreciated down to whatever value it might still have for any future Yanf epxansion, without which the fixed assets will be worthless. All needs detailed work of course to calculate. But estiates a few months back showed HUM's share price was no more than fair.
Lost ! No, if you run the calcs for 50 years you'll find the NPV approximately halves in 20 years. It depends on discount rate of course. But 12% is what roughly equates to the share prices most miners with 10-15 yr projects trade at once fully funded. An NPV based share price isn't mathematically or economically logical in any case. Its used only where a PER wouldn't be appropriate here and now, or by analysts 'boosting' their target prices to please their corporate clients. It is merely a measure now of all future value, which a banker would want to know, but which no sensible investor would ever pay. If he does and holds for the NPV project life, he merely gets an 'annuity' return at the discount rate. Who would want such a boring return ? Its why institutions would never pay anything near it.(and two years ago didn't !)