Member Info for Markyess

I'm not traveling. I don't expect any ground breaking news outside of finalising the admin and share issue around Diamond Creek (which, frankly, is a decent step forward in it's own right, anyway).

Did the crowdfunded fail, or was it successful after two highly experienced mine developers put in $700k of their own money, after their own informed period of due diligence?

I have faith in the guys who have been there and done it, are putting money in my pocket from the gold project they created just 4 years ago, and have created under appreciated, ready value that is just pending a signature in Togo.

As much as there is risk in most things, DR was the reason I invested in Ferrex, I have faith in his knowledge, experience, investment decisions and capability of building producing mines with enterprise value multiple times that of an explorer.

He was recycling my original post :-)

I think Devon pointed him towards it as he wanted to understand the Nayega economics.

The guy of importance at Falcon Isle/to this project/to the here and now is Shawn Helda. I don't believe the other guy is involved any more.

The share numbers in that model were the ones I produced a couple months back, when Diamond Creek was not even a twinkle in our eye.

As is always the case with these things - they still remain valid in their indicative value. Given there is now another project of similar potential value - it's less about dilution and more about the value of the share - and again, the dilution has been material on the % of the company that I hold, but so long as that dilution delivers equivalent value, it's really no issue.

Those numbers/assumptions do need a couple of adjustments, but the outcome is still hugely rewarding.

When I get chance, I’ll update them.

Yeah, phosphate is the only thing that agriculture needs in the product. Higher percentage of phosphate equals higher saleability, more phosphate, more fertility. With the growth of medical marijuana markets (and overseas agricultural needs) there is certainly going to be a market.

The previous guy is a sales guy, but not an exploitation guy, so he has not been trying at this for 2 years. He had the gear, and no idea. You can't sell what you can't produce. We now have both means available to us.

Like any project, margins are lower in the beginning, whether as a result of capital payback, or to break down barriers to enter.

I understand your jaded views (I first bought into Ferrex on 31st July 2011). But I think you are now reaching levels of terminal cynicism - almost to a point of foregoing objectivity.

Don't get me wrong, it's good to have the 'grounding' view represented.

Hi Monty - I'm not sure I'm following you. The difficult is trying to put a static projection on a transient data set, so all is within the realms of a certain degree of judgement/approximation.

The baseline values were broadly based on current market value of Nayega (£4m) and a nominal value for Diamond Creek based on the loan facility and cash injection by DR and RL (£2.5m). These NPV evaluations are (IMO) not truly indicative of either project, but must be broadly how the market sees them - against an issued Share Capital of around 4bn to accommodate the initial tranches of the capital raise.

There is no Nayega operational value in the numbers until the Year 1 figures. First year figures in my numbers attributed a £1.1m profit share to Keras from the Nayega project. Contribution to MCAP was based on 50% of Keras profits being returned to shareholders (possibly generous) and a Dividend Yield of 6.5% (which is way above the usual dividend yield for a primary material producer) to keep the MCAP projection conservative.

Hi Jim, yep, I'd weighted 51% ownership of Diamond Creek and 76.5% ownership of Nayega into the base revenue projections behind these numbers.

Interesting insight on the gold play. One to watch, I'd be more surprised to see us sit on the two plays long term than I would to see us add another quick addition.

There’s a lot of variables, and we’re now getting to a stage where playing around with many billions of shares and hundreds of millions of warrants is just cumbersome. This cannot help but leave these numbers ‘shaky’ to justify at this stage. I’ve assumed full dilution of 5.8bn shares which means most warrants will be taken.

I’m assuming no new project investments, or development of the existing projects outside what we already know. This is purely project economics, and doesn’t take any account of loan repayments to us by the Diamond Creek project.
I’m taking current prices, as much as possible (so Nayega numbers are lower than my last calculations). I assumed that 50% of project profit was issued to shareholders as dividends. I have then taken a dividend yield of around 6% to set the MCAP, which allows for upside.

Differences between Diamond Creek and Nayega project dividends/values for similar numbers is based on slightly differentiated dividend yields, reflecting more stability on the fertiliser market than the Manganese market

Diamond Creek Project Only
Baseline/Now – Contribution to MCAP - £2.5m, contribution to share price (undiluted) – 0.052p
Year 1 – Contribution to MCAP - £7.5m, contribution to share price (fully diluted) – 0.13p, dividend payable @£65.00 per million shares
Year 3 – Contribution to MCAP - £32m, contribution to share price (fully diluted) – 0.556p, dividend payable @£278.00 per million shares
Year 5 – Contribution to MCAP - £50m, contribution to share price (fully diluted) – 0.88p, dividend payable @ £439.00 per million shares

Nayega Project Only
Baseline/Now – Contribution to MCAP - £4m, contribution to share price (undiluted) – 0.083p
Year 1 – Contribution to MCAP - £9m, contribution to share price (fully diluted) – 0.158p, dividend payable @£98.00 per million shares
Year 3 – Contribution to MCAP - £30m, contribution to share price (fully diluted) – 0.56p, dividend payable @£328.00 per million shares
Year 5 – Same as Year 3

In short, the sooner we start to show some revenue and perform a share consolidation, the better. We can also assume that there is likely to be a project acquisition when we see some free capital - either from the Diamond Creek loan repayment, or reinvested profits (in lieu of dividends).

DR and RL had supported the project with their own money, they could have opted to continued with the project independently or in a different corporate wrapper.

It only became Keras business at the point they decided to open the benefits to Keras shareholders, and so we weren't entitled to hear anything sooner.

I'm sure it was broached in something I read. It was as much about exploitation expertise as it was ready finance.

With the finances alone, the guy in charge had accepted his own limitations to make the exercise a success.

I'll have a go, PC

It'll be really rough and ready at this stage with lots of variables. If I get some time tomorrow, I'll have a go.

Even more reason I need to sort out this ISA holding fustercluck.

I'll put the details here over the weekend, I've put the laptop away as it was kicking out so much heat, I was still melting.

Looking at your figures, I was using the max 48KTON (less 5% wastage), but a higher unit price with annual inflation to reflect product premium. The base price I used was in one of the presentations and I think it was above $290, so with an annual uplift it was certainly higher by year 5.

I'd adjusted FX to reflect USD:GBP stabilising back to around 0.63 as I can't see us sitting over 0.7 long term.

I'd not calculated to per share value as this would require a rejig of the Togo manganese numbers, so just left it to project contribution to MCAP for now.

Given some useful numbers in the SP Angel Morning View and the new Corporate Presentation, I bunkered in away from the sweltering heat and started to look into the project potential.

There's a few numbers that I can't get my head around - most notably, the desire to take between 2-14% of the prospective $2.5bn market in a decade - this would translate to a 900KTON production - almost 20 times the current max capability and would drastically reduce the LOM from the 60 year projection - so - I disregarded it and based my numbers, capped to the 48KTON p.a. target production.

Given the projected costs and revenues per tonne, Keras ownership, and taking a conservative view that USD :GBP is likely to scale back to around 0.60 - 0.65 in the next few years. By year 5 and on achievement of full target production:

Annual project profit could be in the region of $20m p.a.
Given the ownership and currency changes, this could be worth £6m p.a. to Keras
Assuming 50% (£3m p.a) is returned to shareholders as annual dividends - given the sizable LOM, it would not be beyond the realms of possibility that Diamond Creek be worth somewhere between £50m - £100m to the MCAP on its own by year 5.

Lots of assumptions and open questions, but it's a starter for ten to start debating.

I think disposing of Togo would be an exceptionally bold strategy.

Borderline insanity.

IDWID - Go to the Keras plc website - the new corporate presentation is accessible on the home page

Looks like a blood bath.

That first market figure was supposed to be $1.1bn