Member Info for NickE

I have no doubt Rob is a genuine holder and have even exchanged private messages with him on advfn. He provides exactly what share forums should be - an insightful exchange of information.

It kind of grates when boards are so full of brainless argumentative one-liners when someone has a go at a poster who contributes really useful information. His posts are always devoid of mindless ramping as well.

Worth keeping an eye on the chart for this ETF which is the VanEck Junior Gold Miners ETF. Beginning to trend up but has yet to break out. It includes 'juniors' with a minimum m/cap of £100m or USD 100m but it gives some indication of where even the microcaps (Kefi) are heading.

https://finance.yahoo.com/quote/GDXJ/

Agreed DVH that it is TK finance second bank approval that is the trigger to move Kefi on for a significant re-rating from the current ludicrously low valuation. I am glad that Kefi has a decent amount of funds so that there is no 'when is the placing coming' drag on the share price when good news comes. Any residue of the placing churn should be mostly gone by then as well.

The positive impact of the gold price will begin to be factored in at some stage for the junior exploration and mining sector as well. So the stars are aligning for a very significant uplift this year. Patience is the key although I appreciate it is not the word a lot of much longer-term holders than me want to hear. But the best stock returns are always those when investors get in before the crowd and the crowd will flock to Kefi when TK is over the line and on a macro level if sentiment shifts for the junior miners.

From the link below:- "it is notable in gold equivalent terms, the Hawiah resource is already larger than Tulu Kapi and Jibal Qutman combined before any resource uplift." So when Kefi do get an NPV for Saudi then it will be well into double figures when combined with Tulu Kapi.

https://www.kefi-goldandcopper.com/files/announcements/kefi-positive-pfs-for-hawiah-28june23.pdf

Five Candles, I agree that Kefi will probably become a takeover target for its assets sometime this year but I would just caution on expecting it near term as opposed to the medium term. The big players aren't always the fastest to act but we do know HA is starting to get unsolicited deals offered in Saudi in particular. I don't think anyone will make a move for Kefi until TK is sorted and I don't mind that as there are plenty of other drivers of the shares this year aside from a takeover. Much better to get takeover interest from a higher share price base.

What will propel the share in the near to medium term? Removal of the placing overhang followed by the second bank's initial and full lending approval, further Saudi discoveries and, perhaps the biggest factor, a change of sentiment towards the junior gold mining sector on the back of a strong and rising gold price.

This link is one of the best bits of analysis I have seen regarding the junior sector and the interview was done in January and his gold price analysis has been spot on (no pun intended!).

Jeff Clark highlights that last year was the worst performance for junior miners but anticipates a sharp turn in sentiment for the sector this year as the gold price gets above $2200. He suggests that as sector sentiment changes many of the junior gold miners could triple. He's been right on the gold price and I suspect he'll be right on the junior mining sector as well. For Kefi it could be a very good year on both the micro and macro level.

https://investingnews.com/jeff-clark-gold-silver-forecast/

I agree eventually FOMO and a more bullish sentiment toward Kefi and junior miners in general will kick in.

We'll see if it happens as quickly as you think Five Candles. I think firstly the overhang from the placing needs to be removed and, secondly, I think any predator will wait to see TK over the funding line.

We'll see the share price move on the former. I don't know the extent of the overhang but no doubt a fair bit was forward sold. A few high-volume days should do it. Then, after TK funding, I do believe Kefi will be in play and from a higher share price base as well.

HA's comments about being approached by companies offering deals at Saudi conferences suggest it's far from guesswork. On the contrary, it sounds like serious interest is already starting to happen now. Just need to throw a change of sentiment toward junior miners into the mix and the share price will get interesting. Logic suggests that it should happen as the juniors have had a rough time for many years but hopefully, there should be a tailwind for the sector from the buoyant gold price to change that. It's well overdue.

Just going by HA's words in the Investor Meet presentation there is a distinct possibility of an offer. The surging gold price only increases that possibility.

Harry said in respect to Saudi in particular:- "There is pegging all around us. Companies are coming to conferences, strutting around and offering us deals and so on."

That was when he was saying what a joy the work currently is compared to the difficulties in the extreme during the civil war in Ethiopia and before the sea change in the Saudi approach to overseas miners. He makes the key point that the banks remained supportive during the civil war and remain so as funding formalities are awaited now.

Earlier in the presentation he said they didn't anticipate selling but acknowledged Kefi is a public company with a duty to maximise value for shareholders. He knows if a decent formal offer came he would be duty-bound to put it to shareholders. I don't think he wants to sell because he said he envisages shareholders including himself of course getting dividends once the mines are in production. He's also aware that Kefi will almost certainly have an NPV well into double figures when in production and the share price will reflect that and probably even be above NPV.

It's easy to say that the current share price might mean a low bid but, realistically, any interested party would have to make a bid that would succeed and that means one that would be recommended to shareholders by the board - in effect HA. I am sure he doesn't want offers and wants to see things through to production, but a 3p to 4p offer right now would almost certainly be successful. I guess the ideal scenario is that sentiment toward junior miners changes in line with the gold price increase and Kefi trades at around 3p with offers around 5p plus coming in and being more palatable to HA.

He did say that he wouldn't be averse to selling down in TK but, in terms of an outright sale, added that Kefi has social responsibilities in Ethiopia. I don't see that as a barrier to a takeover as any acquirer just inherits the social responsibilities and is obliged to ensure they are upheld.

I'd quite like to see an offer at a reasonable price. Based on the presentation answers I suspect there is tentative interest.

Harry mentioned in the presentation that there were a lot of new arrivals in both Saudi and Ethiopia. He added that he was getting all sorts of offers. Not firm takeover offers presumably as that would have to be announced but probably JV's etc. or perhaps even some parties doing some tentative sounding out. If the gold price advances or even stabilises around current levels then the interest is only likely to increase.

Without any sizeable institutions in the Company it would be P.I's who would determine the outcome of a bid. The board would either recommend acceptance or rejection to shareholders. At current levels, 2.5p to 3p might well succeed. I get the impression HA wants to see it through to production and is looking for a share price that is approaching or even above NPV which might well be 10p plus after Saudi feasibility studies allow for an NPV for those assets. So it's an ideal time for an acquirer to get Kefi on the cheap. Realistically, any offer is likely to come once TK funding is finalised.

Aside from Newmont, the likes of Barrick and MA'ADEN (Saudi Arabian Mining Co) might be interested. It might well be the Saudis who are the likeliest acquirer given they have pledged to invest USD10-billion in African mining projects over the next five years.

https://www.africanmining.co.za/2024/03/01/saudi-arabia-investing-in-african-mining/#:~:text=The%20Kingdom%20is%20aiming%20to,Vision%202030%20economic%20diversification%20plan.

The valuation for Kefi will be even more absurd when they do the feasibility studies for the Saudi assets and get an NPV. They are of course still discovering additional resources there so it's a little premature. HA stated the NPV value of the projects in Saudi will dwarf that of Tulu Kapi and the NPV for TK is £304 million. I wonder what that means in reality for Saudi ...double that of TK?

Simms, that is exactly how I would like to see things pan out with a sale of TK post-funding and a focus on Saudi with a GMCO listing. Not sure if Kefi would get £150m for a funded TK but who knows with the current buoyant gold price that is set for potential further uplift.

The Ethiopian stockmarket launch is planned for mid-24 and should give the economy and Govt reserves a boost as I think the plan is to list and privatise a few of the Govt owned sectors.

A Saudi listing looks the way to go for a substantive re-rating and Kefi just needs to get TK over the line but I believe it will be Saudi that drives the share price over the next year or so.

Kefi recently confirmed in the Q&A update with a one-word 'yes' to a question asking if it was the intention for GMCO to list in Saudi. Just a timetable detailing timescales for this intention would get the share price re-rated.

The listing criteria isn't onerous at all with a USD minimum market cap of $80m and a minimum of one years cash which GMCO would have. That's for the main market which would be appropriate for GMCO but there is a junior market as well.

https://resourcehub.bakermckenzie.com/en/resources/cross-border-listings-handbook/europe-middle-east--africa/saudi-stock-exchange/topics/quick-summary#:~:text=A%20market%20capitalization%20of%20at,listing%20for%20the%20Parallel%20Market.

I must have missed this on how Kefi intends to fund the Saudi exploration contribution costs.

"Going forward, Kefi said it expects most of the financing at GMCO to be low-cost loans utilising the Saudi Industrial Development Fund."

https://www.proactiveinvestors.co.uk/companies/news/1038838/kefi-gold-tweaks-saudi-jv-terms-ahead-of-rush-of-news-1038838.html

That is massively reassuring for me given it means the 25% stake is secured without having to tap into substantive equity funding. Plus the opportunity to avail of the Saudi grant funding flagged up in Rob's post and Saudi prospects are lining up to give a substantive re-rating to the share price. Harry needs to prioritise getting a listing there but the frustrating wait for TK credit approval from the secondary bank probably needs to be ticked off first.

An Ethiopian stock market listing for TK would also be interesting. HA flagged this up as on the agenda.

https://www.linkedin.com/pulse/upcoming-ethiopian-capital-market-capitalmarketet-i8aqf/

I will also be writing to investor relations to ask why OBD failed to announce material news that was contrary to public statements. Jon Burrows put in the public domain that CiRT sales were growing exponentially. The reality is that they weren't even flat, they slumped. The exact opposite of what he projected. He had a fiduciary duty to announce as such.

He also had a duty to correct his statement that sales were going to be reliant and grow in numbers due to recruited doctors rather than, as he now seems to suggest, one employee who went off sick.

If the 'total sales to date' figure in the results was calculated up to 17th January that means 72 CiRT tests per month were/are being sold per month. A slump of just under 26%. Jon Burrows needs to go because, when it comes to seeking finance, his complete lack of credibility and trustworthiness that result from his misleading statements may well make it problematic.

He had ample opportunity to correct his market guidance and opted not to. Being generous, his initial words could be deemed over-optimistic and naive, it's the failure to disclose the material news that, contrary to the spin in his webinar statements, sales slumped; that's the problem. It's a regulatory issue in my view.

No CEO who brazenly ignores regulatory obligations to inform the market of material changes in trading can remain in position.

Good post Dug, there should have been an announcement to advise the market there had been a contraction rather than the expected expansion in CiRT sales. It was a highly material development.

The Company reasoning behind the drop is that a sales representative was off sick. That's disingenuous and they must take shareholders to be utter fools. The CEO had proclaimed that his sales strategy primarily focused on using doctors. He mentioned that he had used this approach in previous positions with a lot of success.

I no longer hold (sold yesterday) as I don't invest in companies where I don't trust management and where they have pulled the wool over the eyes of shareholders. One or two cancer organisations have suggested the trials for the products are not large or diverse enough. Jon Burrows disputed that as he said he was able to extrapolate information from their massive database.

He may be right, but the problem is when he is giving fanciful reasons for a drop in CiRT sakes it makes me question his words on any other topic. I also find it odd why the Company isn't a shoe-in for the TRANSFORM trial. The issues around that are a bit of a red flag.

The other big factor is that they will need to raise within two months and unless they can pull a rabbit out of the hat with a partnership the share price will drift and I don't envisage a premium for any raise this time. A traders share for now until they restore credibility.

The Company may still be the cash cow that every investor hoped and perceived it would be, but for now, it's a cash drain. I place it in the 'if something seems too good to be true, it probably is' category. It remains on my watch list but from my perspective, it's not investable other than a short-term trade until funding is sorted and a significant return of growth in test numbers for CiRT.

I was content to see low PSE test numbers now if CiRT test numbers were decent, but I don't think they can even get the PSE numbers up by internal marketing. The PSE has had widespread free publicity so even though it's early days I would still have expected higher numbers . I don't see any clear strategy to get the numbers up with the only reference to potential partnerships being the colorectal and canine cancer tests. That seems odd to me.

Perhaps the moral in the tale is to never trust a Yorkshireman who develops a mid-Atlantic accent.

Good luck to all investors who are staying the course.

Unfortunately, I don't think they are anywhere near 200 plus CiRT tests per month post year end- October onwards. In fact it's CiRT orders *to date* of 770 whereas to Sept 30th it was 515 orders. So just 255 CiRT orders since 30th Sept or 72 tests per month. That is disappointing and highlights the need to go down the partnering route. The positive is that they are embarking on this and will have four tests ready for licensing. Cash will be an issue though given sales of CiRT have gone down but just one deal resolves that.

The market will focus on the figures going forward and 200 plus tests per month post results is significantly above my expectations and means with this growth, as Dug points out, the Company is on course for profitability this year from CiRT alone. Add in PSE (I am confident they will do a partnership deal here) and anticipated partnerships for colorectal and canine cancer and the Company is on course to be the cash cow all shareholders hoped and anticipated it will be.

Both tests that are planned for partnerships are potential very high volume sellers. Avoiding a colonoscopy with accompanying biopsy is a high incentive and more than 15m procedures are performed per year. When it comes to pets there is a 'no expense spared 'mentality for the animal-loving western world market. Again, OBD should be first to market to provide a accurate , fast and painless procedure that contrasts with the current testing options.

In discussions with potential partners for licensing both the colorectal cancer test and canine cancer test. As stated it is a source of non-dilutive funding so it will take the form of a licensing/royalty deal with decent upfront payments. It is the way to go given the small sales force to provide the fastest route for significant sales. I envisage they will do the same for CiRT and the PSE tests. Tests for arthritis, motor neurone and psoriasis are also ready to go but initially the focus is on partnering for the bowel cancer and canine cancer tests.

The exciting thing about OBD is how little of the CiRT & PSE market they need to be extremely profitable.

200 Cirt tests per month combined with a mere 2,000 PSE tests would produce a $10.48m profit from the two tests and move OBD into profitability.

For CiRT profit that's based on Jon Burrows' own figures in the last webinar of the CiRT average selling price being $2200 (it's currently $2400) with a 90% profit margin. It's good to know Jon Burrows is conservative with average pricing estimates and the Company are conservative with their accounting.

For the PSE test figures that's again based on Jon Burrows' estimations that he admitted were rough calculations of $500 per test and $200 profit per test.

Of course, most would anticipate both tests will reach the above figures and exceed them by a multiple factor. As the volume for PSE tests increases then the price and profit per test may come down but any volume PSE test sales of anything close to 1% of the 2m per month PSA test market will inevitably push the Company toward a $1b valuation. That's on around a P/E of 25 with $40m profit from 1% of the market or 200,000 tests per year. It's the declared intention to establish the PSE test and then partner for very high-volume sales.

The CEO seems to give straight answers and covers a lot of points in the webinar so, forward-looking statements in the results aside, I am expecting it to be even more illuminating than the results.

Givemesunshine made the point that although the Company were targeting (and attained) 50 doctors, there was no reason why they couldn't recruit many more. I am assuming that is the case and can't think of any reason (other than admin capacity) why they wouldn't recruit more. I believe they had reached 50 in June last year so if GMS is correct then they will be well above 50 now. There seems a strong correlation between the increase in doctors and the increase in CiRT tests. Additionally, the internal sales team has been strengthened as well. It's clear the CEO has real commercial acumen which isn't always the case in this sector. Bodes well for decent numbers.

Currently the other side of the globe hence different time zone (and temperatures!)

GMS, fair enough on the number of doctors not being limited to 50. The last target was 50 but, of course, it makes sense not to have a self-imposed restriction given they are what amounts to a free but effective sales force. We can see that the monthly rise in test numbers has a strong correlation to the number of doctors on board.

It looks a very big market Dug, and as you say it makes OBD a target for the major pharmas. That would be good for cancer sufferers as well as the testing would become more widespread with more patients benefiting from what is important therapy that they might not otherwise get without a CiRT test confirming they should benefit.

I had no idea that ICI therapy cost was so high so an increase in the number of tests to see if a patient is likely to benefit or not should, in theory at least, be driven by the insurers given that, unfortunately, three-quarters of sufferers won't benefit.

BUPA taking the test is a good start but you'd think the U.S. insurers would be eager to include it and insist on a CiRT test before giving the green light for the circa $100,000 treatment spend. It flags up those that would seemingly benefit but in reality, wouldn’t and undergo non-beneficial treatment which isn't helpful for the patient or the insurer.

From a cold financial perspective the insurers might not like the 17% of those with a negative PD-L1 who could benefit from the costly treatment when, previously, they would be excluded. It seems as if the test is going to rule more out than ruling unanticipated ones in. So, financially, getting as many tested with CiRT would appear to stack up from their perspective.

I like to keep my expectations relatively low and lowish monthly test numbers are still material to OBD. 500 CiRT tests equate to close to breakeven for OBD. The number of doctors selling it (50) won't increase since the June monthly figure but, you never know, the figures might be higher than my 200 to 250 best guess.

Jon Burrows said the plan for the PSE test was to launch and validate and ultimately partner with a major diagnostic pharma or lab. With CiRT they may have the same plan and they will be well down the road of validation and ready now to partner with all the data for an optimum deal. A takeover does seem to have an air of inevitability at some stage.

It's arguable that if an unexpectedly high number of tests were currently being done then an announcement would have to be made as it would be material. On the other hand, OBD hasn't given forecasts and given that nothing has been forecast there is no need even if the figures are currently very decent. Not long to wait to find out.

The results to 30 Sept will be interesting enough but they will be looking back, so the most relevant figure will be the current (or most recent) CiRT monthly figure plus feedback on the extent of early interest in the PSE test.

The reimbursement code starts from Jan 1st so it will be general comments on PSE test interest and any general indication they can give on likely demand. I am sure they will have their internal targets and expectations but how much of this will be shared I don't know.

I'd hope by this time next year they are getting 10,000 PSE tests per month and based on Jon Burrows Q&A answer last time $500 cost per test with $200 profit is the ballpark. That would mean a profit of $20m per annum with rising numbers to be added plus say 400 CiRT tests adding $8.8m (based on a price of $2,400 per test and 90% profit margin).

Of course, the numbers may be very different including for reasons such as linking with a large diagnostic lab company - lower profit per test but significantly higher numbers.

Those sorts of figures don't even have to be achieved to get a m/cap of a multiple of where it is now. 'The market' only needs to get a firm sense they are heading to anything approaching those figures and then it will be factored into the share price in advance as is the norm.

I'd envisage they will appraise whether their doctor-to-doctor marketing and the free publicity derived from the PSE test making the general news means they can fill internal capacity before linking up elsewhere, but they will crunch the numbers if approached by a large lab or pharma.

That's an Interesting link GMS.

This particular extract gives some hope for the category of patients it references and of course, will lead to an increase in the number of monthly CiRT tests. As with the PSA test, it appears patients with an adverse result can be led down the wrong pathway.

Those patients with a negative PD-L1 are going to want a CiRT test given it appears over 17% in this category will find via the CiRT test that they can still benefit from ICI therapy.

" one in six patients with a negative PD-L1 result are still likely to respond to ICI therapy if given a chance. This means that there is another major use opportunity where CiRT can significantly impact and potentially change anti-cancer care."