Member Info for NickE

Who knows regarding the case result but if Kefi don't win any award isn't payable until TK launch.

Co-defendant is Admassu Tadesse is President and CEO of TDB, Eastern and Southern Africa's Trade and Development Bank, since 2011 and was named African Banker of The Year in May last year and: " ...a pivotal factor was the demonstration of influential and inspirational leadership marked by outstanding integrity."

https://www.tdbgroup.org/tdb-group-president-and-managing-director-admassu-tadesse-is-named-african-banker-of-the-year-2024/

I have assumed most of the derampers are misanthropes who either got their timing wrong or are just bitter bores. Much better to green box them rather than interact. Yes the directors and not least HAA are greedy so and so's but that's a compulsory personality trait for all listed company executives. Are they aligned to see the share price rise? Yes, very much so. Are placings and dilution in the past? Almost certainly.

All the signs are that the funding will be closed by supportive African banks who have a mandate to support projects such as this one and a participating and supportive Ethiopian Govt.

Major works will then commence. Kefi will also be cash rich, particularly after the sale of Saudi assets, and the stock will have a clear run without the backdrop of placing fears. It should also get a further boost and read through on valuation from the anticipated listing on TKGM.

In simple terms the investment case post funding closure then becomes what % of the NPV will be achieved initially and the timing and extent of increase as things move forward to production. On that basis, the key question then becomes to what extent will the shares multi-bag. A compelling risk/reward imo at the current price and 20% below the placing price.

A run for the junior mining sector would of course take the stock much higher than anticipated. Kefi, however, commencing major works in what amounts to a Govt partnership in a country reaching out for foreign investment with a mass of supportive economic reforms doesn't need that to multi-bag from here.

Excellent post ElectricLion, Kefi is cashed up with significantly more funds to come in from the sale of SA assets. Sentiment and the share price will change dramatically on sign off with the banks and Govt ratification. Ethiopia needs a thriving mining sector and the development banks are there to support that objective so any prospect of things not moving forward is unlikely in the extreme. No doubt some of the green box whingers will change usernames and become bulls as good news starts to flow.

The dilution was annoying in the sense that HAA could have foreseen the need for cash and sold Saudi earlier with a 25% stake. But the fact is Kefi is close to starting the journey for a gold mine with a NPV of circa 8p per share (more as the underground resource is derailed) and the share price should achieve a decent % of NPV as the journey moves forward without the risk of further placings.

Genuine investors will be excited about that, others who have been stopped out of their spreadbets or sold in frustration will be bitter onlookers. Not sure why they don’t just move on quietly but sadly a fair few can’t do that.

Thanks also Rob for all your research this past year and a happy Christmas to you and all shareholders too.

Just bringing this post back up by dsymons on 3rd Dec. Looks to be info given to placing participants. Doesn't appear to be a ramping poster and the dates implied are specific and in line with the broader timescales given by Kefi's website Q&A - including the one anticipated for this year.

I am not too fixated about whether the announcement comes in the next week or early next year but given they have flagged up this year for news it will help management credibility if it is adhered to.

Either way a fantastic first quarter is on the cards for Kefi and its shareholders next year. It's only a mixture of placing overhang, extreme scepticism of management timescales (lack of credibility due to previous past over optimistic or misleading timescales) and general AIM malaise that allows for an absurdly under-valued m/cap in relation to the inherent value and outlook.

I do think it's 'different this time' and major launch will be achieved in the back end of the first quarter '25. The share price should correct quite dramatically as transformational newsflow comes through without the drag of any placing fear whatsoever. That's not to say the usual green box nutters won't try to play the future placing card that has been well and truly put to bed by the last funding and of course the up to $50m to come in from anticipated Saudi asset sales.

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Post by dysmons 3rd Dec

Raising GBP8M - GBP4M secured with two gold funds – raising GBP4M in London market to progress gold project in Ethiopia - funding now close to completion - targeting 140-180,000 oz production per annum.

Dec 24 – Finalisation of $320M Project Finance Package participants

Dec 24 – Assembly of final detailed documentation

Jan 25 – Confirm fixed price capex, as well as security, community and gov readiness Jan 25 – Sign final documentation and issue financing drawdown notice

Greenhorseshoe - unlikely in the extreme for management and any institution to take Kefi private unless a massive premium was offered. The simple reason being is that a lot of the shareholder base are retail investors and would vote against it. Kefi would need 75% for it to go through and even then if 90% wasn't achieved those retail investors who wanted to stay in could do so.

So in short it's not a realistic expectation. A more likely scenario is a decent level bid (say 4p to 5p) when Kefi starts major works which some investors will be pleased about whilst others will want the Company to reach its full potential of 10p a share plus over time.

Yes, I think this is just one of the many stars aligning:

Parliamentary ratification of key banking law reform that highlights Ethiopia as an enticing international growth opportunity. IMF funding a while back also adds to the economic stability and appeal for a country with one of the highest growth rates in Africa.

Peace accords both internally and externally (with Somalia) add to the increasingly favourable context.

The forthcoming launch of the ESX highlights the country as a free market investment opportunity and bodes well for Kefi's TKGM listing which should give a good read across for the AIM listing. This coupled with tax incentives, a helpful gold price and a more liberalised economy with a switch from state controlled enterprises to privitisation is all part of a bigger picture that provides the conditions needed for Kefi to prosper as it moves towards production in 2026.

Ethiopia has a 120m population with 70% under 30 and an emerging middle class. It's one of many reasons why I think the listing of TKGM on the ESX will be very success with investors clamouring for a piece of the only listed gold mine project on the index. Limited supply and the inevitable high demand will make it interesting to say the least.

It's still a developing nation with some security issues and flare ups but it's increasingly looking like 'right time and right place'. From Kefi's perspective, the Govt wants TKGM to be producing asap, the African banks are development banks and will fund the project which is after all part of their remit to support projects that will enhance African economies. The banking reforms remove any obstacles. In short, all the key players want to see this happen albeit with the inevitable bureaucracy that has caused delays but I think the main hurdles have now been cleared.

I am not too fixated on whether news comes this side of Christmas or if the news flow starts in the new year. Holders will get plenty of positive news in the months ahead. I think we will see major works around March and a share re-rating by then which will have seen sentiment changed from some understandable disillusion to extreme bullishness. After all, there are now no placing concerns to dampen good news and ,in fact, the balance sheet is on course to be awash with cash after the Saudi interest is sold for a decent sum of up to $50m.

Unusual that Bill Brown didn't comment, probably just in line with the new structure and just having the Chairman comment for the interims.

As someone pointed out on advfn a new comment that bodes well for increased sales:-

""The objective for the enlarged business unit and Abiss specifically is to grow revenues through broadening the product range offered to the division's largest customer. RUA has held unexploited IP related to integrating Elast-EonTM into SUI devices to address the complications occasionally suffered by patients."

Will hopefully get that potential presentation that IntraVnus alluded to.

Very solid set of results and a real coup to pick up ABISS for next to nothing. All the figures are improving including gross margins. Surely should be tipped by the likes of IC but it's just going under the radar and seemingly dismissed as another struggling AIM small cap when the reality very different with its offering of both blue sky upside and serious value.

The drive to profitability should get the share price to 30p over time and the instant multibagger gains will come if they can do something with a major on AurTex. On that note I wish they would give a lot more detail rather than the stock phrase they roll out each time "Several opportunities are being pursued for each of the Vascular and Structural Heart businesses, and further updates will be made as appropriate."

Yes, I think holders would all have preferred the placing to come after the anticipated funding sign-off. On the flip-side, all the positive news would have been dampened by 'placing coming' expectations which would have suppressed the uplift. It's out the way now and now the share price post anticipated transformational news will have a clear run without the backdrop of 'placing coming' noise. In reality 'placing coming' noise is permanently out the way given the impending sale of Saudi assets.

AIM is broken but I think the value assigned to TKGM on its Ethiopian listing will be reflected in the share price and act as a catalyst for the AIM price. Ethiopian investors may drive significant demand for TKGM shares because the Ethiopian stock market will have limited listed companies initially, creating a scarcity premium.

Post funding it will also attract a new breed of investor - those looking at a bargain play playing highly rewarding dividends as early as 2027. The £100m plus rule of thumb for insititutional investors should also kick in.

It will also be unique with very competition for investors attracted by the more speculative mining sector upside given most of the other listed companies will be insurers, banks, shipping companies and telecoms etc. Could well head toward NPV value in Ethiopia which should crossover to AIM. A lot of upside to look forward to in 2025.

Not forgetting the over-pegged licenses awarded by the dubious ex Minister of Mines to a Hong Kong off the shelf company expire in March and these are likely to be restored to Kefi then if not before.

Post finance and commencement of major works, I think Kefi will be an aquisition target unless the share price isn't too far from NPV.

Another of Harry's stars aligning with this peace accord between the Oromia Regional government and the Oromo Liberation Army.

https://www.ena.et/web/eng/w/eng_5552576

Very illiquid of course and in a news vacuum relatively minimal selling depresses the price. As a few have said so many reasons people sell - moving to another stock, boredom etc but the compelling reasons to hold remain and FOMO will be a factor for those that have sold. They'll be back.

I would like to see the Company being a bit more engaging with shareholders. Whilst I appreciate they don't want to spend on pr they could do things like a website Q&A. They tend to update in detail but very infrequently which leaves a vacuum and can lead to bored sellers and a lacklustre share price.

They have also made the statement that they intend to release a data pack to the broader heart valve industry for AurTex. It would be useful for investors to get it confirmed this has been done along with more detail on the improved AurTex results already alluded to.

I don't completely discount a deliberate suppression of the share price on behalf of a prospective bidder. A bit conspiratorial I know and the depressed share price is probably due to reasons mentioned earlier. Still, I can't help musing on the odd valuation for a high growth Company with an enterprise value of about £3.5m holding 50% of its value in cash and moving rapidly towards profitability with a ready made solution for fundamental risk and disadvantages facing the multi billion heart valve industry with the material currently used.

It's an odd Company being both a cheap blue sky and extreme value play. Probably a few of the latter orientated investors have exited due to the MTA not progressing. Given the AurTex results continue to impress and create improvements then it makes sense for one of the heart valve companies to make a move. With an extensive data pack available, an offer could come at anytime and wouldn't necessarily mean another MTA as I assume RUA can include the findings of the previous 12 months work. Patience should reward here IMO.

You're entitled to your opinion and I don't doubt a higher price will be achieved when the mine is in production. Also, junior gold miners could go on a run if gold does get to $3,000 USD - a bull run for the junior miners is well over due.

That said, risk factors and pre-production status means a pre-production valuation to a predator is likely to be about 50% to 60% of npv. I don't think 90% of shareholders would accept 4p so you'd be able to keep your shares if that was your choice. A 4p offer would mean a 560% rise from here which would be life changing for many. It's a ball park estimate and just my best guess of what a predator would offer - could be higher or lower if they were trying their luck. Could potentially be higher with favourable sentiment to the junior miners and if the subsidiary listing in Ethiopia takes off and dictates the AIM price.

I like to look at the bigger picture rather than whether a 500,000 trade on a Wednesday afternoon is a buy or a sell. Right now that bigger picture looks very appealing. Sign-off has been a saga but Ethiopia is embarking on an accelerated course to appeal to overseas investors and the agenda of the banks is to support projects such as TK, so I don't doubt that sign-off will come reasonably soon.

It then becomes a case of whether Kefi is snapped up for a pre-production valuation (4p or whatever your own estimation is) or it manages to stay independent and gets valued at around npv when in production. The sale of Saudi assets alone will make it a highly attractive risk/reward play - debt free, placing free and plenty of cash to expand resources adjacent to TK.

My main point is that I am confident Kefi as a whole rather than just the GMCO stake will very likely be in play post funding sign-off.

Good post alanos about a potential bid for the Kefi as a whole and the curious trading and churning. With the GMCO stake up for sale then any interested party will probably look at TKGM as well.

I see Kefi put values for both GMCO and TKGM in the same recent Q & A post with the value from analysts at $50m to $80m for the 15% stake in GMCO and TKGM being valued at $495 to $835m. Is this Kefi hinting that both are for sale at the right price?

Just at the lower valuation cited for both assets that equates to 11.93p a share or a bit less allowing for options.

It’s unlikely in the extreme that any bid will be entertained or offered until funding is signed off then the inevitably much higher prevailing share price will determine what a bidder will offer.

Post funding and trading at about 2p plus, I think Kefi will be in play. Unfortunately, any bid won’t be anything close to 11.93p. share at this stage in my view but I could see a cheeky opening bid of 3p settling at a ball park final 4p offer could be on the cards. If a bid of roughly that amount came in then Kefi would have to put it to shareholders and I think it would almost certainly succeed.

Shareholders who didn’t wish to relinquish their shares wouldn’t have to if less than 90% voted in favour but it would only need a 50% plus vote for those who wanted to exit to do so.

Lots of white noise about trades and what will happen in the timeframe of days. I think an outlook of a two or three months is more healthy for those that aren't short-term traders. In that timeframe funding should be sorted, offers are likely to come in for the GMCO stake and I do think interested parties in GMCO are likely to try their luck and secure a fully funded TKGM as well.

Everyone has their own aspirations for share price targets and time they are willing to wait for it to be achieved. I'm not necessarily saying I would like to see Kefi sold prematurely but a) I think there is a very strong prospect and b) I'd probably take anything around 4p if such a bid materialises.

I think without an AurTex deal it's a 30p to 50p stock either over time as results highlight the under-value on all metrics or via a takeover. The sales are odd and almost seem designed to suppress the share price which is a tactic used by companies looking to acquire. A more likely and less conspiratorial reason is that it's bored blue sky holders who were holding for an instant AurTex ten bagger deal. That may still come as Bill Brown plays his cards close to his chest, but the lapsing of the MTA has on the face of it made that prospect less likely in the near term at least.

It would help if management did some kind of investor presentation to highlight the merits of the stock that are clear to long-term holders but obviously less obvious to the broader market.

They are so driven to reach profitability that they dropped their contract with admittedly poor pr representatives a long time ago. On the one hand I like that cost saving mentality but it's also important for small cap companies to get a positive message out when they have a good story to tell. A few of the anticipated updates before year end will help of course. I'm pleased management are aligned with their 11p options.

Yes, a pragmatic and sensible decision. Kefi is looking like it will be cash rich without the need for any further placings. Ass posted previously, a proportion of UK operating expenses which are miniamal compared to Saudi costs can, it appears, be attributed to the Ethiopian subsidiary when it lists.

Kefi expect a significant premium to the read through of £10m for 10% of GMCO based on analyst feedback so £30m to £40m for 15% isn't an unrealistic expectation.

Part 2

You said:

A a miner does Kefi have intellectual property for 2. transfer pricing to take place?

ChatGPT said:

ChatGPT

In the mining industry, companies like Kefi Gold and Copper may not have "intellectual property" in the traditional sense (like patents or proprietary technology). However, they may possess intangible assets or know-how that could justify intercompany charges under transfer pricing rules. Here are some areas where Kefi might reasonably apply transfer pricing:

1. Technical and Managerial Expertise: Mining operations require specialized technical knowledge, project management, and administrative support. If Kefi’s UK team provides substantial expertise, strategic oversight, or technical services for the Ethiopian operations, these services could be billed to the Ethiopian subsidiary as management or consulting fees.

2. Geological and Feasibility Studies: If Kefi undertook initial geological surveys, resource modeling, or feasibility studies for the Ethiopian mine, it could assign a portion of those costs to the Ethiopian subsidiary. These studies are crucial for mining operations and can be considered as valuable intangible inputs.

3. Exploration Data and Resource Modeling: Proprietary data related to exploration, mineral assessments, and environmental evaluations are often valuable. If Kefi’s UK team developed these assets or contributed significantly to data collection and analysis, it could justify charges to the Ethiopian subsidiary.

4. Operational Processes and Systems: If Kefi has developed specific operational processes, health and safety protocols, or environmental impact management practices that are applied in Ethiopia, the company could justify some intercompany charges for the use of these processes.

While these forms of "know-how" don’t equate to formal intellectual property, they are still intangible assets that can be relevant in transfer pricing. To use these effectively, Kefi would need to document the costs and benefits provided by the UK team and ensure that intercompany charges align with market rates for similar services, as required by transfer pricing regulations.

With a bit of help from ChatGPT:- Part 1

When Kefi Gold and Copper lists its Ethiopian subsidiary on the Ethiopian stock market and raises capital, there are ways to potentially offset or balance losses in the UK. However, international tax and accounting regulations, particularly involving subsidiaries in different countries, can be complex. Here's a broad look at how they might manage this:

1. Cost Allocation: It is possible to allocate a portion of UK operating expenses to the Ethiopian subsidiary if those expenses are directly related to the Ethiopian mine project. This might include staff time or consulting fees directly attributable to work done for the Ethiopian operations. This kind of allocation would need to be well-documented and justifiable under both UK and Ethiopian tax rules.

2. Transfer Pricing: Kefi could use transfer pricing strategies, which involve setting prices for transactions between the UK parent and the Ethiopian subsidiary, such as management fees or royalties for the use of intellectual property. Transfer pricing has to meet "arm’s length" standards, meaning the prices must be comparable to those charged between independent entities to avoid tax evasion scrutiny.

3. Tax Loss Carry-Forward: If the UK entity incurs losses, these could potentially be carried forward and offset against future profits once the Ethiopian mine is operational. While this doesn’t involve directly offsetting Ethiopian income, it could help Kefi reduce its future tax liability in the UK when it does start making profits.

4. Local Ethiopian Deductions and Incentives: Ethiopia may offer tax deductions or incentives for companies operating in mining and exploration, which could offset some of the Ethiopian subsidiary’s costs and improve the group's overall financial position.

Consulting with tax experts who specialise in cross-border operations will be essential, as both UK and Ethiopian tax authorities will require compliance with local regulations.