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At first glance CHRI5P a first look and a matching right are pretty similar but important difference. A first look means you will give someone an option (usually to discuss) before touting around the market. It can say if the offeree does not take up offer you can [only] sell for a given period if its below or within a tolerance for a given period. The devil is in the detail.
A matching right / last look means if I am selling I've got to give you a right to match the offer.
Matching rights / last look suck in my view cos people get put off doing due diligence and negotiation if they may get pushed aside at last moment.
Sounds like Galileo/ SFR on the former.
Their should be a strong buy but only with money you can afford to lose.
I find the Q&A pretty re assuring. I don't think Kefi management are fundamentally dishonest - I do think they are serially over optimistic and occasionally a tad disingenuous.
It sounds as if there was a concern on security where someone in the banks has said it could scupper the deal - so rather than risk getting dinged at credit committee Kefi and the Government have sorted it better (security).
That was sorted 7th / 8th December so revised note won't have gone to banks until c. 12th December.
That puts a decision 2-5 weeks from then (probably the shorter end).
I don't think the banks (given their nature) want to sit with Abiy and his ministers - say we need you to sort this ... then 3 weeks later say I know you sorted that but its off. They really do damage reputations at that stage (although a damaged reputation is better than losing $100m).
I'm estimating 75% chance approval within 3 weeks - prob 1.75p upwards share price
25% get kicked down path - price halves.
Nice odds - but only with cash you can afford to lose.
TST don't think the Credit Approvals were ever going to just follow through overnight. Lawyers / Internal team have to put in a memo with recommendation, update, get credit committee together x2. That was always going to take weeks (not months).
Encouraging things are (i) speed government moved (on this occasion) and Harry nipping off to US suggests he really does think it's down to the home straight.
Of course even week gives opportunity for Gold to crash, renewed fighting, Harry to have a heart attack ... etc. but my money would be (IS!) on material positive announcement in the next 15 business days.
You've got to ask ... is probability of good announcement more than 75%? If it is what will increase be (100% + ??). If not how much does it dive? Do I like the odds?
DYSR. Good luck all. Thanks to those who both on a positive and negative side help us try to understand the odds and the game and have some chance of beating them.
Will Credit committees say no?
Maybe but unlikely. By CC the decision has usually been made a long time ago. CC is to check the case still remains, correct security being got, no material move adversely.
If you withdraw late in the day:
- Your fees, rather than getting paid out of the loan get met by you as a lender - it hits your P&L.
- You all miss out on your bonuses (few banks pay them for killing deals.
- You get a reputation as being a rubbish lender - and the banks names have been announced and they are local(ish).
I would 90%+ expect CC to come through and if so in the next 1-5 weeks.
So you are 10% chance it dives and 95% doubles or more ... decent odds.
I would actually be more worried about Saudi at present.
Q34: Is loan documentation with the two key banks substantially complete, pending Credit Committee approval or are there material matters to be negotiated?
The Initial Umbrella Agreement since mid-2022 , the 40-page terms sheet signed in January 2023, the Final Umbrella Agreement April 2023 and the facility agreement drafted since. it should not take long to sort any fine print once boards and committees approve.
Credit committee approvals should take 3-5 weeks.
Do you feel there is a major risk to this?
Do you feel there is a major risk in the interim?
What do you feel the uplift will be on these coming?
I'm in on the basis I buy the time, I think interim risk sub 10% and upside 25% - 60%.
You're call what you do but that's my thinking.
Thanks Datacheck and CHRI5P. These boards are great when folks help each other.
two questions in fact.
1. has anyone got a decent idea of what the short to mid term ka****u potential is. possibly monthly revenue and when that could reasonably kick in?
2. has star zinc effectively been ceded or is there any potential there still?
thanks
Interestingly Hawiah is more a Copper project than Gold ... which personally I like as I think the upside potential is more likely. It's also great not to be all in on either Gold or Copper (although Copper is struggling this week ... not here for a week).
Shinganda: If the deal is anything like the summary this is very smart. More time to choose when, if and what level to invest (24m) with little commitment on Galileo part.
Note the Luansobe news we hoped for but a decent move forward.
Last year this was really high risk - funding, civil war, MOM. Those risks seem to have mostly subsided or been overcome.
If indeed they are at final Credit Committee approval from the two major banks it would be really unusual for that to not be forthcoming - if approvals did not get given the banks then have to write off fees rather than rolling into the deal; individuals lose their bonuses - and the banks get a reputation as not being good to deal with.
A MAC would of course stymie it but that is low probability.
Those approvals would normally take 2-4 weeks. Say another 2-6 weeks post that to pull everything together. Signature could be 4-10 weeks from last Monday therefore.
I think there is a high probability this is now going to get done (90% plus) in next 10 weeks. You would expect that to re rate to 1-1.5p. Further news on Saudi could kick that by another .25p - 0.5p. Saudi listing ... who knows - that's probably 12 - 18 months away but looks quite a mover unless things change there a lot.
It's not done but if goes to plan (90%) re rate to 1.25 within 2 month then various steps forward over 24 months.
Must admit if it goes to 1.25p+ will prob take my investment back and keep 50% free stake for the ride.
Of course there are Conditions subsequent, undertakings and conditions to drawdown but signature will be a big step.
Some people happy to play for 10% here and there. Fine but I am after 2-4x original investment with a 20% risk of losing everything.
The funding was no great surprise. It's actually great - dilution but the BS was in tatters and Kefi risked getting spanked on stake in Saudi. I chose to take that risk and am about 10% down - but don't want to be out the day it kicks on materially - which I think it is likely to do in the not too distant future.
I would still like the tick up before too long given the 1-2% a month risk of markets going totally Pete.
And Harry is perhaps at times way too optimistic and not always over candid - but if they pull this off they will have turned £50m into £250m - some will have won some lost - but that is no mean feat.
They were a bit vague about the meeting: "KEFI expects to call a general meeting in June 2023".
It is not entirely clear whether the meeting will be in June or the meeting will be called in June ...
Maybe that was accidental ... and maybe they were leaving wiggle room...
I like decision trees and probability weighting:
Cash: 100% 1,000,000?
Sandfire Shares: 1,100,000
Glenover: 95% 5,200,000
Luansobe Copper Open: 75% L 1,000,000 M 5,000,000 H 25,000,000 VHigh 100,000,000
Luansobe Copper Mine: 75% L 1,000,000 M 5,000,000 H 40,000,000 VHigh 100,000,000
Shingada (65% - 85%): L 0 M 2,500,000 H 5,000,000 VHigh 100,000,000
Kalahri Sand L 0 M 10,000,000 H 30,000,000 VHigh 63,000,000
Kalahri Own L 0 M 10,000,000 H 30,000,000 VHigh 63,000,000
Ka****u : L 0, M 1,000,000 High 2,500,000, VHigh 10,000,000
Feber: 100%%: L 0, M 500,000, H 1,000,000, VHigh 5,000,000
Kamatavi (51%): L 0, M 2,500,000, H 10,000, 000, VHigh 50,000,000
Bulawayo (51%): L 0, M 2,500,000, H 10,000, 000, VHigh 50,000,000
Star Zinc? May now have value?
Do your own weights:
Total: L 11,885,526, M 39,385,526, H 100,385,526, VHigh (no chance!) 592,885,526
I'm between M and H - 3p-7.5p
Rob hi. You say "Project not dependent on warrant money". I thought they did need some of warrant money to stand their corner. Whilst I am reasonably bullish here was wondering if that made a lower priced share issue a likelihood. Is it clear the warrant money is not strictly needed for a few months?? Would be happier if they have 3 months to get share price north rather than 3 weeks ... Any indicators where that came from appreciated. It's the bit of my own analysis I am light on! Ta
I try to look at these sorts of investment through a decision tree or probability weighting.
I think the noises coming from Ethiopia are very different from the past. Relatively stable government, new more receptive minister (looking for an early win), civil war calmed.
There is of course a chance Kefi screw around that long there is Global Turmoil and it never gets done (Finance meltdown, WW3, Covid 2). All bets off and you’ve lost! Close to wipeout. 0.0p [10%]
Chance civil war, finance meltdown enough to kill Ethiopia – but Saudi still good. There is probably enough to drag 50% of your investment off the table. 0.35p [10%]
Placing of c. £5m. Possible hit to share price 15%? - 0.6p [20%]
Good news (I am thinking May). 1.5p short term, 2.5 p mid term … way more long term – possibly up to 3.5p within 12 months [60%]
I think the fact TW has been brought over the fence suggests its good news – or at least not thumping bad news. If I was being made an insider I would want to know first it would not leave me holding a falling knife unable to sell. We all know these conversations are not totally without signals.
There is also the possibility of further good news from Saudi before too long (although I think Kefi stake will be the lower end of aspirations).
HAA has no idea of project finance timetables and is a ridiculous optimist. He has also shown remarkable perseverance and has built a team who can sniff out decent licences. Needs a very good COO if they fund.
The price of gold puts a bit of head room in the business plan (necessary with costs rising). Glad it’s not gone further at present – because that would mean banks were heading into a Force 9.
I do think though central banks may take the edge of their rate increases as a result of the last week – which may well help gold head a bit further north in the next 6 months.
The question is are you that worried about taking a 20% haircut (which you will probably get back) on a rights to be out the day it goes 100%+
It’s not one for the pension but the above is why I am in.
DYOR this is not investment advice purely entertainment - but hope this helps. % are what's in my head ... do your own!!!!
Would be (pleasantly) surprised if proper sign off of funding is before May. Just sounds like a lot of pieces to join together before then and last noises were not of close to final drafts circulating. That said the noises coming from MOM, calmed down civil war, 2 local(ish) banks, reasonably good gold price all pretty positive.
The talks around Tesla looking at Sigma (only just starting production at $3b - $4b) may heat the Lithium sector up a little.
Anyone got a view on what value the Shinghanda results point towards for that alone (reasonable not wild wish!).
I know opinions are like *******s - everyone has one ... But.
I was about to be made insider and I held share and ran tip sheet I would not want to be locked into holding shares in a falling investment. Before I "accepted" the news I would want to know is it good news and is it soon... only tell me if it is ...
Just a guess. DYOR...
Hi Vulcan Bob, I think there is good reason why Colin would not pile more into Galileo. He's got about 7% (plus options). If he can get it to £100m he makes £7m (on a decent marginal tax rate). Even if you think it's a great bet you don't want all your eggs in one basket. You also get pretty limited when you can buy and sell with a company that's got announcements on the go most of the time. Finally if you are on the boards of 5 companies and invest heavily in one you undermine there others.