Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
Interim announcement due Monday, 9th August.
There are many times and places this may fall over. I would be really surprised if it was at Ethiopia approval. I would expect Kefi to have kept them well informed of what is in the package so no surprises. EG know that if you knock things back at the final hurdle others factor that into investment decisions and it makes it a whole lot harder to fund projects. I think if they wanted an out they would have done it pre the submission or on some future failure.
I am guessing 3p - 3.5p on bank approval - at which stage I will sell half and stay in for the ride on the rest. I am sure there will be plenty with other views.
At the end of June Kefi said they had submitted for NBE permission to approve. Would be really surprised if it falls at this stage (pre that approval). Kefi must have been keeping NBE appraised of progress and what has been submitted to NBE should be no surprise.
Likelihood of NBE failing to approve is low. If they do, then it makes other Government projects costs go up massively. The Ethiopian Government will be very aware of that.
I would expect that approval within a month.
At that time Kefi is likely to re rate – to maybe 2.25p – 2.75p. The bigger question to me is whether Kefi has got this to the stage where docs are pretty much signature ready, in which case those will come through within a further 4 weeks, and another re rate to 3p – 3.75p or there is still lots of negotiation to come. The company has been very opaque on this. With a bit of luck an announcement may give some indicators (an outside chance it includes both, but I doubt it). If it’s not pretty clear following NBE approval I think I will be out of 2/3rds of my holding at that stake.
By all means disagree, although I prefer polite disagreement – it’s been a tough 18 months for all of us, and only trying to help fellow travellers on this journey.
Thanks Matt
Thanks Matt - where is the Webinar on 21st? Ta
It's all pretty academic and my knowledge of The Companies Acts is very rusty but I would expect AIM rules to generally be in addition to not in substitution for CA requirements. You can bet the co company won't get it wrong.
I am still reasonably bullish about the upside from Kefi over the next 6 -24 months. Financig done and potential for continuing finds …but not entirely convinced they are being candid about timetable. And the longer it goes the more risk that they don’t get it signed off.
I do think there may well be good news of sorts flowing soon (in May) – which may see value creep up. Really wonder whether even by June full funding signed off.
This from their presentation …
“May … Senior Lenders c. $140M formally approve loan details (terms sheet already signed);
$0-10M: Local Private (invited March, now need to commit if wish to participate);
Others invited March and need to commit if wish to participate);
Remaining balance to be finalised, and then sourcing and allocations to be optimised.”
You don’t just get commitment on these things then sign off. The legal documentation is complex and each document and commitment can have knock on effects on others and neeed to be agreed with lots of parties. Once you actually get the commitment you have to sort the rest. I would not be surprised at all to see another quarter delay.
[Still think it’s a buy but not without its risks. Also not an expert in the area but think Gold and Copper will in the mid term keep their upwards trajectory – Copper because of EVs and Gold has potential on inflation worries – and the upside is geared on increases in those].
For what it's worth ... If they sign the funding it's probably worth 3.5p - 4.5p. Yes it will be worth lots more in due course but still lots of delivery risk. If they don't sign it probably falls back to 1p. You may feel Harry has form but it would be fairly unusual to get this far with a funding and not complete bar a seismic change (banks' attitude to lending, gold price, political risk, war). The parties are probably in for $3m - $6m costs all round. It they walk away those are lost. The visits, Ethiopia Gov wants it, banks will want to be at the party. Signs all good. Issue of options was also a strong signal. Also not sure that if it was clearly off track, Kefi would be making the noises it has, so it should be down to shuffling paper by now.
[The local stake issue would have been decided weeks ago - it's not something you leave to 31st March. My guess is they don't take up full amount].
My view is 85% goes ahead (say 3.5p) and 15% fails (say 1p). [I also think they will come in at over 65% stake - prob 70% plus]. Probability weight that and it's a good, but risky investment. Even from that there is lots of upside (good news from Saudi which could be massive, NPV of TK being far more than 3.5p). There may be a few weeks delay - in which case its a bumpy road and you could pick up more cheaper - but fundamentals stay the same and you risk missing the boat.
I would not be betting on Saudi - too much chance to get taken out of the equation - but if they motor on through £100m Market Cap they begin to be more serious and that chance goes down.
Worth a bet. Yes. Worth your life savings. No.
What do I know take your own view but hope it helps.
Amazed they finished the day at 0.5 rather than back where they were 2 weeks ago. Did not see a shred of positivity in the announcement. Even in the pandemic a tech company going backwards on revenue, shedding its senior team and picking up litigation along the way. Even if you believe in it think you will be able to pick the shares up cheaper - possibly as low as 0.3 in the next few months. The dim light at the end of the tunnel was extinguished today. Opinion not Advice!