Member Info for pickedpeck

DRJ - I agree, but dilution is dilution. I don't see it as a bad thing, I would happily accept a share issue to raise the equity for the mine build. I am guessing it would be done in multiple stages though rather than one big bang, we may see staged payments and dilution through the mine build. Would be much easier just to get bought by Teck though :)

There is absolutely expected to be dilution here, the question is how much the raise is at not if it will happen. Most are invested here expecting dilution and significant debt to be put up.

Post finance... lets assume we can get to 10% of NPV with a 40% or so equity wouldn't that imply market cap would shift on finance to around £250m , £100m of which would be new equity, so existing share holders see a 3x return at £150 of the £250 on a like for like basis allowing for the dilution. Round numbers calculation obviously.

If the Vermelho NPV came into play would that double those figures or more? Is the plan to do this in sequence so that dilution for Vermelho funding is a much lower percrentage?

Is 10% of NPV on finance a reasonable assumption, or should it be higher or lower at FEED stage? Obviously the company debt position will have jumped, and it will be spending cash like gangbusters hopefully, the weakest point will come when the mine is nearly built, the cash is gone and the debt is still piled high.

On the other hand is this all about being acquired rather than becoming a miner. I'd rather hope so but at what price? I doubt less than £100m will fly with anyone, but don't Orion just get their money back if an acquisition occurs? So really its £100m for equity plus £25m for Orion less whatever cash is left in the bank. Seems cheap...

Ethiopian tax and royalties would likely be in local currency, construction contracts with international companies would likeley be in dollars. Local labour would be in Birr also.

Smelly - The exchange rate that is the most relevant to TK is Ethiopian Birr to USD, profits if and when they arrive would get converted to Stirling but until then the pound is somewhat irrelevant. The Birr has devalued approximately 20% against the dollar over the last year against a local inflation rate of 15% in 2019 and 2020. If the gold price had stayed flat over the last 12 months then KEFI local currency costs would have reduced by about 5%, but as gold has increased 40% in the same period KEFI future production value has risen signifcantly whilst local costs have effectively fallen in dollar terms.

The variation in stirling against the dollar in the last year has nowhere near the same magnitude of variance as the increase in gold. Jul30 last year $1.22, today $1.29 , 6% variation. That variation would be almost completely offset by the Birr variation, assuming local transactions and taxes are conducted in local currency which of course they may not be. If they are not in local currency then it is extremely likely that they would be in dollars rather than stirling.

Hell of a way to make £29 whoever it was.

Throne - A few of us here have quite large holdings, some lucky sods (my daughter for example) had the opportunity to buy in in March at ~1.5p and are now around 150% up already.
Post finance agreement this could easily be well into double figures almost immediately, and from the RNS and interviews consensus here is that the debt part of the finance deal is already done with the equity part still being concluded. The possibility / likelihood is that the Jeremy M and the big investors are holding out for a better equity price to conclude the deal as 10p was paid for placed shares and Teck and Glencore will not happily accept significant dilution.
My bet is equity placing at 7-10p to conclude the finance package, which once confirmed should see the share price rise well above that. The fly in the ointment has been the open market price post Covid slump, given the price post Orion finance deal was 5p+ and we have had Vermelho PFS since, the open market price 'should' rationally be in the region of 7p now. Part of the deflated price was a strategic sell off by JP Morgan based on a decision to exit small caps for the fund holding HZM, they had a decent enough chunk to hold the price down over the last two months. It seems given the advances in the last week or two that the JPM stock overhang may now have cleared and we may well see a persistent and sustained rise as PIs and smaller funds buy in anticipating financing news, drawn in by the Ni price recovery.

I see us 5p + by the end of August, 7p ish on finance rumours in September, that will trigger the equity placing closure and we could see 12p or more post finance.

The EMA are on holiday for the summer now. Hard to believe, but a lot of EMA staff disappear for up to 6 weeks in July and August. I know we can get sod all done with them at this time of year... I expect to be hovering around this level until September or even October, and then there will be some interesting times ahead. I'll keep building a stake at this level as I don't think there is much downside from here. Even if they have to raise money then the upside still massively outweighs the negative risks.

Don't really care about the day trade price, I am happy to build a decent long term stake anywhere below 2p and expect a multiple return. The Saudi massive sulphide deposit is what is driving my investment here. I'm now less bothered about Ethiopia and TK, Gold nice, bulk copper with a gold side line nicer in my view. I'd expect the JORC to drive interest in acquisition of the Saudi asset from a tier 1 miner, its simply too big and tempting for the global players to leave it with little old Kefi for long.

And by the way, the 500,000 at 1.7498 was me. Averaging up.

With thanks to TrickyDickyTwo on the HZM board this article describing a green field discovery of a massive sulphide deposit (like the one in Saudi) should give everyone some insight into what type of outcome is possible. Our play is obviously Cu rather than Ni with Au as a side bar, but the outcome and potential story is very similar.

https://www.visualcapitalist.com/the-story-of-voiseys-bay-the-discovery-1-of-3/

Still a couple of months to go yet :)

Ezhik - it goes beyond that, Harry is bound by market rules to share information which may be material to the share price, even if he has doubts about the originator of the information.
Imagine the scenario, Harry has a meeting with ANS where they swear to deliver the finance by a certain date and that all formalities have been completed. Harry think he can see their noses growing Pinocchio style in the meeting, but can't prove they are not telling the truth. The information is material to the market value of the company, and he is obligated to RNS it. If he doesn't shareholders and regulators cry foul about him withholding information. It's a rock and a hard place scenario, and the biggest and best multinational companies can fall foul of it let alone a minnow like KEFI. Think BP in Russia, BHP in any number of places and more.
Fundamentally this is what working in the 3rd world is like, there is corruption and associated bureaucratic delay, incompetence, risk aversion, regime change, natural disaster, and everyone from the taxi driver upwards with their hand out wanting a piece of whatever action will help make their crappy situation better.
What you have to do is have the persistence and determination to keep moving the ball forward with an eye on the goal. Putting a public information squeeze on 3rd parties is a good strategy in that regard, publicizing what was said and by whom makes later deniability harder but not impossible. That seems to be the tactic Harry is using, so don't blame him for playing the only game plan open to him.

Less than 20 trades in the day yesterday too. Definitely gone under the radar for the moment, it seems like we are in a slow motion game of chicken over the finance. It could happen very suddenly, or take months to resolve.

I've read the first four pages of this board and whilst there is a lot of chatter and bs on what the share price may or may not do, there is not a lot of comment on the actual valuation of the company based on its assets.
Going against the flow then, it seems the M3000 Ed gel has successfully completed a Phase III trial with reduced side effects and marginal efficacy variation to existing treatments.
For most junior pharma companies this is the end of the journey, completion of a successful Phase III is equivalent to hoisting the 'For Sale' sign up for a bigger player to buy the IP rights. This has been shown to work, does anyone think Pfizer are just going to ignore that fact? The additional 20 year patent also adds massively to the valuation.

The fact this is now likely a takeout by a major should have moved d the conversation on from dilution to asset valuation. The current price seems way below fair value to me. First year revenue for the product could be $50-150m, total npv likely to be easily shown to be $250-500m even allowing for a steep discount curve based on likely competitive product emergence.

So, unless there is something I am really not seeing in the RNS feed this will likely be taken out between today and the end of the year (it could happen any time, and be very sudden) I would have thought fair value before the first reg approval would be nearer £100m than today's price. Post approval that may double. Daily variation on share price trading won't affect the take out price as the major investors already know what they are sat on.
For transparency I work for a major clinical development organisation but have no direct connection to FUM programs.

Generate On Demand. Basically you generate continually, but can draw down peaks from the battery when you need it. So boiling the kettle, oven on, daughter drying hair etc at the same time doesn't draw from the grid but draws from the battery. Its like having a local mini peak lopper generation system at home.

I realise it may be stating the obvious but the big change in the EV market will be driven by GOD and storage. Its front of mind for me as I am having a GOD unit installed at my house today. I have had 14 300W solar panels installed to generate around 4.2KW peak , and added a Tesla power wall battery which will store about 13.5KWh.
With this home power I have choices - I can use it to drive the mains supply for the house, sell back to the grid, or use it to charge my electric vehicle.
A Nissan Leaf battery charge is about 30KWh (Tesla Model S is 100KWh) , so about 8h of solar panel power from my house. In the summer this is probably about half the daylight, in winter it would need a sunny 9 hour day.
However this means the EV TCO model is not purchase price vs purchase price. The set up I am adding to my house costs about £12.5k including the battery, panels and installation. If I had an EV it could now mean that I would never need to buy fuel for my car from the grid.
Compare that to a ICE vehicle, 12,000 miles @ 40MPG @ £6 a gallon is £1800 of fuel a year. With a couple of hundred quid additional servicing compared to the EV then round it to £2k. Five years I'd save £10k. Higher mileage a lot more, the Leaf range is 150 miles or so on the 30KWh charge, if I only used the solar to charge the car it would supply a maximum of about 70,000 miles worth without needing the grid.
At the same time the same system provides electric power for my house - I can charge the battery at low over night rates or use the power from the solar to charge. I wouldn't need to fully charge the car battery every day, or consume all the available power from the solar, so that means the system can and will supply back to the grid, generating some positive cash flow.
As far as nickel goes - Tesla power wall - 20kg of nickel. EV battery - 20-30Kg of nickel now. With the economics standing up like this it will make millions of consumers for this level of nickel. EVs may be just the tip of the Nickel battery demand iceberg,

Topsharepicks, from Ramper to Rabid in one roller coaster month:

07 May 2020 13:47
Topsharepicks
Subject: will KEFI

start to reflect true value £120 million mcap 10x todays SP

lets see mm's are playing to grab cheap shares here imo they know something for sure

One other thing to note. The increase in EV demand automatically increases the value of Araguaia as well as Vermelho. Nickely that would otherwise have been directed to stainless will be getting pulled into the battery makers creating a squeeze on stainless supply too, its not like stainless demand has reduced whilst EV has gone up.

Nthoftheriver - I thought JM said in the latest video that they had received inbound interest in Vermelho but didn't have to sell? I haven't looked at the video (still working class...) again to check.

When I put 6.9 up I thought I was being very optimistic... Near double from here over the summer months is a steep climb and dependent on news. If the news is good then 6.9 may seem cheap, if its delay or excess dilution to meet a timescale then it may seem very high. JMs comments on (still) planning to start construction this year clearly imply that he believes a deal will be done in Q3, finance landing in Q4 would be too late to start build this year. The fact they are already issuing tenders and accepting bids for work is also an indicator they expect to be done within a quarter. The companies I've worked for generally apply a 90 day validity for any pricing in response to an RFP, so if they are issuing about now then they need to be awarding contracts no later than September.

I have a feeling this is a lot closer than we may expect. The video felt like a way of delivering a message to the groups negotiating finance, I don't think he was actually pitching for anything or trying to attract new investors unlike the other companies presenting.

Wasa - been there on the selling too soon front. Around the turn of the millenium I bough Arcadia in the middle of the dotcom boom for 40p share, and patted myself on the back for selling at 55p. I made enough for house deposit out of that. I was a bit sick when they sold out about a year and a bit later for 360p , I'd held enough to not need a mortgage let alone a deposit if I'd not sold.