Member Info for Poppyseed

No probs Mr C, thanks! Onwards and upwards! Like Funky and others, I'm in for the long run. For me, the emerging story is too good to quit before it has time to fully blossom. Assuming the funding gets over its banking hurdles, there seems to be nothing but upside over time. Might surprise some just how astoundingly good this is once the HMS and TVI assets come on stream, not to mention other prospective bolt-ons.

If there's any fairness, the SP should get a significant early boost from the funding confirmation at 2.7p but my personal focus is to the scale of cash generation in, say, a couple of years time. All things being equal, on top of the approx $700k per month already being pumped into the coffers by then, the water pipeline should also be in place thereby releasing the unholy potential of the TVI assets, presumably in themselves, further enhanced by then from a new drilling phase.

Funding confirmation is clearly the key here but scale and terms of that funding, once over the line, would appear to make the subsequent forward possibilities for this company absolutely boundless.

Oh dear MrCautious, not so cautious with the wild accusations, eh?

With a number of likely, company-making events on our doorstep you think I am paid or how could I be so enthusiastic? Says more about you than me I think.

I go to some lengths to support the rationale and information behind what personal thoughts I share. As such, to be accused of being a super-ramper is pretty insulting. As for the notion of seeking to protect my investment, I don’t even understand how that would work. As we all know, only confirmed substance from the Company can do that and in time, the SP will look after itself.

By contrast, have you ever justified your unremitting caution in the face of strong announcements of imminent positive events, except to state the blindingly obvious, that nothing is certain until it’s certain? So true, so safe! However, some may choose to be pre-emptive against the backdrop of their personal assessment of emerging information, others may choose to wait. Apparently, my crime is to belong to the pre-emptive group and to share my thoughts and reasoning.

Fair enough, each to their own, time will tell....

No prior announcement of delay so can't see them being late - but you never know of course. Could even be 3 x RNS's tomorrow when you think about it. 2 x results, 1 x funding.

I did note a piece in today's Align update on IRON re NomAds and the need only to publish verifiable information that is also relevant here. It ties in with what I mentioned here a little while ago re the change of status re funding in the 21 Dec RNS.

KZG was no longer "...in advanced discussions with a major Namibian investor for a substantial equity investment in Kazera...in the process of agreeing terms with the investor...There can however be no guarantee that the investment referred to above will occur or that it will occur on the terms outlined" as had been stated on 1 Dec and prior to that.

On 21 Dec the status changed meaningfully to "As announced on both 11 November 2020 and 1 December 2020, the Company has been in advanced negotiations with a major Namibian investor. The Company is pleased to report that it has agreed commercial terms with such investor..." Agreed, not still negotiating, gone the caveat re "may not occur". However, said to be "...subject to receipt of banking consents in Namibia..."

This is general status is further confirmed most recently on 18 Mar ".... Investment package agreed subject only to banking due diligence...agreement details published, investment at 2.7p equivalent...part of a much larger group of strategic investments which is expected to complete at the same time...the EU based sending bank having now completed its due diligence procedures...the Company now understands that the transaction has been approved by the Central Bank and that the sending bank, which is EU based, has similarly completed its due diligence processes.

Deal done, now seems only to concern the movement of money. Two weeks since then. Maybe tomorrow??? Individuals will measure the remaining risk differently but nobody can say that the Nomad-approved trumpet hasn't been sounded.

31 Mar so pretty much guaranteed I'd say, x 2 even!

I see just 80m shares being issued @ 2.7p in conjunction with the stated equity portion of the funding by the Namibian investment partners.

The rest of the funding comprises a 7 year loan so will not lead to further dilution in the short or medium term and in my opinion is likely to be repaid on expiry rather than Kazera choose to dilute @ 2.7p against an SP that in my opinion will be well north of 10p by then. Well north!

Moreover, the prospective funding will raise near £8m against a prospective pipeline cost of just over half that according to previous statements. Add in diamonds on the cusp of profitability and the HMS proposition said to be worth 6 times diamonds once approved - and expected to be very quickly up and running thereafter - and the question is not at all about further dilution. Rather it is about what plans are in the background for further expansion with the evidently spare capital!

So not only is there no obvious need for further funding once the one in prospect is done and dusted, any notion that these recent investors, then owning about 29.9% of KZG, would sanction such funding below the price they just agreed and paid for their stock is for the birds!

I agree with Fortitude, time to wake up, smell the coffee and look for clues. The main very big one is an investor looking to get on board with a huge stake at a huge premium after significant due diligence not only by themselves but apparently by sending and receiving banks. After such privileged insight which started when the SP was sub 1p and is close to settlement at 2.7p, I guess they are all just totally stupid and it's London that knows best. I guess that must be why London sees double digit % Top Risers every day. Hmmm....

Main clue number 2 is "...the Namibian investment partners is part of a much larger group of strategic investments which is expected to complete at the same time..."

I've been at it too over recent days! Some would say it's still a hell of a risky punt but, bearing in mind the AIM rules on such stuff, my strong sense after they released such detail last week is that it's all but done and, as jasehem suggests, could land any time.

In terms of those AIM disclosure rules and with some big clues as to the level of certainty, I would point to the complete absence of the following caveat since the RNS on 1 Dec 20 - "There can however be no guarantee that the investment referred to above will occur or that it will occur on the terms outlined.". The subsequent RNS on 21 Dec 20 notified agreement of commercial terms and there has been no inclusion of the caveat ever since.

Would be especially nice if finalisation accompanied the FY report which must land before next Wed and, seems to me, the interims to Dec 20 should land on or before then too. It would be normal for both reports to be accompanied by outlook statements so announcing receipt of funding at the same time as publication would provide a fine platform for statements of some weight and certainty.

Re the final results in particular, they already trailed a likely loss of around £900k and cash in excess of £400k as at 30 Jun 20 which in fast changing circumstances, feels a bit like looking in the rear view mirror. My own focus is to the future and just what potential can/will be released by the funding; the "...much larger group of strategic investments which is expected to complete at the same time..." and the HMS licence in due course.

Interesting thoughts 28jaczar01, I can see what what you mean. Raises the question of whether RGO Pluto stake, stated as 4.2% around the same time, has also been diluted by the Argo funding. Sense of being a bit coy here on something surely quite easily solved with a calculator.

Also interesting to note the way Pluto has varied the terms of the warrants issued with its last funding round at 6p. Seems to have strongly benefited PIRI and I had previously thought that RGO may have got warrants too even though it didn't say so.

Not so sure anymore now that I note PIRI announced it has been issued 24m exercisable @ 6p and I see that ARB's 121m warrants are exercisable @ 12p.

Unusual I think but I would now have to conclude that RGO got no warrants (unless and until they make a clear statement on this); and that PIRI's warrants are worth the equivalent of 48m of ARB's, which of course benefits RGO indirectly but clearly not the same as having been given a load themselves.

Was wondering when they were going to tell us KOD had withdrawn from the gold deal, announced by KOD last Friday. RNS now released.

How do you get to 30%, it's a mere fraction of that surely? Current shares in issue around 688m, likely new shares to be issued as an initial part of the deal 80m - new shares therefore just 10% of the total new equity in issue by my calcs.

If I may say so, you seem to be stuck on the idea that the CLNs will convert into equity in due course. I couldn't disagree more. I see such scenario as being highly unlikely for reasons previously outlined. In essence, I believe the CLNs will be repaid and therefore no new equity will be issued in this respect.

There is also another aspect to this deal coming through. Align tweeted that they were in the market after the RNS snapping up another 2.5m to take their holding to the very of possibilities without triggering a bid i.e. 29.99%. Once in place, this deal and the further 80m shares will reduce Align's shareholding to under 27%, giving new scope to add up to a further 23m shares. If they were keen buyers up to the limit last week, why would they not take further advantage of a new opportunity to add to their share of the year if the market fails to recognise? Food for thought!

To be clear, and sensing some of your confusion, my post was comparing what Align had previously expected to what has now been announced. In no way was I suggesting a further raise. I thought that was clear before but hope it is now.

JBTs, not sure why you should be confused. All the Align notes published since they cam on board last Summer are available for free on the Align Research website. Ever since the Namibian investor was first mentioned, they have been the ones forecasting that the investment was likely to be done on true NAV, at around 1.5 to 2p which was quite remarkable in itself because, as I recall, the KZG SP was still substantially below 1p at the time.

In later notes, again as I recall, in their forward forecasts, they appeared to be allowing for around 300m shares to be issued . At their suggested minimum 1.5p at the time, this would equate to an equity raise of around £4.5m which also happened to have been suggested as the price of building the pipeline so it all sort of fitted together.

In the event, it looks like Align will prove to have been way over-cautious - which, for them, is really saying something. Pure equity raise is now trailed as being in the region of £2.145m @ 2.7p so for about 80m new shares.

I'm happy to be corrected if you can illustrate something wrong with this. I certainly don't want to mislead.

Indeed they have JBTs and I agree that the conversion price is fixed and with your SP aspirations.

The point I would make though is that any conversion is said to be at KZG's discretion which I take to be a decision not needing to be made for 7 years. Can you seriously see KZG electing to dilute at 2.7p in 7 years rather than repaying the loans from free cashflow over the period?

Relevant Extracts:

"Kazera Global plc ("Kazera Global", "Kazera" or "the Company").....EUR4,150,000 of loan with a 7 year term, 5% per annum coupon and convertible at the Issue Price.....at the Company's discretion;
-- the second tranche is for EUR2,490,000, via a further convertible loan....on the same terms as above...."

There will, of course, be a level of dilution at the 2.7p issue price from the initial equity-based investment of Euro 2.49m (GBP £2.145m). I'd say around 80m shares to be issued - which I have to say is a whole lot less than I expected - and even extrapolating Align notes, they appeared to be allowing for around £4.5m to be raised in straight equity at around 1.5p on issue of around 300m shares.

Let's get it over the line but what a company maker raising this is set to be and with very pain!

Well, at least we're fed verifiable fact, not fiction as is sometimes the case on AIM:

https://sundayworld.co.za/breaking-news/mineral-resources-is-addressing-mining-licensing-backlog/

With the Maritime, Underwater, Cultural and Heritage tests already verifiably completed satisfactorily and the prospective mining area already in the extensive and recognised Alexander Bay mining zone with oodles of previous mining activity, it looks just a matter of time.

For me, likewise on the inward investment. Until now the Company and Nomad have been notably very cautious about releasing details of what was actually in prospect to the extent that even Align badly underestimated the SP level of the deal - and that's saying something given their normal tendencies. I feel the clarity of detail in the announcement to the market this week speaks volumes given the rules and typical Company and Nomad caution over such stuff.

Based on what I can read about SA's mining application disarray, I feel this investment news will come first - it feels very close now and may well be accompanied by other news as trailed in the RNS "...This investment into Kazera by the Namibian investment partners is part of a much larger group of strategic investments which is expected to complete at the same time..."

Finally, I had had some concerns about the level of forward dilution should the CLNs be converted in due course but having re-read the RNS just now, it was extremely pleasing to note the 7-year term (which I find amazingly long for these types of things), the relatively low level of interest, and that the matter of any future conversion remains at KZG's discretion, not the lenders. This is particularly heartening because I see no chance that KZG will opt to convert at the issue price in 7 years time given the likely free cashflow gathered over such a period.

I must say from start to finish, the details of this deal have the very strong feel of a here-for-the-journey investor that wants to share in the future of this Company and help build the prosperity, not undermine it by setting demanding terms on impossibly short-term timescales. It's often what isn't written that speaks the loudest!

Further to my last, no ongoing links with KOD at all. KOD RNS this afternoon, placing rather than Riverfort! Now we have a reason why those remaining warrants were converted by RGO PCC this week. Toys out the cot and all that?

"Term sheet for Convertible Loan Note facility

On 5 March 2021, the Company announced that it was continuing discussions for potential funding of its gold projects through a $2.5m convertible loan note facility with Riverfort Global Opportunities plc and Riverfort Global Opportunities PCC and a non-binding term sheet had been signed in this regard, and which was first announced on 17 December 2020 (the 'Term Sheet'). The Board of Kodal has decided to proceed with the Placing instead of the funding proposed by the Term Sheet and therefore discussions on that proposal have ended. The $300,000 advance to the Company under the Term Sheet will now fall due for repayment by the Company on 31 October 2021, for which existing cash resources will be used."

Substance for the climb, yes. For the extent of the climb early this morning, not so sure, so not surprised at the pullback. I posted earlier being careful not to confuse RGO plc with RGO PCC e.g. I believe KOD association insofar as it concerns recent warrant conversion relates only to RGO PCC, the Gibraltar company, not this one.

Insofar as it concerns a future gold deal, that is indeed this company in combination with the PCC version but I must say the new shape of the deal as outlined by KOD a couple of weeks back, while looking very good for income, looks to be a slow burner over a couple of years for a so-called "monetising event".

That's my take for what it's worth anyway and I've seen some posts relating to DVRG too and, as far as I can tell, that association mainly relates to the PCC Gibraltar version, though RGO plc may well have piggy-backed for part of it, it's just not clear to me that that's the case.

Luckily I escaped those days but, sadly, not the fall from the 2p area (but have averaged down significantly since). Nevertheless, I know what you mean tucson but I've taken a look back at those heady days and cannot see much of substance to support that move. Under LJ's leadership, it looks very different this time but, of course, still has to be ratified before we can absolutely bolt the substance to the basement.

Likewise!

Was already top heavy, now I'm super top heavy and have an order in for more. Obviously the risk is still that the deals don't complete but I'll take that risk in ratio to the perceived quick and substantial reward still available from this point - wasn't wholly convinced by some of the weasel words in the RNS last month but, for me, there's enough meat on yesterday's bones to believe it's now just formalities on the various fronts.

Re DVRG and KOD in particular but also others, take care not to confuse Riverfort Global Opportunities PCC, in the same umbrella of companies, but an offshore Company registered in Gibraltar, with this sister company, the listed Riverfort Global Opportunities plc. Sadly, they are not one and the same.

I would agree that the people links between RGO/PIRI/SVV/Pluto are a key element to the future. However, I would disagree that there's not much else to Pluto. It appears to building up assets and investments (otherwise known as rocket fuel?) very nicely pre-launch.

Did I mention to take a look at KZG a couple of days ago?

There are many more warrant holders @ 4p than RGO, not least Chris Akers but also a few other HNWIs so it's not at all safe to think RGO is behind any of the recent conversions. Even if true, it would seem a very strange time to be converting PIRI in order to sell. With RGO Investment Director Nicholas Lee also a Director of PIRI, who could be better placed to know the likely near-term benefit to the PIRI SP of the Low6 and Pluto floats never mind anything else going on there?

The warrants still have a year to run so there's plenty of time and what a year that could be. So right now, if indeed RGO is behind any of the conversions, could it be an increase to NAV exercise i.e. because warrants add nothing to NAV whereas shares do. As I see it, every 4p of RGO NAV held in cash could be used to convert into, say, 16p of RGO NAV held in PIRI stock.

Guess we'll get some clues soon enough in the Q1 update.