Member Info for Poppyseed

You need to re-read David, quite the reverse. Following the news this morning that Kodal had "...rejected Resolute Mining Ltd's request to extend the joint venture in Cote d'Ivoire as Resolute's expenditure of around USD2 million falls short of its commitment under the agreement...", there is now potential of a more meaningful stake in Kodal's African assets once RGO finalises the funding deal.

On which subject, Kodal goes on to state "...In addition, and further to the Company's announcement on 15 January 2021, Kodal provides an update on the term sheet signed for a proposed funding agreement with AIM quoted Riverfort Global Opportunities Plc and Riverfort Global Opportunities PCC (together, the "Investors") to provide up to US$2,500,000 ("Funding Agreement"), to be used to further the exploration of the Company's gold assets.

Funding Agreement

· Kodal has been informed that the Investors have satisfactorily completed their due diligence in connection with the Funding Agreement and have confirmed their intention to continue with the USD$2,500,000 funding arrangement subject to agreement on final terms.

· Kodal and the Investors are continuing negotiations over the final structure and terms of the Funding Agreement and will provide a further update as soon as possible as to whether final terms are agreed...."

Besides anything through the 22% PIRI holding (plus warrants), look who the Pluto "Commander" is. Directly connected straight to here....

https://plutodigitalassets.com/team/

Apart from unflinchingly absorbing whatever chunky sell came their way (and still wanted more according to some reports - dummy sells for 500k no problem), perhaps the biggest clue of all is the way the spread was opened up to around 10% early on so as to discourage any more retail buying. In short, wanted all the stock they could get and didn't want to part with any of it! Something is coming for sure!

Align agree with you on Twitter this morning JBTs:

"Brilliant timing for Kazera Global ref the ramp up of their diamond acquisition. Waiting in HMS licence award and Namibian investor deal conclusion. We expect a 2p+ share price on near horizon. "

Any reason why they should choose today to tweet I wonder? News next week?

Should get Kodal news next week at the very least:

"...The due diligence on the Company's gold assets being completed by the Investors includes technical geological review, tenure licencing and subsidiary company review as well as financial and legal review. The process is well advanced, however, some delays over the Christmas period have been experienced and the Investors requested, and Kodal has agreed to, a two-week extension to the due diligence period and for finalisation of the Funding Agreement, which now have a deadline of 30 January 2021..".

Indeed Markjenn, so much value under the radar here and set to keep gathering. I think it's pretty clear that RGO is pretty much piggy-backing with the big boys these days and so is in a different league in terms of the opportunities it can share in.

I think what might be also emerging is a willingness to hold on to direct stakes in those companies with strong growth potential via futuristic tech or investments in such while also cleverly hedging against the world's covid-induced financial turmoil (many governments necessarily printing money like confetti) by very likely adding a direct stake in gold via Kodal alongside its existing move into gold via Tanzanian Gold.

All in all, SP looks well set to continue its recent growth path and keep offering reliable (and very likely growing) dividends. Still around 4.5% pa, the underlying SP growth comes for free! Can't get close to that on the High Street! Feels like my very own Merchant Bank but without the exclusive membership requirements.

Hi Markjenn, typically RGO's deals will see warrants included upfront as part of the deal and typically the Convertibles will be interest bearing throughout the term and, so far, seem generally to have been repaid either within the term or at the end of it and I would say this suits RGO perfectly. Their words strongly suggest little or no appetite for gathering and holding ordinary equity in normal circumstances. Much more a mission to tilt towards secured debt instruments so as to "lower volatility and risk and to drive profits and cash income".

However, as ever, there will always be special circumstances and opportunities and Kodal would appear to be such an example. It's good to see that RGO is not stuck in the headlights of its "secure and safe earnings" mantra and is nimble enough to grab exciting opportunity when it presents itself.

For reasons outlined earlier, Kodal stands out from previous RGO deals as being founded on a no interest, no fee basis BUT for a future stake in what seems to be all of Kodal’s Gold Assets. Subject to due diligence, RGO seems to believe the end game will be well worth the easy terms. Come later this year, I could see a gold JV being floated off into an IPO or RTO new listing or to a cash buyer with RGO holding 20%, gained purely in lieu of interest and fees. Very nimble indeed!

Further thoughts on Kodal:

https://www.rns-pdf.londonstockexchange.com/rns/9324I_1-2020-12-16.pdf

Basically, RGO is splitting the funding 50/50 with the “Big Daddy” unlisted version of Riverfort - Riverfort Global Opportunities PCC.

I think the intriguing/exciting bit is the structure of the deal, allowing RGO the possibility (probability??) of gaining a direct stake in Kodal’s gold assets, note well that, in the document, this is not said as being limited to Fatou alone so I take it to be all of them – 60% Kodal/40% in total for the funders, 20% direct to RGO. Moreover, the expectation is for a point to be reached as early as 31 Oct 21 for the next step. From the link above:

“.…Kodal expects to complete targeted drilling to confirm and expand the defined mineralisation at Fatou within a 9-month period….”

“....Funding proposal from the Investors to provide up to US$2,500,000 for an exploration programme, on a no interest, no fee basis for a future stake in Kodal’s Gold Assets….”

“….At completion of the spend of the US$2,500,000, or by 31 October 2021, or upon monetisation of some or all Gold Assets, the Investors can either:

i. convert the funding to a 40 per cent. holding in a gold joint venture to be formed with Kodal holding 60 per cent. (subject to certain percentage adjustments as detailed below);

ii. convert the funding into new Kodal shares at a price to be determined; or

iii. seek repayment of the funding over a 15-month period….”

Kodal CEO:

"…Once concluded, this funding is extremely positive for our shareholders as it enables us to fund the acquisition of a new advanced gold project and also to explore and aggressively drill our gold projects whilst incurring low or no dilution to existing shareholders.

The creation of a Joint Venture following the spend of the funding will allow Kodal to explore opportunities to achieve value for the gold assets in the future.

"Kodal's existing gold assets are located within the highly prospective Birimian sequence of West Africa. At our Dabakala project in Cote d'Ivoire we are currently completing infill geochemical sampling on a large-scale geochemical anomaly, 10km strike by 800m width, in a previously untested region. In Mali, our Nangalasso project contains gold mineralised drill intersections requiring follow-up and extension drilling which will be included in the expanded gold exploration programme.”

So, all the signs are of yet another “heads you win, tails you don’t lose” deal in prospect for the “unlisted-parent and listed-child” set up. Assuming favourable results, RGO gets 20% of a JV “containing Kodal’s Gold Assets….” (to my mind, most likely) OR convert to Kodal shares at a heavily discounted price (or why would they?) OR, all the while, the full money back option virtually rids the deal of risk. Potential for an exciting hedge here. DYOR.

BTW, VanVan, re Tanzanian Gold, RGO’s interest is via a Convertible Loan, not shares and the proposed Kodal investment is still to be finalised. Due diligence still being carried out so the funding will most likely be completed imminently according Kodal’s rather upbeat release on Friday:

http://irs.nbtrader.co.uk/ir/KodalMinerals/newsArticle.php?id=311428211599698338

“….On-going review of historic drilling is highlighting zones of high-grade mineralisation that will be followed-up as a priority….”

“….Good progress made with the Investors in finalising the proposed Funding Agreement with due diligence nearing completion and documentation in progress - due to delays over the Christmas period an extension of two weeks has been granted to the Investors for completion of due diligence and completion of final contract….”

CEO Extract: “.…The review is continuing to highlight opportunities to extend the previously defined gold prospect, as well as priority exploration targets. The focus of the drilling will initially be to confirm findings of previous drilling and geological information, however, we will also be targeting extensions to the mineralised structure to determine the size potential of the Fatou Project….”

"….We have been working closely with the Investors to finalise the due diligence and drafting of the final agreements for the proposed US$2,500,000 exploration funding to be used to progress the work on our gold projects. As requested by the Investors, we have agreed to extend the due diligence period by two weeks due to delays over the Christmas period, however, the process is well advanced. Kodal has received the initial funding advance of US$300,000 under the Term Sheet for the proposed Funding Agreement and has completed the stage 1 consideration payments for the acquisition of the Fininko and Foutière concessions that form the Fatou Project. I look forward to providing further updates in due course…."

It's a good question VanVan but not one with an easy answer, not least because RGO holdings are mostly not straightforward equity holdings.

We know PIRI but focus since the link-up in Jan 2018 has concerned a move to larger-scale debt and equity-linked-debt investments in tandem with “Big Daddy”, Riverfort Global Capital.

This has made RGO investments of noticeably better quality and structure but somewhat more complex. Nevertheless, tends to notify the market of every major investment and thereafter summarises them in the Quarterly/HY/FY Updates. However, that will most likely be short of subsequent “exiting” details and it’s pretty clear that RGO gets involved in much more than it announces formally because any search gets nowhere near the 23 companies they say they hold warrants for in their RNS of 6/8/20.

In terms of quality, RGO has never ceased to point to the level of security in its portfolio as a result of the types of deals it is now party to in conjunction with Riverfort Global Capital –

“…Majority of investments now in debt and equity-linked-debt investments…” “…These investment structures lower volatility and risk and enable the Company to drive profits and cash income…by investing in the Company, investors are able to gain access to this investment strategy via a publicly listed vehicle….The Company also has a small equity portfolio which now principally comprises its investment in Pires Investments plc….”

Clearly, not so small an equity portfolio anymore! So now £3.5m+ in PIRI alone plus the £4.3m and £3m cash they showed at 30/9/20 – probably £11m+, discounting any further PIRI rise and the 10m warrants exercisable at 4p, not to mention the warrants of 22 other companies. I’m seeing current NAV at 1.6p+, excluding all warrants.

Not only does RGO look well underpinned, the potential for future growth is probably even more important. The sort of investments RGO has been getting introduced to for the last 3 years by “Big Daddy” to get to this respectable place, are likely to see ongoing strong demand from companies as they look to sweat their opportunities and operations.

As RGO puts it (website) “…The Company believes that there is a real opportunity to become a “merchant bank” to junior companies across a number of sectors, combining proprietary capital and structuring skills to create bespoke solutions.

The principal focus will be on investments of US$3 million to $10 million on a syndicated basis.

Cash interest, fees, trading profits and other income streams earned are expected to form the basis of the return to shareholders by way of an attractive dividend yield and capital growth.…”

No surprise to see both Cannacord Genuity and Premier Miton as Major Shareholders. DYOR.

In case it's of interest, I've posted some thoughts up on a certain other site beginning with A and ending with N in response to another poster. DYOR.

HTTPS://rmb.7ae.myftpupload.com/wp-content/uploads/2020/08/06082020-warrant-update.pdf

Piri warrants not even mentioned here last August - since at under 4p at the time, they were out-of-the-money. Add Piri to those already in-the-money at the time but not included in RGO NAV and it's clear the potential hidden value here is substantial without even taking account of the increase to declarable NAV since the last update.

"...The warrant portfolio includes warrants that have been issued by the following companies whose share prices have increased by the percentages shown since the beginning of the year: Whitehawk Limited (49%), Artemis Resources Limited (231%), Tanzania Gold Corporation (50%) and Canadian Overseas Petroleum Limited (442%).

Currently, 39% of the warrant positions held are in the money, however, due to the inherent volatility associated with this form of instrument, the potential value of this warrant portfolio is not fully reflected in the Company's net asset value and a return is only crystallised when the respective warrants are exercised and resulting shares sold.

Phillip Haydn-Slater, Non-executive Chairman commented: "Given the current volatility of markets, we believe that our warrant portfolio offers significant scope to enhance the returns from our investment portfolio."

He can say that again!

Not to forget the 10m warrants! This from RGO's last Finals "....by the end of June 2020, the Company's
holding in Pires will amount to 26,149,993 shares and 10,000,000 warrants..."

On the basis that the CEO now has 4m ordinaries as at 31 Dec in lieu of salary over the last few months (further 3.5m issue not yet formally confirmed), I declare same as tucson. Also declare the same as TheBasher. CEO does have an additional 5m in options at 1p though exercisable by 2025 so can see him being on some coat tails in due course!

They promised it in a recent note, now let's see:

Align Research
@AlignResearch

Make sure you are up bright & early tomorrow when we will unveil our "lucky 7" top picks for 2021.
2:02 PM · Dec 29, 2020

Fortitude, my info is from Companies House. Kind of trust that as being on the money but, as you suggest, not too important beyond knowing he is a number of years younger than you had put him earlier.

I'm not sure 62 year old LJ will be thrilled to be cast as being in his late sixties Fortitude but it doesn't take much away from the general theme of your message. Just nice to know he's probably feeling like he's good for enough working years to see this company through to near it's full potential. I'm feeling that 2021 will be exciting but in itself will represent merely a solid base camp for the assault on the summit in 2022/23.

HMS licence approval must be pretty close. Given its position within the longstanding Alexkor Alexander Bay mining area, I'm sure we're not talking about any opposition to mining in general and that the extra level of scrutiny needed for HMS compared to diamonds mainly concerns maritime and underwater cultural heritage/environmental matters due to the beach mining operation. If so, this seems quite close to having now been satisfied:

"...The South African Heritage Resources Agency would like to thank you for submitting an updated heritage screener which was produced as part of the Draft Basic Assessment Report (DBAR) and Environmental Management Programme (EMPr) for the Proposed Walviskop Mining, Port Nolloth.

This is the third version of the heritage screener as the previous versions submitted did not adequately address the possibility of encountering MUCH resources.

The Maritime and Underwater Cultural Heritage (MUCH) unit at SAHRA is satisfied with the additions to the most recent heritage screener. The concerns that were raised in the previous comment in June 2020 have been addressed and adequate mitigation measures have been included in the recommendation by the heritage specialists.

It is imperative that the mitigation and management measures for MUCH resources are included in the DBAR and EMPr. SAHRA requires that future documents relating to this work are uploaded to the case on SAHRIS and that the listed case officer be informed of the availability of such documents by email.

While the possibility of encountering MUCH resources is considered low, we would like to reiterate that should any shipwrecks be identified as part of this project then SAHRA must be notified to enable us to add the information to our database. Any new discoveries or updated data is a valuable resource in adding to our knowledge of South Africa’s maritime history..."

The good bit as I understand it is that the spoil from the current diamond operation is being stockpiled and will immediately provide the early material for the HMS operation so there will be production revenue from this even before the major processing plant is built further to the in principle agreement with an International player to fund a potential Build Own Operate (BOO) plant enabling the processing upside and WHM receiving a materially higher price.

Re the Align note, assuming as major shareholders they are basing things on a bit more than wild guesses, even if not fully in the picture, we can extrapolate what they believe we're looking at. They say: "...we are, presently, the largest shareholders in Kazera Global...". Why do they say "presently"? Because they know they will most likely not be when the Namibian investor arrives. Interesting because it gives a clue as to quantum and because once their holding drops from c. 29%, they will be free to add more at will in the market.

They say: "...We sincerely believe that investors could be looking at a £25-30m market cap company (approx 2.5-3p on a likely enlarged share count basis)...". It doesn't take a genius to work out that they're seeing an increase of c. 300m shares to the current c. 700m sharebase. If so, taking the imminent Namibian investment at Align's forecast of between 1.5p and 2p, seems we're talking of an investment in the range of £4.5m-£6m.

Which ties in very nicely with Align's note earlier this month (2 Dec) in which they say "...A 13km pipeline from the Orange River would solve this problem, coupled with some plant upgrades, and cost US$3-5 million."

So that would be the water pipeline taken care of then, following which, say hello to world class Tantalum production! Given the £ vs $ difference, seems there'll be a handy amount left over, coupled also with diamond/HMS income for KZG to further its other recently-announced opportunities via a Memorandum of Understanding (MoU) with Manschaft Mining and Energy which holds five EPLs in central and north western sections of Namibia.

These licence areas include more tanatalite and lithium plus the potential also for tin and niobium along with gold and copper projects in the Kalahari Copper Belt. There is also a cobalt, copper and iron EPL on the Kaoko Copper Belt.

Given that these prospective opportunities came out of the blue, who's to say there won't be even more? Align seem to be hinting at it: "...The hot news is that this potential investor seems to have far larger ambitions for the company moving ahead. This astute investor sees Kazera as being a consolidation vehicle to mop up further mineral licences not only across Namibia, but also on the other side of the border in South Africa – a veritable “match made in heaven” given the company’s operations acquired there in early summer..." which, in turn, is based on what KZG said themselves in the RNS on 1 Dec:

"...This major investor has visited the Tantalum Valley Mine to understand the scale of the opportunity in the event that the Orange River Pipeline is commissioned. In addition, the potential investor believes that Kazera represents a strong candidate to consolidate further mineral licences across Namibia and across the border in South Africa as evidenced by the acquired diamond mine, the heavy mineral sands opportunity and the MoU referenced above..."

If he's that excited when they didn't have the means to build the pipeline, he's going to properly pop his cork once the funding is secured from the Namibian investor.

Of course, it's not a one trick pony anymore so, especially with the imminent prospect of HMS licence approval, I think this one is worth a reprise too:

http://www.alignresearch.co.uk/kazera-global/zak-mir-interviews-dennis-edmonds-of-kazera-global/

Talking of Align and Zak Mir, they've been in the habit of doing a year end Q&A podcast which includes naming a list of stocks for the new year. I would expect the same this year and for KZG to feature largely, given that the last note by Align on KZG ended saying "...With the stock currently sitting at 0.90p for a market cap of a shade over £5m, we are extremely pleased to be the company’s current largest shareholder holding just over 29%. Frankly, we are amazed given yesterday’s news that we are not closer to 2p than 1p with our own target price being 2.5p. We are working on a new note to conclude with the closure of the trailed investment which will open up of the “Aladdins cave” of tantalum, lithium and feldspar production at scale and anticipate a meaningful increase in this target price. Without a doubt, Kazera Global is our top pick for 2021..."

Did you miss the one on 8th Oct Basher, since sold and first receipt of proceeds imminent? Probably won't amount to very much in 2020 but it's proof of concept achieved in just a few months from acquisition and rates and takes will build over time. That said, the expected approval of the linked HMS operation/WHM acquisition is the real gravy!