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I think it's worth listening to Dennis Edmonds again, the new Director with responsibility for the Diamond and HMS projects. It would have been reasonable to think there would be no HMS product and sales activity unless and until KZG proceed idc with the WHM acquisition on gaining a mining licence and certain other conditions being satisfied re the Walviskop beach project e.g. the building of a processing plant which would take 18 months.

Clearly that is not the case! HMS will be a substantial by-product of the diamond operation, itself due to generate profits by the end of the year, thereafter expected to quickly rise to the order of $80-$140k p/mth. However, it seems all that's missing in order to also bring HMS sales into this equation is a separate mining licence for HMS, also expected by the end of the year, covid permitting.

Ahead of the licence, the HMS material will be stockpiled and apparently can be bagged and sold "almost immediately" on the licence being granted, thereafter being said to be the "main contributor" to the operation. Interesting, given the $80-$140k p/mth forecast for diamonds alone.

Thereafter the arrival of the processing plant could apparently be expected to boost HMS figures by 600%, also by then in conjunction with the WHM licence. Looking forward to that full note Align mentioned but notable that they've loaded up with even more in the meantime!

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

Source KZG website: "It is expected to be producing profits from diamonds before the end of 2020..."

Re DBM and near-term diamond project, the RNS reveals an inferred mineral resource of 208,000cts @ 6 cts/100 sq mtrs, which by my calcs implies a DBM licence area of 3,466,666 sq mtrs or 346.66 hectares or around 480 average football pitches. Sounds big enough for starters.

It must be noted that the 5 hectares mining site relates only to the planning application for the WHM Walviskop Heavy Sands project, which is a likely but not yet assured acquisition by KZG. If approved, the initial intended mine life for the project is 5 years but sea-replenishment may extend this mine life.

However, since, if acquired in due course by KZG, this project is set to be partly funded by the income from DBM's near-term diamond operation, I'm not sure why the discussion is not more about the latter than the former.

To put things in context, the relevant section on KZG's website shows a map of alluvial diamond mining areas numbered 1A to 4B as the intended areas for DBM's near-term alluvial diamond mining operation. By comparison, WHM's heavy metal sands mining application relates to the Walviskop 5ha single-beach project located in a small region of the bottom of Area 2A alone.

I'm sure the size of "a mining permit" in SA is as infinitely variable as could be expected anywhere else. The 5 hectares you refer to relates only to the forward prospect of KZG acquiring WHM currently applying for a HMS mining permit north of Port Nolloth. It looks likely to be granted and I think the point here is not the size of the permit because of the nature of near-shore mining. In typical land based mining, once a resource is mined the resource is depleted whereas the concept for WHM's operation is that the mineral resource will be constantly replenished by the natural actions of the sea in that location.

None of this has any impact on the already confirmed acquisition by KZG of DBM and the plan to mine for diamonds in an established diamond mining area along a stretch of coast south of the mouth of the Orange River, "expected to be producing profits from diamonds before the end of 2020." (KZG website extract). However, the similarity of regular replenishment of the diamond resource by the sea is a potentially a very interesting and lucrative one!

So interesting that the seller of DBM seemingly can't buy enough of the buyer!

...and, my word, now buying even more!

Last placing was earlier this month Stephen, not last August. Cash is probably now enough to see them through to initial cash generation from DBM which I suspect will be much earlier than mid next year. Either way, certainly not tight at the moment.

Don't want to get into either promoting or defending. Was just thinking there was enough out there if we looked hard enough to extrapolate into something that might be of interest to others.

What I would say is that if those figures turn out to be in the right ballpark, they really only need to justify the cost and rationale of the two acquisitions. Personally, I think the pointers look pretty solid on that score and then some. As I said in conclusion below "...Then there’s the trading arm, then there’s what we thought we were all here for before Thursday.....time will tell but I think there's enough there to see the sense of a broader base, especially in the business of cyclical resources and these crazy times."

I agree with Tucson, IF those figures are anything like we see idc, and we're sort of all in the guesswork game, $2m pa net could justify a typical 10 x earnings valuation which @ $20m/£16m and 700m shares falls around 2.5p or 4-5 x present SP, fairly near-term and probably achieved without further capital raises.

However, as I say, this would totally exclude anything from either the trading arm or tantalum and the latter is pretty much all we were about until Thursday and some were anticipating a return to 2-3p in time on progress on that score alone. On which basis, even now allowing for the effect of the greater number of shares in issue, a combined valuation of around 4p could well be reasonable in the relatively near-term just on the earnings of the 2 new acquisitions and the soon-to-be-learned inherent value of the TVM JORC resource and subsequent progress or JV there, not forgetting the trading arm which will have the prospect of a whole lot more resource to trade following these acquisitions.

All guesswork, of course, but that's mostly what we have to do on AIM for small emerging miners. For me, I think the reasonable prospect of a justified and underpinned 8-fold+ valuation rise over the next couple of years+ is enough to perk up my own senses of possibilities, perhaps now even probabilities, here. I know there are some old wounds out there, I'm not immune myself, but I think all that matters at the moment is current SP and future prospects.

MC’s last quarterly accounts make a decent read on HMS and the sales figures on Page 5 provide some guidance for KZG. MC is seen to have processed c. 570k tonnes in the qtr, producing c. 120k tonnes of saleable product. This compares to KZG’s anticipation of initially processing “at least” 60 tonnes of material per quarter (extrapolated from the stated "at least 20k tpm” in the RNS ), indicating c. 12k tonnes of saleable product per qtr is reasonable.

As for shipped product gross revenues, they seem to be $120-$130 per tonne and the quarterly accounts indicate a longer term average sales-revenue-to-cost-of-goods-ratio of 1.5. So, assuming all KZG HMS finished product can be sold, indications in due course are gross sales revenues of 12k x (say) $125 = $1.5m minus $1m for cost of production = $500k net x 64% net to KZG p/qtr = $320k or $1.28m pa.

Of course, implicitly, both the trading arm and diamond prospect would already be going by this time for which the RNS guides us in the case of DBM to a revenue expectation range of between $84k-$140k pm (as compared to extrapolated gross sales revenues of $105-$175 pm so have taken the revenue figure to be net of production and sales costs). If so, then another $1m-$1.68m pa x 64% net to KZG = $640k-$1.075m pa.

So potential combined net revenues to KZG of c. $2m in about 2 years can we say? Potentially $1m pa accruing from early 2021 from DBM, rising to $2m+ accruing from 2023 from WHM? Then there’s the trading arm, then there’s what we thought we were all here for before Thursday – TVM!

Not sure if I’ve got all the arithmetic right here, feel free to put me straight, and of course it is all based on assumptions of timely progress but I’ve tried just to get a flavour of what we could now be looking at over the relatively near-term with the new additions to see if it would show the rationale. Time will tell but I think there's enough there to see the sense of a broader base, especially in the business of cyclical resources and these crazy times.

Thanks Max and JBTs, the more I research, the more "game changer" comes to mind. Very good to hear Dennis Edmonds, no humming and hahhing and very clear answers to the questions asked, insofar as he could answer them without saying too much.

I noted in particular the section between 1.35 and 2.15. Seems my feelings about the 12 months forecast being a highly cautious one are well founded if those in the Company are looking towards the end of the year but, quite sensibly, don't actually want to put that in writing. Very interesting also his expectation that the HMS would be a bigger provider of cashflow than the diamonds once up and running. Other research below points to that too!

Zak had also done his research and converted the piece in the KZG RNS about the HMS operation "utilising the same technology as the Tormin field which is 200km south of the Deep Blue area of operations". He had correctly converted this into the Mineral Commodities operation. Investigation recommended. They're so happy with their existing licence, they want a whole stack more immediately up the coast.

Strikes me the days of being able to get away with hiding behind the non disclosure curtain ended on Thursday. Same for tantalum but near(ish)-term diamonds and HMS give need for announcements of greater frequency and transparency.

Could be wrong but I think the 12 mth forecast for production and cashflow from diamonds may be deliberately cautious . Probably sensible in current conditions, however, I note the word "within" in several places. This is not really surprising to me given the progress already advanced and previously announced under Tectonic (RNS research recommended) and with KZG set to hit the ground running, "...with existing workforce already in place to oversee restarting of and continuation of production, having worked for the last 18 months testing the area extensively..."

Pretty clear that with Dennis Edmonds appointed to the Boards of both Tectonic on 28 Apr 20 and then KZG on 2 May 2020, though only announced as such on 4 Jun 20, as being in charge of the newly acquired project, there's an intention to keep mutual interests closely aligned. It pleases me to sense via their residual 10% stake, that Tectonic were a forced seller rather than an eager one!

As they say themselves "... Kazera will hold a 64% interest and has raised £750,000 to fund the diamond mining project into production. In addition, Tectonic has incorporated a 100% owned South African subsidiary, Whale Head Minerals Pty Ltd, and submitted an application for a Mining Permit to mine Heavy Mineral Sands (“HMS”) within the Alexkor/PSJV diamond mining area to mine ores with DBM for the dual commercialisation of diamonds and HMS from diamondiferous and mineralised alluvial beach sands. Kazera has committed to buying a majority interest in WHM also, with Tectonic retaining a non-diluting 10% interest, subject to the approval of the Mining Permit under application.....

.....The project will continue to be managed by the existing Board and Management of DBM, with on-going oversight from Tectonic director Dennis Edmonds, who has also been appointed to the Board of Kazera to lead the development of these projects.

Kazera operates a tantalite mining project at Tantalite Valley, approximately 250km east of Alexander Bay on the Namibian side of the Orange River. With an established regional base of operations and local management the two projects can be efficiently operated...We are very pleased to get this transaction closed, despite the delays due to COVID, and to see the South African projects funded for production. We remain a significant shareholder of Deep Blue and expect the remainder of the transaction with the sale of Whale Head to follow in due course. This will leave Tectonic with a sizeable economic interest in a funded diamond and heavy mineral sands project which will in turn be able to provide additional funding for our core gold exploration activities…."

Sort of augers well for KZG if they're talking like that about just 10%!

So, clearly, the appointment of Dennis Edmonds was indeed connected to a major corporate event. A lot of negativity around but, personally, I’m minded towards researching the history of and the prospects for our new additions before I can arrive at any judgement.

Generally, I take the point of potentially spreading the jam too thinly before the first pot of jam from the first pick of fruit has still to reach consumers. However, as an investment company, I can also see sense in KZG not letting opportunity pass by while also broadening the Company’s portfolio. Not least so as not to be stuck with the perils of being a one trick pony but I think there must also be considerable potential merits for the Global Trading arm of the prospect of early stage production of an enhanced range of commodities.

The key, of course, will be whether the new additions are as near-term cash generative as is promised. I guess they also provide a safety net of freeing KZG to accept an offer of majority or full disposal of an asset and still have a purpose.

Anyway, early research has turned up enough to suggest this deal may have been on the cards for some time and also that the acquisitions are already as active as is suggested.

For example, in respect of the WHM acquisition, here's a very detailed and recently produced "Mine Work Programme for the mining of the heavy mineral sand resource at Walviskop, Port Nolloth". Recent because it refers in para 2.2.4(h) to fuel prices from 5 Feb 20. I note in particular the use of the word "will", not "would" or "if".

https://sahris.sahra.org.za/sites/default/files/additionaldocs/Mine%20work%20programme%28III%29.pdf

Seems to me that Dennis Edmonds is 100% connected to the introduction of these opportunities to KZG and his arrival as a Director to oversee/drive these projects is more than just good fortune.

Looks like his appointment at this time might strongly suggest that we're on the verge of that long awaited corporate transaction:

Dennis Edmonds biography
Dennis Edmonds is Non-Executive Director of the Company. Mr Edmonds has a wealth of commercial and corporate experience in southern Africa, having practiced as a corporate solicitor in South Africa - and subsequently in the United Kingdom - specialising in structuring and executing corporate transactions. He has also been employed at board level in the investment banking and venture capital industries. Over the past 15 years Mr Edmonds has been a director of public and private companies, including those operating within the mineral resources sectors in emerging markets. Most recently, Mr Edmonds was executive chairman of AIM-quoted Alien Metals Limited, a company with a portfolio of mineral assets in South America.

Mr. Dennis V. Edmonds is a Chief Executive Officer & Executive Director at Pathfinder Minerals Plc.

He is on the Board of Directors at Tectonic Gold Plc and Pathfinder Minerals Plc. Mr. Edmonds was previously employed as an Executive Chairman by Alien Metals Ltd., a Chief Executive Officer by Setstone Plc, and a Chairman by Asia Resources Plc.

He also served on the board at Dragonfly Investments Ltd.

Fair enough Animal, I actually agree with that way of doing things but I wonder why we have not been informed of the appointment of Dennis Vernon Edmonds as a Director a month ago? It's a must, isn't it?

It's available from UK Companies House pranchalee. I reckon it's probably more to do with aligning the Trading Co's "year" to the be the same as the Group.

My guess is £400k struck the balance between the minimum funds they needed to raise and the max stock they would want to issue at depressed SP levels. To me, sounds like acting responsibly and in the bests interests of shareholders in a very poor situation.

Signs of desperation might have been cheap warrants also being attached or for the broker to want cash now rather than 3-year warrants and/or more than the equivalent 5% commission they got.

Broadly speaking I expect significant amounts to have found safe hands. Anybody intending to make money out of a short-term flipping position surely couldn't choose a worse stock for such a strategy. Simple question - why would the broker struggle to get a placing away and yet the buyer(s) find it easy to flip it?

Just looking for evidence or, in the absence of it, logic and rationale...

Back to 0.6p to buy, I must be a gambler like you pranchalee..

Nice one pranchalee. Holding plenty already at a decent average (all things considered) but another 250k for me too.