I remember when the junior oilies were off to the races about 10 years ago now. Hundreds of mil market caps and none of them had the funding to get them to production. Based purely off the value of the stuff in the ground and potentially for farm-in or asset sale. Whilst it doesn’t seem like it now, I believe we’re at the start of something similar developing in the mining sector. The rising tide will lift all ships but hopefully this little boat will lift more than most!
Patience will be the key here
Can get a quote to sell 1.9m in one lot - never seen it that high. Clearly still a fair amount of demand for stock that’s in short supply. The risk of a massive equity raise is probably the reason why nervousness remains (could be £20m market cap and still 2p) so clarity on the funding sources IS needed to ease fears and hopefully clear the path for shareholder value to be fully realised.
Not come this far to bail out now, and very few shares around with a risk/reward premium this high.
End of the long tunnel in sight - ignore the noise and understand that the gold in Blyvoor WILL be processed. Haneti is a free gift that could end up being the king maker - looking forward to those drill results.
GL all
Interesting to note that they have not given any extension dates for the funding. Maybe because deal is indeed practically over the line now or whether the incorporation of the JV means that the deadlines on securing funding based on the previous agreement are no longer relevant.
Happy with either, but believe the next RNS relating to Blyvoor will be transformational. Expected news by now so looks like the resource upgrade report has been given to the potential funders before the market.
No more delay/extension notifications. No more cheap shares. Sitting tight
GL all
I think if LC had been honest about the actual pace of events on the financing side, suspect we’d have had an even greater slide of the share price over recent months.
That said, we are where we are and truth is, Katoro are significantly closer to structuring the finance than they were back in the summer. It’s a slow moving train but one that will eventually get to the station. Someone’s formally put $14.5m on the table (wish he’d clarify through what arrangement). For me, that’s removed the majority of the uncertainty.
Now just the question remains how much of Blyvoor /equity/future income we need to give away to get this started. The fact that we’ve effectively acquired a 50% stake in a project of this size for only £790k is tidy work indeed.
News today or early next week I suspect.
GL all
I understood that the JV partners had agreed on a preferred funding strategy - more specifically, there’ll be a range of funding options used (farm-in/conv bonds/royalty streaming/equity) Hopefully the latter kept to a minimum as previously advised
That’s not what I understand. ‘ Total Project capital costs of US$110m across the life of the Project’.
Katoro aren’t raising funds to cover the life of the project (most of this will be from cash flow or future finance arrangements), they’re just looking to raise enough funds that will reconstruct the old plant and bring the project to break-even in just over 5 years ($36.4m)
They are only seeking to raise the capital required to bring the project to a cash flow positive (self-sustaining) position - that is $36.4m. They have had a formal proposal for approx. $14.56m (the 40% figure quoted) - so now only need the remaining parties to fight it out for the remaining $21.84m
I’m sure I wasn’t the only one a little nervous about the agreement terms on Blyvoor so pleased LC has highlighted the incorporation’s significance. Guess this may change the structure of the original deal (in return for solid equity, maybe have to waive the £790k loan we gave to the JV?)
Wish LC was a bit more personal in these interviews... ‘well as I’ve already said..’
Clearly they’re going for the full funding requirement as he didn’t acknowledge the possibility that 40% will get the project started. Funding may be a process LC, but confirmation of successfully raising funds is most definitely a crucial event!
If only we had a shareholder asking the questions :)
Of the £36m+ received in expressions of interest, 40% of this were from FORMAL non-binding term sheets (as in paperwork drawn up). The rest may have been speculative. Would like to know what the 40% will be sufficient to fund (plant and aux ops?).
Frustrating year but we’re nearly there
As I see it short term,
Downside risk from here -25% (albeit short-lived)
Upside potential 200% - 300%
If I take a view that Blyvoor JV finance will almost certainly get over the line with Katoro - I’ll take that risk any day.
And once that’s up and running, we have a real chance to maximise Haneti potential. If Katoro had a market cap of £4m and only had Haneti, I’d probably be in for a few quid on its own
Nice mash up of convertible bonds, streaming and equity should do it.
Let’s see what tomorrow brings...
Peak funding requirement in the scoping study was $36.4m / £27m. Never assumed they’d be raising this much initially, but happy to be wrong. I’m sure read somewhere the plant and aux ops might be about half this.
Looking back at the Katoro presentation again, interesting to note that an increase in the assumed gold price of $1500 by 15% ($1725) would increase the NPV ($131m) by around $60m. Currency has gone against us slightly, but look forward to any positive movements on the Grades and Recovery rates
There’s been some bluster about this, but just worth highlighting that LC has options on 4.87m shares (@1.3p) (in addition to his holding of 1.83m).
And his salary is £36k.
Have you heard......
... the bird is the word
It’s a bit like the Brexit negotiations, it’s been a long drawn out process, but ultimately necessity and pragmatism will prevail. Like others I do expect that an equity raising will form part of the funding - and no doubt the directors will be good enough to participate in this (of course once most the risk has been removed!). I do hope LC will prove me wrong on this, but a leopard doesn’t change its spots. No more than a couple of £million hopefully.
On the other side of this however, will be a de-risked route to a near-term revenue stream which should provide yearly EBITDA near current market cap. And could be the last time LC needs to go to the market - HA! Plenty of upside in spite of the dilution risk.
Bring on the resource upgrade and still remain hopeful the tailings project will be sold outright (come on Sibanye, it’s right next to Driefontein operation!). And even Harmony hold a licence next door to Blyvoor ;)
GL all
David Hunter sees a big melt-up in the markets towards year end - equities/oil/metals. Going to be one hell of a move to get gold over $2300 in less than 6 weeks. Here’s hoping...
“The gold & silver sell-off of the past week is likely ending & the metals are poised to resume their big rallies into year-end. Gold to $2300-$2500 & silver to $35-$36 with silver likely heading even higher than that.Miner targets remain GDX $55,GDXJ $100,SIL $75 & SILJ $30.”
@DaveHcontrarian
https://youtu.be/VvQvKfgOAfQ