Cobus Loots, CEO of Pan African Resources, on delivering sector-leading returns for shareholders. Watch the video here.
What he said was that there’s some lithium being fought over so they slipped in and took a licence next door for an uncontested yet highly prospective area.
Which they would allow someone to come in on a JV at some
point to do the mining, like Saudi roles reversed…
Sounds smart… like it…
Makes a lot of sense.
The funding structure is
PLC -> KEFI ETHIOPIA -> TKGM
So we need to consider what we own… it is the TKGM which is under discussion here.. 25% is owned by the government, split between national and local entities… the finding provides 95% of the required capital, and the remaining capital needs to come from in country - so giving up equity to secure this is one way to fund it - at the TKGM level.
Once the funding is secured from the banks then the deal can be done for the last bit - it sounded from what was said previously that there is money trapped in country due to capital controls and also the banks might take this equity portion up as well as their loans.
It was discussed as being “convertible loans” in the past, but could be direct equity instead - until it’s agreed, it’s up in the air.
Were a majority SH regardless - and we must trust the team to get the best deal they can…
@Rob It's an option - only matter of time I suppose until Saudi is capable with maturing industry themselves, so establishing that now might make more sense. Faster growth not a bad thing. On the inside we don't know conversations happening - and how stretched the team already is. I suppose it's easy to overlook the magnitude of the existing assets and opportunities, but like the thinking. Still time to do that once current projects in flight...
Once it's clear to all that the deal is done and dusted + the full details publicised and path to profitability disclosed + some clarity on how Saudi will be funded - the clear disparity between the MC and NPV will start to close.
Traders looking for big bangs - not sure - but more positive news flow will slow sellers and see sidelined £ back in.
Still risk, obvs - sure someone with zero vested interests will jump in to make this obvious point.
Hi Rob, thanks - I believe the funding includes provisions for further exploration - if only at the existing site. It would seem better overall to self-fund than to give some away to bring it forward. The position once revenue is coming in of being able to self-fund going forwards is where it becomes really interesting - especially at scale.