Member Info for Stebo

Money in the bank just means interest charges increase our pre-profit monthly cash burn, but for some reason everybody seems to agree that the market will like this. It's like the refuse to believe that the loans are in place lol

Another nugget that I liked was hearing that the banks had personnel on site last week carrying out their checks and audits and all is good. Just another reassurance that it is a professional project, clearly progressing as planned.

Got carried away typing and ran out of space.

Generally though I feel more and more like Harry just doesn't really care about the share price, or even the shareholders. He's there to make KEFI a success and then everything else looks after itself. That is more and more my own feelings towards KEFI personally.

I spend a lot less time on here, and a lot less time researching. I'm satisfied that Tulu Kapi is about 98% going to happen as planned, and I'm satisfied that when it does the sp will look after itself, so the reasons why is so under-valued today are kinda irrelevant. I've stopped worrying about why, and just kept taking advantage.

I didn't hear anything to worry about, but there are a few things I missed and want to go back and listen to again (like his 'no regrets' over the last placement).

@MF2017

I will want to go back and listen to it again in more detail for any missed nuggets, but my initial takeaways are as follows:

- Progress is on track, and not only on-track but being monitored daily and weekly. Programme slipping is the biggest risk for me, and I know from experience how small delays (particularly early in the programme when they seem less important) add up to extra weeks and months, and how that has a commercial impact which becomes problematic during the pre-profit stage. That is of particular concern to me, and it was really pleasing to hear that KEFI are also keeping a tight grip on programme. Everything is progressing as planned, on several fronts, and if the heavy earth moving plant is mobilising in Aug then that suggests to me that there has been no issues with relocating the community.

- Harry made some interesting comments about the share-price, including that he wasn't surprised that the sp was so low, considering the history of the Tulu Kapi project, and acknowledged that they have tested the patience of shareholders over the rate of progress (due to issues outside KEFI's control) in Ethiopia. He also is not concerned and fully expects the sp to reflect NPV as progress unfolds and the markets become less cynical.

- Also some fair comments about the very recent share-price action, and comparing it to other players in the industry, acknowledging that the recent dip was an index wide issue and not reflective of KEFI progress or performance.

- It was made very clear that the Tulu Kapi is much much more than the bankable DFS 1moz, with Jeff mentioning about how really low grades of ore are now being profitably mined around the world, the existence of 300koz outside of the mine pit body, additional 1moz underground, mine etc. He's the one man who really knows what he's talking about and was very blasé to mention things like this, which I am sure he wouldn't risk saying unless he was confident that it was that at a minimum.

- Good bit of detail about moving from AIM to the LSE Main market, and the reasons for that. Nothing surprising, but great to hear that it wasn't just something throwaway in the recent RNSs. Harry basically said that was the main reason they were all meeting in London, so that must be really progressing. I worked for another company who transitioned from AIM to main market and so I can identify with the work that's ongoing in the background. Personally I think that AIM market dynamics are doing our current sp no favours at all, but I want to ensure I've done as much accumulating as possible prior to a move to the main market!

- Bit of discussion on exploration. I enjoyed Jeff being described as a 'discoverer' rather than an 'explorer', and a couple of times Harry mentioned what might happen to the sp if Jeff announced "look at what I've found". Could just be a little carrot to dangle, but additional discoveries in the near future is definitely starting to feel realist

Down to 3g/T profitable

300koz outside the pit

1moz underground

Like I was saying over the last few days. In reality KEFI is a 3moz project, before even considering further discovery. imo

Will be nice to see the bulk earthworks commence in Aug. The plan fabrication, rehousing, etc. are obviously just as critical, but if a picture paints a thousand words, then the image of dirt being dug and stockpiled is the image that is going to strike a chord with the market imo

@longfell

"100% agree with PP. It's impossible to say when this 'should ' move up. The only guarantee it does is when it's producing and making the profits that are promised."

True, or even more accurately when they are paying dividends. That is the line in the sand, when cold hard dividend pay-outs dictate the share price, and not sentiment.

The point of investing though, is to be speculative in nature. We know pretty accurately what KEFI's profitability will be when TK is up and producing, and we can also see the low and diminishing risk of significant failure. Therefore it's completely reasonable to speculate on what the sp will be, and I would suggest that most people can calculate that fairly accurately.

So we know where the sp is today, and we have a good idea of where it's going to be in two years' time..... but the bit in between is determined by the market, and heavily influenced by speculation and sentiment.

Just look at Space-X. It is a loss-making ($6b loss last year I believe!) company currently, but is being valued by the market at $trillions.

Both KEFI and Space-X will make a whole lot of money, if the business plan plays out as planned. The difference is that investors in Space-X believe that the share price will be much higher in 5 years, and therefore it will continue to rise along that trajectory until then, always increasing. The market seems to accept that KEFI's sp will eventually be much higher, but there isn't that same assurance that the sp will be on a continual upward trajectory between now and then, which also means that there's no FOMO to buy now.

I believe that once the sp does start to rise, especially as we get closer to production, then that FOMO will kick in. I find that 'sentiment-based' forecasting much harder to call, but I am content to just keep accumulating when I can, and sit on my hands for a few years. I don't care when the market decides to start to speculate on KEFI, because I will be here until it is no longer speculation anyway.

for what it's worth, the market sp is pretty much never correct. they are a bunch of ever-changing people and algorithms, voting on a business that they are armlength away from, kept in the dark about, and all dealing with a ****tail of ever changing unexpected issues across every investable industry and millions of individual personal lives.

if you want to stand a hope of making money in stocks and shares you either learn to read human sentiment and trade highly volatile and liquid stocks, or you spot a long-term opportunity, accumulate as much as you can, as cheaply as you can, and then have the patience to seen it out to the end. with kefi tomorrow's share-price doesn't matter.... you invest for what the share price will be in two years time!

@target6p, what a load of nonsense. Your model is clearly your own hole, which is where you're pulling these numbers from lol

If the sp is lower that a forecast, then clearly that forecast is incorrect..... unless the forecast is lower than the sp, in which case it is the market that is wrong lol

@bonkers0801

"stebo , i beg you put me back of your imaginary filter list."

don't worry, i will do

"your 100s of posts had kefi sat at 5p today , to come back with even more predictions shows you haven't learned your lesson"

nope, i haven't learned my lesson and i'm still buying every kefi share i can afford at these prices. i've done my research and have conviction in my conclusions

"you then go on and mention kefi can extract every single oz of gold from tula kapi simply because the gold price has gone up!!!! thats laughable in itself.

what about the dilution and processing loss, during the mining process, some surrounding waste rock mixes with the gold, and some ore is lost. this expected ore dilution drops the actual recoverable gold below the total in-ground resource.

its not just the gold price that determines the viability of making the reserve , the geometry of the orebody alone leaves some of the mineralized zones outside the optimal, profitable pit shell. thats not my words by the way thats kefis"

you don't understand the nature of the profitability. i fully understand the economics of the ten year old mine plan, but the peripheral ore-bodies outside of the current mine design are now well worth the expense of getting to. over and above that, the low-grade spoil excavated just to reach those ore-bodies is now profitable to process. what was previously considered a waste material, to expensive to dig through just to reach small bodies of ore, is now profitable enough to extract and process, with the bonus that the peripheral ore bodies now also fall into the reserves.

your other point about dilution and processing loss is valid, but the actual extent is so minimal that if you are going to consider this, then you also have to apply some value to orebody growth. there is no way that the viable ore body just stops at the same place as the assay cut-offs.

"so your theory every single oz of gold is now economically mineable is as pathetic as your previous share price predictions."

whatever you think, but you're only robbing yourself by not reasonably forecasting kefi's asset and profitability value...... oh wait, you're not even a shareholder and just here because you enjoy ******* on other peoples' chips

@Ortherncopper "Free cash flow of say 3 hundred million, over about 7 years does not make a company worth 5 billion... thats absurd.

There is money to be made on this share, but bloody hell, be realistic."

Nobody is saying that "This Will Happen"..... but it might.

But if this doesn't happen and if the forecasts are way too optimistic and KEFI falls hugely short and only 15X instead of 30X or 90X, I can't see too many of us lamenting only 15X our money.

I invest based on the worst case scenario, but that doesn't being that I don't also consider more likely outcomes, and also keep an eye on the blue-sky upside possibility also.

And $300m for 7 years...... that's worst case, with it being much more likely to $600m for 12 years. A 10x P/E valuation on that is $6b. This is not pie in the sky stuff, and is much more likely than your worst case scenario.

@PuzzledPete You don't understand the point I was making.

Miners typically don't recover the full resource, because the resource exploration is based on a reasonable economic cut-off, and then a DFS is carried out to ascertain how much of that resource can be mined at profit. The extent of the Reserve becomes the point where the cost of mining and processing outweighs the value of the gold recovered.

What I am telling you is that when TK was being drilled, the price of gold was about $1,000/oz, and falling. It hadn't been higher that $1,300/oz for years and years before that, so it was considered fairly constant. Therefore it was considered reasonable to have cut-off grades based on the recovery of gold at $1,250/oz. Ie. it was considered pointless to keep drilling beyond this, because even if there was gold here, it would be lower grade, and the cost to recover it would exceed $1,250/oz, and therefore not economically feasible to mine. When this drilling had been completed it gave a total reserve of 1.72moz gold found.

Then Lycopodium carried out the DFS in 2015 (updated in 2017), and came up with an actual mine plan and drew a circle around all the gold that could be mined and processed for a profit, based on a $1,250/oz gold price. This gave us the 1moz reserve qty.

Roll on ten years and we're at $4,350/oz gold price, with expectations of higher gold prices to come. All of a sudden every last bit of the initial 1.72moz is now well worth mining and processing, due to there being an extra $3,000/oz margin available to cover any additional mining costs! If you read through the DFS, and the 2025 review of costs, you can calculate the mining and processing costs to prove that even at the cut-off grades it is still very economically viable. So all of the gold that KEFI knows is in the ground is now very worth recovering, and we can fairly safely say that the reserves will increase to at least that 1.72moz that we know is there.

There is also the body of unknown gold, just beyond the current resource body, beyond the previous drilling extents. It is still economically viable to mine and process way below the current DFS and exploration cut-off grades. We can't quantity the unknown lower-grade ore, but it would be crazy if the previous exploration cut-offs just also happened to be the very end of the ore body. I expect that there will be a significant volume of low-grade ore, which will add massively to our resource, albeit at an increased AISC.

This is not just blue-sky thinking by the way. KEFI have already said as much in their 6th Jan market update RNS, where they added an extra 23% to the ounces of gold to be recovered. This was just through processing some of the spoil material that will be dug out to get to the DFS ore. Everybody is still working off the 1moz DFS figure, but KEFI have already stated that this has already risen to 1,215,000oz gold (plus the 600koz of silver, at $43m).

@WalterMitie if you use the share-price as your barometer, then you'll never beat the market and you'll always be one step behind.

The winners with GGP were those of us who invested 10 years ago, when GGP was still an unproven and risky proposition, when Gervais Heddle was in charge. By the time the sp had caught up with the proposition it was too late and anybody who bought GGP based on the sp performance got their fingers burnt or stuck underwater for the last 5+ years.

@WalterMitie The question isn't "why"..... the question is how can you take advantage of that!!

You're completely right that Harry isn't liked, and isn't trusted...... but he had delivered and there's nothing to suggest that he isn't considering to deliver. Let the market have it's popularity contest, and instead focus on what matters to shareholders...... the profitability

My calculations are based on the assumption that the current 1.72moz Resource is all recoverable from the open-pit mine - 95% certainty

Plus an additional 15% growth, based on the existing drill cut-offs being way too conservative - 70% certainty

Plus a high-level estimate of 1moz gold within the under-ground mine - 30% certainty

That works out at just a bit above 2moz (2,114,600oz) which is what I base my Valuation forecasts on.

That disregards SA assets, and the speculative upside of future new discoveries.

2,114,600oz x ($4,350/oz-$1,000/oz) x 83% = $5,879,645,300 = £4.38b = 32p per share

Feel free to apply whatever risk-matrix you like to that, but currently the market is valuing KEFI at 5% of that, effectively saying with a 95% certainty that TK will catastrophically fail. To me that is crazy. Surely most people would agree that success is now 'more-likely-than-not' and therefore even 50% risk discount would be considered conservative?

At some stage TK will be pouring gold, and coining in the profit. At that stage there can be no debate over the risk allowance and it will be the annual dividends that will be dictating the share-price.

The Valuation is eventually going to reflect the mulit-multi-billion dollar business plan. The only question that remains is how long it is going to take to get there, and how many who are invested now will have the guts to last the course.

@deedee1, I hadn't even read your "12p per share" when I posted the below lol

@deedee1 The current 1.05moz is based on a ten year old DFS, back when the price of gold was $1200/oz. The cut-off grades used for that exploration were based on a gold-price of $1,250/oz, which is clearly crazy high in todays climate, and means that all 1.72moz of the resource found is economically viable. If KEFI did a new DFS today, even just based on the historic drilling, then the Reserves would be 1.72moz and not the current 1.05moz stated. Right there is 670,000oz. 83% of that, with a $4,000/oz margin, is instantly $2.224b = £1.656b = 12p per share!

This is just based on the existing drilling results, and just applied current and forecast gold prices. This is maths - not some pie-in-the-sky speculation, hoping that Jeff strikes "new gold" somewhere.

Must have left you unfiltered Bonkers!

You completely miss the point.

When you say GGP 7-8X, that all depends on your starting point. Many of us were in GGP from 2p and seen it 20X, but even at 2p GGP was reasonable value and starting to suffer from a period of optimism and meme-stock hype. At the same time KEFI was going through the same, even though it was highly speculative.

KEFI's USP though is that it is currently crazy crazy under-value, if valued against its business-plan and a reasonable risk-assessment. Instead KEFI is currently valued based on sentiment swings, tropes about management, and long-standing 'jam-tomorrow' narrative, etc. Thanks to those things, which are typically rooted in the recent history of Ethiopia, KEFI is so under valued that it is in the ideal position for the huge re-rate.

If KEFI was valued at 5p, which would be completely reasonable based on the metrics, then to claim it would 30X (£1.50/share) would be ludicrous. But when the sp is at 1p, then 30X (30p/share) is completely feasible and reasonable within the coming years.

30p share is a valuation of $5.3b. That is not unreasonable when you own 83% of Tulu Kapi, with a industry leading AISC, during a period of global gold re-valuation.

That's NAV of only 1.25moz at $6k/oz gold price, or 1.6moz at $5k/oz gold price, both very likely.

Personally I believe that there is a minimum of 3moz just at TK, and with even a conservative gold price forecast of $6k/oz, then that would be a speculative KEFI valuation of $12.45b = 90p per share. Might never happen, but the genuine possibility of 90X, certainly puts 30X into context.

Until Tulu Kapi starts pouring gold and paying dividends, it's all just gamesmanship and a number on the screen.

$5k/oz would be a NAV of £2.656b = share price value of circa 20p (just for 1moz at TK)

I appreciate that shares won't trade at NAV, but if we're trading at a 95% discount to that I would definitely not be delighted!

I would like to hope that by end of the year we're well progressed at TK, couple of SA assets kicking on, and possibly a refreshed DFS for TK based on today's gold prices, and possibly even including initial thoughts on the underground TK mine.

It's going to be an exciting year - just patiently waiting on the herd to arrive.