Member Info for Stebo

It's all a risk, and "de-risking" is a fallacy. You have assets that are more / less volatile, and you have assets that are more / less liquid.

Selling KEFI shares is just transferring one asset (KEFI shares, which are currently on a huge bull-run, and expected to fly on good news) to another asset (cash, which is always dropping in value by inflation). There is a risk in holding (that price might drop), but likewise there is a risk in selling (that the price might rocket).

If the sp goes up (I think most would agree it is more likely than not) then it will go up by order of several hundred percent. Therefore Low Risk : High Return

If the news doesn't come, or the can gets kicked again (which I believe is now unlikely), then the sp will drop by maybe 20%, maybe 50% as an absolute max. Therefore High risk : Low return

I'm convinced that within the next week we are far more likely to see the KEFI sp rocket, so for me transferring KEFI shares into cash (missing out on a likely several hundred percent, in a low likelihood attempt to avoid losing 20%) is the high-risk : low reward play, which just doesn't make logical sense.

The only rationale for "de-risking" is an emotional response, where some how losing £1,000 is devastating, but missing out on gaining £1,000 isn't so bad. If that resonates with you, then perhaps you should consider whether that emotional response is a hinderance or not.

Well isn't it obvious by now that that's the whole point!

It's a tree-shake. MMs clearly have a few big orders to fill in the 1.34 region.

Raising the price would give hope of another leg up and suppress selling. Dropping the price (tree-shake) is designed to induce panic sellers or hit stop-losses. The MMs are betting on PIs having no dry powder, which if you did you cold play them at their own game and buy when the price dips.

This is why IIs make money and PIs lose money! In this day and age though, with so many resources to educate yourself, there is really no excuse. Even just look at the sp behaviour over the last few day's - each day there has been at least one tree-shake, with the price rising again before close, back for a daily price increase (ie more buying than selling). What you don't see is all the shares being transferred from weak handed PIs to well informed LTH or IIs.

"This is a sham business"... did you have a straight face while typing that?

KEFI literally owns a gold mine. We're digging up the stuff, processing it and selling it, coincidentally just at the same time that there has been a huge re-rate in the price of the gold that we're digging up. It's about as simple and profitable a business as anybody could be in at the minute.

"Take opportunity to book profit, if anyone has ever made any."...... oh there it is, that's the agenda - you want to encourage other people to sell.

Personally I'm sitting on 150% profit, but I'll have a little smile for you when I'm "3-4x" and on my way to 10x.

Magic - you're wasting you time buddy. Nobody is buying your nonsense anymore. People have their own brains - we know what is happening with KEFI and we know what you are trying to do.

Please don't take us for idiots - it clutters up the message board.

"And if Harry doesn't?"

This deal is simply too profitable not to close. But its also a huge deal. It's more important that it's 'right' than being 'fast'.

It has taken a decade to get here, lets not spoil things by rushing the last few days. If I've to wait another week similar to last week I'll be over the moon :-D

The sells are very clearly the warrants being off-loaded. A completely emotionless automated protocol once that was triggered when the sp touched got to twice the warrants' 0.7p exercise price. Just the same as happened last week when the sp hit 1p, which was twice the exercise price of the 0.5p warrants.

Yesterday and today are just a (closing) window of opportunity to for buyers. As soon as all the warrants are bought up the sp will behave the same way it did when all the 0.5p warrants were bought.

Just take a look at what happened on Tuesday and Wednesday this week.

The 70m 0.5p warrants were all sold, the hand-brake was let off the share-price, and we did 40% in two days.

We only have 39m warrants to get through this time, and the buying pressure is much higher.

We'll fly through these warrants, and then a blind man on a galloping horse can see what is coming after that!!

The share price won't move and inch until all the warrants are forward sold. MMs with just match every buy with an exercised warrant sale, keeping the price completely stagnant.....

...... right up until all the warrants are sold. After that comes the fireworks!!

Hard too know when that would be, but we know that the clock is ticking down. Right now is the best opportunity anybody is going to get to enter or load up. How long this window lasts, nobody knows!

Simms45 - Love reading your posts. It's great to see somebody making use of a calculator and doing a bit of research.

Far too many people on here just talk about what the think or what they feel might happen.

The reality is that what will actually happen is genuinely hard to comprehend, so the only way to believe it is to satisfy yourself by doing the maths and the research. Once the sp is 10p plus the penny might start to finally drop with the market. If you want to beat the market you have to behave different to the market. You have to not think like the market. You have to have better research than the market and you have to understand the business model better than the market.

When you've done all that, 'the market' isn't going to believe you, because if they understood what you understand then it would already be priced in.

The frustrating part is the period when everybody thinks you're crazy and you're pulling your hair out waiting for them to figure it out!!

L1b3rtarian, you are describing how typical volatility and sp oscillation works, in it's never ceasing attempt to find an equilibrium.

That is completely different to and actual inherent change to intrinsic value. Something that was worth next to zero, with a small likelihood of eventually being worth something, will have changed into something with $360m of finance, bankable and deliverable assets, and a very high likelihood of being worth £billions in less than two years.

That is not a sentimental swing, or a pump and dump. Over-bought / over-sold stochastics formulas, etc don't really come into it, because those metrics are based around an "everything else being equal" formula. In this instance everything else will not be equal.

While KEFI is still predominantly non-sophisticated PI, then perhaps these metrics will have an influence in a 'tail wagging the dog' type scenario, so perhaps you are correct and you are better and assessing the situation than I am.

I suppose I think that how it plays out will primarily depend on how many, and how quickly, Institutional Investors (or sensible, risk-adverse, LTH PIs) buy in following de-risking.

Personally my plan will always be to buy things that are under-value, and sell them when they're fair value. If it's something that pays dividends then hold until somebody offers over-value.

My personal thoughts are that there is the true calculatable value, and then there are individuals making forecasts and guesses. The sp unfortunately is driven by PI forecasts and guesses, many of which are based on what the prevailing direction of the sp is, rather than the actual value of what the shares might be. Once IIs get involved, they have to present business proposals and due diligance to their managers before making investment decisions (buys or sells). Therefore those forecasts are based on facts and figures, and are therefore much more likely to be in line with true value. As IIs move in and squeeze PIs out, then the sp will become less volatile and more reflective of true value. Considering our tiny current mcap, that will only be a good thing for KEFI!!

I completely get all that, but presuming there will be a spike, then a retrace is therefore based on the following:

- Value hugely increases due to risk-mitigation

- Lots of buyers and no sellers, so price rises

- Then the price is high, so lots of sellers and no buyers, so price retraces

- The the IIs get involved and the sp goes back up again to fair market value

That is an over simplification and not the way that the market works.

There will be thousands of people all having different thoughts about what is cheap and what is expensive. the majority of buys and sells will cancel each other out, with the net effect either being a sp rise (when buying outweigh sells) or sp drop (when sells outweigh buys). This is a dynamic system that is changing every second. With the huge volume that we will see the balance of buyers to sellers will gradually move back and forth, and it will be impossible to know what direction will be next.

Everybody will be trying to 'beat the system', but that's exactly how the system works.

I feel like everybody has formulated a trading plan of:

'wait for the spike'

'sell my holding at the top'

'wait for the dip'

'buy back in with even more shares'

The problem is that lots of PIs will be doing the same thing. In reality it will be:

'patient IIs discuss what their buy orders will be with MMs'

'price goes up'

'first PI wets the bed and sells (say at 2p)'

'the crowd of PIs, scared to miss the top, also sell (at 1.8p, as the MMs have dropped the price to spook the PIs)'

'MMs and IIs sit back patiently hoovering up all the shares that the PIs are shifting in a fire-sale, hoping to get in lower'

'Selling cools off and MMs slowly increase the price until they've filled their order books, maybe with the odd tree-shake on the way up'

'Eventually PIs realise their mistake and start trying to buy back in a 4p, and the MMs move the price up to 5p+'

The only way to win is to focus less on share-price movement. Instead take a minute to decide and determine what your shares are worth. Even just what they are worth to you (ie what you'd be happy to sell at, even if it' below actual worth). Have patience to wait until somebody offers you that amount. It's as simple as that.

There is a very good reason why the vast vast majority of PI traders lose money. You simply can't beat the system when it comes to trading.

Can somebody explain to me why there seems to be an expectation that there will be a retrace?

I don't claim to understand sentiment, but I'm genuinely interested to hear the rational behind why people expect this to be the case. Seems completely illogical to me, but the notion is prevalent so perhaps it will be a self-fulfilling prophesy?

That RNS will be the company maker.... and the generational wealth creator for anybody ballsy enough to take advantage!

Lol, imagine how gutted you'd be if you sold tomorrow, and the news dropped on Friday evening.

Having all weekend to kick yourself, and then missing all the excitement and riches on Monday morning! lol

Na, I think I'll just sit tight personally lol

I was going to respond about the finite reserves business model, but Sharezy already did, so no point in repeating.

The whole mining industry operates on this model, but only very few pull of what KEFI has almost done.

When we are 80% owners of TKGM, we will be self-funding a huge exploration operation, across the many lucrative licenses that we already have, and we will also have the means to consider acquisitions and partnerships with other successful discoveries in the arabian nubian shield. Investing in miners will always carry a speculative slant.

The reality of the situation though, is that you've mentioned 17p Valuation yourself... even if that was only 15p or even 12p, today's price of less than a penny and a half is incredibly undervalue. Personally I don't think that discount reflects the remaining risk around finance, and once that risk has been mitigated, I don't believe that anything below 7p is anything less than an absolute bargain.

KEFI's sp has the anchor of historically horribly sentiment, and engrained low share-prices. Eventually it will shake that off, and thus the current opportunity for savvy investors with a bit of patience.

Doze

That's a good point... " HAA has said if there is no big rise on finance close he wonders why he bothers or words to that effect."

At the AGM Harry said that if the market doesn't re-rate then he may as well sell. It was a flippant remark, because he is so confident that fear will turn to greed, but just out of curiously (as a very worst case outcome) I pumped the data into Chat GTP to see what it would estimate the buyout price would be. This was the result:

"Here’s how the estimated company valuation shifts with different gold prices (simplified DCF, 12-year mine life, 10% discount, 65% FCF margin assumption, plus $70m Saudi assets):

📊 Gold Mine Valuation Scenarios (all USD million)

At $3,000/oz → ~ $1.28 billion

At $3,500/oz → ~ $1.60 billion

At $4,000/oz → ~ $1.92 billion "

This is 13p, 16p and 20p respectably. Not a bad worst case scenario.

I keep saying it, but go crunch the numbers. People simply aren't getting what we have in front of us here, and by the time you believe it the market will have already priced it in.

Now is the opportunity to beat the market!!

ShotgunMike, that's a sensible post and good advice.

It's the old saying that you need to ensure that you can remain liquid for longer than the market remains irrational!

I believe that we have a deadline, when the market will become 'rational' which would be when first dividends are due. Allowing for risk and delay, lets say 2029.

I also believe that the sp valuation at that stage will be a worst case of 20p (no more discovery, gold price collapse, etc.).

Is somebody told you that if you that you can have a x10 return on your investment in 4-5 years, for reasonably low risk, you would bit their arm off.

Once finance is de-risked, that is what I believe the KEFI proposition is, worse case scenario. Over and above that there is the bonus of huge blue-sky upside with KEFI.

But in the medium and sort term, what your saying is very good advice.

ShotgunMike, respectfully I completely disagree.

Yes, nothing goes up in a straight line, and if you're into trading then it's always wise to choose and upward trajectory to trade, but the numbers don't lie.

Up until now KEFI has always been 100% speculative, so sentiment ruled the sp, and that sentiment was not good!

Going forward it is profitability, Net Asset Valuation and dividends that will dictate the sp. Yes we are two years away from that being the case, but a smart investor will be running those sums now, and they will already have a really good idea of where the destination is that we are heading to.

We won't get there immediately, and we don't know what bumps there will be along the road, but if you don't keep one eye on the destination they you're directionless and just setting yourself up for manipulation and emotional bad decision making.

Nigel,

Can't disagree with any of that. For me though, the huge upside absolutely dwarfs almost every peripheral issue.

When the mcap is a cheap as it is, that huge profit margin covers a multitude of risk. Similar to how I don't fixate over whether SA is worth £30m, £50m or £70m..... it all pales into insignificance compares to the multi-billion valuation for Tulu Kapi once de-risked.

Good luck with your investment strategy.

Nigel.

The issue with KEFI raises in the past is that the money has just went into the black hole of cash-burn costs. It was required to get us to this point, but from a Valuation point of view may as well have went up in flames.

That all changes on sign off. We don't have the final details of the deal just yet (and it is KEFI so who knows what will change!) but we expect to be collecting a $10m rebate on expended costs, and we know that KEFI PLC costs will drop to almost nothing (less than £1m per year). The majority of our costs will go into running TKGM and those costs will be covered by the finance package.

As per the latest accounts, we had plenty of cash in the accounts in June, and we just got another £380k from warrants. We are not currently struggling for cash, and very soon we will be getting circa $10m into our account. In the interim (worst case scenario) we would have no bother utilising short term finance. Because of that I believe that the chances of a placement raise is next to zero.

The only reason that I could think of for a raise would be if Harry decides to structure the deal in such a way that we forgo our $10m rebate and instead hold on to more equity. This would be completely different to previous fund-raises in that instead of the money going up in flames, we'd effectively be using it to buy a bigger stake in a hugely lucrative project. This would not be a devaluing event, but actually increase the KEFI mcap by the same amount (or more) than the dilution effect.

Placements are a bad word in KEFI circles, but once finance is signed off we no longer have to worry about funds disappearing into the black hole of delays. Going forwards placements and fund-raising are not something to be feared, but will be investments that will pay dividends down the line. If anything they will be value-adding.

I'm not going to say that there will never be another placement ever again (although probably not), but if there is it will be for accelerated exploration, development of SA, purchase of equity, etc. and not something to be feared or something that would have a detrimental impact on the sp.