Member Info for the_shareminator

Yep it's providing a nice long term opportunity. Just like WRES has been for months, sat in the 0.4 - 0.42 range and jumped 50% in a matter of trading sessions, I'd expect KEFI to rerate as we draw closer to commissioning the mine. Before that, we have the financing arrangements to finalise and that will encourage the more risk averse to take positions. Still a good 18 months away from first gold pour but I wouldn't think KEFI will be sub £10 million by this time next year :)

Going around in circles here...

You can't have it both ways by suggesting the 12m are free and then suggesting the average value of shares to be issued is 1.7p. That is complete rubbish. It's either they are issued for free in which case the value of shares issued is 2p+ OR the shares are not. If they are not treated as free then they count towards your supposed 1.7p average and so as I said I don't expect them to be selling for a loss. If they are selling at 1.5p today then they are selling at a loss. If you want to stick with the official details, they are issued for free, then like I said the average price of shares to be issued is 2p+

Frankly I don't care which narrative you want to spin, the fee shares total 12m + 5m shares (at the very most) and potentially less if the share price climbs above 2p at the time of drawdown.

I haven't once ignored this.

But it's quite obvious the bulk of the shares to be issued has a much greater impact on the average price of shares being issued.

You aren't fooling anybody. Indeed if they have sold any of their 12 million, then they are selling at a loss. If you want to discount them from your 1.7p average go ahead, I'm quite happy to run with the fact they are issued for free. Which means the average price of shares being issued is going to be 2p+.

The lender can choose to hold or sell as they please. I wouldn't want to assume their motives as you have so quickly done. We will know sooner or later how many shares they are holding when they rise above the 3% holding level. You certainly have no evidence they are selling into the market and unlike yourself, they aren't fools to believe the shares they hold are "all profit" at any price. As that would mean they would be discounting the 12 million from their long term holding and so it wouldn't count towards their average.

Good afternoon, thank you for sharing the Heraeus article, some interesting tidbits in there worth highlighting below. Must be stark raving mad continuing to buy shares here but feeling confident now rhodium is back above $2500, palladium has moved a little closer to $1100 and platinum isn't far off $850.

Regarding the article it details quite succinctly the relationship platinum prices have on the price of rhodium. I hadn't given that too much thought before but indeed it's worth considering if you're unsure of the market forces pulling prices this way and that. It's volatile but the trend is clear. According to the report

"Primary rhodium supply is now on a downward trend"

This is significant because South Africa accounts for 80% of annual rhodium production and much of this is as a by-product which the producers are reliant on to sustain marginal revenues. But the irony is whilst platinum supplies increase further dampening appetite to invest in new mines, the rhodium price will continue to increase.

"The platinum market surplus is depressing the platinum price, keeping rhodium supply caged and lifting the price"

Significantly higher platinum prices, as well as rhodium prices, will be required to incentivise start-up of these new mines. Until then we should look forward to increasingly stronger revenues and margins.

Impala which contributes a sixth of rhodium supply is doing well now but the company plans to reduce production from 2019 onwards, which is expected to further tighten the market.

The UT was an anomaly, trades all around the 8-8.2 level. The share price didn't climb nor did it fall. An uncrossing trade doesn't affect the buy or sell price but being at such a premium yesterday it has skewed the charts. It shouldn't have any other effect and like we saw this morning, the UT didn't affect the spread. It's at the same level. Just ignore them.

Point me to evidence they are forward selling shares...

On the contrary the loan facility has been agreed with a longstanding KEFI institutional shareholder. They will almost certainly have a disclosable interest once all the money has been drawn down or even sooner if they hold about 1% of the share capital currently.

If KEFI make repayments, the lender can choose to take half as shares at 2p
If KEFI make no repayments, the lender receives shares at a price not below 2p

2p is not the ceiling, it is the floor as I've tried to make clear previously. Never mind your deramping suggesting these shares are worth 1.7p, do you really believe they are going to offload their 12 million shares the very next week at whatever price? Lol we will see...

The 5% fee will be issued for 2p+ depending on where the share price is at the time of each drawdown. It won't be any lower... Clearly if the share price is 2.5p or 3p then fewer shares will be issued.

You wrote "they could choose to sell at any price. If they sold at 1p, it would be an effective 2.5% interest rate." Regardless of what price they choose to sell it, the shares are issued at 2p+... selling at 1p prior to ramping up production in the coming year would be a pretty dumb move so no, I don't expect them to be selling for a loss.

You wrote "If the share prices rockets the only way it effects the number of shares issued it in the 5% fee. £5m shares.
So say the price goes to 10p. It will means 113 million shares could be issues which again would lead to a similar 1.75p average price."

Actually it is not fixed so you are wrong again. The bulk of the loan, if not repaid can be converted at a price NOT BELOW 2p. That means a price of 2p or higher. Precise terms yet to be revealed but certainly not fixed as you claim.

So in conclusion your claims are both incorrect and your intentions to deramp, obvious.

Complete rubbish.

As mentioned earlier the average price per share is yet to be determined and will most likely be a good deal higher than your 1.7p guess. For the third time, it clearly states the lender "will convert the loan to shares at a price not below 2p per share"

12,000,000 shares issued to the Lender for £2 million cash which can be drawn down over 4-5 months.

Fees on the loan draw down will be 5,000,000 shares issued at a price of 2p per share

Up to £2 million may be converted to shares "at a price not below 2p per share"

So if they are converted at 2.5p it's 80,000,000 shares, averaging 2.06p

If they are converted at 3.3p it's 60,000,000 shares, averaging 2.60p

You fail to comprehend there hasn't been a set price for converting the loan accept that it won't be below 2p per share and will more than likely be around the prevailing share price assuming KEFI are above 2p per share and that doesn't seem unreasonable once project financing comes in and confidence returns.

And by the way, point me to another small-cap explorer that just raised a loan on better terms.

Unfortunately some of them still have their heads in the sand. I am sure Beaty regrets ever touching CNR but he has no choice but to hold. Still a long way out from production, but agreed it does look cheap. No doubt next placing will be at a discount and dilution fairly heavy. Nicaragua is splashed across news websites today, nothing positive. More of a gamble there than HUM in my opinion. The current quarter will be close in terms of cash-flow but rainy season has finished and the following quarter should be solid. CEY broke 100 earlier, good time to sell given HGM yielding 5% dividend and AAZ probably 4-6% this time around. Do you hold any SLP?

Thanks for sharing the IC mention!

Still can't believe we are sub 20p. Rhodium appears to have found support, climbing overnight. As you say platinum at 4 month highs, palladium breaking new highs every week or two, basket price continues to strengthen and the ZAR has strengthened in recent days which is good for our sizable cash holding of $17.7m. I would estimate $14m is safely tucked away earning 7% interest this quarter which would be $250k on top of earnings growth expected to come with higher production. Cash held at the end of the quarter may well be higher than $20m and this doesn't take into account the strengthening ZAR more recently. Last time around the company commented that the current South African political environment was causing depreciation of the ZAR with it trading above 14.00 to the USD for most of the quarter. It's dipped below 14 this week. Further dips will be good for enormous cash pile which is mostly held in ZAR

Looks like the management finally woke up and took note of comments left here. Surely they would have known about this before today, yet it begs the question why not release an update last week to calm investors. As it is the share price has fallen considerably, partly due to the ongoing issues the country is facing.

I think it's a very out of touch update, note the following "The monetary situation in Zimbabwe is receiving the highest levels of attention from Zimbabwean monetary and government authorities"

Do they not realise who caused this? There are countless reports that point towards siphoning of funds that were meant to keep the economy stable. Gold exports are at their highest and yet there is a shortage of foreign exchange?

CMCL are one of a number of bidders looking to secure a state-owned ZMDC gold mine according to one news portal today. No company update as results on the bidding are due in about two weeks. These mines are apparently "operating below capacity or under care and maintenance", Chitando said.

last week, one of the country's largest gold miners closed shop claiming it had hardly received cash from the central bank in 30 months

be worth getting to the bottom of this?

https://www.fin24.com/Economy/the-big-heist-where-is-zimbabwes-cash-going-20181103

Worsening outlook. US sanctions a possibility. Looks like one dictator replaces another. Inflation at this rate could be harmful if employees decide not to turn up because their salaries are worthless. Wouldn't put it past this country to seize assets or impose new regulations like Tanzania did. Acacia and Shanta both suffering as a result.

https://www.telegraph.co.uk/news/2018/11/03/zimbabwe-government-fails-keep-inflation-check-post-mugabe-honeymoon/

One small correction when KEFI draw down £450,000 each month, they will allot the 5% fee to the lender. This being 1,125,000 shares 4 times and presumably 500,000 shares for the remaining £200,000.

Holders will have the last laugh as your feeble attempts to ridicule me prove nada.

1.71p you keep quoting but perhaps you're too dim to understand the meaning of the figure? The shares are not being issued at 1.71p, it clearly states the lender "will convert the loan to shares at a price not below 2p per share"

Got it? That means a price of 2p+ dependent upon the prevailing market price.

1.7p is the par value of every single share in issue.

KEFI shares are referred to as 1.7p shares, you can see reference of this in the last set of Interims were it states

"Consolidation of ordinary shares during 2017

Following the Company's General Meeting on 1 March 2017, at the close of business on 1 March 2017 shareholders received one Ordinary Share of nominal value 1.7 pence each for every 17 Existing ordinary Shares of nominal value 0.1 pence each."

Like I wrote earlier, assuming worst case 117 million shares are issued and the share price climbs back to 2p per share the market capitalisation will be just £13.4 million. Until that time we can access £2 million cash in exchange for 12,000,000 shares.

Seingred - yes best to steer clear of CNR and the chatboard for now, things are continuing to worsen...

Confident we'll see AAZ strengthen this quarter and SLP finally bounced to test 19p on Friday with precious metals rallying. BMN has put on 25% in a fortnight but I reduced into that rise. Sometimes it's best to just ride your winners, but impatient hands! HUM and SHG further out could offer decent upside but more risk attached.

Wouldn't go anywhere near POG, I was burnt waiting for the rights issue back in 2014 and when it eventually came how bad was that for shareholders? The people at the top mismanaged the assets deliberately from what I could see and took action long after all shareholder value had been wiped away. Now the same people are sniffing around, only there appears to be an internal tussle for control, so there is that added risk. The share price hasn't gone anywhere in 3-4 years which tells you nobody in the city will touch it despite chipping away at the net debt. Hard lesson learned, don't trust shady Russians. HGM has not caused concern thus far so I wouldn't class that in the same category but ALTN doesn't inspire confidence regardless of improving financials. Are there potentially more bonds to convert to equity in the year ahead? The last report lists $9.7 million worth which is a significant chunk of the company value today.

hex314 - I don't think retail investors are as soft as you believe.

KEFI receive £2 million for 12,000,000 shares up front. There is no interest on the loan. They can use this working capital for a year or there abouts and come repayment if KEFI choose the lender will convert the loan to shares at a price not below 2p per share. I would interpret that to mean 2p+ dependent upon the prevailing market price.

Blackfish - I did mean no more than 30p. We are trading at 18.5p today because of short term issues. Hostile bid in the next 6-12 months while the mine struggles to keep up with debt repayments and rebuild the cash pile

Yes and the buyers are back! 18.45 on the ask

Okay, I see your point that the share price was trading around 1.6-1.7p but it clearly states 2p a number of times in the terms and mentions that that is a 14% premium to the share price (at the time). As we can see 2p is closer to a 30% premium now.

Indeed, should Kefi not repay the loan in full then up to 117 million shares will be issued to the lending shareholder, at a premium of 2p per share. This is much preferred than continued placings at ever lower prices and a discount no less, with warrants to boot!

If 21% of the company is siphoned off in this way that's simply how the market works. The lender will likely make a handsome reward on their investment but then they should do as they are taking on plenty of risk. Shareholders, myself included, who bought at higher levels will have to wait longer before we break even, but anyway buying today is doing so at a near 25% discount to the price agreed by the lender.

The implied valuation you mention is still a good 12-18 months out so asking for a 150% premium at 4p is never going to happen. There shouldn't be an issue taking out other financing options in 2019 as the mine draws closer to commissioning and that would be my preferred solution to repayment of 50% of the loan (£1 million).

Again, the company need cash. So this isn't about whether an investor wants to accumulate 21% at market prices. This is a cash-rich, savvy investor who are providing what is effectively a short term loan at a premium to what the market currently values the company at.

Assuming worst case, the 117 million shares are issued and the share price climbs back to 2p per share, the market capitalisation is still only £13.4 million. Is the £2 million sufficient to see us through the entire 2019? I am not 100% sure but £4 million should get us to initial production and by that time we will hopefully be worth closer to £50 million.