Member Info for thunderbuddy

Thanks Mike, that's really interesting.

Your take on Endeavour was where I landed on them - a really well managed company but too expensive compared to PAF. I've seen how these West African miners can get into trouble. For the record I think PAF are really well managed too and have huge upside when the gold price continues it inevitable rise.

On THS I've lost complete faith in the management and previous lessons have taught me to get out when you get to that stage. My last involvement was when Ilja (the Investor Relations guy) started threatening the LSE forum contributors with legal action for negative comments surrounding the CEO. As far as I know, they may get out of their predicament what with the PGM price rise which will cover the Karo purchase price they paid to the other Poroulis firm, but I couldn't stay in there.

Finally, there are other contributors here but I do look out for what you post. As far as I know you haven't bragged about "getting in at 13p" like some of the others here and I find your comments measured so at least for me you are one I look for. Thanks for what you put on here.

I think we're aligned on the macro case for gold (replacing US Treasuries as the global reserve asset), so there's plenty of running room. No reason to dispose of this investment here for the foreseeable!

Mike, interesting to see you mention Endeavour, it’s a goldie that’s on my radar; although I prefer PAF as it’s got good management and imo has its operations in safer jurisdictions.

I follow your comments with interests as you seem to be the sage of this board. How are you thinking about the PAF and EDV and how are you balancing between the two?

Also, do I recall you being involved with the African Platinum miners - THS & SLP? I am still in SLP but sold up THS due to what I perceived to be tricksy management earlier this year in hiding their Zimbabwe mine purchase at an extortionate price (from the CeOs family business) in the small print of their accounts.

But the 5 main board directors are the ones trying the buyout!

Glad you got the correction in Hxul before they take legal action against you! 😉

Thanks Hxul, that's good work to collate the individual "investments".

So in summary Tharisa have bought:

- 66.3% of Karo Mining Holdings for $31.5m up to March 2022.

- 9.95% of Karo Mining Holdings for $113.6m since then.

Wow!

Interesting to note that the 2022 Karo PGM basket was stated at $2,100 (when the first 66.3% of KMH bought) whereas now it is $1,279 so the market value of KMH is obviously drastically less. Clear as day that the most recent cumulative 9.95% is being bought at a hugely overinflated price.

Also interesting that the massive increase in prices paid have come to buy portions less than 5% (which I think is the proportion you can buy so you can hide in the footnotes of your 100+ page final accounts rather than RNS declaring).

Again, we remind ourselves that the other KMH owner is Leto Settlement > Medway Developments > Pouroulis Family. They inevitably benefit from Tharisa 'paying over the odds' as Tharisa effectively buys a portion the company from them.

To me, there are two possible conclusions here:

1) The conflict of interest is being acted on. Tharisa are the major shareholder of KMH and Pouroulis family members are CEO & Chairman of Tharisa. The KMH minor shareholder (Medway/Leto) is a Pouroulis family vehicle. As Mike rightly points out, the professional/moral/ethical/obvious thing would be for Tharisa to buy out Medway's portion if Medway do not agree to purchase additional shares. It seems the Tharisa cash (that we own as Tharisa shareholders) might be being transferred to KMH via the expensive share subscription; and therefore Medway get to become 23% owners of this cash as they keep their large portion of the KMH business without subscribing capital.

2) This is an innocent overpaying and Tharisa are valuing KMH at nearly $500m (double what Tharisa is worth). This is clearly an awful use of capital and the CEO should be gone.

I'm giving the benefit of the doubt and going with 2). Therefore my call is for the Phoevos Pouroulis to go...

Just to clarify, thought I'd check my information...

1) Karo Mining Holdings (hold 85% of Karo Platinum) are 75% owned by Tharisa / 25% owned by Medway Developments.

2) Quote from Page 46 of 2014 Tharisa Pre-Listing Document

"Medway is held 96.74% by the Leto Settlement of which the trustees are Artemis Trustees Limited and the beneficiaries are Adonis Pouroulis, his spouse and his children, who are related to Loucas Pouroulis and Phoevos Pouroulis."

https://www.sharedata.co.za/Data/015273/pdfs/THARISA_prelisting_apr14.pdf

Obviously that is 10 years old but it's safe to assume that Medway is still a Pouroulis vehicle given they are intertwined with Tharisa.

Just to clarify, thought I'd check my information...

1) Karo Mining Holdings (hold 85% of Karo Platinum) are 75% owned by Tharisa / 25% owned by Medway Developments.

2) Quote from Page 46 of 2014 Tharisa Pre-Listing Document

"Medway is held 96.74% by the Leto Settlement of which the trustees are Artemis Trustees Limited and the beneficiaries are Adonis Pouroulis, his spouse and his children, who are related to Loucas Pouroulis and Phoevos Pouroulis."

https://www.sharedata.co.za/Data/015273/pdfs/THARISA_prelisting_apr14.pdf

Obviously that is 10 years old but it's safe to assume that Medway is still a Pouroulis vehicle given they are intertwined with Tharisa.

hi mike! yes i know that medway is a pouroulis controlled business.

the point is that these overpriced karo share subscriptions are costing tharisa a fortune to the benefit of the minor partners (medway and the zimbabwe government).

all in all, karo is being valued at $400m based upon the most recent subscription (bear in mind tharisa's market cap currently is significantly less at $260m for a profit-making business). karo would not be profitable currently so obviously it is overvalued there, and there is c.$200m construction spend still to go. on that, the market value of the new subscription should be drastically less than what tharisa are paying.

now we know that without tharisa's involvement, there would be no way the project could be brought to completion, so you would say that the price of the new shares should be much much less than $20m for 1.22%. as medway are not subscribing to the additional (hugely overpriced) new shares, they effectively get a smaller share of a much greater capitalised company, effectively that is equivalent of a windfall share sale. especially as medway will almost certainly have no way of completing the project without tharisa's backing so effectively tharisa have all the power in the share price negotiation there.

in conclusion, you are left with no other option than to think that the pouroulis's are using tharisa (of which they are the chairman and ceo of) to inject cash to karo for relatively little extra shares to the benefit of their privately held company (medway) who are diluted at a very very generous price. you suspect that there is no way the same terms would be agreed if the minor partner was not a company held by the chairman & ceo.

i am greatly disappointed in this, especially as all of these arguments were rehe****d the last time one of these footnotes on the 2023 karo purchases came out. there is also a telegraphed commitment to commit to buy more overvalued shares to take tharisa to 80%, presumably that will be at this incredibly high price.

as far as i know, there has been nothing communicated to shareholders to tell us how the directors are valuing karo or to justify their decision to subscibe to shares at that value.

notwithstanding that, appreciate both your (mike) & hxul's comments on this board. i value your generous and wise input on this company as a fellow shareholder.

Does anyone know how to invest in Medway Developments Ltd?

Those guys are great businessmen. Clearly running rings around our directors on Karo! 😂

Is there anyone attending (either physically or virtually) the AGM on Wednesday? I applied too late and missed the deadline …

Could we get a report back on the board’s comments in relation to the recent Karo new share subscriptions in the AR footnotes please? Specifically why the board thought the Karo valuation (at c. $350m) was reasonable for a currently non-profitable not-yet-developed venture, when Medway Developments obviously didn’t think it was worth that much hence they didn’t participate in the subscription.

There will be much concern if they avoid addressing this point. Currently it appears the minority shareholders of Karo Holdings are the beneficiary of overvalued subscriptions using our (Tharisa) cash.

Thanks for replying Ilja/Tharisa.

I think you imply that I missed your point - which is the original poster miscalculated the Karo valuation and so you would like action taken against them. In defence of the poster, I would say that they have later acknowledged and corrected their calcs.

The underlying issue remains however and you have not addressed it. This issue is that Tharisa appear to have used our business’ money to subscribe for new shares in our partially owned subsidiary, Karo, valuing this subsidiary business at double Tharisa’s market cap, at a price which appears to me to be highly unattractive. This has then been relayed to us shareholders in the footnotes without proper comment or rationale leaving a void for us to speculate and fill in the blanks. You appear not to be happy with the ‘filling of the blanks’.

Not sure anyone has mentioned the word corruption specifically. I would point out though that hypothetically should additional Karo shares be overpaid for by Tharisa, then the other Karo owners would therefore benefit disproportionately. And there seems to be overlap with Pouroulis both owning Medway Developments (who have minority interest in Karo) and controlling Tharisa, which you no doubt can see might lead to speculation over conflicted actions.

We’d like management to explain the rationale of the business decision and why the extra subscription is deemed in our business interest. If it has been explained previously please kindly point out where so we can put this matter to bed.

Are Tharisa threatening their shareholders with legal action? Seems like it!

Very disappointed with Ilja’s response, have been waiting for what he had to say.

The discussions on this board are valid regarding how our funds are spent. It has been pointed out as the disclosures are in the footnotes without explanation as to how the board have valued Karo Holdings. Ultimately, with the latest subscription, valuing Karo at 4x asset value - at a time when the PGM basket has collapsed (which the board have noted hence delay in construction).

It is also fair to point out that Medway Developments are the ultimate beneficiary of any overvaluation of the Karo business.

I remain a (large) shareholder as I believe Tharisa is vastly undervalued and that PGMs will turn up. I also supported the Karo investment and stick by that. I have been impressed with the Pouroulis family and their running of the business to date, however this is highly concerning and I demand that the Karo valuation be explained!