Kopane Share Discussion Threads

[smarm] 02/8/2010 16:38

wendy - thanks, I got his thrust but I don't understand it so I can't evaluate it. If Obtala want out then surely, simple thought here, they want the price to be as high as possible.

S

[wdurham] 02/8/2010 16:29

smarm - I think the point Fraser is making it that some others might well be focused on short term games. Nothing much can be done during the offer period because of the rulings cited above by Adam, which also apply to derivatives, but Obtala (who are largely holders via derivative anyway) will want their exit one way or the other. His scenario is one way it could be achieved - although I don't pretend to understand it, I know HE does!

[adam] 02/8/2010 15:19

In a takeover situation all 1% shareholders have to announce their trades under Rule 8.3 of the takeover code.

New disclosure requirements: Rule 8.3
of the Code has been amended to provide
that during an "offer period", persons
"interested" in 1% or more of any class of
"relevant securities" of an offeree company
or, unless the offer is solely cash, an
offeror company must publicly disclose
their "dealings" in any relevant securities
of that company.

[fjp73] 02/8/2010 15:16

Afternoon Smarm, if that's the case? How has 2% holder on Iofina done it, a 9% holder on Regal Petroleum done it... I could go on and on! 2% on Vialogy...8% Hawk. I think the picture is clear and it is something people should consider as a risk!

I was merely adding some trading strategy to it!

BW Fraser

[smarm] 02/8/2010 13:43

FJ - FWIW I don't/can't follow your logic. I doubt an 8% holder can push FDI to a 50% fall. Really, I can't make head nor tail of your logic (although it seems very well thought out in your head).

S

[fjp73] 02/8/2010 12:44

Thanks for correcting me on Obtala's (OBT) KDD's holding.

Now if I'm correct and OBT do look to exit, which for some strange reason I doubt, well at this stage anyway...

Hypothetically speaking, OBT's net holding would be around 8.398% after merger so the figures need to be somewhat larger to exit and profit. At 8.39% there would have to be an assumption of 70% long-term holders which looks more than likely at the current KDD / FDI share price The CFD short would have to be 5.5 times sales on a like for like basis but limited to 0.2495% to avoid disclosure and the Spread bet is really only to top up the movement in terms of profit, but I'd go larger to make more.

However it would still leave just under a 3% holding for free, so for the "short position watchers" if you see some erratic shorts and a decreasing price to say 13 pence on FDI, you wont need to ask why! Of course, numbers would vary if there was another buyer/seller but it's easy to adjust mid-position.

All waffle but interesting to work through..

The irony is FDI/KDD aren't far off the Iofina ratios that make for a very good profit for the short / long traders. Finally, in terms I hope at least I understand, the seller would need 15K share sells, 75K share CFD short and £1 for every one share / CFD sold on a spread bet could prove very profitable indeed, but of course a lot of them. Ethical? Hmmm...if my figures are correct, that could me an bottom share price around 45% lower than it's current price.


Just a different slant that's been running round my head whilst reading the NKWE bankable Feasibility Study...

BW (Best wishes) Fraser

[smarm] 02/8/2010 10:21

We were.

S

[123asd] 02/8/2010 10:14

Were blue....

[hectorp] 02/8/2010 09:27

BW Fraser, you know thing or two all right about how these things can be done.
IF there is some overhang in coming months, whatever cheap price persists, value will always out, add more on further weakness.
I do however pray that there is 'some sort of arrangement'.
H.

Meanwhile I note both KDD and FDI are blue this AM.

[smarm] 01/8/2010 23:47

Andy -

I'm leaving it there. You are clearly p!ssed at him personally and I don't think that has anything to do with the deal on the table.


S

[andy] 01/8/2010 23:00

smarm,

oooh getting really personal now!

Out of interest, how does he know how many shares I own?

I am on the FDI email list, surely he could have informed the list of shareholders they already have, that there was a meeting?

And quite frankly, no he can't, I think the deal increaes risk for FDI shareholders, at a time when they should have been consolidating BK11 / 16, which were the focus of interest up to two weeks ago!

I personally think he should have called a meeting for FDI holders rather than doing it through Conduit, where actually anyone on their (Conduit's) list could attend, as opposed to actual FDI shareholders!

But there again, communications between FDI and their shareholders has been nothing short of appaling over the years, despite many promises to improve!, so why should it change now?

And you will say there is no pleasing me, and I will say where were you on the day when the share price fell from 120p to 86p or so, due to an error that should have been spotted! (IMHO), and I was the ONLY FDI holder backing up the company on the thread on that particular day, and he was pleased to phone then!

[gobbyash] 01/8/2010 22:54

Kopane in the FT



Rise in demand prompts mining consolidation

[fjp73] 01/8/2010 20:09

Exactly my point Wendy, and albeit the 74 pence was rumoured it was mentioned by a number of people, so a caveat of hear'say.

I believe the tie up is best and certainly should enable a management team capable of going forward. As I stated there's a lot of water to run under this the FDI/KDD bridge before production, if they do so at all, well under the FDI logo anyway.

Just some way off...However, if Obtala do want out, which I find perplexing in terms of the opportunity for a cash offer, at 15% ish holding the in the enlarged group, it could force FDI down around 40% in the short-term if there wasn't an engineered deal with other investors of course. If the latter was the case, there could be the potential for a premium to the current share price However, with the opportunity to cash in via many derivatives, you have to ask if an engineered deal would be not good for OBT in terms of maximising profit. If I wanted out of a 15% holding, I'd be CFD short, Spreadbet short and then go to town, in essence you could end up with a 4% holding (thereabouts) for free in addition to the cash from sale, 3 fold on the Spreadbet short and 2 fold on the CFD short, assuming the ratios of a 60% long-term holders in the enlarged group. Some massive profit...likewise the overhang could smack the share price for some 5/6 months. All hypothetical, but I think "if" the share price gets beaten up you know the answer!

BW Fraser

[fjp73] 01/8/2010 19:26

Smarm, please note that is what one of the largest shareholders "wanted." I am sure FDI (Firestone Diamonds) over the next 4 years will present very good value. Just one to stick away and meets my criteria on Non-UK company. BW Fraser

[123asd] 01/8/2010 15:32

FJP - and delays that are STILL taking place!

[fjp73] 01/8/2010 15:12

123ASD, only what I heard, so please consider that a caveat to it. However, if you look at the costings and the likely $70 million profit once in production, 74 pence would make perfect sense in an "perfect climate." Thus it is my belief he'd rather wait for it in real terms when the mine hits full-production. Not much assistance, but it sort of adds substance to the "delays" that took place.

BW Fraser

[123asd] 01/8/2010 14:54

FJP - Scolaro was looking for cash bids around 74p?? While I believe Kopane has substantial value and it will eventually out, I find that figure incredible. Can you substantiate it at all?

[fjp73] 01/8/2010 14:14

Hi 123ASD, I have edited my post to hopefully make sense. Apologises, my English wasn't confusing it was bloody poor! Thanks for pointing it out :-)

[123asd] 01/8/2010 14:06

FJP - sorry but your English is a little confusing in the first para of the above post - could you clarify?

[fjp73] 01/8/2010 13:25

Adam - very nice terminology, in terms of prostituting a company :-).

There would have been other offers but what a certain "Shareholder" was wanting in terms of a cash offer, it made it restrictive / deterring to suitors as the demanded price was around 74 pence. For those that follow the sector it was clear many had a look at Kopane, Gem Diamonds was clearly sniffying and liked the asset, they merely disliked a certain "large shareholder!"

The writing for the deal was on the wall and it started to stink. However there is a lesson here, cash is king. FDI/KDD should deliver, just not for some time, long term, a corking deal which will create a company worth give or take $700M at full production assuming no further dilutions above 10%. That would give a market cap of around £443.0379746835443 Million based on £1:$1.58. So with a combined market cap between KDD / FDI of £68.13 million that's some headway, or in % terms around 650.2832448019144 increase. Let's see over the next 4 years!

BW Fraser