Kazera Global Share Discussion Threads

[outspan] 04/4/2023 14:25

In a word, off-grid!



2.5 Electrical

The electrical scope on the beach will be limited to area lighting that will be mounted on the pieces of equipment on the beach i.e. the booster pumps. The electrical supply for the lighting will be run from an alternator on the equipment diesel engine.

2.10.3 Energy Supply

Power to the plant will be supplied via two generators, one rated at 1.8MW and the other at 160kW.

The 160kW generator will only be used for construction power and on maintenance days when the main unit will be switched off. The standby generator is sized to run the 110kW fire pump (soft starter is incorporated on the pump) as well as the plant lighting and the welding plugs. The unit price included in the E&I tender is for a second-hand unit that has 2000h on the engine. This is deemed to be in order as the unit will only be needed on a standby basis.

The main generator will be sized according to the load, sized at 40% above the running current ofthe plant. The biggest motor to be started is a 160kW, however a soft starter should be included for all motors 100kW and above. The diversity factor on the motors was chosen at 10%. A design factor of 1.2 is included when specifying the motor powers. The chosen load of the motors is thus 72% of name plate current. As this is a plant with most of the pumps in line, a diversity of 10% is not deemed too high. There were no standby pumps allowed for or taken into account. The loading
factor for the 6 welding plugs was chosen as 20%. If all the pumps are running, then the load on the generator increases to 1 431kVA and thus still within the maximum rating of the unit.

[farrugia] 04/4/2023 12:28

what about the electricity problems in South Africa?

[gbcol] 02/4/2023 11:01

Good posts guys, interesting thoughts. I came here as I’ve built up a fair sized holding in Tectonic Gold which is currently under water but I’m very optimistic on that.

I’ve been building up my holding in Kazera since last December but slightly hampered by the suspension and now awaiting new tax year to fund my ISA & SIPP. Hopefully my timing here is a bit better than at TTAU where I got in at least a year or so too early.

On balance I’d much prefer a share buyback here with the cash, rather than a special divi but can understand why others may prefer a divi payout. Happy to wait the 4, 6, 8 months I think this will take to start flying but as has been noted in the posts above there are plenty of potential factors that could accelerate that.

[outspan] 01/4/2023 23:39

Wouldn't disagree wildly with the above targets or the need at this stage to remain cautious about delivery and set-up timescales for separator but, personally, I'd throw in more potential for other positive catalysts to occur along the way.

Some possibilities in no particular order:

New Tax Year/ISAs to increase demand?

DE interviews.

Update on diamond production and sales.

Update on HMS production from newly installed double-deck 500-micron screen, mainly to upgrade to 60%+ concentrate for approval by (up to 4) prospective offtake partners and to stockpile for faster 80%+ concentrate production on arrival and commissioning of separator plant.

Offtake partner deal?

Share buyback? - when Align was questioned on this on Twitter recently they replied "We have suggested a staged share buy back over a rolling 12 months to reduce share count and enhance NAV further. Prob when receipts from Hebei exceed $5-6m is appropriate point. Likely early June re this stage."

AMS to want to maintain stake at 29.9% following exercise of outstanding May (and Oct) warrants? We know AMS has a contract for 280m shares (currently 29.88%) from Align & related parties to be exercised in tranches through 2023. However, what will AMS do if the share price remains under 1.5p, assuming 116m warrants @1p are exercised in May, thereby reducing their 280m to just 26.58%? I know what I would want to do. Will they? Similar in Oct but for c. 40m warrants.

So, re May warrants only, potential for AMS to be buyers in the market for 3.41% (c.36m shares) of the enlarged share capital just to stand still. Separately, according to Align, potential also for Kazera to embark on a programme of share buybacks from around Jun onwards. Worth noting in this context that full exercise of May warrants would also mean £1.16m added to KZG coffers (Oct warrants c. £400k).

A commitment of just £2m of KZG's growing cashpile by then would see them embark on a programme seeking 200m shares @ 1p (133m @1.5p), to be removed from the market and cancelled. So what would any such combined demand from AMS/KZG do to the market I wonder?

Update on additional HMS mining licence(s) in adjacent areas?

New venture(s) either sourced in a normal way or introduced by AMS?

Strategic investment of growing cashpile directly into similarly undervalued mining companies with near-term potential but without access to funding on reasonable terms in current conditions? REE? Gold?

Offer for TTAU's 10% of diamonds/current effective 40% of HMS to provide funding for their core gold ops?

Bid received from AMS or other major HMS player? Always a possibility if market continues to undervalue.

Dividend declared?

Not necessarily an exhaustive list and includes some far-fetched notions but, nevertheless, a stab at some possible catalysts for demand and share price improvement beyond the "straight and narrow" pathway and timescales currently to hand.

More or less a new company on all counts here. Once the HMS proves to be a much more exciting asset than is generally appreciated, once the cashpile is allocated wisely, once a bit of confidence returns here, it should be a totally different game here and we'll know why AMS are coming in now at the current 50%+ premium!

[wrtmf] 01/4/2023 15:00

indeed. does it suggest they may be up against a schedule to sell?
tbtt, your exchanges with outspan have been very interesting. thanks both.

i'm working off the assumption the hms separator WILL arrive late, but there's enough in the targets above and xinjian keeping broadly to the schedule to lift the share price in steps through apr-sep, before steeper rise into sep-dec

[tigerbythetail] 01/4/2023 14:12

I agree. This just needs a little time and for everything to remain on track.
In 3 months or so the HMS plant will be delivered as well.
When exactly the market wakes up to the bizarre value situation here is anybody's guess. It's all a question of the size of the share overhang. Oddly, the sellers would do well to let the price rise by 20% or so, as that would entice in more buying interest, and they would sell more shares quicker and at a higher price.
Volume is too low here to clear much for now.

[wrtmf] 01/4/2023 07:45

i'm currently thinking 2-4 months of the $1.05m payments will change sentiment here.

[to be paid: 9 x US$1,051,629.56 and then regular product selling can takeover]

--
target1: us$1.05m payment by 30apr
target2: diamond sale by 31may
target3: another us$1.05m payment by 31may

[wrtmf] 30/3/2023 14:33

the 'conundrum' phase - if we were pulling in $1m/month from resource selling the mcap would not be where it is. dec to dec [assuming payments on schedule and so far they pretty much are] that's what we have, 13 months, $13m.

[tigerbythetail] 30/3/2023 10:16

Many thanks for all the detail, Outspan - it's very helpful.
1. It seems to me that Tracarta (aka Giles Clarke & Friends) and Spreadex are both committed and current sellers. That's a lot of shares (hard to know for sure, but very roughly c. 7% of company still to be sold through the open market). That would explain the strong selling into the rise on suspension being lifted.
2. FWIW, I don't understand why Spreadex had built up such a large position in the company. I can't believe they were trading on their own book; they must have been hedging something. Any ideas, anybody? Had Align taken out a big spreadbet long position with them on KZG; is that it?
3. Align (& related parties) declared 20.5% direct shareholding, plus a few percent in financial instruments. I'm not sure what they mean by that - was that a long bet with Spreadex??? Certainly, I take your point about the warrants - they'll have lots of them, and it's easy money to cash them in at 1p and flip them straight out to AMS for 1.5p. I wish I could make money that easily!
4. I think, if you add up the Align shares + financial instruments + warrants (assuming they are exercised) it comes to a potential interest in KZG of over 29.9%. So the question then becomes will Align hold on to those extra shares, or will they join the list of sellers.
5. There are also a fair number of PIs who invested in a tantalum mine on the basis of the former Chairman's statements. Judging by the LSE board, most of those investors are disillusioned, poorly researched, and want out as soon as they get back to break even.
6. All in all, that adds up to a lot of selling pressure, and the lack of "action" in the share price means that few PIs are looking at the company. Volumes are low.
7. Kazera is pretty much a new (and much better) company now - new CEO, new cash-heavy balance sheet, new business, new major shareholder, new website, new everything. The current share price is absurd. But, IMHO, it will take time (some months) for the share price to come "right". But the potential gain is big, and the risk is relatively controlled, so "give me the patience I need"...
"Buy" triggers are basically holdings RNS indicating Spreadex/Tracarta/Align reducing and AMS increasing. An AMS takeover offer must be a possibility here; if you put yourself in their shoes it makes a lot of sense (if they've got the money to do it).

[outspan] 29/3/2023 23:53

Not mine either. Not sure that it's a factor in the current absurd price either judging by the twin table of substantial shareholdings on the Company website:



Upper table would appear to relate to how things stand according to formal receipt of the required notification whereas the lower table is likely to be more correct as it appears to be an extract from the actual Share Register. If so, Spreadex were already down to 35m sometime before 2 Mar 23 and yesterday's RNS was no more than admin catch up. That's my take anyway.

Only know that the Align/Spreadex relationship is bound to unwind in the relatively short term as the AMS stake in KZG builds to up to 29.9%. AMS has taken its first 30m/3.2% but looking at that KZG share table, the bigger question for me now is where Align & related parties are finding all those 280m shares when apparently, they held only 192,147,044 on 9 Mar and 162,147,044 following the recent 30m transfer to AMS.

They seem to have committed to a "certain Put Option" relating to a further 87,852,956 shares they do not currently hold. Trying to make sense of this, I can only think they are anticipating conversion of their entitlement to warrants in at least this quantity (it doesn't say anywhere that they won't continue to be a shareholder beyond the AMS deal, just impossible to be as major).

My research says there are now only two classes of warrants that have not already lapsed. One group numbers 116,131,500, exercisable @ 1p by 31 May at the latest. The other group numbers 39,397,643 also exercisable @ 1p but by 30 Oct latest. This combined total exactly corresponds with the 155,529,143 "share warrants subsisting" as shown in the above link, above the other tables.

Four things strike me. One that KZG will likely take in a further c. £1.5m this year from these warrants, beyond any other cash receipts this year, of which there are likely to be several amounting to $9m+ for the TVI sale, plus revenues from diamonds/HMS sales, plus revenues from TVI 2.5% royalties (previously said to be expected to be producing/selling lithium/tantalum in quantity by around now).

The second is that, logically, Align must be set to speak for at least 87m of these warrants, buying @ 1p and more or less immediately passing on to AMS for a 50% gain which, in turn, would suggest a much reduced possibility of an overhang in the market than might otherwise have been the case when these events occur.

The third is how this scenario embolds the feeling (to me anyway) of disconnect between the AMS price and the current market price.

The fourth is that if indeed the Chinese are now at the point of production/sales (as was forecast last Oct/Nov when it was still a JV and not a sale), then it would suggest that future payments for the sale are set to become considerably easier for them! This is expectation is presumably behind the original plan of scheduled payments through Apr to Dec of $1m+ per month.

GLA DYOR

[tigerbythetail] 29/3/2023 18:04

The Tectonic info - at face value - implies a value of £90m for KZG's 60% share of Whale Head.
I think a reasonable person would value it as less than that. In effect the BEE partners are getting a "free" 20% of returns until the £45m is paid back. It's an easy deal for them to make at even an elevated price.
But, anyway you slice it and dice it, there is a simply huge mismatch between this valuation and KZG's tiny £9m market cap. And, remember, KZG has no debts, and it has money in the bank and about $9m more on the way over the course of this year, and it also owns other assets (the Aftan royalty, the diamonds) which are not without value, and the HMS business has excellent growth prospects.
I've seen utterly worthless companies (e.g. EUA) valued at over £1bn on AIM, so I can't say this is the most extreme misprice I've seen on AIM. But it does take some beating!
If anybody can explain what is going on with Spreadex and Align, and why that might be a factor in the current absurd price here, I'd be grateful. I admit I don't really understand spread betting - it's not my thing!

[tigerbythetail] 29/3/2023 17:55

Copied from Poppyseed on LSE board - notes follow in next post...

The view from Tectonic's Interims today:

"...The half year saw the team supporting our partnership with London listed Kazera Global Plc (“Kazera”;) (LSE:KZG) on the Heavy Mineral Sands (HMS) and Diamond project site in South Africa. Our joint venture with Kazera in HMS in was awarded a mining license. This is the first and so far, only mining license inside Alexkor, the South African Government controlled and operated diamond fields at Alexander Bay. Previous testing has returned exceptional grades of HMS and independent studies conducted for Kazera valued this project at £150 million.

Tectonic holds a 40% economic interest in this project via a non-diluting 10% equity holding in Whale Head Minerals Pty Ltd (Whale Head) and a further 30% economic interest via a sale and loan agreement with a Black Economic Empowerment (BEE) consortium. In order to ensure compliance with South Africa’s BEE regulations requiring mining projects to have a 30% holding by qualifying local investors, when Tectonic sold 60% of Whale Head to Kazera, the Company sold a further 30% to a syndicate of local investors. Pricing for this 30% was based on the £150 million independent valuation conducted on behalf of Kazera. The BEE investor syndicate includes a South African private equity group headed by a highly respected business leader, two experienced South African entrepreneurs, a local community group and an employee group. Tectonic has financed this 30% syndicate with a share loan program under which 80% of the returns to the syndicate are paid to Tectonic until the £45 million in agreed loan value has been repaid.

Tectonic holds a 10% non-diluting interest in Deep Blue Minerals Pty Ltd, Whale Head’s sister company that operates an alluvial diamond concession in the Alexkor mine site. Diamond extraction is a regulated pre-requisite before the tailings containing heavy minerals can be processed by Whale Head. Kazera has announced that both Deep Blue and Whale Head are now funded to bring into production. This could be a significant source of cash flows for Tectonic to fund Mt Cassidy and new projects for the portfolio..."

[shearluc] 29/3/2023 10:36

Agree TbtT ... excellent opportunity to accumulate. If they are good to their word there could be a sizable distribution to shareholders later this year... in the mean time we can sit back and watch things unfold. (as opposed to unravel hopefully)

[tigerbythetail] 29/3/2023 10:00

Hi Farrugia!
Thanks for calling them up and getting the answer to that question.
KZG's share price is a complete mystery to me as well - should be way higher. Heck, African Mineral Sands are buying 29.9% of the company at 1.5p - presumably because they think that's a good price. What does that say?
My only explanation for the share price is that tired old cliche - share overhang. We have large sellers (Spreadex? Associates of Giles Clarke?) who have simply placed huge sell orders with the market-makers, and we need to chew through them before the share price can move up.
In answer to landersd, I'm assuming that the heavy mineral sands (aka "the company maker" here) is currently being stockpiled ready for the new plant to arrive and be commissioned (another 4-5 months for that). So no income from that for a while yet.
I'm also assuming from the company's silence that they are not receiving any income from the diamonds yet - diamonds are clearly being mined, but then they have to go through a slow sales process and KZG have to get the money. That could be quite a lag.
But if you combine the cash on hand, the cash due from the Chinese for Aftan, and the forward prospects of the HMS business (even without allowing for new licenses), then the "buy" case here looks very solid to me.
Things that could go wrong? 1. The Chinese decide that they can't make TVM / Aftan pay and walk away after blowing a few million dollars. Unlikely now, I think, but not impossible. 2. Usual Armageddon scenarios - world economic collapse, price collapse in basic commodities like ilmenite, South Africa meltdown etc.
FWIW, I'm putting my money where my mouth is at these levels.

[wrtmf] 29/3/2023 09:58

holding rns
ams now hold 30m shares, 3.2%
section 8b1 notes the other 26.68% targeted?

[landersd] 29/3/2023 09:46

Farrugia, can you ask them why they dont release figures ................are we producing selling HMS , are we producing selling Diamonds ??

[farrugia] 29/3/2023 09:23

just asked them - 'Yes, the US$687,500 has been received. It is part of the cash balance figure as of 27 March 2023.'

So the deal is on. Why is this valued so lowly?

[wrtmf] 29/3/2023 09:03

from 16 march - 'Under the terms of the agreement announced on 20 December 2022, Xinjian was due to have paid an aggregate of US $ 3,642,207 by the end of January with the balance of US $ 9,357,793 payable in equal monthly instalments commencing in April 2023 and completing in December 2023'

close to schedule at us$3,535,334
to come: 9 x us$1,051,629.56 from apr

[gbcol] 29/3/2023 08:06

Another US$500k on the way re Aftan sale. One can only assume the US$687,500 referred to in 16 March RNS has now been received. I can’t see it referred to in today’s RNS.

I believe those take total paid to circa US$3.5million

[tigerbythetail] 28/3/2023 16:51

I'm no expert on these things, but the Spreadex holding would seem to be linked to Align / Richard Jennings.
That is, I think they took the other side of a bet on the share price with Align, and bought the shares to hedge the risk.
If anybody knows more about how Spreadbetters work and can explain what's going on better, I'd be grateful!!!

[gbcol] 28/3/2023 15:55

So Spreadex have sold about 34million shares. Wonder if they will now stop, pause or continue selling down. Would take another 6million or so sold to drop them below the next notifiable level of 3%.

[wrtmf] 28/3/2023 15:25

holding rns

[wrtmf] 28/3/2023 14:53

its prob a bit soon for another payment from xinjian, but confirmation on thurs/fri of receiving US$687,500 would be satisfactory.

de can't keep saying diamond plant is in production - what about some sales or even to say we've handed over a batch of x to alexcor would be something.

70t/hour since july - that's what the rns say