Kazera Global Share Discussion Threads

[al101uk] 13/7/2023 17:40

"This payment is a further indication of Xinjian's desire to meet its obligations. As well as strengthening the Company's cash position, it further justifies our approach to continue working with Xinjian to achieve a mutually beneficial outcome."

Would suggest that the company had to make a decision on if it wanted to continue to work with Xinjian?

[penrith] 13/7/2023 17:20

Your suggesting in 2 to 3 years time this share could reach 8p.In my humble opinion if this share ever got to half of that then 95% of us would have sold. I for one would be delighted with 1.5p (av .93) and pressing the sell button like a machine gun trigger.How many times on AIM have we heard the ten bagger line. Alliance told us 4p and skipped of at 1.5p.

[tigerbythetail] 13/7/2023 15:18

The most important three words in mining are "grade is king". And KZG have world-beating HMS grades in a naturally replenishing resource.
So, Whale Head HMS business in full operation and generating significant FCF (as it would at current market prices) + grant of licence for a second larger HMS concession in same area = (very roughly) £80m market cap. Time horizon: 2-3 years.
(I'm ignoring the diamonds. Nothing wrong with them, but small beer, IMO. Also ignoring the highly theoretical royalty from TVM.)
That's why I won't be at all surprised if AMS want more than 29% of the company. In their position, I'd like to keep the company public (a listing has its advantages), but ideally I'd want c. 60% of the shares. So I'd go beyond 30%, make a compulsory offer at 1.5p, but then be happy to settle for less than 100% ownership.
All in all, I get that AIM is manic depressive, and in its manic "up" phase it can insanely overvalue mining stocks (hello EUA), but in its depressive "down" phase (e.g. here) it can also crazily undervalue them.
ALL IMO, of course, and I haven't listed out the risks (which do exist) here.

[chrysalis99] 13/7/2023 13:50

Please talk us through the £80m valuation. Feels like most of us need cheering up.

[penrith] 13/7/2023 12:26

I bet IF we were being honest 90% of us long term holders wish they had never heard of KZG.

[penrith] 13/7/2023 12:23

Tiger you say :I've got a low average here, but it's fair to say that I invested too early, and so I've had money tied up for several months.I thought you had been here years like me?The problem is they have promised us revenues for years from producing minerals. Our only revenue has been from selling assets and that is under threat.I joined a Tant company and have ended up with a hundred year old diamond company that does not produce revenue and a radio active company that may not see revenue for 9 months if ever. Don't understand your enthusiasm. We are currently overvalued until we generate income from production....

[outspan] 13/7/2023 11:47

Getting the feeling of a bit of stakebuilding today. A bit of Director buying wouldn't go amiss. Post results, shareholders brought up to date, value seen, fully funded, great future seen with AMS influence, we hear. Perfect time?

[chrysalis99] 13/7/2023 11:41

There is rarely any discussion about future revenue potential/p&l in the interviews with the CEO. The market is waiting for clarity on this and hard evidence of consistent actual profitability.

[tigerbythetail] 13/7/2023 09:05

Yes, you have to factor in opportunity cost.
I've got a low average here, but it's fair to say that I invested too early, and so I've had money tied up for several months.
When will the share price react to the news flow here and rerate - at least to AMS's buy-in price of 1.5p?
It really should have done so already, but I guess we may have to wait till the early autumn now. Or it could be tomorrow for all I know. Good luck to all in guessing the timing of that.

[mdchand] 13/7/2023 08:48

Indeed. Boredom, lack of momentum, lack of recent RNSs, fear over the HMS operation. The list is endless, but it also throws up price distortions which you can exploit if meaningful news does materialise. On my watch list waiting for the trigger catalyst (normally production / cash flow orientated).

[tigerbythetail] 13/7/2023 08:35

So, given we know what we know, how on earth is the share price down here? It's ridiculous.
1) A "player" in the Heavy Mineral Sands business is buying 29% of the company at 1.5p per share - double the current share price.
2) The market cap is £7.5m = roughly $9.5m. But there is still about $8m to come from Hebei and the company is debt free and its cash balance must be healthy given the payments already received.
3) The HMS business is a superb mining opportunity.
I'm flummoxed. I guess it's just AIM. I can name small cap mining companies as crazily overvalued as this is undervalued.

[gbcol] 13/7/2023 07:32

RNS confirming it has received a further US$650,000 from Hebei in respect of the sale of African Tantalum. The total received now c.US$4.8 5 million

[outspan] 13/7/2023 02:03

"Will AMS make a bid to take the whole company private at 1.5p per share? It must look tempting!"

Tempting, perhaps, but my own fancy is that that's not their plan. I think they see KZG as a vehicle to further their growth ambitions via its London listing and its relatively near-term capacity to deliver serious free cashflow in order to bolt on or take stakes in new, probably deeply undervalued projects and opportunities at this time, similar to KZG.

They sure ain't parting with £4.2m for a stake that AIM currently values at around £2.2m without good reason or a plan. I suspect that plan to have a medium to long-term vision and, now that they have the voting rights, I expect to see first signs of their influence on KZG before very long, I would not be surprised if it's well before this year is out or why the earlier arrangement to acquire full voting rights?

As Dennis says of AMS,"...one of their principals is involved in a number of big infrastructure projects, both in Africa and in America. They see, I believe, Kazera as a strategic investment and they see a number of opportunities that can be created by introducing deals to Kazera and allowing Kazera to be built up. So they see Kazera as being a much, much bigger company, in a fairly short period of time.

Certainly, some of the things we have looked at and are currently looking at with them, are very exciting and will make a very, very big difference to the scale of Kazera....

[Re AMS holding]....it does mean they have a substantial influence in what happens in the future, going forward.....[Should shareholders be concerned]....Oh no, their interests are very much in seeing Kazera grow and in seeing additional value. They have paid a premium, a substantial premium to the current share price which makes no sense at all unless they can increase the current share price and see a return on their investment so that's very good news for everybody...."

I say, in the land of smoke and mirrors, follow the money!

[gbcol] 12/7/2023 16:33

That’s how I see it TBTT (whether they have paid $4.2m or $5.2m at this point is largely irrelevant, they are unlikely to pull out and lose that sum). I continue to add here. Fortunately I haven’t been here that long so my average buy is well under 1p. So even at what I see the worse case of 1.5p I’m in for a healthy profit at some point.

[tigerbythetail] 12/7/2023 16:11

I'm fairly sure that this is new money that has arrived since the last RNS. It was $4.2m - that is 3.5m + 700K. IMO, this is the first tranche of the approx. $1m per month that Hebei should be paying from here on.
I remain fairly confident that Hebei will continue to pay - but I'm also confident also that they will constantly pay late in an attempt to protect their own working capital position. IMO, they're too far in to back out - not only have they paid (I think) $5.2m to KZG, but they've been running the mine and bringing in new kit for it, and they've bought up the neighbouring licences from 3rd parties as well.
IMO, the only way this deal goes sour is if production goes so badly at TVM that the Chinese effectively walk away from it. Let's hope that doesn't happen.
All told, I'm very happy that KZG managed to dispose of this troublesome asset for good money. The $5m or so already received is enough to start up the HMS business, so a critical milestone has been passed.
Current share price is ridiculous, all things considered. Will AMS make a bid to take the whole company private at 1.5p per share? It must look tempting!

[gbcol] 12/7/2023 15:34

So they are also talking to other parties that were interested in buying African Tantulum when deal was tied up with Hebei. Dennis says that Hebei are finding prices aren’t as high and production isn’t as high as they expected, which may be part of the reason for payment delays. So if they have to sell elsewhere, as outspan says, that $4-5million Hebei have paid will be handy to offset any lower offer they need to accept.

[gbcol] 12/7/2023 15:25

TBTT - yes he did say that they have paid another million but I’m not too sure if that was included in the previously quoted $4.2m or on top of it. He says they have paid another €1m “this month” so I think that is included in the $4.2m we have already been told about but not clear.

[outspan] 12/7/2023 14:36

Which sort of suggests that if KZG do end up taking it back, they would only need to resell to another party for around $8m in order to have raised the full $13m they had anticipated.

Meanwhile, interest is accruing @ 8%, 100% ownership is retained until fully-paid, there's no distraction for KZG operational management and Hebei is taking the hit for the full running costs. Top marks for negotiating such favourable terms!

Basically, everything points to strong reasons for Hebei to get a move on with a conclusion of some sort and it seems KZG and new major shareholder AMS are happy to provide assistance.

Aside from all that, I got the sense of a strong push towards ramping up the diamonds operation from background to foreground and getting some meaningful sales coming through while sales from the HMS operations await the paperwork to allow commercial production.

[tigerbythetail] 12/7/2023 12:44

The "new" news in that interview (c. 6 min in) is that the Chinese have paid another million dollars to KZG. So they are paying late but still paying.