Kazera Global Share Discussion Threads

[tigerbythetail] 18/7/2023 21:32

OK - to break that mysterious "ghost" Twitter post down...

1. Xinjian already have operational control of TVM. And they are paying all costs at TVM already.
2. They don't have 100% ownership of TVM; not until a further $8m or so is paid.
3. "Kazera to invest in other projects without issuing equity" - DE has already said that. The implication has been that they will be further HMS projects introduced by major shareholder AMS.
4. 2.5% life of mine debenture over TVM - that's already been announced. Old news.

So the new "news", if any, would be the accelerated payment of the money owing for TVM. If it does turn out to be true, (which I rather doubt), I bet the Chinese managed to negotiate a discount (up to 10%?) for early payment! Even so, it would be great news for KZG.

[penrith] 18/7/2023 15:36

Xinjian gains operational control, 100% ownership.Kazera to invest in other projects without additional capital raising. 2.5% debenture payment for Tantalite Valley Mine life. More: buff.ly/3MvPMG8Mmmmm if only!KZG twitter....what is going on???

[outspan] 17/7/2023 11:02

Absolutely TBTT, the diamond licence/operation has to be seen in exactly that context - a significant barrier to entry for any other player here. Once they properly prove up the HMS concept, they could scoop up the whole area without facing any serious competitor.

I agree that the HMS is the company maker here but, with AMS having now achieved full voting control over the 280m shares they're buying at 1.5p, I'd add "for now".

[tigerbythetail] 17/7/2023 10:03

"They've got funds" is no small thing for an AIM miner!
If you add up the likely current cash balance and the money still owing for TVM it equals roughly the current market cap.
Hopefully, DE can spend the money effectively! I'd agree with giving him the benefit of the doubt for now (there is always doubt, this is AIM).
IMO, it's the HMS that is potentially the company maker here. I believe the diamond mining operation will turn out to be profitable, but it's always going to be small-scale. That said, the (very hard-to-get) diamond mining licence that KZG has provides a key "moat" around the HMS business, so it's not irrelevant.

[al101uk] 16/7/2023 21:45

You're right, they still have to prove up the diamond mining business... only potentially marginal.

But I think the moves they have made so far have done a couple of things:

1. They've got funds.
2. They've found some carrots

That's two steps further down the road than they were. Will the carrots turn out to be a mirage? Who knows. If this was still GC I would assume the company was still some way away from actual progress. But this management appears to be making meaningful change, as of right now I'm willing to give them the benefit of the doubt.

Still on the fence about chucking any money at them yet though and if I do, it'll be play money... 0.5% of my portfolio.

[wrtmf] 16/7/2023 10:34

less than marginal. can kazera make a go of the hms?
lots of carrots in october interviews

[al101uk] 15/7/2023 17:02

wrtmf,

The diamond mining is marginal in my view as I said above. The point is that Alexkor is state owned so animosity between KZG and Alexkor such as we saw under GC cannot be a good thing. Having Alexkor onside gives KZG more opportunities, not less. What they can make of those opportunities, if anything, is yet to be seen.

[wrtmf] 15/7/2023 07:56

plse show me rns where alexcor with their very good relationship with kzg [interview] have sold diamonds in the last 1.5yrs

[penrith] 14/7/2023 20:58

I tend to take the position that AIM miners and oilers are run as something approaching a scam until proven otherwise.Wise..

[al101uk] 14/7/2023 20:47

Looked at the interview and you're right... "every $ paid is lost if the deal falls through"... he couldn't have been clearer!

Thanks for the link.

Penrith,

Sorry for scaring you, I did put a question mark after the line you quoted :-)

I tend to take the position that AIM miners and oilers are run as something approaching a scam until proven otherwise. Possibly too long watching Giles Clarke in action where anything unsaid is generally the worst case scenario.

Need to watch the rest of the interview now.

[penrith] 14/7/2023 17:09

Phew! That was worrying.

[tigerbythetail] 14/7/2023 16:29

I crossed as well!

[tigerbythetail] 14/7/2023 16:28

al101! That's really not how business is done; no sane person would enter into that kind of arrangement. (I speak as a former CEO of a PLC equivalent).
I'm sure GBCol and DrRadcliffe are right. If the Chinese walk away then they lose the money they have paid to KZG. Plus the money they've spent on kitting out and running the mine, plus the money they've spent on buying up the neighbouring tenements. Which would be a crazy thing to do, unless they were absolutely convinced the mine was a complete bust, and that it wasn't worth throwing good money after bad.
As said, I expect the Chinese to pay as late as possible, in order to preserve their working capital position. But they will pay up eventually, barring disaster scenarios.

[outspan] 14/7/2023 16:27

Apologies. Crossed with other contributors saying the same thing.

[outspan] 14/7/2023 16:24

Penrith is right, the CEO has made it clear at various times, including in his last interview, that the contract gives KZG the right to reclaim the mine and retain the proceeds paid to date if Hebei default.

Witness last interview from around 7:45 in connection to a further $1m having been received from them in the last month "every single dollar they pay us, is a dollar they don't get back..." In which case, the fact that they are still paying chunky sums surely heavily underscores their ultimate intent.

Interest is also accruing at 8% on the amounts outstanding so, assuming completion, the price paid will now be a chunky bit higher than $13m. If they default and KZG exercises its right to reclaim the mine, the c. $5m already banked by KZG, is a considerable buffer against the sale of the mine to another party at a lower price, or a considerable bonus if sold at around the same price.

What I think is clear from his answers on the subject from around the 5 min mark, is that DE does not intend to ever operate that mine again. The future is elsewhere, as he suggests many times in the interview concerning the money they already have. So it'll either complete with Hebei or it'll be sold to another party but, either way looks win win for KZG.

[drradcliffe] 14/7/2023 16:12

Link to interview

[gbcol] 14/7/2023 16:10

Re 1448 That is certainly not what Dennis has repeatedly stated. He has been unambiguous that any monies paid by Hebei would be kept by KZG if Hebei default. Admittedly, we aren’t party to the contract and so cannot verify that 100%.

The RNS states “ Under the terms of the sale agreement with Xinjian, Kazera retains ownership of 100% of the shares in Aftan as security until all amounts owed by Xinjian have been paid in full.”

[drradcliffe] 14/7/2023 16:10

Dennis covered this scenario in the recent interview; Xinjian are in too deep to back out without losing everything they have paid.

[penrith] 14/7/2023 14:54

Al101uk, Kazera would be on the hook to refund all or a large part of the money paid (deducting a fine for the contract breach)?I never realised that. I thought the money payed so far would belong to KZG.

[al101uk] 14/7/2023 14:35

Thanks outspan,

Not keeping up here really, so missed it...

"Under the terms of the agreement Xinjian was due to have paid and aggregate c.$6.1 million.
To date, Hebei Xinjian Construction ("Xinjian") has arranged aggregate payments of US$4.2 million.
Xinjian is currently not in compliance with the Agreement, with payment arrears of c.US$1.9 million (excluding interest). Nonetheless, at this time the Company has elected not to exercise its contractual rights to terminate the contract."

So, in a hypothetical situation where Xinjian decided to walk away (not saying they will), I assume Kazeras liabilities are not zero. Kazera would be on the hook to refund all or a large part of the money paid (deducting a fine for the contract breach)?

If the deal isn't really "done" until all funds are paid, there is a risk that would explain why the share price remains where it is. You can expect the company to rerate to a level more in keeping with a company that has a relatively huge cash pile and a viable business model once the Tantalum mine actually changes hands, meanwhile the funds are held in multiple currencies... is there any exchange rate risk on repayment if the deal fell through?

[tigerbythetail] 14/7/2023 08:58

Well, it takes many differing opinions to make a market. And it's obvious (esp. from the LSE board) there are still many embittered legacy shareholders from the days of Kennedy Ventures / Giles Clarke. Typically, "stale long" PIs wait until they get back to breakeven and then sell-out, so they'll be a drag on the share price if and when it moves up. That's how it goes, I guess.
KZG is a new company now. New management, new balance sheet, new major shareholder, new jurisdiction, new commodities, etc. So banging on about Giles Clarke isn't constructive. It doesn't really matter what the share price did in the past, based on the bad information that investors were spoon fed by former management. The question we should all be asking is, is KZG a good buy at its current price? For my money, the answer is decisively yes.
Obviously AMS agree with me, since they're paying 1.5p per share for 29% of the company.

[outspan] 14/7/2023 01:17

The balance of decisions and alternatives on the subject is all outlined in the recent RNSs and interview so I'm sure his comments are intended to build on that.