Keras Resources Share Discussion Threads

[alan@bj] 25/11/2020 08:38

Yes, thanks RS, good to know that’s not an issue now.

[mjcrockett] 25/11/2020 07:54

RS - Thank you

[rec0very stock] 25/11/2020 07:50

Ok I have confirmed what I said above. MM are no longer an issue. There is a new and much more professional team in place in Togo Govt. All the press releases about improving things are genuine. The new team need a bit of time to get up to speed and given how slow the old regime were in doing anything, they have a lot to do. By virtue of the latest visit, KRS is on their radar and on their priority list.

The key thing for us is to develop and maintain a productive long term relationship with Togo Govt, which means allowing them the time they need. Frustrating in the short term but much better in the long term. NPVs rely on long term stability.

[the skipper] 24/11/2020 19:49

I’ve been digging into developments in Togo and found this:

Seems that the issue could be about the resettlement and compensation of the the small scale farmers that live in the area affected by the mining. I had thought that the area was barren but homing in on satellite imagery of the Naki-Est area that forms half of the Nayega permit area you will see that there are a number of small farmsteads there and it will be the state’s responsibility to deal with them, but at least this demonstrates that they are on the case.

[rec0very stock] 24/11/2020 18:48

I will ask and let you know what I get back. I was aware of issues with another licence which basically was defunct as that company had done nothing, but Togo Govt was concerned - "afraid of their own shadows" was the phrase Russell used. However my understanding was that the ministerial decree about a year ago was the unblocking of all of that.

The moving of SGM to become the equivalent of a PLC that was required to give Togo Govt took longer than expected, then there was the election then COVID, then the resignation of all the ministers etc.

Anyway great to see the share price drop on this latest news given there is nothing in the share price for Togo in the first place!

[rec0very stock] 24/11/2020 07:27

"I expect to get feedback in the near term on what the pathway to final permitting at Nayéga comprises."

So we will get the permit before Christmas, just not sure yet which year! - The joys of mining in Africa.

Whilst it is disappointing we are still talking about pathways rather than having signed bits of paper in our hands so we can crack on, I am not all that surprised as this is how it has gone for the past 5 years+. We just need to get it done before the next upheaval.

[edgein] 24/11/2020 07:26

Well hopefully this new pathway to the mining licence is a short one. At least they have had a few positive meetings of late. A good way for Togo to encourage investment in their country would be award the mining licence!

Regards,
Ed.

[rec0very stock] 23/11/2020 20:05

andy,

Could you repost on here as LSE is restricting viewing to account holders only.

[andylee3] 23/11/2020 17:25

Some interesting recent posts from Jimbl over on the LSE forum over the last couple of days.
RS, would welcome your views/comments.

[zhockey] 23/11/2020 14:38

I wonder is Russell is still in Lomé?

[zhockey] 20/11/2020 17:09

So a Mcap of £40M target?

[rec0very stock] 20/11/2020 13:35

May be, but not necessarily in NPV terms. There is likely to be significant CAPEX involved in getting a product fit for battery use and there will be significantly increased OPEX, though obviously the value of the product is much higher. What will be left of the reserves (yes there could be more there, maybe a lot more) for stage 2 is not massive. The scoping study will balance the options. There are quite a few to consider. At the bottom end is dig it up, wash it, do minimal additional onsite processing, stick it in a truck to the port and ship it to someone who can turn it into something the steel industry wants or something battery industry wants - would the NPV of this option even be as high as stage 1? There are a whole range of options in between right up to the highest which would process on site to produce a product that can go straight into battery manufacture - I think this would be prohibited by CAPEX. It might be that more than one option needs to be taken to DFS stage to really decide.

My calcs for Utah and Stage 1 Mn are £10m and £20m respectively (basically agree with Shard on Utah and think Shard got Togo badly wrong on the low side). If stage 2 added another £20m a few years down the line, I would be satisfied as at that point I would be happy to see the dividend stream maintained for another 8 years or so.

[zhockey] 20/11/2020 10:52

I would have thought the battery phase would be many multiples of value compared to the bulk market.

[rec0very stock] 19/11/2020 19:41

zh,

With so little to go on I really could not hazard a guess. Whatever happens it will be a good few years down the line. I am as confident as you can be in this game that whichever way KRS goes they will be able to sell everything they produce. In terms of valuation I would expect that NPV of Stage 2 from the point at which they start will be at least as much as Stage 1.

[zhockey] 18/11/2020 13:59

RS,

Any thoughts on how big the battery play could be? Looking at the Giyani Metals presentation, seems a significant battery grade Mn deficit in the decade ahead.

[rec0very stock] 15/11/2020 12:39

Marky,

I read your recent posts on LSE - I don't have an account there because whilst the KRS board is not bad, most of the others are mad houses.

Your calcs regarding dmtu are correct. The best way to explain dmtu is it is the quantity of ore that has 10Kg of contained pure metal. So 1 Tonne of ore with 1% metal is 1 dmtu. 1 tonne with 2% is 2 dmtu or 500kg of 2% ore is 1 dmtu. So for Neyaga annual output it is tonnes of concentrate produced in year which starts at 72,000 and rises in about 10 months (maybe less as long lead items were bought and have probably been sat around waiting for the licence or are due to arrive very soon) to 300,000 x average grade of concentrate achieved - we think this will be around 38% but it could be higher (bulk sample was higher) or lower (bulk sample projection was 35%).

That is stage 1 which lasts for about 6 years based on current reserves, but might extend a bit as exploration happens. The ore is Manganese Oxide which is better than the South African Manganese Carbonate. This will be subject to an offtake deal, maybe only for an initial period rather than the whole stage 1 LOM. The mining and benefication in stage 1 is very simple - dig it up, wash it, screen it, stick it on a truck and send it to the port. Keras is providing the capital washing and screening equipment (more being bought to increase capacity - funding may come from offtaker but a debt facility is already negotiated and is conditional on the licence being granted) and the turn key contractor is doing everything else. This gives a high degree of certainty to the OPEX cost per tonne of concentrate of $77. The per dmtu cost depends on the actual grade achieved and $2.2 per dmtu is based on the conservative 35% figure. The Shard note only covered stage 1. It also had adjustments for other costs which effectively cut EBITDA in half when converted to project cashflow. However the bulk of those extra costs seem to be a management fee paid to Keras. I could not fully reconcile Shard's figures but what seemed to make most sense was the fees and taxes were taken as % of the top line ie revenue. If this is the case then KRS gets 7.5% of revenue as a fee and gets its 76.5% of the bottom line cash flow. I did ask for clarification but did not get a reply. I am expecting all to become clear when the DFS is issued shortly after the licence is granted.

Stage 1 uses up 45% of current reserves (likely to expand with ongoing exploration) this is the surface stuff (eluvial rubble). The other 55% of the current reserves to be exploited in Stage 2 is the transitional and saprolitic stuff and is where the silico manganese comes in. This will require additional processing (probably SO2 leaching). The scoping study, which again should be released either with the DFS or shortly after should provide some greater clarity on which way to go with exploiting this. Some additional benefication on site is necessary and there will be a capital cost and additional OPEX. The value of the product should be greater. There is also an option of going further on site at greater capital and OPEX cost which produces a product which can be sold to battery producers. Presently we have no figures to go on here. The next step after the scoping study, which will give us a rough idea, is to do a full DFS for Stage 2.

[rec0very stock] 11/11/2020 17:43

Google translate gives the tweet as saying:

From exploitation to production KERAS by its subsidiary (SGM) will start manganese production in early 2021
We welcome the free participation of @GouvTg in capital (10%)
We believe in the creation of a local processing unit.

Not sure who "we" is in this context, the tweeter is "Expert process, oil & gas, chemical and nuclear industry" which to me says jack of all trades master of none.

I would guess he is a contact of Russell's tweeting to put a bit of pressure on the govt to actually deliver the licence before Christmas. Hope it works.

[andrewhbruce] 11/11/2020 10:21

Loved tweet with Russ looking so dapper. Are the highly polished shoes a giveaway??!!
AB

[markyess] 11/11/2020 10:09

Another interesting tweet alluding to production commencing early in 2021.

Obviously we had official Togolese government sponsored press stating we'd be in production by Q1 2020, but let's keep the faith and be positive that this is now the real deal.

[rec0very stock] 11/11/2020 07:37

Yes strange tweet and I suspect it came from:



No doubt we will get an RNS at some point, though I suspect after the embarrassment of what happened last time, Russell will want to wait until he has something concrete to say. The KRS tweet is effectively just letting us know he did make it out of UK before the latest lockdown. I am sure the discussions did go well, because they normally do. The issue remains the Togo govt actually following up what they say they are going to do at meetings like this with action. There is every reason to be hopeful this time, but nothing is in the bag until the licences is properly signed.

[markyess] 10/11/2020 20:12

Idle and baseless speculation, that last Twitter post.

Be as easy to suggest that the fact Keras made their photo post means we're still a little bit of distance away from the main news... a picture of the rainbow as a placeholder to show we're not quite at the pot of gold.

I hope I'm wrong....

[daar] 10/11/2020 19:41

https://twitter.com/keya5000/status/1326225213378486274?s=19