Keras Resources Share Discussion Threads

[zhockey] 21/1/2021 15:31

Not all manganese is created equally

[meanreverter] 21/1/2021 13:33

Before anyone gets excited by “battery metal” hype, we need to keep our view of manganese in context. It is widespread (#0.1% of the earth's crust), inexpensive (comparable in price to aluminium or zinc), and mined on a large scale (c. 20 Mt per year, about the same as copper). It is not in the same league as nickel, cobalt, lithium, or graphite by any measure. Even if a high-manganese formulation is eventually the standard for car batteries, it will add at most a few percent to total manganese demand.

[jimbl] 21/1/2021 11:52

What I am missing is the same as most others, and it's not something you nor RS can answer via your own opinions.
I hear excuses provided as to why the company cannot simply and clearly inform us as to the issue over the license. An issue which, because of its continued delay, forces the company to seek out other options, when we really should be producing profitable manganese and seeing returns on our investments.
Would we be pursuing Utah if Nayega was up and running? I doubt it.
I disagree that a BOD of professional mining executives cannot craft a factual statement without being critical the Gov of Togo. Instead, year after year we continue to be told nothing or, as after the recent decree, "we know of no other obstacle to the granting of the license".
It's simply not believable. Not after 10 years in the country. Not with a locally owned subsidiary. Not with a 5% shareholder who had or may still have a position in the Presidents Office.

[markyess] 21/1/2021 11:00

What do you want to see happen, Jim? There's clearly something you are 'missing' here. Maybe if I/we understand what that is, we can have more productive discussion.

[jimbl] 21/1/2021 10:51

Marky - I don't have to register a 'complaint' simply for having a criticism.
The opinion coming back always sounds like the BOD can do no wrong and nothing untoward or underhand has happened or is happening in Togo - while also stating that doing business in Africa is inherently dodgy.

I agree! But you can't have it both ways.

[tomboyb] 21/1/2021 10:38

Market is moving up -

KRS left a bit behind -

[markyess] 21/1/2021 10:30

With Manganese alone, we are a battery metal play. I'm pretty certain you can find posts where I expressed the self same views on Kamina at the time. Our share price didn't budge on either acquisition nor disposal of the Kamina permits.

Openly criticising any jurisdiction for which you hold primary exploitation rights would be exceedingly stupid.

Business in Africa is business in Africa. If you think that the BOD are acting inappropriately, register a formal complaint with the Ombudsman or FCA? I'll level, I don't think the complaint will go anywhere...

[jimbl] 21/1/2021 09:53

You do? Well then, the only logical conclusion would have to be the BOD was misleading us and the market. We know a lot of shareholders (from the comments on boards) jumped in here and got very excited about EV battery talk - and company information and strategy relates to that market still though only in regard to manganese.

And if keeping the the Togo Gov 'sweet' amounts to a suicide play otherwise, then that literally indicates we are being held to ransom, and legal decision making is not at the forefront of the jurisdiction we are in there. A decree effectively means nothing.

Both points more or less exactly what my own criticism has been aimed at.

[markyess] 21/1/2021 09:32

FWIW, I *do* believe that the take on of the Kamina permits was purely a gesture to show intent and commitment to investment in Togo. The permits and minerals were never a fit with our modus operandi of low cost, easy to extract minerals. The fact they were battery metals was the tenuous link, but we were never going to be serious players in that space without significant investment and dilution, well ahead of what we were capable of supplying at the time. Their acquisition never gave us an uplift in sentiment not share price, and their disposal was equally met with ambivalence.

Did the exercise help our standing with the Togolese government? Who knows. For me, it is clear, the Togolese government is the longest pole in the tent. Our BOD *cannot* be openly critical of them - that is in essence a suicide play.

This is typical frustration of involvement in Africa, you either hold tight and accept it, or bid a quiet retreat. There is little more that the BOD can do - especially in the public eye.

[jimbl] 21/1/2021 09:00

RS-
Are you seriously suggesting we are exploring Ogaro and took on Kamina purely as a 'gesture' to Togo? That we acquired cobalt/nickel exploration prospects and informed the market that it " marks a decisive step in the implementation of our strategy of building a portfolio of assets that will allow us to target the burgeoning battery market" only as a gesture? Well, what would that say about the BOD if true - not that I belive it to be.
The simple fact is we took on Utah as we have no other remaining avenue to create revenue without the Togo license. It was a move similar to the gold tributes once Mebaga and the AA/Kumba deal fell through due to the sinking IO market.
We are not exactly expanding the product range either. We are following the original FI development and marketing plan targeting organic farmers and medical cannabis growers and in a similar production method.
As for investing, I had every faith in the BOD (starting 2011) when I made the bulk of my purchases. I fail to see how having valid criticisms results in your sage advice for me to hush and exit quietly. No thanks. I am similar to many remaining LTH's in this regard. I've also been to GM's in the past and never got definitive answers to many questions which still exist today. Front and centre of course remains Togo, the one asset which our original investments helped fund.
So, no thanks. I'll stick around and rightly question anything as a shareholder which I have the right to.

[rec0very stock] 20/1/2021 23:22

jimbl,

I think you answered your own question on further exploration in Togo - why bother without a licence. I doubt very much is going on at all right now. It was a gesture (we already have enough reserves for about 14 years LOM) just like Kamina was a gesture - show them you are serious and capable. Show them you can raise money and spend it on other projects in other countries, but could have spent it theirs, if they just got on with granting the licence. We can debate whether MM ever was a real issue or just perceived to be an issue by the Togo govt until the cows come home, the fact is that the 2019 decree made it a non issue for the Togo govt - they couldn't have made the decree if they still believed there was an issue. I do agree that a proper explanation by RNS of what the hold up really is would help us all here, but it is likely to be critical of the Togo govt and that would be totally counter productive.

The key risk with Utah is the growth of market share - we all knew that from the outset but even at low levels of production it is OPEX cash generative even without our own plant in place, admittedly margins are not great a low levels. I don't understand where you get highly subsidised from. Why expand the product range, spending a little more on the plant to do it if there was not significant interest in those additional products?

Both Togo and Utah are very simple operations with turn key contractors which can be turned on, turned up, turned down and turned off quickly and cheaply.

If I am right about yet another similar stage low CAPEX project being in the gestation then that will diversify risk further.

It does all come down to faith in the BOD which I believe is justified, however you seem to have lost faith and that is entirely understandable. I make it a golden rule not to invest in companies where I do not have faith in the competence and integrity of the BOD and if, having invested, I subsequently have reason to doubt the competence and integrity of the BOD to get out. Most of the times I have done that it has proved to be exactly the right decision. Even when a BOD I have lost faith in does subsequently deliver, I have never regretted selling because there are plenty more pebbles on the beach. It sounds to me like you should sell out and reduce your frustrations by finding an alternative investment where you have more faith. If you decide to stay then as soon as there is a GM that shareholders can attend then come along - the last one I went to there was only RL, BM myself and one other shareholder so you will get to ask the questions you want and you will get the best answers RL and BM are able to give within the rules of the market.

[jimbl] 20/1/2021 19:02

RS
Sorry, but you said that previously. I very much doubt the BOD would have sought specialised mining sector legal advice in Paris if they had not thought this was a 'real issue'.

[rec0very stock] 20/1/2021 18:47

jimbl,

The MM agreement is not an issue, indeed it never was a real issue - look back at my posts where it was explained.

[rec0very stock] 20/1/2021 18:45

zh,

I was hoping to go to the GM, but it was proxy only due to Covid. Unfortunately we can only speculate what the problems are. RL did say that there are very few landowners and they are all champing at the bit to get the money and relocation package as at the end of the mining they get the land back for free. I suspect it is mainly a matter of a new government getting its act together - something the last government consistently failed to do so probably there is a lot that needs sorting out in general. I think it is notable that the talk of a road map has just turned to positive progress. The problem RL has is that he can't say anything in an RNS which might be interpreted as being critical of the Togo government. I remain confident we will get the licence before Christmas just not sure which year.

[jimbl] 20/1/2021 18:37

No. The 2019 decree was granting us the exploitation permit (license) which of course, has still not been forthcoming. There's been no reference to ownership since the EITI reports and the 2016 statement by the DG of Mines who said the MM agreement needed to be renegotiated to allow us to mine Nayega. Frankly, I don't put much store in ministerial decrees when the President and a previous Gov signed of on the MM agreement to begin with, and 2 years later gave SGM exploration rights over the same minerals on the same land.
RL told me they sought specialised legal advice in Paris and 'we are comfortable with SGM’s security of tenure on the Nayega project which is also underpinned by the 2019 Decree.' He may be comfortable, but we don't know if there's any continuing legal or governmental blocks in our way - and there certainly continues to appear to be.

[zhockey] 20/1/2021 15:12

Did the council of ministers not already validate Keras exclusive right of ownership?

I suspect the blocking issue is due to resident landholders, some commercial negotiation or some matter related to the government measuring Keras’ capability or suitability.

[meanreverter] 20/1/2021 15:11

jimbi: I'm relatively new to Keras, and don't know anything about “the MM Mining agreement”. Please could you give me a reference for this, as I'm unable to track down any such thing via the usual internet search process.

[jimbl] 20/1/2021 13:54

@tcrober1
No problem. As I said, it would be a fairly Orwellian discussion board if you could only ever discuss positivity and optimism!
I'm not saying I'm correct (entirely, partly, or slightly), i'm just sharing my point of view.
I stand by my position however, that the BOD has never mentioned (until I pressed)and no other poster managed to identify the MM Mining agreement before me - largely I suspect because we didn't 'dyor' exhaustingly enough until this point. That's why perpetual blue-sky thinking no longer cuts it for me.
My own current thinking on Togo is that we are stuck in a position of possible Presidential/Government embarrassment and/or legal wrangle as a result of the MM agreement. We cannot go forward until and unless that is rectified.

[tcrober1] 20/1/2021 12:31

jimbl/recovery,
Great balanced posts, thank you. Much appreciated by those who have much lesser knowledge of the company but still shareholders.

[tomboyb] 20/1/2021 12:28

Well I've taken a few more to add to my initial holdings -

Buying just above placing price -

[jimbl] 20/1/2021 10:34

RS - Points duly noted. Some clarification from me on your own 'opinions' here. Having held this share since Aug 2011 I am as knowledgeable as you and many others on the history.
1. Exploration is still ongoing at Ogaro in Togo - aside from awaiting Nayega licensing. Clearly, money is needed for that. Call it what you wish therefore, opex or working capital, but it is needed.
2. If (which I concur with) you don't believe Nayega license is imminent, then why are we continuing to explore and expend funds on Ogaro? Almost 7 years after first being told by the BOD that a Nayega license was imminent, we still have no definitive explanation as to why it has not been granted. The excuses provided so far are simply no longer believable - especially after learning of the MM Mining agreement, for which we also have no definitive statement that it is legally defunct or has been renegotiated. This was never forthcoming information from the BOD. That, despite a belated admission when directly approached on the subject, they had been concerned enough about the situation to seek specialised legal advice on it.
2. Just as the Utah acquisition has shown, if we acquire another asset then at some point in the not too distant future, more funds will need to be raised and very likely more dilution will therefore take place. It's not rocket science to wonder how many shares will be in issue if a consolidation ever does take place - and what position we'd be in afterwards when we are now already over 6 billion and a share price barely over 1/10th of a penny. There comes a tipping point where slicing the cake just can't be done any longer.
3. We are aware of the marketing plan for Utah (sounds exactly like FI's original one - sales to smaller growers/users) but we have no sales update since being told 20% of the stockpile has been sold. The only way sales can become profitable from this Yr 1 initial heavily subsidised price, is if a current non existent market share is also increased to that in the marketing plan. That's a lot of if's to hang your hat on.
4. Likewise, eventual repayment of our loans to FI are entirely dependent on that marketing plan and sales working out as envisaged.
5. While the CAI spin-off has been a success, and our iron ore history is well documented (no fault assigned), lets not forget we also acquired the Kamina prospects in Togo, (EV battery market assets to compliment our manganese) before also giving that up.

Horses for courses here. You may think me overly negative, whereas I think your opinions are perpetual blue-sky, with little (other than CAI) factual evidence to actually support that ongoing optimism.

[andrewhbruce] 20/1/2021 08:31

Many thanks RS, your contribution here is, as always, hugely appreciated. I am greatly encouraged by the fact that the BOD could easily pursue new projects off their own backs, but choose to channel them through Keras, contributing their own funds. Calidus has been a huge success, with much more to come. Faith will be rewarded here.

[zhockey] 20/1/2021 08:27

RS what do you think in reality is holding up Togo. I don’t buy the argument that it’s just admin waiting to happen, there must be some point of contention or negotiations that are holding this up?

[stockriser] 20/1/2021 08:25

Well said RS ;-)

GL SR