Keras Resources Share Discussion Threads

[beenhereb4] 24/5/2023 13:43

Thanks, Pinecone. Next RNS, I will follow Judge Judy's advice and ... "read it very carefully." (One for the daytime TV pensioners.)

[the skipper] 24/5/2023 12:33

There’s a picture of Russell at the signing ceremony in Togo on the Minister’s Twitter page:

Accélération de l'exploitation minière impulsée par le chef de l'État pour la diversification de notre économie! Je suis convaincue que ce partenariat stratégique avec , pour l'exploitation du manganèse de Nayega, portera ses fruits très rapidement!… [...]
— Mila AZIABLE (@MilaAziable)



The contract looks lengthy enough to have tied everything down and the Minister’s comment suggests that they certainly want to get on with it:” Acceleration of mining driven by the Head of State @FEGnassingbe for the diversification of our economy! I am convinced that this strategic partnership with @kerasplc for the exploitation of Nayega manganese, will bear fruit very quickly”

[jimbl] 24/5/2023 10:07

@BeenHereB4 - Lol! Yeah well my love of the BOD has only diminished with the absence of DR. At least he took the time and efort to personally respond on every occasion you reached out to him.

The current KRS crew seem more than happy to treat us as mushrooms...

Anyhow, I certainly share the same concerns over Togo and potential future revenues from it. As for DC, it's hard to form further opinions when we aren't told anything.

[gb904150] 24/5/2023 09:58

I think most would agree that the 'deal' is pretty abysmal compared to the money and years of effort that have been expended.

That said, Nayega/Togo has been valued at zero for years now. No real expectation of any resolution to the problems there. It has been apparent for years that the government weren't in favour of KRS mining it.

If the $1.7m is all KRS see from this deal then that is fine but that will mean the Togolese will learn nothing from the BOD and are unlikely to do a good job of exploiting the resource. I guess that's up to them.

If they had any sense they would accelerate the entire project - get it up and running as fast as possible, optimising it with the input of the KRS BOD.

The more likely is they will dither and delay, but in that case they are the ones that will lose out as they will learn nothing.

It's clearly up to them (Togo govt) but the opportunity is there.

Yes it's a rubbish deal, but that's why KRS pivoted to Utah. If they hadn't they would be in an even worse situation, dependent on this single resource, limited to 3.5 years of revenues and with only $1.7m to show for it. They might not even have had that if they didn't have a plan B.

DC too was a mess and owning 51% of it proved not to be great, but that too is resolved and we now have the 2nd payment of $800k available to us. That was hanging over us but now isn't.

It now just comes down to whether DC is a good project and can generate much profit.

[pinecone] 24/5/2023 09:22

All valid points, some of which I will raise with the board at the next AGM (to be announced!)
Just quick point the “ cash” element will be 17th July 2023 !
All being equal !

PC

[beenhereb4] 23/5/2023 22:28

I suppose when someone is holding a gun to your head, it's difficult to negotiate the sort of deal you would like and in that respect, we should be grateful that the management came away from the table with anything at all, but this really is an appalling deal, considering the amount of time, effort and money spent on the project by Ferrex/Keras over the last 12 years.

As the RNS was dated 18th May and the $1.7mn was due to be paid on 17th May, hopefully, that money is already in Keras' bank account because that is all we are likely to see from this deal. Anything else depends on Revenue generated in the first 3.5 years. What if there is no Revenue to speak of generated during this period? What about accidents closing the mine, teething problems, strikes, labour shortages, adverse weather conditions - all these things can have a negative effect on the performance of the Company. Even if things go to plan, surely, "Robin" Gnasse and his Merry Men will have first dibs on any available funds. Will any monies come across or will we just be a perpetual creditor on the Balance Sheet of the Togo State Company? On the evidence to date, I know which my money will be on.

Incidentally, this may be my first post here but I have been invested for a long time, long enough even to remember when jimbl (like myself) was once a staunch supporter of this Company and the management.

[rec0very stock] 19/5/2023 11:54

I agree Togo has mostly been a disappointment with the exception of the bulk sample which made a profit and left an oven ready operation in place, which just lacked a signature on an exploitation permit to continue with and expand.

The state run company effectively has the signature and has KRS to support it getting going so there are no impediments. You seem to suggest Togo would deliberately delay for 3 years in order to get out of paying a tiny amount compared to what it can get by proceeding, including gaining the good will of the people who have been waiting for years for the employment. Even by African standards that make little sense. However the security situation could worsen further, making it impossible even for a state company to operate in the region - that would be very much in line with African standards.

If nothing had happened in Togo then Utah would have needed a fund raise - I am certain of that. The RNS gives some detail on what has been going on and what will now progress in Utah. Full year results to 31 Dec 22 are due in the next month, as is the AGM. Both provide opportunities for the company to tell us a lot more and the AGM in particular gives an opportunity for shareholders to engage and ask questions - will I see you there?

[jimbl] 19/5/2023 11:15

I expect the worst as that what Togo has consitently provided us with. Disappointment.

Considering we were supposedly held up for years due to mining code changes etc etc, then I see no reason to think Togo is suddenly capable and willing to get Nayega into production. If I'm wrong then great.

As for progressing in other areas, who knows. The BOD seem quite content to tell us as little as possible now.

[rec0very stock] 19/5/2023 10:43

Jim,

You like to expect the worst so that you are never disappointed.

We have all been waiting a long time and whilst this is no where near the result we had hoped for, it is at least a result which allows the company to progress in other areas away from the basket case that is Africa.

It is possible that Togo could still renege on the deal, however Togo has got a very good deal. It also seems unlikely that they would go to all the trouble of setting up a state company to exploit the asset and then not exploit the asset when it is basically oven ready. Indeed with the security situation in Northern Togo it is unlikely anybody other than a state run company could operate there at the moment and in the foreseeable future. Indeed if the situation worsens that may become a reason why nothing happens.

Not being quite as pessimistic as you, personally I would gravitate toward the lower of DR's figures - very good of him to do it when he is only a shareholder now himself, but his calcs align very well with my own. $1.7m sells us short on what we paid less the profit made on the bulk sample. $4.5m does more than pay us back and the smaller payments nicely cover what we still owe Shawn for Utah. Any more than the minimum would be a nice bonus given the $4.5m was roughly the same as our entire MCap before the news.

btw it is Mn not Mg.

[jimbl] 18/5/2023 22:24

Based entirely of course, on the premise that Togo steams into producing Mg from Nayega asap. There's been no urgency to do so since 2014 when we were first informed a license was 'imminent'.

Time will tell, but I for one won't be holding my breath for payments or royalaties from Togo.

[the skipper] 18/5/2023 21:49

I see that a poster on lse sought Dave Reeves’ view on the deal and posted his response as below:

“ Dave reeves shared his thoughts on possible earnings from Nayega going forward. He said I could post here.

"No doubt you have seen the news today. Attached are my calcs on what it is worth to Keras, min $4.5m, Max $14m…! Just depends on the size of the plant the government install. Smaller is the plant on site, larger is what we planned to do.

Feel free to share on bulletin board and these are my own calcs, not the companies!

Cheers

Dave"

Saleable grade (%) 37.00%

Price ($/dmtu FOB) 3.5

Saleable production (dry tpm) 7,480

Advisory & brokerage fees (%) 7.50%

Value to Keras

$/month 72,650

$/year 871,794

$/3 years 2,615,382

Notes:-

7,480tpm (dry) is the product capacity using current infrastructure installed during the bulk sample

23,375tpm (dry) is the planned production using an upgraded scrubber plant per KRS internal study

Sales tons v Price ($/dmtu ) sensitivity

3. 3.5. 4 4.5 5 5.5 6

7,480 $2,241,756 $2,615,382 $2,989,008 $3,362,634 $3,736,260 $4,109,886 $4,483,512 ”

Maybe we’ll at least see some stability here now prior to the update on Utah, with the speculators on a better deal in Togo having taken their leave today by the look of things.

[apotheki] 18/5/2023 11:05

Keras Resources* (KRS LN) 5.25p, Mkt cap £3.9m – Fully focussed on N America as Togo takes on the Nayéga manganese project

(Keras holds 100% of the Diamond Creek phosphate mine in Utah, UASA. Keras also holds an 85% interest in Societé General des Mines for the Nayéga manganese project in Togo)

Keras Resources reports that it has agreed with Togo that the Nayéga manganese project is “a Togolese strategic asset” and that it will be transferred to a state company, Société Togolaise de Manganèse along with Keras Resources’ “intellectual knowledge on Nayéga”.

Keras will receive a US$1.7m cash payment and “will be paid an advisory fee of 1.5% … of gross revenue generated from the Nayéga mine for the provision of advisory services for 3 (three) years … [as well as] … 6.0% … of gross revenue generated from the Nayéga mine for the provision of brokerage services for the lesser of 3.5 (three and a half) years or 900,000 (nine hundred thousand) tonnes of beneficiated manganese ore produced and sold from Nayéga”.

The company says that the proceeds from Nayéga “will be used to fund the second US$800,000 tranche for the acquisition of Falcon Isle” which owns the Diamond Creek “high-grade organic rock phosphate mine located in Utah”.

Keras Resources confirms that as a result of its agreement with Togo it is now fully-funded to start resource exploration in Utah as well as to convert its “current mining permit to a large-scale mining permit which will create significant flexibility in medium to long term mining operations” and to complete the granulator plant and research “the development of liquid organic products from our existing product streams in order to access markets not already served”.

CEO, Graham Stacey, explained that the agreement over Nayéga “finalises Keras's transition into a fully focussed high grade organic fertiliser producer in the United States … [and] … draws a line through the uncertainty related to the Nayéga asset”.

The company confirms that the cash payment from Togo, which is “due on 17 July 2023 and ongoing cashflows associated with this Agreement underpins the already robust Diamond Creek mine economics which Keras will continue to develop into the premier organic phosphate producer in the US”.

Conclusion: Disposal of Nayéga provides funds for Keras Resources to expand and focus on its Utah phosphate business while eliminating uncertainty surrounding the development of the manganese project in Togo.

The deal with the Togo government should give nearly $0.9m a year at a price of $3.5/dmt for manganese and production of 7,480tpa equating to some $2.6m over three years.

Indonesian manganese ore currently sells for around $4/dmt which would give Keral around $3m over three years. If manganese prices rise to $6/dmt the value of the deal to Keras should rise to around $4.4m assuming production of 7,480tpa and to $14m if production runs at 23,375tpa.

*SP Angel acts as nomad and broker to Keras

[rec0very stock] 18/5/2023 09:35

Not a great result but a good enough result and just in the nick of time given the impending Utah payment and this:



We are finally out of Africa and able to focus on better prospects in the US.

Without the cash we would have been looking at a mega diluting placing. Now we can look forward to a decent news flow out of Utah.

[the skipper] 18/5/2023 08:46

In the circumstances it’s a good deal for KRS shareholders as it removes all doubt about further dilution to fund the next payment to FI and will enable it to be turned into a massive cash cow. This should end the day up by more than 50% once the news starts to spread imo.

[the count of monte_cristo] 18/5/2023 08:24

So Togo stole the asset

[edgein] 18/5/2023 08:02

Jim,

Another possible scenario would be get nothing and go through arbitration over many costly years. So to get out with $1.7m cash and a royalty is a good outcome to a deadlocked situation. They'll need KRS to set up and run the operation therefore that's where the royalty comes in. But it should be a very good case study for other miners thinking of investing in Togo. Look elsewhere, they'll not get these issues at DC. So if they get something out of the royalty then bonus. What they should do is mine design for a 4 year life and target the highest grade areas and leave what's left as a parting gift.

They're now walking away with a relatively large sum for a small company and can put it to good use on proving up the scale of DC etc.

Regards,
Ed.

[apotheki] 18/5/2023 08:00

Graham Stacey, CEO of Keras, commented, "This transaction not only finalises Keras's transition into a fully focussed high grade organic fertiliser producer in the United States but draws a line through the uncertainty related to the Nayéga asset.

This Agreement is a reflection of the constructive relationship we have with the State and sets a very clear picture of how the asset will now be developed to the benefit all stakeholders and rewards Keras for its investment to date.

The upfront Cash Payment due on 17 July 2023 and ongoing cashflows associated with this Agreement underpins the already robust Diamond Creek mine economics which Keras will continue to develop into the premier organic phosphate producer in the US."

[pinecone] 18/5/2023 07:33

Probably had little choice, given the set up in the country!
Always positive to leave on good terms!

[marvel66] 18/5/2023 07:22

A little disappointed we've given it away so cheaply.

[stockriser] 18/5/2023 07:16

VERY NICE ;-)

[rec0very stock] 16/5/2023 08:40

Really not sure it has any relevance to KRS at all as it is Potash (Potassium or if you like the K in NPK) and we are Phosphate the P in NPK.

Hopefully we are going to get some positive news soon as the next $800k payment is not that far away now so we need some.

[alan@bj] 14/5/2023 11:53

No, of course we're not. Thanks for the reminder Jimbl.

[jimbl] 14/5/2023 10:54

We aren't exporting any product.