Keras Resources Share Discussion Threads

[jimbl] 02/6/2024 07:48

Curmedgeon eh? Well that's probably because of listening to folks like you and tim000 and having to re-read regurgitated and factually incorrect nonsense.

Wherever you copied and pasted your lenghty post from (Togo First?) most of it is of course pure BS. I'll explain simply, via this paragraph of yours:

"According to Agence Ecofin, production at Nayéga was initially expected to start in 2020 at a nominal monthly capacity of 6,500 tons of marketable ore but these milestones were not met, and works were suspended to allow the State to negotiate better terms for the project."

KRS of course, then as FRX, had been trying and expecting to get Nayega licensed since 2014. Indeed, we even received a ministerial decree in 2019 that suggested the extraction license was finally to be granted. Alas, once again it was not forthcoming.

'Milestones' were not met because they couldn't be met as the Togo Gov wouldn't bloody license us! Works were not therefore suspended as no works were taking place. The site was on care and maintenance following a succesful bulk sample. Succesful in the meaning that it seemed to only confirm to the Togo Gov that they should have our asset for themselves.

If you think President Gnassingbe and the Togo Gov do anything that's remotely logical, then simply compare us to the other debacle which is their approach to phosophate and cement. The Gov entered another agreement, with Dangote, to build cement and phospate plants (for fertiliser) which involved Dangote raising $2 billion in investment. Dangote ended up with no licenses, the investment didnlt take place and the Gov took it over instead.

While tim000 has stumbled upon the fact that DR used to be our CEO and is now running CAI instead (clearly wasn't here when us LTH's received our CAI in-species free shares) I simply reiterate my point. I'll now believe something good comes from Nayega and Togo only when I actually see it happening.

[tim000] 01/6/2024 23:47

I see that Dave Reeves - CEO in the early days of the company and now CEO of ASX listed Calidus Resources (which was spun out of KRS) - is still a significant shareholder in KRS. Like KRS, in my view CAI is currently an excellent turnaround play and I have a decent holding there too. For those that invest in the ASX, they should definitely give it a look. And JMS too!

[tim000] 01/6/2024 23:31

Skipper, thanks for your posts. I can’t understand why anyone would pay KRS $1.7mn cash and then sit back and do nothing while the Manganese ore price hits record highs. I don’t care who the President is, they would have to be a lunatic to procrastinate on appointing a contractor at Nayega. The fact that they have announced a competition to tender, with a quick deadline, suggests that isn’t so. I understand this is Africa and that has to be taken into account, but if the contract is awarded to a competent firm then there is a chance that KRS might get some payment at a time when it has real value. But in any case, having the backstop of a committed and supportive investor in the business is a major plus. As has already been pointed out, they don’t demand death spiral terms either. And the phosphate resource is substantial. This all suggests the share price still has a long way to go - as Grosso believes too.

[the skipper] 01/6/2024 22:38

Link won’t post so here’s the transcript from Togo First:

“ Togo First) - Togo wants to double the contribution of mining to its GDP by 2025. To do so the country relies on the recovery of its phosphate industry, and its manganese-rich subsoil.

Togo’s government inked with the British firm Keras Resources a deal that will double the mining sector’s share in the country's GDP by 2025. Under the deal, Keras gave up on its operating permit for the manganese-rich Nayéga project. Now, the permit is exclusively held by Société Togolaise de Manganèse, a 100%-State owned company established in April 2023.

According to the agreement, Keras will transfer “its intellectual knowledge on Nayéga to the State, and provide consulting and brokerage services to accelerate Nayéga’s development”. The British firm, which ran the project for many years, will also start selling its participation in SGM, the subsidiary through which it held a stake in the project.

In return for the participation, the State will pay Keras $1.7 million in cash on July 17, 2023. Additionally, Keras will receive 1.5% of the gross revenues from the mine for its consulting services for three years, and 6% of the gross revenues from the asset for its brokerage services for three years or 900,000 tons of enriched manganese ore produced and sold from the mine.

“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 reward Keras for its investment to date,” said Graham Stacey, CEO of Keras. He added that the company would begin a transition to focus on its Northern American projects.

A good formula for Togo?

The deal aligns with the objectives that Togo announced when it created the Société Togolaise de Manganèse in April. Indeed, the company was tasked with enhancing the country's manganese reserves in a bid to “double the mining sector’s contribution to GDP by 2025”.

The first hurdle the public company will have to overcome is to realize Nayéga’s potential. A project which hosts mineral resources of 13.97 million tonnes grading 12.4% manganese and ore reserves of 8.48 million tonnes grading 14% manganese.

According to Agence Ecofin, production at Nayéga was initially expected to start in 2020 at a nominal monthly capacity of 6,500 tons of marketable ore but these milestones were not met, and works were suspended to allow the State to negotiate better terms for the project.

Though the new deal could be the right formula to restart the project, only the following developments will tell more about the plans of Sociéte Togolaise de Manganèse. Will the firm stand by Keras’ initial plans and when will production begin?

While these questions remain unanswered, the manganese sector continues to face new challenges, with increased needs in steelmaking and growing demand for electric batteries. The ore, according to a report that Ecofin Pro released earlier this year, is “an additional asset for the African continent in the industry of tomorrow.” Africa, let’s emphasize, produces more than 60% of the world’s manganese output, and several African countries, such as Togo, South Africa, Gabon, Ghana, Ivory Coast, and Botswana, are positioning themselves to take advantage of new opportunities in this market.”

Louis-Nino Kansoun

[the skipper] 01/6/2024 22:35

tim000 if you had been following this board as long as I have you would appreciate that jimbl is the ultimate curmudgeon, pouring scorn on any positivity expressed by others here. To an extent I can understand his cynicism regarding Togo, but given its expressed desire to double the contribution of mining to its GDP by 2025 I have every reason to believe that they will not hang about in appointing a contractor to extract and process the Manganese ore at Nayega: [...]

[jimbl] 01/6/2024 12:08

As I said. A sanctimonious child. Filters me but then writes another comment just to let me know... lol!

[tim000] 01/6/2024 11:46

Btw Jim, I’ve filtered you. Your power of reasoning is mediocre so I’ve decided you’re not worth reading. You make a simple mistake in believing one’s personal choice of discount factors is neither here nor there, when in fact it is a critical decision in one’s capital allocation between investments. Anyway, I hope we’re both successful here. Please feel free to filter me if you dislike my posts, I won’t be in the least offended, partly because I won’t know.

[jimbl] 01/6/2024 11:24

Grow up, you sanctimonious child.

[tim000] 01/6/2024 11:00

I’m not at all touchy. Btw, you misspelt a simple English word and then chose to blame a machine that you control. You’re not very self aware are you?! 😜

[jimbl] 01/6/2024 10:52

Dear me. You're a tad touchy aren't you? And of course I can spell. A typo however, anyone is capable of.
As for what I 'prefer' that is neither here nor there now. I'll finally believe something positive about Nayega once it actually happens as there's been far too many false dawns.
Like a few other remaining LTH's, I've been in here since 2011 and have yet to see anything positive come to fruition regarding Togo.

[tim000] 01/6/2024 10:37

Incidentally, I have been invested in KRS in the past, just didn’t post here. I now expect to be a more permanent holder given the progress made in developing a profitable phosphate business. Nayega might or might not help fund that progress, we’ll see.

[tim000] 01/6/2024 10:24

Ok, I was careless in using the word “back”! Also being a pedant, I note that you can’t manage simple spelling. I’m not counting on it, I made that clear. Neither of us know, it’s just that you prefer to discount any upside more than I do, namely you discount it nearly 100%.

[jimbl] 01/6/2024 09:19

Nayega can't be brought 'back into production' as it's never been in production (other than for a prior bulk sample of ours)!
If you'd had an intererest in this over the years then you'd understand that the Togo Gov doesn't just move slowly, it's utterly glacial and moves when it suits them (for that read the President personally).
There have been multiple manganese price movements over the years since KRS first expected to be licensed, as that was back in 2014.
Will they move quicker now the asset is thiers? Who knows. But I wouldn't count on it.

[tim000] 01/6/2024 08:55

Our management will understand the rapid price hikes currently seen for manganese ore, and the fact that they will be sustained for about a year and then start to unwind. Either they or Togo govt advisers should have stressed to the govt the importance of getting Nayega back into production asap. A well-resourced contractor should be able to mobilise quickly if incentivised to do so. It could be that the wheels of Togolese govt move slowly and the opportunity is missed. If however they seize the opportunity and get production started quickly, then all parties will benefit greatly - ourselves included. So news on how proactive the Togo govt has been on Nayega may present an opportunity here to top up. I don’t get the impression the UK markets are awake to the news regarding manganese.

[citys2874] 29/5/2024 08:49

4.00 now and looking very bullish

[tim000] 29/5/2024 08:41

Grosso is a long-term investor, which is why he has committed to funding the company’s development with debt and equity finance. You don’t commit scarce capital to a business for maybe a decade or more without having conducted due diligence, and the prospect of a seriously high return on capital.

[tim000] 29/5/2024 08:35

In that placing, an institution named First Uranium became a shareholder. Almost exactly a year later they sold out, selling 8mn shares to Grosso @2.5p! I would guess the fund manager at FU left and his successor had a clear out, as they do. How did Grosso, who lives in Florida, become acquainted with KRS? One might speculate that an exiting FU manager might be involved? Anyway, terrific business for Grosso, who hopefully projects KRS to be another Silvercrest-type success in the fullness of time. Diamond Creek has 3mn tonnes of high-grade phosphorus pentoxide accessible by opencast mining, no doubt with more reserves waiting to be booked. KRS hasn’t produced a NPV calculation of the resource, but maybe Grosso has and it would be an awful lot more than KRS’s mkt cap, hence his enthusiasm.

[tim000] 28/5/2024 17:09

In April 2022 the company raised about £2 mn @ 12p. The company is stronger now than it was then, eg the new JV arrangement is a big positive for securing customers.

[the skipper] 28/5/2024 16:50

Easy to see this settling at the 3.75p resistance tomorrow ahead of the next news release.

[apotheki] 28/5/2024 11:30

Hybridan Small Cap Feast: 28/05/2024

Keras Resources 3.1p £2.5m (KRS.L)

The owner of the Diamond Creek organic phosphate mine in Utah, United States, announces that it has on 24 May 2024 restructured its short term liabilities of US$900k incurred in the 2022 acquisition of the outstanding 49% in Falcon Isle Resource Corp and Falcon Isle Holdings LLC (Falcon Isle) into a US$1,525k, 4 year loan and convertible loan, comprising US$1,325k in new cash funds and US$200k in capitalised Directors outstanding fees. The additional funds will be used to pay US$800k consideration due to the vendor of Falcon Isle on 1 July 2024, US$100k for a final severance payment to the former CEO of Falcon Isle, and for growth projects and general working capital.

[tim000] 28/5/2024 10:57

The JMS thread at Hotcopper includes some expert research on manganese ore prices. One miner in Gabon is currently pricing ore at $8.30/dmtu CIF for delivery in July.

[apotheki] 28/5/2024 10:40

Keras Resources* (KRS LN) – 3.00p, Mkt cap £2.37m – Restructuring of loan to meet Falcon Isle acquisition payments and directors fees

(Keras holds 100% of the Diamond Creek phosphate mine in Utah, USA)

Keras Resources has restructured its short term debt of US$900,000 which it incurred buying out the remaining 49% in Falcon Isle Resource Corp and Falcon Isle Holdings LLC in 2022.

Management have restructured this into a US$1,525,000 four-year loan and convertible loan, with US$1,325,000 of new cash funds and US$200,000 in capitalised Directors outstanding fees.

Additional funds will be used to pay US$800,000 due to the vendor of Falcon Isle on 1 July 2024 along with US$100,000 as a final severance payment to the former CEO of Falcon Isle, and for growth projects and general working capital.

“The restructuring ensures the Company can meet its current obligations without negatively impacting the long-term growth profile at the high-grade organic phosphate business in Utah, USA.”

Directors Russell Lamming and Graham Stacey have agreed to capitalise US$100,000 in outstanding fees each due from the Company with 50% of this taken in convertible loans and 50% in normal loan form.

The four-year convertible:

US$762,500 at 4%pa convertible into Keras shares at £0.0275/s.

If the 30-day VWAP is £0.09/s then Keras can force the conversion of the convertible.

The convertible can be converted at any time by notice given by the holders with interest will be compounded annually and included with the amount being converted, or paid at the end of the four-year loan period if not converted.

Four-year promissory notes totalling US$762,500 at an 8%pa after four years are being made to Falcon Isle Resource Corp which has the right to repay the loans, without penalty, after two years.

The funding will be done in two tranches due to limited share issuing authority of £165,000 with the total nominal value required for the restructuring, including interest of £254,308.

Convertible Loan
Shares
Nominal (GBP)
Tranche 1 (Principle)
£431,203
15,680,125
£156,801
Tranche 2 (Principle)
£166,601
6,058,230
£60,582
Sub Total
£597,805
21,738,358
£217,384
Tranche 2 (Interest)
£101,542
3,692,446
£36,924
Total
£699,347
25,430,802
£254,308

The plant uses Keras’ high pressure grinding rolls and an HPGR mill from Keras’ original Spanish Fork site.

The jv has added a 5tph granulator plant from a China OEM which will be scaled up to continuous operations by the end of the year.

The mine will produce and sell some 760tpm at full production to be sold into the jv increasing sales of 50 mesh product for the balance of 2024.

At full production, the jv is expected to increase Falcon Isle’s quarterly sales of 50 mesh by approximately 2,280t / quarter equating to a 115% increase on the Q1 2024 sales.

100% of the revenue from the sales to the jv are attributable to Falcon Isle with while also sharing 50% in of the profit from the Phosul® product produced from this material.

Demand for Phosul® currently outweighs production capacity at Phosul's Idaho processing plant indicating potential to increase sales from Keras’ Diamond Creek 25,000tpa rock phosphate mine.

The Phosul jv will consume ~10,500tpa of 50 mesh phosphate vs 2023 sales of 2,111t.

The Phosul® formula uses 80% Falcon Isle rock phosphate from the Diamond Creek mine
Phosul® granules are currently selling for $40 for a 25lb bag or $75 / 50lb bag on Amazon in the US.

Manganese: Keras sold its Nayega manganese mining project to the government of Togo last year receiving $1.7m in cash along a 1.5% royalty advisory fee plus 6.0% of gross revenue generated from the Nayéga mine for the lesser of 3.5 years or 900,000t of beneficiated manganese ore produced and sold from Nayéga”.

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.

Manganese ore prices continue to rise and are now selling for $5.4.-5.5/t 13% min EXW China indicating higher royalty payments to come for Keras if the Government of Togo start mining and exporting ore from the Nayega mine.

Conclusion: The debt restructuring removes a degree of near-term uncertainty over debt repayments incurred in the restructuring of the organic phosphate business in Utah, USA.

Keras’s 100% ownership of the Falcon Isle business and its machinery along with its relatively new jv with Phosul LLC should see a significant lift in phosphate sales.

The new plant was due to be commissioned in May with the ability to ramp up the 520tpm capacity to 920tpm if there is sufficient demand for the Phosul® granules.

The Government of Togo recently started a tender process to appoint a contractor to manage activities at Nayega.

We look forward to further news on this contract and to the start of manganese mining and export.

Total number of shares pre-convertible are 80,497,177. Converting the convertibles will add a further 31.6% new shares for a total diluted number of shares of 105,927,979.

*SP Angel acts as nomad and broker to Keras

[apotheki] 28/5/2024 10:36

Added to which the chart is now starting to look increasingly bullish

[sclper] 28/5/2024 10:35

The convertible notes are not the death spiral type you often see on AIM where the conversion price can end up being lower and lower. The notes announced today are at a fixed conversion price and half the funding is straight debt without a convertible element.This is excellent news for shareholders, as some were worried about a placing. I think this and forthcoming operational news will kickstart a re-rate in the share price.

[tim000] 28/5/2024 09:18

Me too, I’ve added a further 100k shares today. The resource at Diamond Creek is substantial and will accommodate a large increase in annual sales. ASX listed Highfield Resources, a large prospective phosphate miner in Spain, mentions the growing strategic importance of mines in the West, with a lot of existing global supply sourced from Russia, Belarus and China. Also rising world populations and declining amounts of agricultural land necessitate increased use of fertilisers to increase crop yields - thus putting upward pressure on demand and prices. Grosso clearly likes the story and with full debt conversion will probably own about 30% of the company.