KING RIVER RESOURCES LIMITED (ASX:KRR) - corporate strategies - unlocking value, page-3 - HotCopper | ASX Share Prices, Stock Market & Share Trading Forum

Originally posted by ptan ↑

These macro issues may now be foremost in the minds of the management.

Completion of SS, CS for Vanadium/Titanium

Completion of SS, CS for Fluorite

Feasibility metrics on both projects

Estimated Capex Requirements

Funding for projects

Selection of Strategic Investors (SI)

The strategic corporate games for KRC have started, i.e. how to maximise values for shareholders. It will be fluid and complex (with many variables) but will centre mainly on the latter 3 issues.
These are 4 probable scenarios :-

1) KRC may undertake one project only (Van/Tit). Other projects to be disposed to raise funds for capex. Cost consideration is the key issue. JV with SI is needed.

2) JV agreement with SI on Van/Tit/Fluorite projects. SI provides capital funding and KRC provides the assets. Two options here – projects driven by JV agreement only or JV may evolve into establishing a new Corporate Entity whereby shareholdings are divided between KRR and SP. Projects could then be injected into the new corporate based on valuations done from the feasibility studies and capitalised. SP provides capital injection with cash.

In view of the scale and length of the projects and for legal reasons, the SP will likely opt for the setting up of a new entity. Process will be time consuming.

3) Management to dispose KRR outright (arm’s length but friendly sale) and just focus on the gold project. Straight forward exercise and shareholders will need to approve. If offer is attractive, getting the vote is a given.

4) Hostile takeover of KRR. With the fragmented shareholding structure, this scenario may play out and beyond the control of KRC. As for timing, hostile bidders will wait for the release of SS and CS reports before considering their moves. Already they should have some metrics to work on based on data available from KRC.

The recent simple/short announcement on corporate restructuring is expected but have interesting implications. Segregating the assets between Kimberley Gold Pty Ltd and King River Resources may effectively closed off scenario 1, thus leaving 2 and 3.

Scenario 2 is a long term investment and this will come with some degree of uncertainty. Capex consideration may be inhibiting. For Junior Miner, scenario 2 is a nice to have situation. Unless BHP is the SI, then perspective will be very different.

As such Scenario 3 is, in my view, the preferred option for the management. At least they still have the exciting gold projects with them.

Scenario 4 will be very exciting if it happens. It will conflict with Scenario 3 and will be beneficial for shareholders. May come from competing bids from Foreign Mining groups to take control of KRR. On a strategy level, Scenario 3 may trigger Scenario 4 or vice versa.

KRC has enviable huge valuable resource assets with potential huge (secular) market demand. It is an exceptionally attractive target for big Mining groups to diversify its business model.

Based from my corporate experience, I would not be surprised that the Management, knowing the estimated project feasibility metrics, are already talking with potential SIs and progressing matters.

This is a glimpse of the exciting corporate games that may be unfolding soon for KRR’s assets.

Good luck to all Holders.

Please DYOR

Expand

I picked up these presentation notes from Largo Resources. Very interesting read for Vanadium investors and, in particular, shareholders of KRC.

Eagerly awaiting for the SS and CS of Speewah Project.

http://s22.q4cdn.com/197308373/file...8/07/LGO_Corporate-Presentation_July-2018.pdf

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(20min delay)
Last 1.3¢		Change 0.000(0.00%)		Mkt cap ! $19.86M

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1.4¢	1.4¢	1.3¢	$322	23.01K

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