G6M (ASX) Ann: KIS Raises $5.6M in Strongly Supported Placement

Originally posted by phuket guy: ↑

Ok now lets take a fundamental look at what this company can be worth.

The first simple way to value this is use the current independent expert's valuations from their DFS from last year. They gave this company a current NPV of AUD 241 million. Right now the current market cap is AUD 88 million. - so the share price can still almost triple from here to reflect fair value. A double and it's still undervalued. So buying it here, given we now know it will get its financing and get into operation is a no brainer.

I will do a more detailed valuation below, but first let me say KIS obviously did this recent CR now for two reasons:
1. Is to get a truly powerful and influential cornerstone investor aboard.
2, is to wipe its AUD 4.7 mill debt - which to me is clearly in preparation for finalising and announcing the new bigger commercial debt to fund the mine- There is no doubt now they will get debt financed from banks and govt.

So what was the 4.7 mill debt for? if You've seen the pics of the mine with the port nearby it and a golf course in between? KIS borrowed the money to buy the golf course because
1 They are very confident there's good tungsten there too.
2, so they can get unfettered access to the port on their own land,
3. so they can build their new plant there near the port and mine.

Right now KIS had projected a 14 year LOM (life of mine) By doing some Jorc drilling on the new land, we're confident, and believe they are too - (but under ASX rules they officially can't make forward -ooking statements) that they can greatly increase their reserves and hence their NPV and LOM increase - Which means it can go onto a bigger PE calc too.

Right now KIS has 327 mill shares on issue
- there are also 36 million options which will all convert (giving the co AUD 3.6 mill more cash)
-28 million more shares were issued today.
If they raise say AUD 8 mill more equity before production starts? they can do at 40 cents after debt financing is announced?. So that's 20 mill more shares. So fully diluted, there should be around 411 mill shares out? agreed?.

Calculating profitability of APT is complicated - we reckon the company should be making NPAT of around AUD 25 mill a year - using current apt prices.

Put that on a 10x pe -and we get a similar AUD 250 mill valuation as the independent experts.

A 250 mill mkt cap valuation divided by 411 mill shares = 60 cents a share.

But IMO that doesn't include a lot of positives

1. Given its rarity- and that The LOM can probably be extended to 25 years -so this stock can sit on a 15x pe =90 cents a share.
2. Also the tungsten price is going to rise- We believe that post covid there will be greater demand and a faster rise in the price of APT back to its highs of USD 420 per kg (now its 280) this can allow fo another 30% rise in the value of this mine, This can put the share over 1$.

So with little real downside, still a big potential upside and a high potential divided yield - this share is a great buy here or all the way to 45 cents!

Caveat :the above figures are from my own calculations only based on others facts. I also declare I am long this stock, so before you buy DYOR please!

Expand

I believe in the developing KIS story and a longer term shareholding should be very rewarding but an issue which comes to mind which I am having difficulty to resolve is this:
China controls 80+% of world tungsten supply. They can determine world price.
China has no problem to play the long term game and would have no problem to depress world tungsten price to their long term advantage.

How does this play out with KIS?
What weighting do we give to world tungsten price and KIS as a reliable strategic supplier.?
Is this mine staying in operation regardless of tungsten price or is it not that strategically important after all?

No.	Vol.	Price($)
1	20000	2.6¢

No.

Vol.

Price($)

20000

2.6¢

Price($)	Vol.	No.
2.9¢	108822	1

Price($)

Vol.

No.

2.9¢

108822

No.	Vol.	Price($)
1	20000	0.026
7	705317	0.025
4	226384	0.024
1	500000	0.023
4	544193	0.022

No.

Vol.

Price($)

20000

0.026

705317

0.025

226384

0.024

500000

0.023

544193

0.022

Price($)	Vol.	No.
0.029	108822	1
0.030	220000	2
0.031	250000	1
0.034	180000	2
0.035	136345	3

Price($)

Vol.

No.

0.029

108822

0.030

220000

0.031

250000

0.034

180000

0.035

136345

(20min delay)
Last 2.9¢		Change 0.004(16.0%)		Mkt cap ! $29.11M

Open	High	Low	Value	Volume
2.6¢	2.9¢	2.6¢	$26.93K	1.012M

Ann: KIS Raises $5.6M in Strongly Supported Placement, page-42

Strike Energy secures $153 million for Perth Basin gas projects

Plagues precede widespread power shifts. We’re living in one – and minerals are at the fore

If you thought lithium was dead, think again. The Pilbara will be central to the next upswing

Belararox delineates another porphyry in Argentina at Tambo South

ASX Market Update: Shares fall flat as GYG soars on debut | 20 June, 2024

Shekel Brainweigh CEO Nir Leshem weighs in on AI adoption ahead of FY25

With financials holding the fort, materials must step up with some heavy lifting to stimulate stocks

Guzman Y Gomez shot up nearly 40% in first hour of trades. Can it last?

Cultural heritage agreement puts Walford Creek exploration back on the map

Frontier Energy achieves key milestone for Waroona energy project

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News

Ann: KIS Raises $5.6M in Strongly Supported Placement, page-42

Top Stories

Strike Energy secures $153 million for Perth Basin gas projects

Plagues precede widespread power shifts. We’re living in one – and minerals are at the fore

If you thought lithium was dead, think again. The Pilbara will be central to the next upswing

Belararox delineates another porphyry in Argentina at Tambo South

ASX Market Update: Shares fall flat as GYG soars on debut | 20 June, 2024

Shekel Brainweigh CEO Nir Leshem weighs in on AI adoption ahead of FY25

With financials holding the fort, materials must step up with some heavy lifting to stimulate stocks

Guzman Y Gomez shot up nearly 40% in first hour of trades. Can it last?

Cultural heritage agreement puts Walford Creek exploration back on the map

Frontier Energy achieves key milestone for Waroona energy project

Featured News

Buyers (Bids)

Sellers (Offers)

Featured News