Ann: Kasbah Completes Convertible Loan Transaction, page-11

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CL27

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22/12/18

20:37

Post #: 36945775
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Originally posted by marcus A: ↑

PovertyBoy, have you actually read the ASX release or the resolution in question? 'We' do not have $5m, 'we' have a shade over $1m cash and a $5.1 m debt accruing interest at 12% which is now fully secured by KAS's 75% interest in Atlas Tin SAS. To quote the release;

“Pala has provided the Company with the additional funding of A$1,064,186, after repayment of the existing loan principal, interest and fees. The Convertible Loan balance as at 21 December 2018 is A$5.1 million after capitalisation of arrangement fees.”

$1,064,186 isn't going to see KAS through until the start of 2021 given the current burn rate;
30/6/18; cash $3.017m, debt $3.2m
30/9/18; cash $1.475m, debt $3.3m: cash burn, $1.623m, debt accrued $.1m
19/11/18; cash?, debt $3.5m, inc. debt accrued $.2m
21/12/18; cash $1.064m + ?, debt $5.1m, inc. debt accrued approx $.5m

Do you notice any trends hare? Any guesses as to the cash balance and burn rate at 31/12/2018? My guestimate is sub $1m cash, and a burn rate of $1.5m+ with debt accruing at 12%. At these rates Pala will not need to convert to gain 48.9% of KAS as they will gain the Atlas Tin assets by default.

With the passing of this resolution KAS management has delivered Pala both senior security over the main asset and a option on whether to take control by conversion or default for little or no improvement in the loan T's&C's

KAS's only hope is that they can find a white knight (do we still believe in white knights?) to fund their share of the project and pay out the Pala loan or that Toyota Tsusho and Nittetsu Mining, having spent $25m to date for their 25% interest are disinclined to stay as minority partners in a Pala controlled Atlas Tin and find another $20m or so to take over KAS and payout the loan.

If neither of these scenarios materialise I fear that KAS management has delivered our collective cajolies to the warm palm of Vladimire Iorich!

Expand

Thank you for posting what I have been thinking

Maybe the other thing to add is That the one for ten shares consolidation is now locked in.

This is likely to reduce the market cap by a third. Meaning a share price of say six cents after consolidation

After reading Razorline post. I decided to listen to the punk song "Rock The Kasbah"

Oh! Yeah!

KAS Price at posting: 0.9¢ Sentiment: None Disclosure: Not Held
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0 Great analysis

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