Suddenly not giving a dividend has become slaughter?
AMP, Qantas, etc. all returning hundreds of millions in buy backs.
To pay a dividend to a manipulator of a share price or indeed a person who is inclined to sell it for half or a third or a quarter of it's value is insanity to me and quite frankly a dereliction of duty by the executive team.
If we reach intrinsic value, by all means pay a dividend. Until then, do not.
If you are happy with your percentage holding at 257 million shares. Then as shares are bought by the company and it reduces. Simply sell your shares to keep the same percentage ownership of the company as you have now formally stated you are happy with that percentage.
Said differently, if KCN buy back 1% of their shares. Simply sell 1% of your shares. For the most part this will have 20% in tax as a long term holder.
Also, buy backs give the company more flexibility as a 10c dividend requires a spare $25.7m in one shot plus a buffer. Buy backs can occur each day out of cash flow generated and received weekly.
The next point is if an IPO is intended or dare I say an out right sale of Akara. Then shares on issue is a very, very big deal. This is a possibility as should have some airtime.
While 50c dividends for the next 20 years is Nirvana to all. It is not that simple, unfortunately, as even I would take that deal. The chances of KCN just mining very well in Thailand and paying a great dividend is zero. Yes, you heard me correctly, zero percent. Hear me out. Before, we have even got full production and still limping along, there is talk from the top of another project. So, now you introduce a number or risks that are really very large. There is a history of this and it is not good. There is location risk, price risk, political risk, metal price risk, exchange rate risk, global war risk, execution risk, time zone risk, etc etc. If everything goes right, your dividend will fall as profit is funneled into some new venture while it is takes years to develop. If things go wrong, then you are stuck in a non dividend paying entity using good money to salvage another project and let me tell you, the team at the top still get paid.
So again, I'll reaffirm, buy back shares with every cent until we are at fair value. Then, lets open the debate for a dividend.
In the mean time, the correct debate is what is the enterprise value of Kingsgate?
(20min delay)