interesting that everyone is focussed on the tangent, rather...

interesting that everyone is focussed on the tangent, rather than the main point; the research and the $2.50 valuation!

This is a very solid piece of detailed research that is top drawer and comes up with what looks like a reasonably conservative valuation of $2.50 ( albeit a speculative buy) - Kudos to the Don for finding, reading every word forensically until the end and sharing!

It no doubt is adding to the SP positive movement with a wider audience reading and seeing the upside. It should be compulsory reading for all holders.

I share the view that an IPO for NE is a long bow. my own view is that the answer is for the advice they will offer to meet the Q2 working capital shortfall, assuming there will be some corporate advice from Canaccord about repaying / rolling over the Nebari loan.

from page 3

Net asset valuation
We estimate a risk-weighted NPV5% valuation for KCN of A$2.50 per share which
includes a nominal value for Nueva Esperanza in Chile and unmined inventory of
A$30m and is net of corporate costs/net debt, noting KCN has no hedging in place.
Our conservative modelling suggests additional funding of A$45m is required in
JunQ’24 to cover refinancing of the existing drawn Nebari facility and ramp-up phase
in 2024, and we assume this is funded by additional debt (however some equity may
be required subject to market conditions). We add a small risk adjustment (risked at
80%) for near-term funding risk (and country/permitting/ramp-up risk).

as an aside, i feel this would have suited KCN much more if it was initially structured as a longer term loan. If it had been for more than 1 year, it would have been a Long Term Liability and meant our working capital was much stringer and we would not have had the material uncertainty issue qualifying the Financial Statements etc. etc.

Anyway, it wasn't drawn for longer than 12 months and the SP suffered. The upside is that as this is resolved in the coming months, loan renegotiated and production ramping up, the qualifier about a going concern will also expire and we get a clean audit report, the SP wil continue to appreciate.

All good for the SP, but I don't see an IPO.

changing my sentiment back to buy....

Wazz