kenyan voodoo

Some bad magic going on between Perth, Nairobi, Sydney, Melbourne and London. Perth has the company management and directors. Nairobi has the Kenyan Government, Sydney Melbourne and London have most of the investors. Reputations of very good people are at stake, not to mention many millions of dollars of aussie superannuation funds held by the big investors.

It doesn't look promising. I am sure the company management and directors are working 24/7 in getting this problem resolved. I really hope they are successsful.

It is hard to be clear about what is going on simply because the company is not making any statements therefore this post is just conjecture. So I could be very wrong. But we do know a few things
1) the disclosure document for the rights issue stated that that the Kenyan Mining Legislation was currently being reviewed and they could not advise what impact this would have on the company. So the company knew that the legislation was being reviewed and, apparently, had no idea of what the Kenyan Government was planning to do. This raises some serious questions not only about the Kenyan government but also about the management and board of the company. The obvious question is, "Why didn't you know about this?"
2) I think the company doesn't have enough money to finish building the project because the bank facility has not been drawn down. I think it impossible for the banks to allow the drawdown of the facility when there is a question about the ownership of the project. Simply, the how much and when cashflows from the sale of product will flow back to the banks for repayment has to be unclear until the ownership issue is agreed and understood and then made legally enforceable and in a manner acceptable to the banks. This might happen quickly but possibly not quick enough.
Get the bank loans drawn down and the project sails along.

For my money the risk is too high.
This isn't investing now, this is punting. If the banks don't stump up or decide to stump up less than before then equity holders will be asked for more cash. I'd buy in around the issue price when there is more clarity.

good luck to all shareholders but I think some better african magic is needed here.

cheers
omg