Katanga Mining Ltd Ord KATFF

RE:Any thoughts about the debt offer?

[bigguy56]

Well, frankly yes they could. And I just loked t the balance sheet numbes and they are indeed cary, especially in tis world of high interes rates. SO what in the world was this stock doing at 2.50 not so long ago?? Simply optimism and speculation. THis stock has the power to go up as we have recently seen. It is not a dead stock, but one certainly has to have alot of patience, and a job. I think we are talking about next Fenruary before we get a significant movement. BUt it is purely base don speculation. At the moment thsi company si a basket case. However, management is pouring money into Capital expenditures so ther emus tbe a strong reason to do that. It is all very speculative. ANd politically risky.

In face, when I look at it in the light of day my buying behaviour was very chart-driven and frankly quite reckless. I did not follow the nor,mal rules of picking stocks based on the numbers, not on tips from friends, other's opinions, articles (the 10 best..) etc. 

So yes they have a huge debt problem. Swapping debt for equity would be a massive dilution.. in fact since the equity is negative (1.5 B) at tis point it is even incalculable. Another eveil thing that could happen is a reverse split. On the other hand, if the rosy predictions we toss around here come true... they might pull it out. One thing I remember from the AGM was the % of copper in the ore. It is upwards of 3% and that is a hige number. Concentrations are usually in the 2% and less range, although I am nto an expert.

I compared with Vale, a mature divvy=paying mining company that has come out of a tough time. Vale has a Total debt/ equity of .4. Current ratio 1,21. Quick ratio .82/ 

Kat.. debt is more than the equity. Current .91, quick .51.

So I admit that this purchase was chart-driven and a bad idea on my part. I should have looked at the cobalt price and bailed. If they are doing around 350 M a quarter... well if you look at the cash flow... that is just enough to servie the debt. I am not sure if they are retiring debt (they might be) but it is going to be a long haul. We are hoping for a miracle if we lose the focus on the EV thing and copper demand.

THe fact that thre is  amajority shareholder is not good. tHey will act in their best interests and we have no voting power. i was at the AGM and the gentlemen from Glencore stood up and reponded to every motion and they were all passed. THere was no debate. It was only election of directors, but the principle is that we hav no power. THye can do what they want.

I am playing the chart on this thing and hoping to get out of it. If I cant, i have to live with it. I hope that the stock peaks again in fenruary and nothing drastic happens between now and then and I can get out andf avoid a huge loss. My biggest loss ever and something I will never quite forget.

I have no idea what the likelihood of a bad thing happening is... but it seems to me that without the promise of EV... something bad always does happen in case sliek this. It is inevitable. All we can do is play the chart.

My opinions only.