Katanga Mining Ltd Ord KATFF

Dont Take Up Rights Offering

[patels96]

To all minority shareholders, dont take up the rights offering as Glencore will take any unsubcribed rights and exercise it. If no minority shareholders exercise the right then Glencore will own approx. 98% of KAT which means minority have been diluted to 2%. However, if the market cap of KAT after the rights is about $6,000 Mil or $6 Bil (which I believe it to be given Co and Cu prices, progress on US-China Trade issues, and resources available), then that means the minority is worth about $6,000*2% = $120 Mil. Why did I say $6 Bil market cap? Well prior to the rights offering KAT had an enterprice value of about $8 Bil (which includes $7.3 Bil in debt and $0.7 Mil in market cap). At about $6 Bil in market cap and the proposed residual debt of $1.5 Bil the enterprise value of KAT after the rights offering is about $7.5 Bil 

Most Cu mines in the last 5 years have been taken out at a premium of anywhere between 20-30%, meaning that the $120 would be $144 if a 20% premium was assigned. This means that given the currently float of minority shareholders which is 261 Mil shares the price that Glencore could potentially take KAT private is 0.55 ($144/261)

If however, minority shareholders take up the rights offering this will increase the amount of shares at the minority level and depress the takeout price that Glencore will offer KAT in order to take them private. It is best for minority shareholders not to excersie the rights offering and just let Glencore take us out at a price anywhere between $0.45-0.60. 

I know it not much, given the high quality assets that KAT owns and the where the future is headed in terms of electrification and Co demand. but its better to recoup some of the investment then nothing.

AGAIN...the best we can do is NOT excercise our rights offering

Best,

[stockhunter20001]

Can someone smart verify @patels96 point? @topdop, @sogo? There are people buying the stock, may be there is some money to be made here, but there is a missing piece that many of us may be missed.