Local equity market in director buying spree
Business
A trend has emerged where company directors are buying shares in companies they hold directorships of and this fashion is happening across all the sectors in the Botswana Stock Exchange.
Market watchdogs and observers see this as a movement by shareholders to increase shares since share prices are currently low hence these will be good purchases.
Before the end of markets last week retail moguls Ramachandran Ottapathu and his long-time business partner, Farouk Ismail, each bought 5 million shares of Choppies when the share price was 60 thebe; together amassing 10 million ordinary shares at P3 million.
On Thursday it was announced that Choppies founding shareholders bought shares from their own company, Ottapathu 8 million shares worth P4.8 million and Ismail 5 million shares at a tune of P3 million.
The Choppies Directors claimed the 13.23 million shares transaction that went through the market on Tuesday. The shares were almost evenly split between the company’s Chief Executive Officer and a Non-Executive Director — and all went through the market at the prevailing market price of P0.60/share, said Motswedi Securities on Thursday.
Another Choppies shares transaction done by director, Ismail, was announced by the local stock exchange midweek. Ismail, alone on Tuesday, bought 365 000 shares with the same share price of 60 thebe and they costed him P219 000. So far Ismail spent P3.2 million to buy shares from Choppies.
On Tuesday Motswedi Securities said trading on the local exchange accelerated, as the number of shares traded climbed to 19.44 million with a turnover of P13.21 million, from the previous day’s modest activity of 62 100 shares valued at P551 000. Talking of Ismails midweek transaction, the stockbroker said the market saw another large block of Choppies shares moving across the board, with this block being slightly bigger at 13.27 million shares valued at P7.96 million.
The same week saw Choppies holding the stranglehold of the local market, claiming the overall liquidity with trades that crossed 10. 4 million shares, according to Motswedi Securities. This being a little over 70 percent of the total 14.7million shares that went through the market in the week. The total turnover was at P11.4 million a considerable increase from the prior weeks turnover of P3.5million, said Garry Juma and Salome Makgatle, Motswedi Securities researchers.
Both the two directors in a brief encounter with BusinessPost this week acknowledged their share buying galore as a vote of confidence on their enterprise. Only our confidence in the company, they both agreed.
The two directors buying spree came four days after Choppies went for the 2018 and 2019 Extraordinary Meeting concurrently. According to fund management firm Kgori Capital, in the 2018 Extraordinary Meeting, all resolutions were passed by 82.0 percent and above with the exception of: Ordinary Resolution 1, approval of the 30 June 18 financial statements, 46.4 percent of shareholders voted against and 53.5 percent voted in favour. The other exception was a Special Resolution, ratification of donations made, where 39.0 percent of shareholders voted against and 60.5 percent voted in favour.
For the 2019 meeting, all resolutions were passed by 81.5 percent and above with the exception of; Ordinary Resolution 1, approval of the 30 Jun 19 financial statements, 46.5 percent of shareholders voted against and 53.4 percent voted in favour. Again, the Special Resolution of ratification of donations to be made won amassing 60.4 percent against 39.1 percent votes.
This month has already seen six deals involving property giant Turnstar Group Managing Director, Gulaam Abdoola. Two of the deals he was dealing in he dealt in his personal capacity while the others his associates were the ones purchasing the shares. On Tuesday Turnstar announced that Abdoola has bought 3000 shares at a share price of P2.50 for P7500.
Last week, before the markets closed, Choppies directors in their buying spree were joined by the Managing Director of property giant, Turnstar, announcing purchase of the companys shares by a director. According to Kgori Capital, Turnstar Group Managing Director, Abdoola, bought 10,699 shares at P2.20 P2.40 per share.
The company last week Thursday further announced that the Managing Directors associate Moosa Abdoola, also amassed 5,000 shares at P2.50 per share and the time when the share price was P2.50 (a year to date comparison of -11.03 percent). Last week Wednesday another associate of Turnstar Managing Director, Abdoola, by the name of Ahmed Ismail Patel, purchased 1 000 shares for P2500.00.
The same day Mrs Hawa Amod Abdoola, an associate of the Managing Director closed in on 3000 shares at the total transactional value of P7500.
Turnstar closed the week 13.6 percent higher at P2.50/share. The price gain shaved off almost half of the stock’s year to date losses, to close at negative 11 percent. It is worthy to note that this gain in Turnstar was the first positive price movement on the Equity market since the 7th October 2020 (about 2 weeks), said Motswedi researchers.
Juma and Makgatle highlighted that a large chunk of the gains in the week coincided and sometimes were an effect of transactions by a Directors and an Associate of the same Directors trading.
The BSE indexes gained in the week a welcome effect of the gain in Turnstar. The Domestic Company Index (DCI) and Domestic Company Total Returns Index (DCTRI) gained 0.39% and 0.63% respectively says Motswedi Securities recently released weekly update.
In the first two weeks of October, it was Choppies retail rival Sefalanas Group Managing Director, Chandrakant Chauhan, who bought a total of 273 756 shares in a back to back market purchase transaction. In those two weeks Chauhan used over P2 million to make those transactions. The companys share price remained flat at P9.30 during those transactions and it remains at the same price before the closure of this weeks markets.
Chauhan bought shares before Sefalana heads for their Annual General Meeting which will be held virtually via Microsoft Teams, on Friday 30 October 2020 at 16H00 for the purpose of transacting the following business. One of the major business decisions will be to ratify the appointment of Susanne Swaniker-Tettey as an Independent Non-Executive Director with effect from 1 October 2020. Swaniker-Tettey is Chief Financial Officer of De Beers and is a Chartered Accountant with 21 years post qualification experience with extensive experience in governance and compliance.
The same decision will also be on economist Mr Moatlhodi Sebabole, who should be appointed as an Independent Non-Executive Director with effect from 1 October 2020
There will also be matter worth noting like the resignation of Dr Keith Robert Jefferis from the Board with effect from 31 May 2020. Reginald Mootiemang Motswaiso also retires in accordance with the Articles of Association with effect from 30 October 2020. The same noting will be for Elias Moyo Dewah who also retires in accordance with the Articles of Association the same date. Former Vice President of Botswana, Dr Ponatshego H K Kedikilwe, will also retire at the AGM.
Prior to the presentation of its half-year ended 31 August 2020 on 1 November 2020, tourism outfit, Chobe Holdings, board announced that Groups results before tax for the period under discussion will likely be between 140 – 145% (approximately P147.2 million to P152.4 million) lower than that reported for the comparative period ended 31 August 2019 which amounted to a profit of P 105.1 million.
Despite the gloomy news, Chobe announced that on 9 October 2020 a director at the company, Adams Tuomey Chilisa Dambe, bought 104 355 shares at P9.49 per share and the Total Value/deemed value of the transaction is P990,328.95.
Business
New Khoemacau owners commit to mine’s multibillion Pula expansion
The future of Botswana’s largest copper and silver operation, Khoemacau Copper Mining, looks promising as the new owners, MMG Group, commit to the mine’s expansion plans. MMG, an Australian headquartered company owned by China, has expressed its dedication to doubling Khoemacau’s production and transforming it into one of the most significant high-grade copper operations in Africa.
Nan Wang, the Executive General Manager for Australia and Africa at MMG, stated that while the immediate focus is on maintaining a consistent production level of 60ktpa, there are solid plans to increase Khoemacau’s production capacity. The company aims to double its production from 3.65Mtpa to 8.15Mtpa, resulting in an increase in payable copper from approximately 60ktpa to around 130ktpa.
To achieve this expansion, Khoemacau has completed a pre-feasibility study on the project and a solar power initiative. The next step is to conduct a feasibility study, which will pave the way for increased production capacity. Additionally, Khoemacau has identified extensive exploration opportunities across its license area, positioning the company for an exciting new phase of development.
The current Khoemacau operation reached full production and nameplate capacity in December 2022, following over a decade of investment totaling over P10 billion. This significant investment allowed for an intense exploration program, resulting in the development of the most automated underground mining operation in Botswana. The first concentrate was produced in June 2021, and the product entered the export market in July of the same year. Throughout 2022, the company has been working on the pre-feasibility study for the expansion project, with the feasibility study scheduled for the following year.
The expansion plans will involve the construction of a new world-class process plant in Zone 5, where the current mining of ore takes place. This new plant will be larger than the existing one in Boseto, which currently receives ore from Zone 5. The expansion will also involve the development of new underground mines, including Mango, Zone 5 North, and Zeta North East. These additional mines will bring the total number of underground shafts at Khoemacau to six. The ramp-up of production from the expansion is expected to occur in 2026.
Khoemacau, which acquired assets in the Kalahari Copper Belt after the liquidation of Discovery Metals in 2015, currently employs over 1500 people, with the majority being Batswana. The Khoemacau Mine is located in north-west Botswana, in the emerging Kalahari Copperbelt. It boasts the 10th largest African Copper Mineral Resource by total contained copper metal and is one of the largest copper sedimentary systems in the world outside of the Central African Copperbelt.
The mine utilizes underground long hole stoping as its mining method and conventional sulphide flotation for processing. Resource drilling results have shown the existing resources to have continuity at depth, and there are several exploration targets within the tenement package that have the potential to extend the mine’s life or increase productivity.
The Zone 5 mine has already ramped up production, and further expansion in the next five years will be supported by the deposits in the Zone 5 Group. The estimated mine life is a minimum of 20 years, with the potential to extend beyond 30 years by tapping into other deposits within the tenement package.
In conclusion, the commitment of MMG Group to Khoemacau’s expansion plans signifies a bright future for Botswana’s largest copper and silver operation. With the completion of pre-feasibility and feasibility studies, as well as significant investments, Khoemacau is poised to become one of Africa’s most important high-grade copper operations. The expansion project will not only increase production capacity but also create new job opportunities and contribute to the economic growth of Botswana.
Business
Khoemacau Copper Mining to be acquired by MMG Limited
Khoemacau Copper Mining, a leading copper mining company, has recently announced its acquisition by MMG Limited, a global resources company based in Australia. This acquisition marks a significant milestone for both companies and demonstrates their commitment to continued investment, growth, and sustainability in the mining industry.
MMG Limited is a renowned mining company that operates copper and other base metals projects across four continents. With its headquarters in Melbourne, Australia, MMG has a strong track record in mining and exploration. The company currently operates several successful mines, including the Dugald River zinc mine and the Rosebery polymetallic mine in Australia, the Kinsevere copper mine in the Democratic Republic of Congo, and the Las Bambas Mine in Peru. MMG’s extensive experience and expertise in mining operations make it an ideal partner for Khoemacau.
MMG’s commitment to sustainability aligns perfectly with Khoemacau’s values and priorities. Khoemacau has always placed a strong emphasis on safety, health, community, and the environment. MMG shares this commitment and applies the principles of good corporate governance as set out in the Corporate Governance Code of the Hong Kong Listing Rules. As a member of the International Council on Mining and Metals (ICMM), MMG adheres to sustainable mining principles, ensuring responsible and ethical practices in all its operations.
Over the past 12 years, Khoemacau’s current shareholders have made significant investments in the development of the company. With approximately US$1 billion deployed in the project, Khoemacau has successfully transformed from an exploration and discovery phase to a fully-fledged operating copper mine. The completion of the ramp-up of the Zone 5/Boseto operations has set the stage for the next phase of expansion.
With the acquisition by MMG, Khoemacau is poised for an exciting new chapter in its development. The completion of a pre-feasibility study on the Khoemacau expansion and a solar power project has paved the way for increased production capacity. The feasibility study will be the next step in doubling the production capacity from 3.65 million tonnes per annum (Mtpa) to 8.15 Mtpa, resulting in a significant increase in payable copper from approximately 60,000 tonnes per annum (ktpa) to 130,000 ktpa. Additionally, Khoemacau has extensive exploration opportunities across its license area, further enhancing its growth potential.
The CEO of Khoemacau, Johan Ferreira, expressed his gratitude to the current owners for their stewardship of the company and their successful transformation of Khoemacau into a fully operational copper mine. He also highlighted the company’s focus on the expansion study and its vision for the future with MMG. Ferreira emphasized that the partnership with MMG will ensure Khoemacau’s long-term success, delivering employment, community benefits, and economic development in Botswana.
MMG Chairman, Jiqing Xu, echoed Ferreira’s sentiments, stating that the acquisition of Khoemacau aligns with MMG’s growth strategy and vision. Xu emphasized MMG’s commitment to creating opportunities for all stakeholders, including shareholders, employees, and communities. He expressed confidence in Khoemacau’s expansion potential and the company’s ability to realize its full potential with the support of MMG.
The sale of Khoemacau to MMG is subject to certain conditions precedent and approvals, with the expected closing date in the first half of 2024. This acquisition represents a significant step forward for both companies and reinforces their commitment to sustainable mining practices, responsible resource development, and long-term growth in the mining industry.
In conclusion, the acquisition of Khoemacau Copper Mining by MMG Limited signifies a new era of investment, growth, and sustainability in the mining industry. With MMG’s extensive experience and commitment to responsible mining practices, Khoemacau is well-positioned for future success. The partnership between the two companies will not only drive economic development but also ensure the safety and well-being of employees, benefit local communities, and contribute to the overall growth of Botswana’s mining sector.
Business
BPC Signs PPA with Sekaname Energy
The Botswana Power Corporation (BPC) has taken a significant step towards diversifying its energy mix by signing a power purchase agreement with Sekaname Energy for the production of power from coal bed methane in Mmashoro village. This agreement marks a major milestone for the energy sector in Botswana as the country transitions from a coal-fired power generation system to a new energy mix comprising coal, gas, solar, and wind.
The CEO of BPC, David Kgoboko, explained that the Power Purchase Agreement is for a 6MW coal bed methane proof of concept project to be developed around Mmashoro village. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy in the energy mix. The use of coal bed methane for power generation is an exciting development as it provides a hybrid solution with non-dispatchable sources of generation like solar PV. Without flexible base-load generation, the deployment of non-dispatchable solar PV generation would be limited.
Kgoboko emphasized that BPC is committed to enabling the development of a gas supply industry in Botswana. Sekaname Energy, along with other players in the coal bed methane exploration business, is a key and strategic partner for BPC. The successful development of a gas supply industry will enable the realization of a secure and sustainable energy mix for the country.
The Minister of Minerals & Energy, Lefoko Moagi, expressed his support for the initiative by the private sector to develop a gas industry in Botswana. The country has abundant coal reserves, and the government fully supports the commercial extraction of coal bed methane gas for power generation. The government guarantees that BPC will purchase the generated electricity at reasonable tariffs, providing cash flow to the developers and enabling them to raise equity and debt funding for gas extraction development.
Moagi highlighted the benefits of developing a gas supply industry, including diversified primary energy sources, economic diversification, import substitution, and employment creation. He commended Sekaname Energy for undertaking a pilot project to prove the commercial viability of extracting coal bed methane for power generation. If successful, this initiative would unlock the potential of a gas production industry in Botswana.
Sekaname Energy CEO, Peter Mmusi, emphasized the multiple uses of natural gas and its potential to uplift Botswana’s economy. In addition to power generation, natural gas can be used for gas-to-liquids, compressed natural gas, and fertilizer production. Mmusi revealed that Sekaname has already invested $57 million in exploration and infrastructure throughout its resource area. The company plans to spend another $10-15 million for the initial 6MW project and aims to invest over $500 million in the future for a 90MW power plant. Sekaname’s goal is to assist BPC in becoming a net exporter of power within the region and to contribute to Botswana’s transition to cleaner energy production.
In conclusion, the power purchase agreement between BPC and Sekaname Energy for the production of power from coal bed methane in Mmashoro village is a significant step towards diversifying Botswana’s energy mix. This project aligns with BPC’s strategic initiatives to increase the proportion of low-carbon power generation sources and renewable energy. The government’s support for the development of a gas supply industry and the commercial extraction of coal bed methane will bring numerous benefits to the country, including economic diversification, import substitution, and employment creation. With the potential to become a net exporter of power and a cleaner energy producer, Botswana is poised to make significant strides in its energy sector.