Kidman (KDR) - World Class Asset + World Class Partner ='s?
KDR has been a roller coaster for the last 12 months. A world class Li discovery, followed by a court case by which they stood to lose their newly discovered assets, then a resounding win at court, then finally a deal with the number one Lithium producer globally in SQM (Sociedad Química y Minera de Chile S.A. NYSE:SQM). We have written about it along the way, thinking the stars would align eventually. The fact that KDR is trading below levels seen during the court case, and ~25% below the highs of the announcement of the SQM JV, presents a significant opportunity to assess what is the first fully integrated Li project to be built in Australia. We can also understand that the register, which was ~80% retail wanted more immediate satisfaction, a takeover or a deal at a higher valuation. However, the choice for KDR was stark; significant capital dilution, and progressing it alone without the experience to take advantage of a world class resource, or funding with a world class partner and having the option to participate where all the margin is, downstream. With a $180m market cap, this value is yet to be realised.
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Tom is a Founder and Head of Wealth Management. For the past 10 years, he has been running the Wentworth Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core...