Kidman (KDR) - World Class Asset + World Class Partner ='s?

Thomas Schoenmaker

Alpine Capital

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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Thomas Schoenmaker
Director and Head of Wealth Management
Alpine Capital

Tom is a Founder and Head of Wealth Management. Since 2012, he has been running the Alpine Model Portfolios, focusing on macroeconomics and tactical equity positioning. These portfolios were initially created as a solution for "core wealth...

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