London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East and have access to Premium Chat. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Exactly per forecast...Ride 'em, Cowboys!
Bit surprised we went down today given the conclusion of the Red Rabbit extensive drill programme. Got to look forward now to an updated resource and extended life of mine early in the new year. That’s the news that should drive value. Hopefully that will then be followed by a new mine plan and new reserve. There was nothing today that should have done anything else than add value. Weird.
VanVan just hit the right note with "By the end of February I suspect the landscape here will be quite different. Best to wait and see what transpires imo". This last day of share movement seems to indicate an appreciable fluctuation...around 7% to my rough calculation. Sells and buys have been about equal and there have been no RNS or any further information or presentations from the Company. Nevertheless a 7% profit has been possible without ramping, deramping or any sort of distraction. I think it's going to be a roller coaster ride for some time folks, prodded with rumor and occasional news from our BoD. Better get used to it....perhaps until Easter.
"So the company swings back with this deal towards a purer exploration agenda, but seems to be at the price of giving away productive and very profitable W.Turkey assets at a knock down price where no help from a new partner is even needed. "
Pretty much sums it up, the only action is to pay a share dividend because there is just no justification in holding this share if it keeps going back to the beginning of the Lassonde Curve on a new pasture and using the profits from the previous one for that.
Besides which what is this paying for local expertise, some sort of mafia tax?
Evening VanVan, John, Joe and everyone else here. I have read this weekends‘ posts with great interest and agree with so many of the points made and fully understand the different views.
The bottom line is the proposed deal is very divisive when I’m sure many of us would have wanted something with a clear benefit that we could all agree on.
Just to add something else into the mix, which has crossed my mind, is that the deal could be considered as a hedge against a fall in the gold price. That is to say, if the price were to fall, then future profits would be lower and the deal would be viewed in hindsight as very much in the interests of shareholders.
However, if the gold price rises, then the deal reduces the exposure to the value of the increasing gold price.
In that sense, it comes down to where you believe the gold price is heading and maybe we will have a clearer view on this over the next couple of months before deciding whether to vote to approve the deal.
As you may expect I don't really agree with some of your points. I'll address them individually
1, The argument you put forward is essentially logical if you assume that a MC of c. £23m truly fully valued Ariana Mk1. In fact yes, then it would then be a cracking deal. But since we have both been on record for several months saying that on fundamentals (not least of which was the imminent flood of cash from a 51% interest in W.Turkey operations) AAU was 2,3,4... times undervalued than the argument doesn't really hold water. And the BOD are on record as saying themselves that the MC very significantly undervalued the company, and you do normally put faith in their judgement
2. What monetarisation? A small special dividend which Dr S has said will be a proportion of the $5m received for 17% of Salinbas? Given the unchanged SP punters could monetise similarly by selling a few shares - AAU Mk1 was over 2.40p in July if you remember.
3. Fair point, provided you think the growth percentage will exceed the proportion of assets given away.
4. Again fair point
Yes more results due. At one time this old saddo would have been excited by that prospect. I ought to get out more I know. Now I think ok, but since we will only have a 23.5% interest in future then I'm in no hurry to read it. I'm not being facetious, this company no longer excites me because of the proposed asset & control giveaway.
I do have faith in the BOD leading Ariana Mk1. Not so sure now they are playing with big fish who have sharp teeth. Essentially Dr S is a fantastic geologist. I have met and respect him. Not sure his heart is as CEO if that means handing over the geology to others. So the company swings back with this deal towards a purer exploration agenda, but seems to be at the price of giving away productive and very profitable W.Turkey assets at a knock down price where no help from a new partner is even needed. The AAU/Proccea JV should remain as is imo. Exploration focus is not the company profile I want. The only thing I can think of to challenge my view on this deal is that MDV seems supportive. He, as we know, is a large (maybe the largest private) shareholder. That almost alone makes me question my current judgement, I have met and respect him too.
Finally, I think Joe has made the point well but I reinforce that I am not to blame for the SP being c.2.20p to anything like the extent you imply. You flatter my superhuman powers! I have sold around 1/2% of the company equity. That is not enough to explain the drop, not only are others obviously selling large(r)) amounts but the SP drop also highlights that punters aren't buying. If this deal was that bloody marvellous then others would be mopping up mine and other sellers shares as soon as they hit the market.
I disagree that (presumably john's) "hefty selling has taken the wind out of Ariana’s sails". Last Autumn I moved a million shares out and subsequently back in and the sp didn't even twitch. The only thing that moves AAU seems to be either improved income ....real not potential ....or fears of share dilution. Let's just hope that 2020 will be Happy & Prosperous. Meanwhile Ya'All enjoy a Merry Christmas!
On the face of it there are lots of positive aspects to this proposed MoU.
1. A JV partner potentially prepared to give us in cash our market capitalisation whilst allowing using to retain 23.5% of the business.
2. Short term monetisation. Some who have held for years will appreciate this even if it means reduced revenue for the foreseeable future.
3. Potential for accelerated growth and asset monetisation.
4. Potential to raise our profile and attract Institutional support.
Shareholders will be asked to vote on the deal and will therefore be provided idc with much more detail. Perhaps this week we will get the drill results from Red Rabbit which is hopefully leading towards understanding underground mine potential, a bigger reserve and extended life of mine. By the end of February I suspect the landscape here will be quite different. Best to wait and see what transpires imo. Good luck.
To be fair I think your hefty selling has taken the wind out of Ariana’s sails. In an illiquid stock this amount of constant selling took away any benefit we had initially from the surprise, potentially transformational news. So as someone said it isn’t really surprising the market appears not to like it, just that that isn’t really a true reflection, as it is skewed to one big seller and perhaps that created other small holders to also jump ship. I’m not saying we should necessarily come to a final decision yet, but for now perhaps hold fire thinking carefully about the questions we want answers too and wait for further details once DD is concluded. Kerim has done right by the Co. historically and on that basis alone I feel we should give him the benefit of the doubt during this interim period.
" the JV that Ariana are looking to earn in to will be based in southern and not Northern Cyprus."
Just goes to show how much real interest Im paying in AAU right now,
I do remember Kerim stating Ariana was more exploration focused, so have they got good value out of Salinbas?
Well I don't see 4p or more any time soon any more or I wouldn't have sold what I have!
Feel sad because I don't think AAU had a bigger supporter than me on this board. I just don't get this deal, at least not for someone who wants a return in the short rather than long term.
Tick up for you by the way!
ps Wonder what would happen to the SP now if the deal fell through - so Ariana Mk1 + the Cyrus announcement, especially as 'debt free' April approaches? Just a thought....
Yes, john, I concur with your last posting and especially the logic of your final para. Over the years I have spread my AIM investments among various minnow miners/oilies and start-up companies but now I believe the better route to riches might be to buy into the lenders and royalty people who seem to either cream off the top of successful entrepreneurial initiatives or snatch any opportunity (like vultures) if the borrower gets into difficulty. Yes...I'll stay with my 3p forecast by Spring (but hope your 4p is more accurate). At 5p I might consider cashing in 50% of my holding. Below 2.5p I'm outta here.
Sorry DJ, I was having a thick moment and misunderstood.
You sum it up well. I don't think much 'windfall' will be distributed as a special divi, in fact Dr S has already implied that the SD will be a % of the $5m that the new partner pays for 17% of Salinbas. The rest I guess including the $25m will be earmarked for exploration. Further I agree with another poster who pointed out that a large SD is very unlikely at least until the current share options have expired for senior staff, because the net assets of the company will drop and take the SP with it. I don't think we honestly expect the BOD to be that philanthropic.
I also agree with Benjie that I would expect regular divis to normally to be paid from regular income, but since AAU seem to be giving away over half of that then I would have thought divis unlikely until at least Tavsan is also in production and debt free - which is about 3 years away. Salinbas will be advanced undoubtedly, but only probably halving the 10 year time line to production so still too distant to boost SP in the short term.
In other words you are spot on. There is nothing to drive this price any more. You thought 3p by Easter, to be honest I though 4p or more by this time next year when the market saw Ariana Mk1 receiving large divis from a debt free RR operation and a positive road map to Tavsan in which it benefitted 51%. Now I see no driver. I have been selling, nearly 50% of my holding, but I think stopped now as I may as well hang on at these low prices because Ariana Mk2 is still attractive, just less in my opinion than its forebear. If the price rises I may well sell more. The new partner, whoever it is, didn't get big by playing nicey nicey with minnows like AAU. It will have used its size to drive a very very hard bargain.
Greetings john but I truly believed I had offered some reasoning. You suggested "This (the MoU) is a chuck it all in a bag, swirl it round, chuck it in the air and see how it lands sort of news". I fully endorse that.... hence my response " I really don't see anything now which will drive our sp seriously upward except a specified dividend and/or a detailed commitment by all signatories to any impending re-structuring". In the absence of very detailed information of what this MoU will entail for both the Company and also existing stock-holders, plus anyone else considering buying in, I really don't comprehend how there can be a dramatic upward movement of the share price at this time. Last week most of us had no idea that such a deal might be "on the cards". Show us the money!
As always respect your views. But this time we are not talking about the quarterly production results or some half expected positive drilling outcome. This (the MoU) is a chuck it all in a bag, swirl it round, chuck it in the air and see how it lands sort of news. Its a total seismic change to company structure, assets owned and indeed cedes majority control over the assets that AAU have nurtured and developed very competently over many years. So no, I wouldn't expect the SP to wander up a bit, pause for thought and gradually drift. If this is a good deal I would have expected it to have gone up and stayed up. And it very clearly hasn't.
I think there are two situations here (john). Firstly there was a general euphoria just before your Election when sterling rose quite dramatically against both the USD and the euro. It has now fallen back a little. Simultaneously many shares rose, including AAU which could be partly because of the potential deal and partly because of the general buoyancy which may have encouraged investments. Again many shares subsequently fell back. If I have gauged it right, having sold all my UK bank shares on the recent spike, the next phase will be doubts and concerns about managing Brexit and the inevitable "what ifs" scenarios which, with some scaremongering by the media", could well drive stock down and enable me to buy my bank shares back for less money.
How many times have we witnessed AAU shares rise a little on news and fall again little by little when the "excitement" wears off until there is a new kindling? So the current "downward trend" is hardly a surprise. I really don't see anything now which will drive our sp seriously upward except a specified dividend and/or a detailed commitment by all signatories to any impending re-structuring. Without this.... speculation about underground seams, alternative sites (or investment possibilities by the Company) is little more than "pie-in-the-sky", Smoke & mirrors, pure conjecture or wishful thinking projected on these chat boards. Current reality is the choice to hang in here folks or whizz off elsewhere if you've run out of hope and patience after so many years. Maybe I'll just hibernate for the winter. Enjoy your Weekend. Regards DJ
I hope the BOD are noting the downwards pressure on the SP, it clearly indicates that investors (including prospective investors) are not universally happy. There are not that many sells, but equally if Ariana Mk2 is such an attractive proposition compared to Mk1 then they should be asking why no one is buying either, especially as the SP is now barely changed from the pre RNS level.
Hi Paul, I think Benjie is correct - the JV that Ariana are looking to earn in to will be based in southern and not Northern Cyprus.
Kibris is only recognised by Turkey
Im interested to know how a UK listed company can operate in Kibris without questions being raised by Greece or the EU, even after we have left their 5**t show!
Paul - thanks for comments. I probably am getting mixed up in some way but if you can elaborate on Cyprus/kibris it would help understand where I’m going wrong
Benjie you are getting your Cyprus and Kibris mixed up.
As for Ariana it’s hard to fathom out what will unfold, I think most were looking for a multibagger around now or next year. This now seems not to be the case with the Kibris opportunity, I’m happy to keep holding in my SIPP and ISA until 2030 along with Panther metals.
I was in Mariana and now sit on Sandstorm and I hold a considerable amount in Greatland Gold so I’m happy so far.
I agree with all the sentiments but what I would say is that if the directors recommend the deal then given their expertise and knowledge they should be supported by the shareholders
However clearly the dynamic will have changed massively and if there is an unwillingness to redistribute a substantial amount as a special dividend then it would be reasonable for the shareholders to expect an updated business plan so we can see what they intend to do with it and then whether as a shareholder it ticks the boxes. I don’t agree that it would help to fund an ongoing regular dividend because my own personal view is that regular dividends should be paid from sustainable profits.
Given the uncertainty expressed from the BBs I also think that Ariana could benefit from appointing a non exec director (possibly a shareholder with a decent shareholding) onto the board to oversee the private investors interests. I think if they did this it would benefit the share price as it would give shareholders some confidence that their interest / voice is being heard. How about putting yourself forward!! I’m staying invested but am hoping for an updated business plan before the deal is concluded. By the way Cyprus scares me only because I read a book recently about money laundering and the Panama papers and the amount of dirty Russian money in the Cyprus economy. In fact I think it was the Russians would bailed out the Cyprus banking system not that I’m in any way suggesting Ariana would be involved in anything dodgy. Sorry for waffling on!
All the best
Hi Benjie, on the face of it, the cash is a positive and the special dividend will be welcomed (apart from the tax), but as you say, what then?
It is after all just cash and is not going to generate any immediate benefits. If it’s going to be used for exploration and development in Cyprus or elsewhere, I agree with Willowman that it might be as well to not do the deal and use the retained profits and cash to develop Salinbas to a point where the potential value of a deal is much greater.
The numbers don’t really tell me anything in as much as the cash & foregone profit pretty much balance out rather than there being a clear incremental benefit.
Where I find myself now is stuck on the fence, having formulated a strategy to hold and at some point partially cash out with a free ride on the remainder and now I am uncertain whether the new proposal fits with my previous timescales, I am having to decide on something that I basically did not want to have to make a decision on without a clear view of the incremental benefit and I am having to formulate a new strategy based on what I think may happen in the short term, medium term and long term. Ok, so there will be events such as the recent Syrian skirmish and movements in the gold price that were always going to throw in the odd curve ball and it would be foolish of me to think that everything would go according to plan, but I still feel a bit miffed and underwhelmed by what is on the table, a bit like John, but hopeful that in time, we will all be better off as a result....
Thanks strangerstill. I have just posted it.
Hi VanVan I hope that the world is ok with you.
If you think my missives are good enough to copy to ADVFN by all means copy them you do not need to keep asking my permission just let me know that you have done so.
I suspect that whichever strategic path Ariana chooses long term shareholders will end up making a substantial profit.