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Hi VanVan, only 2 options to return capital to shareholders as far as I know. Dividend or buyback of shares. Given MDV’s strategy of moving shares into a pension, the previously announced special dividend seems the more likely. Just needs the share premium account to be cancelled either by a Court Order or, assuming they have the necessary permissions, 75% shareholder approval to create the distributable reserves to cover the dividend payment.
As to an ongoing dividend policy, I have no idea whether that’s likely. Maybe a mixture of dividends from future profits plus acquisition of exploration & development projects would appeal to most shareholders.
Cheers, Ash
Yes, Benjie, I'll readily go along with your last sentence. There is every chance of a rally this year but after some sort of "special dividend" I can see a lot of reasons for a "dormant" period and we are all too aware of how Ariana shares slowly drift downwards when the hoped-for flow of discoveries and increased production is absent. That's when we have to choose between holding longterm or investing in potentially quicker returns elsewhere.
As for gold, VanVan, you and I have differing perceptions on buying into it. It should be remembered that taxation on my side of the pond deems "collectibles" , especially precious metals, antiques and works of art to be fair game for capital gains whereas at least share trading profits may benefit from a lower rate of tax if the stock has been held more than a year.
It may be that, having secured your "freedom" from the European Union, ya'all may be hoping to benefit from closer trading etc with my country but therein could be a bumpy ride no matter who takes our Presidency next year. You know how unpredictable Trump is. However should Sanders take the reins it is likely that anything linked to Wall Street could well be out of favor and those perceived with an affinity to the dreaded One per Cent could be a taxable target. That might not encourage investors. It could spill over to affecting global corporations....including yours!
All fair comments Benjie.
I would just add that I think the way the potential deal is being structured is primarily to reduce tax liabilities . Less hard cash on which we would have to pay tax and more via earn-ins by Proccea and the mystery partner to accelerate Salinbas.
The cash that is received for Salinbas from the potential mystery partner (say £5m) will be paid out hopefully. I see this more as a capital payment rather than a dividend. Ash may have a view.
As we know they are considering a defined dividend policy, potentially including the facility to buy back shares, but this needs some changes to the capital account which I believe Michael and no doubt the Accountants are addressing. Once this is done I hope they will announce a formal dividend policy, as I'm sure this will attract a new class of buyer.
I've been reading the book "How to Invest in Gold & Silver" by Don Durrett (www.GoldSilverData.com) which for me stresses two things. How few "Juniors" make it all the way to production and beyond and secondly how apparently undervalued we are.
If this deal is confirmed with the large pay-out and the vision "to become one of the premier gold mining companies operating in Turkey" is articulated again, I'm very confident of further significant re-ratings. As I think we have discussed before you really need a Mkt Cap. of at least $50m if not $100m to be taken serious by the market. For some reason they perceive risks falls with size. Bringing in a major Turkish construction and engineering Co. will I think go a long way to eradicating risks that investors still perceive. Next week will be interesting. Let's hope they complete D.D. prior to the end of March.
Hi van van
Nice post. I think the gold price will continue to prosper in the medium term especially as the health crisis will likely give rise to money stimulus from the elite politicians who will not wish to see their wealth fall during such a crisis so money printing low interest rates etc all good for gold. As far as Ariana is concerned I have been a long term holder but like johnpwh I’m not sure whether the deal is in the long term interest of the company. So for me it has become a short term play and I would hope for more clarity once the deal is done The way that I think it will play out over the next few months is that the deal will happen, the share price will rally, they won’t announce a dividend until the results in June to give them time to decide how much and then hopefully they will announce future plans including what they plan to do with any surplus cash not returned to shareholders which I think will be as much as they can get away with. If their plans are to sink a small fortune into Cyprus I’ll probably sell as I would have sleepless nights wondering where the money was being channelled! Anyway I think we’re safe for a share rally in the short term
So what are we expecting to happen this week? Will gold & silver continue to increase in value on the back of the health crisis and the coming impact on trade (300000 containers not moving). Supply of parts to facilitate manufacture being hit very hard with the consequences yet to be felt. EU budget problems of course, more QE, more desperate cuts in interest rates and more negative interest rates. Carbon tax scenarios and moves to achieve zero carbon emissions all putting more pressure on margins and global business confidence. Flight to safety - gold & silver.
In this tense environment with more expecting the end result is recession, how will markets reaction, in particular the PM markets. Good for gold & silver producers? Are we entertaining transformational plans just at the right time to maximise production over the next 2/3 years? Any thoughts?
Fair enough. I agree that AAU is still very investible, I'm still in too
John
Hi John, I have felt for a while that the proposed deal is probably giving away too much of RR and reducing exposure to the increasing POG, but the research I did recently leads me to think that there is a strong possibility that developing Salinbas without the new partner might not happen.
I guess it’s all about striking the right balance in order to grow AAU in the long run.
Along with everyone else, I have formulated a strategy to achieve my own goals over the next 3-5 years. My investment in AAU may vary in that time, but if all comes to fruition, I will certainly be invested here for the long term and on that basis will be supporting the proposed deal.
Cheers, Ash
On last quarter we saw strong gold prices and good production levels with diminishing grades. I think this quarter is likely to be the highest revenue we are likely to see from Kiziltepe without investment in Tasvan. So on that basis we are likely to see see free cash generated drop from about $8 million. Of that we will get half, so a max of 16 million a year, less royalties . The mine life of kiziltepe will diminish with time, so for us to hang on without the JV we would need to hold onto current profitability for nearly 4 years with record gold prices which will drop at some point. I think banking the investment may be the sensible decision
Ash
I know you have expressed some apprehension about the deal. Do you think, like I do, that the increase in profitability of Red Rabbit (due in part of course to PoG/PoS performance) should now make holders question the terms of the proposed JV and whether to vote in favour? I would remind peeps that the JV will reduce (financial) interest in RR from 51% to 23.5%, a reduction in excess of 50% for a one off $25m payment.
Hi RD2U, good to hear from you. Hope you’re enjoying today. I’m not an expert in the dark arts, as you put it, but happy to hold and wait when the RSI is below 80%. I also look at how the sp is moving between the bollingers. AAU has been in the upper half during the recent rise and tends to pull back quickly when it moves over the top band. That’s it for my TA. Still prefer the fundamentals and will base my long term decisions purely on those.
Cheers, Ash
This message is aimed excuse the pun not deliberate. Reading the board recently there is in my opinion an element of bullishness regarding the SP. And the SP being under priced. I was very glad to receive an important bit of technical data care of the fundi, which is Ash. For those not familiar with the word fundi, you will have to google and check out the Wikipedia meaning! Not only is Ash a master of the AAu fundamentals, he is also a wizard who is knowledgeable of the dark arts and technicals when he advises that the RSI is currently only 68%? What time frame and what horizon period is this from? I presume daily and annual period n’est pas? Are we at the point where we should be “fearful” rather than greedy? Interesting Ash you posted your average of PP of 1.75P This assists me to gauge your bullishness and confidence of an increasing and higher SP. I did not wish to label you in the category “a ramper” . You once posted a message a couple of weeks ago setting out aau’s strengths and weaknesses, a mini SWOT analysis, in very clear terms. You left out your own target price, leaving it up to the individual punter/investor/reader to determine their own their own target price. At these levels I am close to my first target price and I am weighing up whether to de- risk a portion of my holding! With an average of 1.45 PP it maybe in my best interest to realise some of my gains. In my experience I have held on to shares too long, especially aim shares and watched my holding diminish by 90%. Not this time I cry! I have some big losses to recover , so the posting of a SP of 6P! suggests to me that I should be fearful!!
In the mean time I wish to congratulate this board as I have enjoyed its contents for several years and find Ash, Van Van , John and desert Joe whose contributions on this BB as well as other goldies like HUM, SHG are all very informative and have helped me in this period of stroke recovery as I no longer have the mental dexterity and research capacity that I once did.
Best Wishes to you all
RD2U aka Rory the Rhodie