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Not the RNS I was expecting. In previous years the annual report would have been out by now.
Nothing spectacular in the Q1 figures IMO. Usual statements of a 'harsh Kazakh winter' and a 'grade improvement with the new equipment', which was to be expected I suppose.
It was interesting to see milled ore increase, which means they are increasing processing (albeit slowly) and using up some of the stockpile.
So a 'solid' if unspectacular start to the year. Big question of financing and what they have planned for next 2-3 years will only be answered in the full report....hopefully answered!!
Reasonably decent update.
Mined ore was down on last quarter but it sounds like that was weather related and overall it was still decent.
Good throughput for processing with over 150k tons processed and I assume some of that was lower grade inventory so the fact overall grade went up marginally on last quarter was also decent.
Run rate though is 32koz this year based on Q1 so someway off the targeted 38koz, however if they can mine and process 150k tonnes per quarter and improve grades further potentially 35koz can be hit.
Not sure I like the statement at the end though - an update on annual results will be given shortly. Why an update and not a release of the results?
Thought there would have been a bit of excitement here this morning with that RNS. 42% increase in revenue is not to be sniffed at.
It can take a while. I think they use carrier pigeon!!
Has anybody actually ever managed to get hold of IR at Altyn? I have been trying yesterday and today and they only have a remote reception service who can only pass on messages.
Good to see the share price stable despite all the turmoil though
So quiet here. Guess an RNS must be imminent now surely?
Need to get the results out soon or the market will start getting nervous there are some impacts from the Russian situation that haven't been disclosed or are holding things up.
If we follow the pattern of last years announcement the RNS will be tomorrow at 6:21pm. Hopefully they won't make the same mistake twice!!....make themselves look like they are trying to hide bad news.
Gold production was forecast to be 30,000 oz (2021 financial year), and it will be circa 28,500 oz.
It will be interesting to see whether they stick to their forecast to reach 38,000 oz gold production next year. According to company figures they 'planned' to spend $26m on underground development alone next year, plus all the other investment of course. I can see a rethink on the cards. Those gold plated executive toilets will have to be sent back (hopefully they kept the receipt).
RB, as you rightly say the financing is the key unanswered question. Finance may be even more difiicult since the start of the war....with finance through Russia problematic to say the least (after talk last year of a Russian bond!!??!!)
I expect they will bumble along , making a profit but not enough to leverage the business into the next league.
We should be getting 2021 FY results any day now.
Looking back at that Sept '21 presentation I think they should show Revenue $50m ; PBT $15m.
They should also announce that 2022 production is estimated at 36-40k oz.
But the million dollar question is where is the projected $62.9m Capex in '22 and $42.7m in '23 coming from ?
If they can make any credible announcement on that front then this rockets.
I'd love to hear something like this ...
"Today we have issued 5mm new shares to Freedom Finance for gross proceeds of $7.5m. In addition Freedom Finance have extended a $75m line of credit to ALTN @ 10%. With this additional capital injection and funding secured we believe we can reach our target of 60k oz production by 2025 and then fund future growth to our 100k oz target organically."
Share price rises to 250p instantly ... FF get a paper profit of $7.5m plus $7.5m annual loan interest ... and the prospect of owning a 33% stake in a company well on its way to a $250m market cap. Wouldn't that be nice !
Judging by the amount of drilling undertaken since the last update at Teren Sai and Sekisovskoye, I believe their is potential for a very substantial increase in resource/reserves.
Isn't there suppose to be a resource update very soon, and more concrete plans for developing Teren Sai?
In 2012 following the open offer, when the major shareholder African Resources total shareholding reached 59.884 per cent the company was under AIM rules.
At that point in time, any other investor that did not like having shares in a company with a major shareholder (with more than 50 per cent) could walk away.
It was stated at that time and on later occasions that it was their intention to maintain a listing for the benefit of all shareholders. Their website still states "... our progression to the Main Board of the London Stock Exchange in December 2014 represented not only a natural step in our growth strategy, but also our commitment to the London investor base and regulatory environment, and we remain committed to meeting best practice governance standards...."
In 2014 the company moved from AIM to the Standard Segment of the Main Market on the London Stock Exchange.
At that point onwards the rules for The Panel on Takeovers and Mergers apply.
However as the major shareholder was already more than 50%, they would have been granted an exception by the takeover panel from rule 9 of the takeover code.
The only limits in terms of % shareholding I think that now exist are that they should not:
1) go above 90% = must make cash offer for all remaining shares. Would breach listing rule of maintaining at least a 10% free float.
2) go below 50% = rule 9 of the takeover code would then re-apply if they later went back over 50% (unless they were granted another exemption from the panel)
Their percentage shareholding has since 2014 gone up a bit, then down a bit (they were diluted by new shares being issued). They also chose to have their bonds repaid in cash rather than convert to more shares.
So there is not a concerted trend to buy up shares at every opportunity
The company now is:
UK registered office
UK share register
UK shares main market (standard) listing (small secondary KaSE listing)
Kaz bonds AIX and small secondary KaSE listing
Kaz Mine, Plant, licences and operational offices.
Although the Moscow Stock Exchange has resumed issuing new bonds, the level of activity is very low, the interest rates are very high 17% - 20% and many russian banks have stopped all currency transfers to other countries except for rubles.
Well I've come back in again - pretty much the same price as exited at. I was concerned that Kazahkstan could follow down the Belarus path and throw its lot in with Putin, given Russia supported the current regime in the recent trouble, but they've strongly pushed back and are supporting Ukraine's right to sovereignty. So political risk seems about the same as before the invasion.
Hopefully a Q1 update and 2020 financials, combined with a higher gold price should push the SP back up a but - I guess the main question as that moment is how they source the capital needed for further expansion as clearly issuing bonds through Russia is no longer an option.
RB, the takeover code does not apply to AIM stocks that are registered overseas. They are not circumventing anything. HTH.
I’ve exited for now - too much political risk here at the moment. Hopefully things improve and there may be an opportunity to re-enter even if ultimately I have to pay a little more than I sold at.
It's a fair reservation for sure RB but a couple of thoughts:
Firstly if that were their intentions they would not bother with any bullish comments such as today's in relation to how cheap they think the business is at current SP. The other point is, even in that worst case scenario, we still gain so in theory no downside to worry about.
A bigger risk for me is a voluntary delist where they cite lack of liquidity and no access to capital etc hence listing not required. I believe this only requires 75% S/H vote so could possibly get that through with connected parties ?
In such an event it is not clear to me what we would get out of it but no doubt a scramble for the exit would ensue in the 20 business days notice required before the delist comes into effect.
I feel that Altyn is overlooked and undervalued - I generally believe our mkt cap should be double it's current level.
I'm also happy to know that Assaubayev family holding is at an average of around 250p - so they won't accept a lowball offer from an outside party to buy the company.
But my one big reservation, is I don't understand how Assaubayev's have been able to circumvent the takeover code and are allowed to hold almost 70% of the equity. I don't know what prevents them from offering any price they want to us minority shareholders to takeover the whole company. I know a compulsory takeover requires 90% of the vote, so they wouldn't get that, but what if they offered 180p ... higher price than we've achieved in the last 12mths ... would they get sufficient sellers ?
600LT, it was not a flippant comment. It is a fair question, can they grow organically?
Yes they probably can (assuming gold remains high). But they have a very aggressive expansion plan and IMO that needs quite a lot of finance. Hopefully with increased cashflow the amount of finance can be reduced but at the very least the finance will be easier to find & on better terms.
Your are of course correct. My flippant comment was more to illustrate the amount of free cashflow which may soon become available
"....just a 10% rise in gold would probably allow them to organically fund the next level"
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It sounds like a good idea. I would love it if they could self fund the mine development. But realistically it could be a precarious thing to do because even a slight drop in price of gold would impact that investment.
'Probably' what will happen is that increasing gold price and increasing revenue would make finance easier to obtain at reasonable finance costs. So hopefully they can get the finance ASAP and leverage that money to increase production.
The recent unrest in Kazakh and possible Russian sanctions (if there is a war) may be a factor.
spike501....at this rate (and growing) of production just a 10% rise in gold would probably allow them to organically fund the next level