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Of course you couldve given those links yesterday I cannot understand anyone accepting a statement made by a commenter without it being backed.
..Katusa sounds desperate..that Kitco piece was 3 months ago.. a lot has happened in 3 months.. the Ffitch report is 4 months old.. The Outlook changes reflect the pressure on banks' financial profiles from the coronavirus outbreak, lower oil prices and the resulting economic downturn.''.
The coronavirus is not as serious in Russia as it is in the US..the oil price has bounced from nigh on $0 to $40..and economic downturn.. the US is in bigger trouble. The US trade decicit has turned down again and is over half a trillion dollars. Why will other nations continue accept US IOUs?
Goldman Sachs..just last week.. ''Goldman Sachs Group Inc. put a spotlight on the suddenly growing concern over inflation in the U.S. by issuing a bold warning Tuesday that the dollar is in danger of losing its status as the world’s reserve currency.
With Congress closing in on another round of fiscal stimulus to shore up the pandemic-ravaged economy, and the Federal Reserve having already swelled its balance sheet by about $2.8 trillion this year, Goldman strategists cautioned that U.S. policy is triggering currency “debasement fears” that could end the dollar’s reign as the dominant force in global foreign-exchange markets.''
For Goldman to even hint at this... is a warning? and a worry because if the dollar is on its way out the death throes will cause big global disrupotion...from relyimng on the dollar. The Russians & Chinese have been de dollarising. I wonder if the Chinese who used to hold trillion+ in US debt have probably been dumping it for quite sometime!
Now as the election nears will Trump stop handing out cash to voters who can't work?
What does Russia need dollars for.. they are not buying anything from the US.. The gold that the Russian government buys is produced in Russia, backing up the currency!
As for Russian Banks if they are in trouble... thats up to their depositors & shareholders! I dont know what responsibility the Russian government has.
''..Russian strength comes from Russian propaganda..'' What Russian propaganda?
Or is this a continuence of Russian meddling in UK elections etc... none of which has been proven..
Maybe you can provide some proof of Russian meddling & propaganda!
Try Pure Gold based in Canada - more high grade finds and this could turn into another Kirkland
I guess the likelihood is it will all go through smoothly for our buyer, but things can fall into a heap easily if other big shareholders put up a fight.
I think the company will cease to exist when the fighting is done, but if someone with some clout decides they won't just roll over to accommodate the buyer then we still have a chance of a better offer.
The Russian sellers would also get the improved offer under takeover rules I suppose they have not actually sold (have they?) just committed irrevocably to sell.
I've had a significant holding here for some years and now weighing up options. I also hold some POG and recently sold half my holding in CEY. I'm considering adding more SLP and definitely SOLG which is, in my opinion, a no brainer as a long term investment.
Hi Workingstiff,
I am holding on for the moment, but I am not sure for how much longer. Truth be told - I feel a bit like a rabbit caught in the headlights. I would love Prosperity to come riding to our rescue, as they have done with POG, but they have under 10% of our shares, and even if they call an EGM, I can't see how they can prevent Fortiana adding to their share holding and gaining the 50% they need to seize control of the company.
What with this and POG (my two biggest holdings) both facing hostile takeovers (as far as the small investors are concerned), where do you go next? HOC and CEY are certainly worth considering, but both are priced rather high at the moment, and I already hold a fair amount of each anyway. TSG looks worth a small punt, but I am certainly not investing large amounts into another Russian miner, especially such a small one.
I can imagine other posters reading this and thinking - what the hell are you moaning about? You have made a good profit, take the money and run. However, I do not wish to day trade. I like to invest for the long term in solid stable companies that offer good growth prospects and / or pay good dividends. Now thanks to the greed of Russian funds and oligarchs, I have to face a major reorganisation of my share portfolio, just when I felt happy with it.
Thanks guys, I will check them out. I looked at POLY a while ago and it was a choice at the time between HGM and POLY. I chose HGM which was trading around 1.80 at the time and added at 2.20, 2.35 and 2.70. It was my first exposure to gold in my portfolio and I’m glad I had it given the broader market turmoil. I’ve also got some CEY (good dividend but limited growth) and SRB (good growth profile and should hit their stride if they can get back to full production). Dartron I think you’re right
drunk you don't know me and jet characterise me "you people never provide anything to back up your argument!"
I'm not part of any grouping and never say anything without qualifying it as my own opinion without some reasonable evidence. Your comments on Russia betray your support, much of the cr*p about Russian strength comes from Russian propaganda, like the drivel about being able to withstand low oil prices .
I'll grant you Putin is a smart guy and so it's damned obvious he and his team will talk tough on the economy , bravado is what they do, never blink, but I suspect behind the scenes they are extremely concerned but would never betray that to the market. They, like most countries need foreign investment - for example Igor Sechin came to London and did the rounds some years ago to try to raise the 10s of Billions of Dollars they need to modernise their oil industry (all is not rosy in the Russian cottage) . Russian agriculture doing well is great news for them, but is rather incidental to what I'm discussing.
Russia must have a source of billions US $ to function or spend reserves, that's why they keep near 1/2 trillion in reserve and are reluctant to spend it supporting the Rouble and I believe why they bought gold as it's immediately convertible . That doesn't mean the underlying Russian economy won't prosper in the long term , but my point was it's prudent to repatriate $ income.
https://www.kitco.com/commentaries/2020-05-01/The-importance-of-a-dollar-SWAP-line.html
https://www.fitchratings.com/research/structured-finance/fitch-revises-15-russian-banks-outlooks-to-negative-on-coronavirus-disruption-oil-price-slump-07-04-2020
Just before this happened I invested in TSG, another Russian gold miner, who are extricating gold and paying dividends. Might be worth a look. I also read an interesting post on HOC saying that some of these countries may start to impose higher windfall taxes on miners (to bail themselves out), so expect more shenanigans. Investing in miners seems like, now the goose is fat the fox is watching.
Kenj
I sold up early yesterday to take advantage of a small market premium over the offer price. Which leaves me with a large chunk of cash looking for a home amongst the miners. looking around nothing really grabs me, I've a horrible feeling that I'll put it into POG.
If you are holding on here, good luck. There may be the chance of a counter (better) offer.
Hi Red - would welcome your views on this RNS out yesterday, if you're still invested here...
I'm quite taken aback by this development, fearing that the buyer of the large minority holdings (40% odd) is trying to gain control of the company on the cheap at the expense of the majority investors by relying on the rules to have to offer the same 300p ps to all the shareholders.
Am even more surprised that the BoD which, in complying with that rule, is actually recommending the offer to all the other shareholders, too; unless there is something seriously amiss with HGM all of a sudden, 300p ps seems well below 'fair value' to me.
Your thoughts? - sasa.
Hi Planets - you and me both and probably just about everyone else who's in this... The general consensus seems to be that this 'steal' is likely to go through, regardless, sad to say.
The only decent, potential, replacement I've come up with is Polymetal (POLY) - although not quite such a good yielder, its in the FTSE 100 and isn't too expensive, imv. If gold continues to push on, then POLY should continue its good run; hope that helps - sasa.
I would like to think that a counter offer might emerge from somewhere given its a steal at 300p. I’m in two minds whether to hold in the hope that a higher offer materialises (and possible bidding war) or sell in the market and reinvest elsewhere. But where? Are there any other companies with a similar profile to HGM? Forward p/e of 4, >5% dividend yield, able to fund new mines out of FCF and a growing production trend. With this out of my portfolio I’m losing a big chunk of exposure to the POG.
'' I'm not interested in arguing with you.'' well of course you are not... you people never provide anything to back up your argument!
The devaluation of the Rouble (pyb) has been hard on Russia but also has been a boon to Russia.. where imports were cheaper than producing their own food..up til April Russia was the worlds largest exporter of wheat.. ''
''Russia Cuts Off Wheat, Other Grain Exports.. April 26 .... https://www.rferl.org/a/russia-cuts-off-wheat-other-grain-exports/30577633.html ... The supplies from Russia, the world's largest wheat exporter, will continue to fellow members of the Moscow-led Eurasian Economic Union (EES), which includes other post-Soviet states Armenia, Belarus, Kazakhstan, and Kyrgyzstan.''
''EU to give 500 million euros to farmers hit by Russia sanctions'' http://www.reuters.com/article/us-eu-farming-idUSKCN0R71OQ20150907
''Europe pays farmers to destroy food hit by Russian ban''
http://money.cnn.com/2014/08/18/news/europe-farmers-russia/index.html
''Ripe economy: Meet the Russian farmers benefiting from the ban on Western produce''
July 20, 2015 17:12 BST http://www.ibtimes.co.uk/ripe-economy-meet-russian-farmers-benefiting-ban-western-produce-1511712
The sanctions on Russia for Crimea and the collapse oil prices has done Putin the biggest favour he could ask for.. the Russians understand that the west's alienation to Russia has caused the problem! But with oil at $40 odd the halving of Rouble gives them 80 pyb per bbl?.. the old equivalent of $80 per bbl.. yes there has been inflation.. and it has been hard but wont be as bad as what is coming down the line for the west!
''I've been investing in Russia for well over a decade...''.. of course you have!
And I can claim the same!
drunk - I'm not interested in arguing with you. believe what you like, I've been investing in Russia for well over a decade in a number of companies and sectors and if any of you don't know that the Russians grab what the want if they're connected and IMO all major businessmen are tied to doing the Kremlin's will (the ex owner of Rosneft can verify that). I
I've clearly rattled your cage, interesting , your motives are difficult to fathom.
Furthermore, surely you understand why governments require US$, same reason they stock Gold, I find it hard to believe you don't. Debts need to be serviced and currencies prevented from crashing (managed) . Rouble at just under 75 to the dollar makes life hard for Russians, they need to ensure it doesn't crumble further as with other currencies.
And I'd like to add that coming on here and rubbishing the Russians is doing us no favours at all!
If you dont like the Russians or doing business in Russia ...
What on Earth are you doing here?
I welcome others views
''..many Russian banks are in danger of bankruptcy (check online articles if you don't believe me) ..''
had a quick search and ....nothing!
Russia needs $s for what?
Look at the Russian trade surplus..$133 billion over the past 12 months and yes thats dropped off over the past 4 months.. but oil demand nigh on dropped to nil!
https://tradingeconomics.com/russia/indicators
What does Russia need to import?
Meanwhile also on trading economics ''Dollar on Track to Suffer Biggest Loss in a Decade''
The oligarchs in 2014 were offered amnesty on cash repatriated. I dont know how much was.. but any russian who keeps money or assets in any USA influenced nation is bonkers!
When I was in the US last year... a wander around Publix.. cauliflowers $5.09 (I had to take a pic of them!) in english £4.00! Now granted they were quite large but a little past their best but on returning to the UK in Waitrose a cauliflower was £1.00 or $1.30? Thats inflation!
The yanks are in trouble after decades of printing esp the last 10 years!.. Thats why golds up to a new high thats why HGM is being grabbed. And POG could well be next. If ever you wanted proof things look bad... we are witnessing it. Why would the Russians, when the west has been so mean want any of their gold left in western hands!
Compare Statistics on https://tradingeconomics.com/ to have Russiua's figures any western politiciann would be green with envy?
I bought into HGM in 2015 for 41p do I want more YES but
HGM has risen by 38% over the past year. Is that fair?
So what to do? Gold you can hold in your hand!
But we should remember the USA in the 30's confiscated gold from citizens for $25/oz and then the gold price rose to $35/oz!
Back in the credit crunch and the attack on the Rouble, Vlad P made it clear through his political reps that the Oligarchs would be expected to repatriate their Billions if required - as far as I know it never happened , but bear it in mind wrt what is happening here.
A few weeks ago I read an article, which highlighted an issue that all investors in Mining or Oil in risky nations should be aware of, it was about Dollar swaps and the risk of nationalisation or even asset theft in highly pressured nations that need Dollars and can't swap their currencies to service debts.
To be honest I didn't post it because it was against the trend and would probably been accused of scaremongering, however, it doesn't matter now as the theft/confiscation angle is negated.
Here's the thing, many Russian banks are in danger of bankruptcy (check online articles if you don't believe me) they and the state need US$ currency and are not on the favoured nation list (UK and a few other nations are), it will be a huge problem for some nations.
So here's my theory - our Russian shareholder have been given the nod to put the company back into the hands of Russia (nationalise discreetly), so we're selling to a Russian entity that can provide the Gold to the state controlled Russian bank(s) backing the deal without paying in US$ - essentially this could be a con to nationalise the company without being seen to do so.
The value to the Russians is effectively helping free up finance the Russian state. Our buyer is being financed by a major Russian bank.
Is the same going on with POG, our buyer sold 5% of POG recently or are other listed Russian entities about to be pounced on? I advise anyone to do a little research before trashing my suggestion - Russia needs Dollars.
kenj - I agee they won't intervene to protect small shareholders, they don't give a stuff about us, my point wrt to the AGM voting numbers was that they do not have full support of the big shareholders and another opposing party could make life very uncomfortable for them.
The Russian way is to fight with everything you've got - I just hope they have upset some other parties with the finances to hire lawyers that can formulate an objection. This will not look good to the takeover panel particularly if relationships between the main players come to light.
Whatever happens I return to my original point, we have no need to worry and can sit back and wait for things to pan out
Hi kenj - I agree that only a tiny gain might be the result of adding now but that's not the point; I resent some wealthy 'smart alecs' trying to leg over the other shareholders in getting our asset on the cheap - not unlike what's going on over at POG.
It's obviously a futile gesture on my part but trying to buy a £5 note for £3 at others' expense rankles me quite a bit - sasa.
Jointhedots,
I share your concern about the way this was executed. Deals like this are not made over a couple of drinks the evening before the AGM. This will have been negotiated in the weeks leading up to the AGM. So why not inform us beforehand, or offer us a vote?
However, I will be surprised if the deal is blocked, as I have zero faith in the FCA or the Take-Over Panel intervening to protect small shareholders.
Totally agree, shareminator. The existing group of oligarchs could have sold their strategic holding to an Insto or two 'off mkt' if they had other plans to pursue and didn't want to offer a realistic price for the majority remaining in order to release their funds.
Under the rules, Fortiana, now holding this 40% odd position, is required to offer the same terms to all holders and I suspect that they're trying to intimidate other holders to accept these terms to get control under that guise rather than pay for what HGM is really worth right now.
They would have required Board consent where the appointment of an additional director or two to represent their sizeable minority interest was concerned but the BoD didn't need to recommend such poor terms to the majority - just state to them that this deal made it mandatory under the rules.
As you say, one wonders what prompted them to recommend those terms - sasa.
My take on this, put as simplistically as possible.
Very, very likely deal will go through. Guaranteed minimum £3. Might be slightly more. PoG largely irrelevant.
Very unlikely deal is voted down. If so, SP will be £3 minimum anyway. Possibly more depending on PoG.
Best case scenario... PoG rises substantially between now and vote..... £3 will seem too cheap, will have to offer significantly more.
Worst case scenario..... PoG crashes between now and vote..... they still have to offer£3.
It’s one of those rare events in investing.... a no lose gamble. I am in at under £2, so an easy decision to hold for me....l I am not offering advice. Suspect SP will hover at or around £3 until clarity. Taking broker fees into account, I will add if it drops below £2.90..... but don’t think it will.
Jointhedots,
I did not say that the shareholders will lose out. Assuming the deal completes they are guaranteed a minimum of 300p.
However, I think that you are deluding yourself if you think that the Take-Over Panel will block this when Fortiana get their 50%. Owning over half of the total shares in issue and with full support of the Board of Directors, this will sail through.
"Shares carrying more than 50% of the voting rights
The Panel will normally waive the requirement for a general meeting under this Rule where the holders of shares carrying more than 50% of the voting rights state in writing that they approve the action proposed and would vote in favour of any resolution to that effect proposed at a general meeting."
kenj - just thiking about your point which I assume to be correct - I suspect there may be a problem for our BoD and relationships within the consortium that could be objected to if they attempt to avoid a shareholder vote, as the shareholding could be considered considered to have been secured illegitimately as votes at the AGM where lined up knowing this was an agreed deal. Dishonest ??? I didn't cast a vote as it's importance was not known. Not to mention D Davidovich selling shares!
Things will become clearer but we must give it time.
Kenj, all I'm suggesting is that shareholder don't need to do anything to win and avoid missing out on anything here, also I'm not convinced the deal will be waved through if other big shareholders object. It's all If's buts and maybe's - we need to wait to see if there is any resistance from other big shareholders IMO.
Also I started reading the A of Association the but gave up after a marathon, but the BoD need to follow those if they are more stringent is any area, I repeat it is not done and dusted and a third party can also throw their hat in the ring (unlikely in Russia I suppose but look at POG, there appears to be a turf war going on in Russia)
I'm holding for a while (it's now a safe haven IMO) to see if we can tease more money out of our buyer.