The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
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"Simple rule of communication; If you don't tell people what's going on, they'll make it up for you and it probably won't be that great....A lot can be said to allay concerns without going anywhere near revealing negotiation tactics or positions". Would that it were so simple....
For better or worse, RBW has to satisfy multiple stakeholders simultaneously; any public announcements to shareholders will be pored over by the Burundi authorities. For example, if RBW were to say something like "everything is fine, we're on top", the Burundians would get tougher. Conversely, if RBW were to say it's going terribly, that might well scare shareholders, and hammer the SP, while not necessarily incentivising Burundi to go more softly. (The Burundians would want to set a benchmark for parallel or future negotiations with other mining operators).
RBW may well be nodding and winking to *some* (large) shareholders, or at least giving them a little more colour about what's happening, even if this is technically against the rules. It's just how the world works - regrettably small-time punters get disregarded.
I've seen apparently similar situations in DRC get worked out eventually. I don't recall running commentaries there either though.
OK DP, CT, yes add to that everything is down. Hence why im thinking of going all in on something else, but hard to fathom. Hence frustration at lack of comms. Agree this is now undervalued, but if there is a raise, it will be lower than current SP at the time, if not agreement and a lawsuit that could drop the SP even more, as it is a waste effort and cash more delays and more uncertainty.
If they cant do a deal, just sell it and move on to the main event.
The decline is fairly normal for a pre-production miner, e.g. PRE, JAY and others are similar.
Bard, im sure we are not the only 2 to share this opinion, general market seems to agree.
It was DP who suggested negotiating by the press, mis-interpreting what I wrote. Iv had issue with several of his other posts, in his approach to the other poster, so he is not somebody I would want to engage with.
It is worth continuing to discuss this as and when. It doesn't matter if others don't follow the theory. I feel a bit stuck here now, 35% down and expecting a placing. On that basis, not much to discuss. Very tempted to bail, trust my instinct that I can buy back in sub 10p after placing. The only bit that doesn't fit is Pham's options, but we dont know what money he also receiving. I think those options had a long timescale on them, so could be for 5 years time. I really dont see this jumping much higher than 13p on Burundii resuming. Thoughts?
I won't argue with you because you obviously feel right about what you think and don't seem available to alternative views. All I would say is look at the SP. Simple rule of communication; If you don't tell people what's going on, they'll make it up for you and it probably won't be that great. You say GB communicated via RNS, but as Dartron nicely summarised, they didn't really say anything at all. As a stakeholder in the business that is not good enough. A lot can be said to allay concerns without going anywhere near revealing negotiation tactics or positions. Anyway, I've said my bit and will leave it there.
I agree the company can not negotiate via press statements. George has employed Pham to do the negotiation. The Burundi workers need to be factored into all this.
Precisely DT. You mirror my thoughts exactly. I am most concerned about the impact of poorly judged stakeholder non communication on the SP. When further finances will inevitably be required, this will cause unnecessary additional dilution. The CEO may possess engineering excellence, but he must also extend his remit to attend to the broader aspects of running a public limited company.
In terms of official RNS communications from the company, there have been 2. Let me summarise them:
1)14th April - "Exports stopped. I don't know why"
2) 29th June - "Mining suspended". "I'm going over there for talks".
Nobody is asking for a running commentary, but I for one, would have liked an explanation as to what the problem was. How this was explained and handled back to share holders would have revealed a lot about the character of the company and GB. Instead we get the opposite, silence, which seems contempt for the people investing at best and at worst could be covering up for something, we are yet to find out about. Maybe there is a deal but its untenable for RBW, and they are stuck between a rock and hard place.
In the interim, we have heard allegations of corruption, now its a re-negotiation of the deal. What ever it was, and what ever needs to be sorted, could have been communicated in broad terms without going in to lots of detail. I think the share price would have held up far better in that scenario. In fact, I would go further to say that now the companies plans may have been well and truly derailed in terms of raising finance, now the SP has halved.
Since none of us really know, how do you know it is delicate? Why would it be an insult to explain why the exports have stopped? etc etc. Your making up your own storey, which is precisely my issue at having no news.
So are you suggesting shareholder communication has been done to a good standard DP? Please explain.
of course if Burundi want a greater share of profits from RBW (over and above their risk free tax stake) all they have to do is invest their cash in buying Rainbow shares and share the costs (and rewards) thereof ... just like everyone else.
Bardo
The situation is getting resolved. The fact it has moved from the Prime Minister and now delegated to the responsible Minister who has made it clear (It was 10% contract deal that was taken advantageous or akin to theft) tey want a better deal. The new deal can be factored in many different ways. The best deal for Burundi is 48% profit share after costs with no other tax constraints other than the 2% Royalties. The second deal is 25% profit share and they have some equity to give a share/dividend on upstream profits that give a similar end result. Rainbow takes out a bank loan to fund the South Africa operation. It was always going to read badly using profits in Burundi to deliver SA development. The new options remove those sensitivities and keeps profits earned in Burundi.
Abysmal shareholder communication. I do not appreciate being updated by the press rather than the company itself. This silence does nothing for confidence in the business and its handling of serious allegations from the Prime Minister of our host country. Whether a deal is being negotiated or not, this shows scant disregard for the people investing in your business GB.
Fresh news :-
https://uk.finance.yahoo.com/news/burundi-suspends-rare-earth-mining-133920738.html