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So the current JV partners are interested?
'we are encouraged to note the significant interest that this has generated amongst our existing partners, and we look forward in conjunction with our partners to explore opportunities by which they may become involved in the development of Dokwe'.
What does that mean, another huge giveaway present to Ozaltin? Yes, a JV partner will be needed at Dokwe to fund the plant etc. without loading the balance sheet with debt or unnacceptable equity dilution, but not on the appalling terms achieved for Kiziltepe, Tavsan and Salinbas. Hopefully the Rockover shareholders have sufficient business ability to compensate for the current AAU BoD.
Well that RNS went down well. Again.
There's not been too many RNS's that have gone down well John. I'm not sure the Q & A tomorrow will give us any answers either, as they usually end up with us scratching our heads at their answers. I'm still not particularly happy at getting involved in Zimbabwe, but it looks like Kerim wants some of the action there. I want to know whats happening in Turkey and Cyprus and whats he going to do to get the SP moving upwards as you can forget any dividends now for a few years.
I am in agreement about divis. There is East Turkey to develop with the JV funds and Dokwe to develop as well. AAU will be 100% owner there so no sharing the costs. Unless of course there is a JV in Zimbabwe with someone well funded. And I sincerely hope that someone is not Ozaltin who as far as I am concerned gave very little cash for their huge interest in AAUs Turkish interest and haven't 'enabled' or delivered anything - in Africa they cant even try to put a value on political influence which many seem to think was the reason for them being chosen in Turkey. Beginning to this Ozaltin are effectively the Turkish mafia.
Hi John,
Weren't we expecting a lot more than 20,000 ozs; certainly not that long ago it was c. 50,000 ozs from the two with a further 50000 ozs from Salinbas by 2027 I believe. As it has taken so long to bring Tavsan into production, Kiziltepe is being run down and will now rely on ore being trucked in. So the numbers will never be achieved, but perhaps it is all just spread out over a longer period.
But even though we have given away half of these core, cash generating tangible assets to the JV (for no benefit in our Mkt Cap over nearly 5 years - in fact we've gone backwards) we now want apparently to give even more away to Rockover and its shareholders, who are perhaps looking for an out. The Director's are retirement age and it has been suggested by Kavango that Dowke is technically demanding and costly, so they need a fairy godmother. Apparently it is under deep Kalahari sand and this may be one of the reason it hasn't been developed todate. Perhaps we will learn more tomorrow.
But on top of all that, we have talk of needing finance (how much and from where?) and or existing partners joining the pot. Does anyone consider the AAU shareholders and potential depletion of our assets, or are we expected to forego our promised dividends for a capital return in 3 but more likely 5 years? And during that period I believe Zimbabwe has an election. Would Ariana shareholders choose to invest in Zimbabwe if they were starting from a clean piece of paper?
It seems to me that Kerim has a great deal to do tomorrow morning to convince us this isn't riddled with red flags.
I would be interested to hear what Panmure Gordon make of it. Has the Co. had outside Independent Financial Consultants helping them ensure this is a fair deal. If they had done so with the Ozaltin JV deal perhaps we wouldn't have seen such a poor outcome. So I hear to be convinced, but Zimbabwe is a no no for me.
C&B
They will only answer the questions they feel like answering, that always happens. I bet someone will have tabled a question relating to when Dokwe will realistically be developed rather than the following mentioned as part of the RNS the other day, and I'll also bet there will be no concrete reply:
'.....we anticipate advancing the Dokwe project towards production within the next three years'.
What the hell does that mean? AAU may advance towards production but it doesn't say a plant will be there and shovels in the ground.
Sener seems to forget that we have been exposed to ambiguous waffle like that for too long. I would remind people that in presentations in April and December 2022 there was an anticipated production from Salinbas in 2025. Truth is that we aren't a day closer than we were at the time of the wonderful new JV proposed in 2019. To me that is deception at best, outright lies at worst. Does anyone fall for it anymore?
‘ It seems to me that Kerim has a great deal to do tomorrow morning to convince us this isn't riddled with red flags. ’
It certainly is not SP accretive just more SP dilution and diversified risk!
‘it has been suggested by Kavango that Dowke is technically demanding and costly, so they need a fairy godmother. Apparently it is under deep Kalahari sand and this may be one of the reason it hasn't been developed todate. Perhaps we will learn more tomorrow.’
When did Kavango state this, do you have a link?
Well Van in my defence I was against the Ozaltin from day 1. Just work out the value of the lost 26.5% production since the completion of the JV (early 2021?) and very single gram of gold that Tavsan will ever produce. I have and its massively more than AAU received by selling. As for Salinbas where we gave up 76.5%, just don't get me started,
It was on a public Telegraph Group apparently . I believe it was mentioned by Ben the CEO who said they passed over on Dowke, but I haven't seen it myself. They might have passed over due to lack of funds of course and now are now just a bit jealous. Who knows? I have no idea how you find these Telegraph Groups.
Agreed John. That is why I believe we need to know they have sought outside advice to protect our interests. Yes he might be a good Geologist, but that doesn't make him a good Corporate analysts capable of securing the most appropriate deal. I think the outcome of the Ozaltin JV after 5 years is proving that point, as you say. I believe they sort no help at that time either. But Zimbabwe. Not my cup of tea. If we wait for the HizHizarliyayla and Salinbas results ( over due?) then perhaps our share price would be higher and we could negotiate from a stronger position. Issuing all these 687,817,998 shares, diluting our current core assets (including assets producing hard cash) doesn't seem right to me. But I need help to understand why this is a good deal as I expect many others do. We can't take it on face value.
I don't know Van. The Dokwe resource is big and effectively AAU gets 2/3 of it. Its a lot of gold, more than I think we will get from anywhere else. The obvious red flags are how does the development get financed while we own 100% and can we trust Zimbabwe? I'm not sure about it as I've always avoided African 'investments' (quotes intentional), as I think we discussed before.
So finance for Dokwe development, as far as I can tell, is by massive equity dilution, debt (lots if tragic stories on AIM about those providing loans wiping out equity holders) or a JV. And after todays RNS we know who that will be with, nailed on - I'm no clairvoyant but I'll bet they will want 51% at least.
I reckon we would all be better selling AAU and buying Ozaltin shares. That way we can benefit from all the things AAU s good at, because directly holding AAU equity certainly isn't doing it.
Three weeks ago AAU had a 3p share price. Now after releasing big news about a deposit some shareholders have been excited about for months and a delayed 2024 production announcement its down to 2.45p. Wasn't news like this supposed to excite shareholders?
PS Is it me or is the Tavsan heap leach plant looking increasingly delayed, vague references onlynow to 2024? Maybe all will be clearer tomorrow. Wont hold my breath for a concise answer.
Sadly the share price is what it is. I don't know what the basis was for the rather precise 687,817,998 number. I guess it gives an exact % in AAU or to equate to a particular sum based on an assumed AAU share price. Dunno haven't thought. I suppose we have to look at what assets each company brings to the table to decide it the (roughly) 1/3, 2/3 split is fair. Somehow you have to adjust each prospect for the stage of development. Dokwe is big, and compare surely to out paltry share of Salinbas after the giveaway JV. Don't know, lets reconvene tomorrow and hope the presentation and Q&A doesn't send the SP any closer to 2p yet again.
I found it,
This is a useful discussion and highlights some good points about our strategy in Zim
We looked at Dokwe (Rockover’s project) and passed on it
There is true genius in Nick Graham’s work but the problem is Dokwe is in the wrong jurisdiction. If it were in Botswana it would make sense but in Zim it doesn’t when there is so much more conventional and lower cost opportunity elsewhere
Dokwe has been around for 20 years and had $20m spent on it. The deposit sits underneath deep Kalahari sand cover and has a very large cap-ex requirement ($75m from memory)
The discovery of Dokwe was amazing. Nick and his team found it using a sophisticated fine fraction soil sampling method that was able to identify minuscule variations in gold levels relative to background
The problem is it’s too sophisticated a project for the stage Zimbabwe is at. A possible positive is that Rockover has large exploration permits in virgin ground, but its virgin because of the sand cover. Again, in Botswana this would be attractive but in Zim why go to the trouble of such complex and expensive exploration when there is so much untested potential, near surface that has been scouted by the small-scale miners?
I don’t know what Ariana’s plan is. They did well in Turkey. I imagine they must have finance lined up, otherwise this makes no sense at all. Perhaps, the gold price has changed the economics of Dokwe favourably, I don’t know but we wish them luck. The more international companies in Zimbabwe the better.
Coming back to Kavango and our strategy is to focus on near-surface, open pit, bulk mine opportunities. This is completely different from Dokwe so a comparison between the two doesn’t hold up
The path we are on is more conventional. I expect it might take the market a little while to grasp what we are doing, but once we have more demonstrable success the market will see the scale and realisable potential of our business
The Dokwe project is technically demanding, has taken a very long time and hasn’t yet been able to raise the finance it needs
We have simpler targets, are moving extremely quickly and are raising what we need to build on that momentum. By growing Kavango Mining in parallel with our exploration, we will be well positioned to bring open pit mines into production relatively quickly once they are defined