We would love to hear your thoughts about our site and services, please take our survey here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
Didn’t this project already fail in its past life?
if if if if if etc
no thankyou life is too short.
If they can get a multi-million ounce resource to JORC or NI-43-101 standard, then yeah, might get the debt. A very strong PEA (IRR > 60% @ $1500/oz gold) then that would probably do. I think everyone recognises that this is a narrow vein deposit and that delineating an indicated resource will be very expensive, and thus it would be better just spending the capital on a processing plant and underground development. But that doesn't mean you shouldn't still have a fully costed plan and engineering studies, and at least an inferred resource and PEA, preferably with indicated resources for the first payback period. I imagine they will realise this sooner or later when they start asking for the debt, if they haven't already.
TW has interviewed Eldur this week and it will be released this weekend.
There is definitely significant risk to get this mine in operation but IMO the reward is now very substantial since the price drop. I do think that Eldur is a very focused young man and I’m confident he will deliver albeit we are now effectively delayed by a year.
Lots of drilling planned throughout the summer to expand the resource. As gold punts go it can’t get much better than this. If luck is with us the resource could be expanded to several million ounces and if the gold price starts to rally it should be heading back north of 50p in no time.
GLA.
Apparently Tom Winnifrith (yes, I appreciate his marmite/panto-villain qualities...) has spoken with Eldur Olaffson and reports that the additional capital required is likely to be debt-funded so there is no current threat of a placing.
I only have a tiny holding here tho I think the company at least (if not the ceo) ha± been trading on canadian exchange before it traded under aex. Hard to know whether to aveerage down or not
"The flotation circuit is - for me - a harder question. If this is such a good idea, why wasn’t it in the original plan?"
I mean basically there wasn't an original plan. There were a few rough assumptions, a lot of hype - but no breakdown of the costs involved, nor detailed timeframes to execute, nevermind engineering plans etc. One has to assume that the reason there are no published plans is because they don't exist, which begs the question I asked back then to be asked in the CRUX interview - how do we know the funding raised will be enough to reach production? Turns out its not.
Back in July last year when this was floated, anything with Gold in the name was getting money thrown at it. And high grade gold - well you just got a blank cheque. In this case they wrote a fairly big sum of money on the cheque, no doubt thinking it will be ample to build a mine, but in reality, they obviously didn't have detailed costings as it won't be enough. On the flip side of the negatives, as I said originally there is high grade resource potential, that means high margins - which means $$$. If they can prove they have a credible plan, they will get the money they need, and if its as profitable as it should be - they could get it from debt without equity funding. But you won't get debt funding based on a hunch, you will need a proper detailed feasibility study. I don't think getting to a point of sustainable production is going to be as easy as these people think. I know there were some very accomplished mining people involved in Angel Mining, and as we know - they made a hash of it. But this young CEO with no real mining experience thinks this is going to be easy? Lots of alarm bells going off.
when a mines at the pre production stage,it can be a nightmare
especially if they havnt sufficient funds.
tstr/wres/orm/wlfe/sgz to name a few.
and the ramp up stage,which can takes longer,than most think,can be a pain aswell.
and the longer the ramp up period,the more the cash burn
Agree on all your points leehardcastle.
That interview left me feeling that the CEO is a little naive, over confident, the interviewer was scoffing a little at the promised timescales and lack of reports, and I feel he has probably good right to scoff, Angle Mining went bust and he thinks they mismanaged the business, saying we have a much better plan, so we won’t suffer the same fate, so if the gold is that abundant, how did Angle Mining get it so wrong? and taking off from where they left the project standing doesn’t offer much confidence, I think this time delay set backs and increased costs is one of many obstacles AEX will have to cross as they finally start the production and processing, this project may seem well funded, but it will be a lot less than required before they turn a profit, new rounds of funding required would incur more dilution than the last as the share price will be lower than the last, early share holders are usually the least profitable in mining start ups, it’s those that get the timing right, when the company is de-risked and making cash that will benefit the most, that’s 24 to 36 months away in my honest opinion, look at AAZ or MTL, both had high share price enthusiasm at the beginning, both lost 95% in the years up to getting their act together, AAZ is now a success, and MTL are looking highly likely to follow suit, but both journeys were painfully for early adopters, just my honest opinion, and I have no agenda, I have no shares in AEX, but I do like mining, and gold especially, GLA
keep the faith,positive vibes needed here,ive had to average down,hey ho,still all to play for though,just wee hiccup,get coronavirus out of way and then who knows,sooner better
Nalunaq is a long term, capital intensive project as the documentation for the original fund raise made abundantly clear. It is entirely possible that it is NPV +ve to pause development if the costs involved might realistically be significantly lower in a years time. Far better to pause than to press on and then hold a gun to shareholders heads when the money looks like running out.
I listened carefully to the points the CEO made about travel bans, staff costs, steel costs, shipping costs etc. I know from other companies that this is reality. What was forecast to cost 20m might cost 30m if started today. And it might be back to 20m again this time next year. I find all of this credible.
The bulkhead issue sounds like typical mining risk to me. It’s likely the sort of issue that there was some contingency in place for. But I guess that fixing it will be expensive in terms of labour, materials and time.
The flotation circuit is - for me - a harder question. If this is such a good idea, why wasn’t it in the original plan?
The company has said that it may need more capital, and that it plans to consult with shareholders. Best case scenario is that one or two of the existing shareholders (perhaps the SWF..?) can be persuaded to stump up for this in return for a discount, so existing shareholders will have to accept some dilution.
One to watch, but all to play for.
The CEO seems confident as others have said, but is this a classic case of pride before a fall? He only graduated from university in 2010 so appears pretty inexperienced with dealing with issues such as those he now faces. Regardless of the cash on the balance sheet, £56m market cap seems expensive for a company in this sort of predicament. Bottom chasers ploughed in yesterday, I used to do the same thing when I first started on AIM but you learn to fully research first and not be led by the price. What happens if the damage to the bulkhead is worse than expected? Could the tailings collapse? If the next RNS isn't good news then the price will really start to crumble as market confidence will be gone. I hope they get it right but I wouldn't be investing anything at this juncture - it would be like betting on a horse without knowing what the odds were...
3 day rule
He does well with a tricky message. Good work.
Here's the interview; https://www.cruxinvestor.com/videos/aex-gold-aex---18-months-to-production-with-no-pea-fs-or-dfs-how
My question got made into the title I noticed, which was quite amusing. I found the CEO extremely confident, but bordering on arrogant, and made a note to keep watching to see what happened with the project, but keep my money well away from it.
Some may remember the disaster that was Angel Mining. Some very good engineers involved in that - but they made a total hash of this project. Have no doubt execution is key, having a detailed highly scrutinised plan is crucial - not making it up as you go along which seems to be the AEX strategy so far. A good way of burning through a lot of shareholder cash, but creating value? Not so sure. They should focus on drilling and putting together a proper feasibility study, executing a mine build anywhere in the world is tough enough even with those things, but without them trying to build a narrow vein underground mine in Greenland - is a recipe for disaster.
I was invested in Angel mining when they tried to build a gold mine and processing plant at Nalunaq. They didn't have the cash reserves AEX have or the buoyant gold price. No One should underestimate the difficulty (and expense!) of building this project in the middle of nowhere that is frozen a lot of the year. It would be impossible this year due to CV and also transport costs have increased by up to 10 times, hopefully next year they will have dropped. I only noticed AEX today and will look on with interest for now. GLA
If you go back to my post on 03 Aug 2020 17:36....
"the key question leading on from the fact no economic study has been published, is the equity raising adequate to reach production? Is the current capital raised enough to commission the proposed mine and 300tpd processing plant?"
So I warned about todays RNS back then, the question was put to the CEO, and he brushed it off in the CRUX investor interview. But in fact it is an inevitability, if there is no clear plan of what is being executed, that there will be cost overruns. Blaming Covid is ridiculous, it was obvious that in a jurisdiction where all of your mine workers are going to be FIFO, that it would be impossible to execute mine development during the pandemic, it was clear in June last year, and they would have had to start mine development months ago if they were going to be in production by the end of this year. Spend the money on drilling, delineate a proper resource, that is key. But the real question is why is there no published scoping study or feasibility study - how can the company deliver a mine if it doesn't know what it is building. Continued high risk of execution failure here - unknown funding requirement to complete.
All credit to the man for coming out to explain the bombshell RNS. Clear, logical and persuasive. In marked contrast to other goldies like HUM I would add.
However, he'll still be taken to the cleaners by the moneymen.
I'd urge caution at this stage like others have on this Board...
Thoughts ?
Probably best not.
Guys, anything with a moniker similar to Aminex (AEX) is dodgy. Believe me.
Thanks for posting. Seems a tough but sensible choice by the board
Interview with AEX gold https://www.youtube.com/watch?v=0c3oFDyVWrk
The man who’s £50k down in 1 day must be needing a stiff drink tonight, if your reading this, I honestly feel your pain.
Not sure odds are 1 in 10000, but the odds are slim, I have been part of many explorers companies over my 20 years of investing, and only 2 have succeeded in terms of producing and making profits, the company valuations on promises astounds me, of which 90% never deliver, a week or two back, Share prophets had AEX as a dead cert double or triple your money from 50p, and I’ve seen dozens of tips like that from them, most are unfounded tips, I would have thought many would have bought in from those buy recommendations, AEX will as hinted in the RNS will have to raise more cash to get this project to fruition, the cash in hand will not be enough, and the longer that takes, the more they burn through on company expenditure, so, what will the dilution be? and what price will the offer be at? and will it be open to PIs? the bounce those talked about today won’t happen, as the market hates uncertainty, and I would be careful averaging down, looking cheap is not a reason for buying here in for me, we’re all here to make money and I wish those already invested good fortunes, but I would urge caution.