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"If the intention is to steal the very small part of the asset they dont already own from shareholders, they've had years and years to do this already and haven't. Why now? "
We can speculate on all sorts of things - the fact is they have gone so far beyond what is acceptable from a corporate governance perspective that who knows what comes next. Who owns the bonds that has security on the mine?
If the intention is to steal the very small part of the asset they dont already own from shareholders, they've had years and years to do this already and haven't. Why now? And why waste money on such a tidy annual report? And why waste money on Renaissance Capital research coverage if that was the intention? Indeed why waste money on a decent audit firm in London and listing on the main market? And why would people with such quantum of wealth bother with such a half baked and limited value fraud? Wouldn't they first accelerate the company, funded with plenty of foreign credit/equity, then steal it when there's something valuable they dont own to steal? They already own almost the entire company - they're stealing from themselves. Nah, I don't agree this is fraud at all and your assertion is far fetched - it is not obvious at all that theft is what this is.
But I do appreciate your reading of the annual report and highlighting what you found - and I do agree it does smack of **** governance and controls. But it's Kazakhstan.
"Fairly minimal in my view. More likely to be related party transactions lacking paperwork but not actually fraudulent."
I'd argue related party transactions that are not disclosed are fraudulent. Issues like this already scupper any chances of getting institutional capital - no one is going to stick funds into to develop, when there is no sufficient control that 6 months worth on running costs can go out to a related party with no paperwork and the board don't know about it. It might all be intended relatively innocently, but its not a good look.
What is even worse is that when they have published the annual results to the stock market on Monday, they haven't published any of the auditors comments or disclosed that the auditor has given a qualified opinion - that is terrible, its only because I bothered to see if the annual report was there I found it. I also understand now why they didn't actively notify the market of the AGM with this coming.
This will smash market confidence - I'll probably sit with what I've got as it ultimately trades at a PE of not much more than 1 - even if the market still thinks its a POS it could get up to a PE of 3, in which case I get a nice return, but equally it could languish here for ever more and not improbably I could wake up with an RNS one day and fine the share is worth nothing as they have done something else and shareholders no longer control the mine.
Share price tanking as usual be worth F . All at this rate ? Another B.O.D. twist robbing the investors of their capital for themselves .?
Suspicious yes. But these guys are so filthy rich, how likely is it that they're plundering their LSE listing for a handful of millions of dollars and ruining their credibility and future access to capital from any western credit organisation? Fairly minimal in my view. More likely to be related party transactions lacking paperwork but not actually fraudulent.
Worth reading the full annual report - I think its clear now why the report was delayed, the prepayments are murky to say the best. Read the qualified audit opinion
https://145908.selcdn.ru/files.altyn.uk/reports/2021/Project_Altyn_Annual_Report_2021.pdf
No mention anywhere of a resource update for Teren Sai? Wonder why...
Probably Putin Joined the Board !
Something to ask at the AGM perhaps?....what caused the delay
One interesting point of note - the commentary with the results highlighted a prevailing gold price of $1950 at the time of writing - the last time gold was at that level was mid-April. So it seems the results were finalized at that time but then the release for some reason delayed.
Well the results largely confirm what those of us who are overweight this stock already know.
This is a gold producer (not just a speculative hole in the ground explorer) which is now capable of generating consistent profits and yet trading on a p/e below 2 ! IMHO A doubling of the sp could easily happen with no further news !
The new information seems to be that Assaubayev's would rather slow the rate of increase in future production than dilute their shareholding or take on overbearing debt burden. That almost sounds prudent and fiscally responsible, terms you rarely hear these days from anybody let alone BoD of mining companies. I'll be happy with 15% increase in production and flatlining profit (if gold reverts to $1700 as they are using for budget calculations) ... or 25% increase in profits if gold goes back towards $2000. I've top-sliced this a few times and then bought back at lower prices. Best price I ever achieved was £2.50, think I'll be getting that again before too long !
$480,000 to a broker for 'sponsored research' and to help attract new investors....money well spent!!!!!
$540,000 travel costs.....first class flights and stays at the Ritz.....sign me up!!
If they could reduce some of those unnecessary costs then they would have more money to invest in the business....but I suppose they were hoping for the external funding. So 'hopefully' from now on they will cut their coat according to the cloth (easier said than done).
HappySurfer, the previous Capex requirements were part of a plan that aimed to achieve multiple things simultaneously at times. Sometimes it makes sense to spend money in preparation for development in the future. With limited resources that wont typically be an option now.
So the $38m is 'probably' the minimum required to reach at least 850ktpa....but personally I'm not sure it will guaranteed 1mtpa (the current report is understandably a bit vague).
The $38m will defintiely not be enough for a 2nd 1mtpa processing plant....that has now moved firmly into the long term plan (aka wish list).
Need to revisit that September presentation as I recall capex required to get to 1m TPA was >$100m over 2022/3; now it is only $38m to achieve the same so clearly the dial has moved. Unless of course further processing plant capex is required on top of the 38m. This is part of the issue the numbers keep changing. There is also about $27m of debt to repay over the next couple of years so self funding out of FCF will still be tight. They could really do with rolling the $10m bond due for repayment in Dec.
I don't think we will see a significant re-rate here until the ownership structure is resolved however. It just seems that this, in conjunction with perceived geopolitical risk, outweighs the operational and financial progress at present.
DOF's comment re. HKEX listing of another Assaubayev vehicle is interesting and perhaps there is some read across here; although what that would means for the completely superfluous london listing is not clear.
I think the difference between the gold poured and gold produced is the gold recovery rate.
"The Company achieved its principal goals in relation to its current operations at Sekisovskoye being that of....., and producing gold of 34,258oz (target 33,634oz)."
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I'm not sure what that means. Gold poured was 28,450 oz (with a target of 30,000 oz).
Looks like the external financing is currently off the agenda. Therefore organic growth with 'small' incremental increases in production and all the milestones are pushed further into the future.....850ktpa and 1mtpa processing capability.
The second processing plant and development of Teren-sai will be impacted too with everything focussed on Sekisovkoye.
Perhaps the management can now focus on maximising production rather than chasing financing. Obviously 'bank of dad' is always an option for strategic investments.
Link to results
https://www.investegate.co.uk/altyngold-plc--altn-/bus/final-results/20220627070000Z1206/
Link to results - great performance - shares look astoundingly cheap
https://uk.advfn.com/cmn/fbb/thread.php3?id=44534590#firstpost
All looking really good - not too much we didn't know in there but the all in cost of production was particularly good. The main new information are the CAPEX plans - they have been set out on the assumption that they don't get any debt financing, Teren-Sai is now conditional on debt and they continue on the plan to develop Sekisovskoye out of own cashflow with the majority of CAPEX being in 2023 now, instead of 2022 as previously planned as per the September presentation - can't say I have any real issue with this, it all looks pretty sensible and any new funds can be used for the Teren Sai development.
Kazakhstan has strong links with China,( who love gold) . The Assaubayevs are in the process of floating a steel company there on the HKEX by way of an IPO. Its another route for fund raising.
Kazakhstan will always have close ties with its neighbours including Russia. But there are also some signs of divergence from russian influence.
Kazakhstan will switch from its current Russian dialing code, +7, to its own national international dialing code, +997
Kazakh language is intended to be simplified from its present 42-letter Cyrillic script into a 25-letter Latin alphabet.
Altyn's auditor BDO have adopted the new latin alphabet for the local office by including the new spelling of the country's name "BDO Qazaqstan"
Of the Kazakhs voting in this month's constitutional referendum, 77.18% of the votes were in favour of the amendments, which decentralise decision-making, which is the opposite of what is happening in Russia.
it means London is no longer the primary trading market for gold.. Maybe it will move to Dubai
this is a strange ban
London is a major market for Russian gold . New gold will be banned, old gold is OK. How will they tell the difference? Is it date stamped bullion bars?
I guess Russian gold is exported to the London Exchange (London Bullion Market Association).. They will export it elsewhere or stock pile it
Stonefold, it is good to know, thanks.
In recent times Kazakhstan has been moving cloer to Russia politically. Let us hope that Russia doesn't try to circumvent the sanctions by trying to sell their gold via Kazakhstan. But I expect India & China will be happy to take the Russian gold that we don't want.