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happy the Chinese are NOT selling! wonder who is buying First States Shares? Clearly they have move to sell... maybe the RNS is a little behind the trades...
Not what was expected but explains the activity a couple of days ago.
As nobody knows what's going on, no-one can either Buy or Sell. Stalemate and very confusing. It appears : We've fallen out with the Chinese - no info China Non-Ferrous are Selling - no info The project has some existing suitors - no info The unsigned-off optimised FS is fantastic - good info (I note the Feb release of the 'final draft' of the FS stated the Competent Person was "The Competent Person, who has reviewed the resource and reserve information contained herein, is Sunit Patel, M.Sc. (Geology), FGS, GSSA.")
A roller coaster goes up and down.
The Chaarat Rollercoaster.
http://www.proactiveinvestors.co.uk/companies/news/125054 Crucially No interview.
Lots of questions being asked of what's going on and where do we go from here and people asking themselves what are they still doing here. Don't think anyone has questioned the fantastic optimisation of the Feasability Study - the potential is there for all to see. The huge liquidity that suddenly started Mon pm and then from the off on Tue at 8 am remains unexplained. It seems very clever how the market started Buying if someone wanted to dump up to 22.4m (China non-ferrous). A rise was certainly created first. Anyway, looking for a 'Holdings RNS' and a Dekel interview (ProActive?) before jumping to any conclusions. Anyone want to sell while they don't know some facts and the project looks far more attractive than ever - they're welcome to.
I think that you are probably right that the Chinese buyer has gone and is now selling out of the company. Whilst that is disappointing, Chinese companies do have a habit of bidding low so perhaps maybe we can look at the possibility of other bidders emerging. I understand the frustration of long term holders as I have been in the same situation (look at OSU and ARS both of which have had a similar history of bright futures and non-delivery). AIM is riddled with companies with crap management that have overseen shareholder destruction. Dibs should know - he is a big holder in one of the worst culprits. But CGH does have a significant gold deposit and this will be of interest to a buyer at some stage of a gold bull market.
Following today's news and especially the views in Dekel's commentary, it looks to me like our potential Chinese buyer has fled. I would have expected a bid to be tabled after such a significant reduction in operational costs has been announced. All along, the markets have met news from the board in luke warm fashion at best, so today's drop is no surprise. I groaned when I read that Dekel will inform investors of developments 'in the coming months' as in CGH speak, this means years. There is not even a hint in today's RNS of a jv really and that is now the board's only chance of achieving 'value for shareholders.' As for members of the board stowing away shares off-shore or in trusts, that is hardly the behaviour to inspire confidence. Time for me to move on, I think.
Bankside - excellent post and someone who really knows this company clearly. I have been generally a long term interest and supporter of this stock but today's announcement, as much as it tries to appease and charm shareholders leaves a lot of questions. You've brought up a key one which I forgot to include earlier. If the Chinese didn't sign off on the DFS then who has??!! What competent person has declared it correct to the best of their professional knowledge? I don't see a name or a company anywhere. And which potential buyer is going to take Charaats word for it?? Come on folks And yes I do remember Mac Deguire and we still don't know why he went so early on in the DFS? A much respected figure in the industry - gone just like that before the job was half done. And then there were the consultants that got turfed out which delayed things again. You can have a world class resource but if you don't have competent management you are not going to extract value. It's sad to say it from a shareholders perspective but it's a shambles because there is no strategy. It's wet your finger and stick it up in the wind. You maybe lucky and get a bit of a rise on the gold price but I know what I'd do on strength.
fairly good summary of Chaarats situation. I am considering selling at HUGE loss because I am losing faith in the BoD to deliver anything.
Bankside, Thanks for that! It is really useful to hear the background. My thoughts are somewhat simpler. I believe that the existence of a JORC compliant gold resource (with most in the measured and indicated categories) is not disputed and the price of gold looks like it is breaking out. If the incumbents are not capable of taking this forwards, somebody will be and will pay a comparatively (to the market cap.) large amount to do so. This is why I want them to stop spending money on further development and just look for a buyer. The money is in the asset. We are coming to the right time to realise it.
I am writing this without notes but a few years of experience with this company. Can someone check out my points.Todays RNS is typical of this company - forever promising but never delivering. The longer term members on this board seem to just make individual comments rather than a continuous thread thereby letting Dekel + Co get away with a total lack of quality information. Everything is at the last minute and then never complete. It goes back to the very beginning of the company formation. Dekel (Israeli) was mid level guy in silver company that had rights to Chaarat. He left formed partnership with Alex Novak (KG/Russian Specialist local fixer). Silver company goes bust and Dekel and Alex end up with majority interest in Chaarat (helped by London money man C Palmer-Tomkinson - remember Tara). CGH came to market about 9 years ago promising to build a plant and be making gold bars in two years. After further money raising, of about $100m in total, they are no further forward with the plan. But, CGH currently valued at under $25m. A few years ago they exchanged some other KG assets for additional shares in CGH and last year decided that these assets were no longer worth anything (sound familiar). The also bought mining machinery and equipment but later sold it because the plan changed, obviously. Where is that plan now I wonder. A long the way they have taken on then lost some great prescious metal veterans who had joined the board only to fallout with Dekel (Dr Rob Weinberg + Mac DeGuire). The latest DFS has taken morethan two years and Dekel can't get it signed off (what experience of mining does Dekel actual have?) Perhaps the fact that the company geologist, who signed off the original drilling reports, has hightailed it back to India over a year ago, has meant Dekel is now the CGH competent person!!! Was the fleeting mention of a tunnel really a proposition or just another reason to delay. Meanwhile the Chairman (CPT) has moved his shares in to a trust, so who knows what has happened to them and Dekel and Alex have theirs in offshore companies. Perhaps squeaky clean Ms Naylor could investigate, she has plenty of time on her hands since she only ever produces annual figures at the very last minute, so don't expect last years results until say July even though they could be produced on the back of a large envelop. And who sold 10m shares in the last couple of days, when just before, out of the blue, some online pundits promote the company... just we get the latest news that surprise surprise the Capex cost could come down but the Engineering Company paid to OK this won't sign off on the figures. The information to verify these comments is out there but don't expect to find it on the CGH website. Past studies and business plans have been removed. Put your collective minds together and come up with some questions for the AGM, which few people ever get to attend. I wonder why?
You may be right. As I said it is difficult to judge as we haven't seen the figures for some time.
fed up of hearing about - "world class low cost asset" "interest" "negotiations" and "shareholder value" etc... over the last 5 years.... all the time he receives a nice salary each year.... at some point enough is ENOUGH ... today's RNS buys a few more months
Thanks for that Daisan, I just used a linear projection from the last interim and I got to around mid this year which is very very soon. The had $5.2m June 15 and expenses run at around $1.5m plus exploration of around $1m for 6 months. I assume the expenses would remain the same but the exploration/capex side is hard to call. With the FS, I would imagine some money would have been spent there as well. On the upside is, Dekel has said a number of times that there are several other buyers/JV options in the mix. The only question left is has Dekel got a tendency for over hyping those prospects to keep shareholders happy?
Hard to be exact carvegyber. It depends on whether they embark on any more significant expenditure. If they don't then it should last a year I believe. Given that it has been a while since we last saw the cash balance and the rate of burn, it is difficult to be precise however.
I will answer you Dibs despite the abuse you tend to dish out and your shameful behaviour on SHG. Not sure the strategy has changed at all but when you can't come to a reasonable agreement with the company you were targeting you have to move on. It is clear that CGH were not happy with the results of the DFS and hence wanted it reworked. I don't blame them to be honest as it is obviously a world class deposit. The suggestion is, and I am not in a position to know the realities, that the study was not reflective of the underlying asset value. At this point CGH need to look beyond the company they were hoping would buy/JV the project and open it up for other parties. Inevitably this is resulting in the target buyer unloading their shares (this is a logical conclusion but not one which I have any proof of currently) causing the share price to weaken. Personally, I think in a rising gold price environment they shouldn't have issues funding development or selling the project. Of course, that requires the market to be convinced about a rising gold price. As for cash, now that they have a DFS that probably is closer to reflecting the value (I think it is still conservative compared to other projects), they should hold fire on further expenditure and preserve their cash which should be enough to survive for at least a year unless they embark on any further activity (they should not). It is a waiting game at this stage.
I've never been a miner when it comes to shares and I'm giving up again as quickly as it started for me trying to trade them. I sit and watch several miners when they are moving thinking they will come back down so refuse to buy them and then watch them add 100-150% in a day and then the ones I do play just go down down down and everybody sells. Just going to accept they are not for me so will stick to trading good old fashioned profitable stocks which might not spike like miners can but at least I will not get trapped as much as I do when I try the miners.
I am a long suffering holder here and am now quite encouraged by the optimised FS. I do agree with the reading between the lines of this RNS so I am considering adding to my holding. Does anyone know how long our cash will last before we have to raise more money to keep the lights on?
Was it the Chinese selling down over past few days? Why, if the mining group have done DD have they not bid? This questions the entire long term strategy. They were initially focused on full production and were targeting western partners or buyers. Then they scrapped that for the DFS. They then explicitly stated they were targeting Chinese partners/buyers. The Chinese have not delivered what Charaat either wanted or thought they would get. I assume they paid the Chinese to complete the DFS and have rejected it. despite saying the Chinese were technically excellent they have rejected a number of their key conclusions and metrics. So what on earth do they do now? Where do they turn? The Chinese are well known for their patience and playing the long game. They will wait. In the meantime Dekel knows that if they are to progress this project much further they will require funding. He's already admitted they don't have funds for further drilling in the coming season. He had previously declared they would be starting a BFS later this year. However that was going to be on the back of a Chinese approved DFS - which they have not received. He's also said they might consider limited production but what is the true capital cost there? It's a mess to be frank. Strategy? Changes like the wind. No wonder the market isn't keen. Too much uncertainty and I also think the response is one of the market now anticipating an inevitable fundraising in the next few months.
China's gold miners plan to extend the biggest buying spree in 4 years http://bloom.bg/1r0FpNQ HUM and CGH long term hold for me
ArielArrow, Believe me, I have been in other companies where that is not the case! Selling is always the most difficult part of the equation.
Beginning to come in now. Not saying this won't go down further but at some point the value becomes a screaming buy and the trades will come pouring in. As significant as China Nonferrous (if it is them) stake is, eventually it will be gone and this will have real momentum on the upside. Just need to find the bottom first!
If you think your entry was poorly timed, at least you chose the right decade (possibly)