The latest Investing Matters Podcast with Jean Roche, Co-Manager of Schroder UK Mid Cap Investment Trust has just been released. Listen 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.
Well, its make your mind up day today. The fact that we had an RNS announcement out stating that the 3 major shareholders controlling over 50% of the stock have already irrevocably voted in favour of the deal, together with, I am sure, may of the directors and other insiders, really puts the outcome of today's Shareholder's Meeting beyond doubt. Also, I reckon SJH had it right a week or so ago, the key to making easy money out of this amazing deal in South Africa will be to drill the shallowest prospects first and prove up the JORC compliant ounces. Given the highly predictable nature of gold reefs in the Witwatersrand and the drilling that has already taken place on the property. This is not going to be difficult.....
As and when they are proved up, invite the majors in to either buy out the discoveries or sort out a "farm in" arrangement where the major provides the capital and LEX takes a profit share... Money for old rope, very few employees, easy to manage... I am thoroughly looking forward to hanging onto my position, and , if the inevitable capital raising terms look attractive, getting some more on board. We all know how tightly held this stock is. Being able to bag a chunk "off market" looks like a sensible play to me..... Also worth bearing in mind that Australia's most successful mining entrepreneur also thinks in the same way. He's got options that will and up with him owning 30%+ of LEX. I wouldn't bet against him.... happy to have Mr. Creasy as a partner.....
Why would you mine it? Why not get all the compliance and regulatory requirements upto to scratch and either sell the assets for vastly more than we acquiring them or get let harmony (who already have a deal with) or another big miner do the leg work. I can pretty much guarantee LEX won't being the doing digging.
I would like some reassurances from the board here mainly how all the financing will be done. It is going to cost a fortune (eye watering amount) to even get this new project off the start line (in my view at least) and in a position where they can actually mine it.
We need clear timelines as to when, how and at what level of cost each stage will be. I don’t particularly want to see heavy dilution early doors (as I am sure other SH’s don’t).
The deal does look good but it needs to be done extremely cost concisely and effectively. We will have to see how it pans out but with the expertise and experience of the board one would hope they have the interests of SH’s at all times.
At the moment the SP is heading down and not stabilising.
It's not really Dilution when your gold reserves have 10x and we only doubling the amount of shares. I actually believe the math if done correctly looks better than that for share holders. I think the recent politics in SA have not done us any favours. This is not riskless, but let's dumb it down 200k ounces gold in US plus stratgic rare earth's. 37 million ounces potential in WR, Mark Creasy to be a leading share holder. Whats the MC today £30m? Less? Even if these figures in WRE are adjusted to downside considerably its still well undervalued especially as we likely going into a gold price expansion. Risk vs reward play here is favourable. I'm quite optimistic is anyone can make SA work it's Bernard whom is a SA national, in conjunction with Harmony. Probably plays out over 24 months this a deal with a large miner in US to exploit the US grounds would be fantastic. The last fund raising here was done a + premium to the 3 month SP and I expect if another one was done which we don't require it would be at a very responsible level. Risk vs reward very good here, the flippers come and go but the major holders are looking for 10x on this one. Gold at $3k on my radar and critical rare earth's likley outpace.. Its a AIM stock dyor, I'm happy to keep adding 10% of my portfolio in this one and I sleep well having it.
Because of dilution, what you talking about.. when a share is diluted you get a proportion back, increasing the number of shares you have. None of that has happened. The share has just tanked.
SP has nosedived since the announcement. Not sure why given the latest news but very disappointing nonetheless.
Https://lexingtongold.co.uk/wp-content/uploads/2023/06/2023-06-02-Lexington-Gold-WRE-Acquisition-Circular-v5-Final.pdf
A lot of this is recapitulated from the announcement 3 weeks ago, but this is the statement of the BOD that they are unanimous in recommending the deal to S/H's .
PAF down over 20% today on problems with operating in South Africa
Yep, I may be being a bit gloomy; it's a fair cop! And yes, I agree I was far too trusting of the BBC pre-Covid. I am now highly sceptical of numerous articles it publishes. Having said that RSA does have very serious problems.
I think there is great potential here - let's hope the management team can execute a successful development of this new asset for the company. Creasy, plus the LEXers with RSA experience have excellent credentials. Time will tell and I accept this will be medium to long-term investment. At the current SP, can you believe I am actually in profit for the first time since 2009.
I would be less worried about SA than the Beeb! They have an agenda, and since most gold miners are still controlled by the evil white man, they tend to over egg the situation. Yes, power supply has been an issue, but they are working on it. Also, bear in mind that there is tons and tons of solar power potential there too!! Its going to be a long time before we need to power a gold mining/processing facility, at least 5 years I would say, and I am sure that the short term prospect, the Harmony JV have already addressed this!! Also, proving up resources in SA because of the nature of the deposits, (large, flat, concentrated), you do not need to do anywhere as much drilling to prove up a resource compared to other jurisdictions. Take a look at civil law in SA too, it is still ranked as the 3rd best jurisdiction in Africa to do business. There are good reasons for that. If it were such a bad place to do business, why are all the major gold miners still doing biz over there? And it looks like our concessions are shallow!! In other words, very cheap to mine!!
Looks like today, finally, the market is sitting up and taking notice. Decent volume today and some sound looking buying in good chunks going on.
I appreciate your caution but I would rather rely on the experience and expertise of Mark Creasy, Bernard Oliver and Ed Nealon than a couple of two bob journo's trying to write a story for the BBC !!
The deal looks good on paper, with a massive increase in potential reserves - but these are not 'official' JORC; I wonder when/if this will happen.
My worries about working in RSA continue though. Have a look at this article from the Beeb https://www.bbc.co.uk/news/world-africa-65671718
It's a country rich in resources yet extensive power cuts now seem to be becoming the norm. This is basic infrastructure provision and things have got so bad that "Turkish company, Karpowership, has signed deals for its ship-mounted power plants to supply electricity to several West African countries, and last week South Africa. These are moored off the coast and directly plugged into the national grid, supply between 30 MW and 470 MW per vessel." This is another quote from the Beeb.
I am staying with Lex as it looks as if it could be a multi-bagger over a period of years but RSA will be a very difficult place to do business.
It's a gift! get more stock! Creasy gonna be leading this to 100-300m market cap. LEX move was a cleanup operation and now a vehicle to extract maximum value. Deals with actual mining operators in place. Proven gold reserves that can easily be mined but what's really over looked is the other plots. 8p was fair value for the US plots with cash in the bank for a year's operations. I'm shocked we not at 25p+ already but actually look at the deal with Creasy its best for LEX holders if SP holds here until deal is completed. Creasy becomes a major shareholder and his experience will be a massive asset. I can wait for this to unfold and will aquire more and more shares as and when I can!
I think it is quite staggering that a Junior miner can come up with 37mn Oz of Gold and the market shrugs it off as if nothing has happened. Mark Creasy is no fool and has a great track record of rewarding shareholders who back his judgement, I for one will stay fully invested here and look forward to the future... I have batted on a bit suggesting one of the bigger players close by to us may want to acquire us at these levels and recent announcements surely makes us more attractive
Methinks that the community is getting hung up on stuff which is not really relevant!! Lots of people here seem to focus on why Creasy is selling out. Well he is not. He is well known for investing in mining juniors in Australia in particular. Surely, the fact that he has got on board a group of managers who know and/or live in South Africa, should count for something? He retains between 30 an 40% of the business potentially. Loads of incentive to support existing management. And there is low hanging fruit there for us.... The Jelani Joint venture with Harmony. Technically, they will be waiting for AGM approval, but I think you can bet your bottom dollar, the phones will be ringing already to get this one back on track. Management would not risk approval of the deal by an AGM/EGM being rejected if they had not already had a quiet chat post deal announcement with the major shareholders and got their approval...
We need to relax, and look forward to the slow realisation that this is going to be a 37,000,000 ounce company, not a 200K ounce one, and let management get on with it!!! The potential is there...
Is it because he/WRE acquired the land/claims/licences proved them up to pre development, now selling them to LEX for a profit, retaining a 10% interest via LEX shares, so still benefits but does not have to spend anything on development/mining costs in future ?
A VERY in-depth interview with #LEX CEO Bernard Olivier.
“…This takes us from a junior explorer into a far, far larger company with potentially multi million ounces in the ground….”
https://total-market-solutions.com/2023/05/lexington-gold-ltd-may-2023/
Agreed, However, you can't ever keep everyone happy, but I thought the bit about the depths of the prospects at 2-400m is very telling. You don't even need to put shafts in at those depths, you can spiral down and put a basic rail transport system in as I understand it. MUCH cheaper........... I am sure that we will hear more about this as things develop. But really, it seems to me that it is the absolute massive size of what we seem to be getting into that is fascinating, not to mention game changing. Going from 0.22mn Oz to potentially 37mn, is pretty bloody amazing.
Not sure why my link below was removed but check out Vox markets interview with Bernard Oliver if one so inclined.
Most reservations I've heard put to bed by the man himself.
[LINK REMOVED]
I hear you SJH. If you look at the trades yesterday, most of them were what I would call "junk trades", there was really no evidence at all of concerted selling by major holders. Just 1 X 200k, 1 X 150k and 1X 100k, on a volume of 2.8mn which is less than 1% of the company. This share is still very tightly held.
Someone was also questioning why WRE was put through business re-organisation. I have n idea about that as someone who has been through this process before,. If you are a sensible business person, its a very neat solution to quite a few things and cleans up very potentially messy situations. 1) Creasy, as the major creditor would always be in control of the process, but much more importantly re-organisation would achieve, 2) getting rid of all old debts to suppliers (if any) and 3) would ensure a sale of up to 100% of the company totally wiped clean of previous shareholders and potentially a useless Black Empowerment operator (and there are many of those in South Africa). This is great for Creasy, great for LEX. Clean clean clean!! The government sponsored process GUARANTEES a shiny new asset which has been totally laundered of any nasties. It will be interesting to know who LEX chose to become their BEE partner. There are actually some very good ones too.
Yup all those that needed to sell gone today, back to a shortage of available shares on the market now much the way its been for at least 9 months. We at 15m market cap with some of the most exciting gold prospects out there and Mark Creasy on board.. unbelievable really. I'd of thought this market cap was cheap for the US assets alone let alone WRE which has outstanding proven potential and holding exploration potential as well. With gold prices where they are and unlikely to see any major decline I'd be suprised if we didn't see a quick and substantial repricing to the upside.
Thought i would check all the trades today as I thought there were more buys than sells, yet we ended the day status quo against Friday. I backtracked all the delayed buys to the price at the time of the trade, and they were all fairly obvious if they were a buy or a sell. Results: Volume of 1,372,914 buys Versus 1,444,926 sells. A difference of 72,012 in favour of sells. So in other words, the MM's made a nice packet of dosh today trading 2.8m shares. lol