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I hope DB has been selling all his gold at hand today, because at $1620 an ounce we will be heading for $32 million income in Q1, yep, just 1 quarter income, that happens to be our market cap today, funny but true.
Great Post Volmer
Well it never surprises me how easily people can give up their money, selling out at just over a penny? I’m baffled how you can have belief 1 minute and panic the next, I do my best to put a rounded perspective on events, and have been since the 0.3p days, because I believe this is only going one way over the coming years, and I have many reasons why, but when you get a piece of information that tells us a little of what to expect, it’s seen as the end is nigh, the share price is already battered, and rushing for the door leaves more losers than winners, and the clever money is still filling their boots with millions upon millions of dirt cheap shares given up so easily, the finance will be sorted in the next month or two, that’s good news, if it takes a little dilution to get the sums to add up, then it’s worth it, the Q1 numbers will blow us away and payments to the our new financiers will start, many will see how hasty they have been in writing off such a fantastic opportunity.
Don, perhaps it was frustation. On 22 Jan he said "....these negotiations can be concluded swiftly, such that the Company's financial position becomes sustainable; allowing management to focus its efforts on improving operational performance at Runruno and to consider growth options for the Company." He wanted to get on increasing the business and its profits. If it was out of frustration, then it is good for us shareholders. It means that he is acting for the benefit of all shareholders and not just the 2 major ones.
A quick conclusion was not reached. I suspect one or both debt holders is pushing to max their benefit. I also believe the banks took a haircut in selling the debt. Otherwise it would not have taken 12 months to negotiate the sale. The banks would hhave accepted 100% immediately. Do the debt holders want to keep the debt at 100% or will they pass on some or all of any discount to shareholders.
I suspect this is at the core of the negotiations with the 2 debt holders. If push come to shove then they are in a similar position to that of the banks when they couldn't risk the government taking back the mining licences if the company were liquidated.
On this BB some time ago I read a comment that the company needs to have total sustainable debt of around $50/$60m. That means the remaining debt - however much it will be (we don't know haircut or no haircut) - needs to be repaid or converted to equity through one mechanism or another. Part of it could be repaid from net cash flow of the first 3 or 6 months of 2020 - the gold price is helping in that.
Another thought on the debt. If the banks had agreed to a new repayment schedule last year, the company needed a small equity raise in order to finance the capex and to start repaying the debt. The debt standstill was great in that it allowed the capex/maintenance costs to be funded from cash flow without a fund raise.
Overall the company had to issue some equity then or now. We are not necessarily worse off based on what we know so far. So as I see it we have negotiations going on between the company (representing us) and the 2 debt holders. Better a little frustration rather than rolling over like Mrs May last year.
The outcome may not be as good as the 2 debt holders want nor may it be as good as we want. Somewhere in between would suit all parties fine.
Amazes me that more stock was bought in the latter part of the day than sold and yet we didnt go up that much will never get how the MM’s set prices
Totally agree Shinfalls, it’s CEO 101 to only announce the deal when it’s completely worked out. Dropping a one liner re dfe has trashed the share price unnecessarily. We did touch a MC of 40M and debt of 100M, GBP... a dfe swap for 40M at 2p and a 5 year repayment of the remaining 60M at 6 percent, ie 1M interest plus 3M of principal per Q, would have been eminently doable, imo. That would have left us with a MC of 80M at same 2p. In that scenario, I think the sp would have held firm! Oh DB, why have you not kept the lid on it until it was ready to put to shareholders!
Carefree could you point me in the direction where they have stated they want to take the company off AIM anytime recently?, they made an offer 10 years ago but it was a completely different enterprise back then and they had only just started to raise for the construction AISC in PFS was around $600.
If Candy and Edwards wanted so much to take it private they could have easily at any point over the past few years.
Lee - You have failed to appreciate that the debt is owned by the major shareholders and it is they who will be swapping some of the debt for equity. There was no mention of an open offer at all.
If the D4E results in the major shareholders then owning at least 75% of the shares in issue then, as they have stated, they will take the company off AIM so the share price then becomes irrelevant.
Add now because i promise you once this is finalised you’ll have missed out
Just topped up £2,000 lads bargain at these prices.
Now hold 3,589,832 shares to be exact, at an average holding of 0.8499p
Apoligies Lee, roy Pharma et al. Have read your advice but:-
I just sold some this morning for very close to the value of my book cost. Mainly because I'm not an experienced investor and not sure of when and how much the effect of the D4E will have. sorry guys.
However I'm now left with a total of 904,726 shares in this stock that have cost me next to nothing, so I'm sticking around
and will see where the price goes from here
Its been an exciting ride and I hope it will continue
Regards
Jim
I think the silence from the LTHs is more of a sign that they are comfortable with the proposed debt reduction path, they are not winging, non of us knew how that deal would pan out, we now have an idea of the proposed direction, I see it as a way to bring down our debts in an instant, and that reduces our risks over the long term, it reduces our interest liabilities, it reduces the repayment period, and yes it reduces your share of the MTL pie, if that bothers you, you can buy more, at a discount to last months share price. Win win is how I see it. Keep calm and carry on.
Gold hit $1613 earlier, Q1 2020 is going to be seriously good at these levels, mining is a waiting game, for those who can’t stand the ups and downs, of which there will be many, you may need to find another investment platform, or switch of your computer and take a look every 6 months, this is a 2 to 3 year journey to the serious money, a debt free MTL and a dividend income, I’m 100% in for that journey, Darren Bowden is the man who will bring this to fruition, he’s no fool.
Just noticed that 2mil buy first thing this morning wise money
I have £2k waiting, just seeing when the loose holders work themselves out.
Always amazes me how quickly something falls but on the same value of buys doesnt move
That’s the spirit, top up time
Shins, if you had an open offer of 1 billion shares at 2p, would you do your bit and buy some? If you would, that’s great, you would have to buy 50% more than you have now to have the same share of the MTL pie, so why not double your holding now at 1.45p today to achieve the same end, assuming I’m correct that 2 billion new shares may be released to drop our debts by £30 million.
You will still have the same share of the MTL pie, and the pie will have 30% less debt, just a thought.
DB mentioned the debt for equity intentions because that’s what’s on the agenda, he’s been transparent, when the deal is announced it’s not going to be a shock, DB is keeping us in the loop, thank god for such a decent CEO.
If you have a longer term view then you will see this is a fast pass to a debt free business, it’s not a underhand way to shaft the little private investor, DB has our back, he said from day one, his goal is to increase shareholder value.
I am really surprised the update even mentioned the D4E element, why not just say debt restructure talks are ongoing and a announcement will be made when concluded. Had they done that, with those excellent Q4 numbers, the share price would have probably be near 2p now.
This aspect is very disappointing and has blotted a near perfect run of RNS statements, minority shareholders now have to trust the major shareholders to look after them, I think all will be well but how nice it would have been to see the SP heading to, or even exceeding 2p today.
Let us see what today brings, if we see some large buys then maybe that is a signal from those closer to events.
Well I have a worry that the price is being held back. The major shareholders will simply pull the rug from under us with a very low ball offer. If we don’t take it they pull the debt and cause bigger issues. I wish I had more faith and trust but recent experiences with the market show otherwise. AAOG, Koovs, Valirix, Flybe, and the list goes on. Let’s try and remain positive. Debt gets sorted. We get diluted but the path is then clear and we can all move on.
I think we need to understand where we sat this morning before the RNS, we had a share price of 1.5p and 2 billion shares in existence, making our market cap of £30 million and total debts of £100 million ($125 million)
Let’s say we agree to a £30 million reduction on the £100 million debt, at 1.5p that’s another 2 billion shares allocated to the major shareholders, making a total share allocation of 4 billion shares at 1.5p.... our market cap becomes £60 million with a reduced outstanding debt total of £70 million.
£70 million is a lot quicker to pay back than £100 million, it reduces our interest payments by 30%, it shortens the time to become debt free by around a third, a debt free MTL would produce a fair value market cap of £200 million, that’s 5p a share when there are 4 billion shares, a debt free MTL means the start of a dividend payment, a dividend income and a 330% increase on our 1.5p share price. What’s the setback? The debt free position will come much sooner with a £70 million debt total, than a £100 million debt total.
The Q4 gold output was great news, todays gold price above $1600 is great news, the debt for equity is good news, look at it as a fast pass to a debt free MTL, and today’s RNS is nothing to panic over. Glass half full or glass half empty, some posts here have agendas to get cheaper shares.