Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
As a similar-ish benchmark for how these deals can play out, check out Cardinal Resources (formerly an ASX listed junior miner with operations in Ghana).
Cardinal received an initial conditional takeover offer in mid March 2020 from NordGold.
3 months later in mid-June 2020, Shandong submitted an enhanced all-cash takeover offer and ultimately Shandong successfully acquired the business.
Shandong's bid was a +31.1% premium to the NordGold bid, so this gives an indication of the potential upside here if Shandong came back for another look.
I guess this rules out Endeavour as a potential suitor…
https://www.reuters.com/markets/commodities/endeavour-mining-removes-ceo-citing-serious-misconduct-2024-01-04/
Tibbles - your guru has been shown to be an emporer with no clothes - you seem to fete him as some kind of prophet, largely overlooking the fact that his clearly erroneous comments evidence his total lack of knowledge about Shanta and show he has a clear inability to understand the most basic of regulatory releases. Most investors here are not naive gamblers - clearly this is a high risk AIM stock as we have seen from the Odey debacle. I'd suggest that most here have the ability to read (unlike Kees it seems) and have made a carefully considered risk-weighted investment based on the information available. Indeed, anyone who has invested in Shanta in the recent past will be in profit and has been shown to be correct thus far, having identified an undervalued company that was a clear takeover target.
Every time you post I am reminded of the saying "Pessimists sound smart. Optimists make money.". I'm happy to occupy the latter camp.
BPat - good point re timelines and it is true that we know the confidentiality agreement was in place prior to finalisation of the Winshear settlement. However, the bidco (Saturn Resources) was only registered in Mauritius on 9 November 2023, some 24 days AFTER Winshear publically confirmed that they had agreed a settlement with Tanzania and received $30m payment into their bank account. I speculate that this could have been a deciding factor for the Patels to launch the formal bid. My belief is that the Shanta legal team has confidentially advised that the Winshear settlement signals that Tanzania will likely settle Shanta's VAT claim, as part of a broader policy to attract international investment into the country's mining sector. Mining companies are obviously going to be comforted that Tanzania has complied with international norms and arbitration rulings, potentially increasing the likelihood of investment in both exploration and development projects in Tanzania. The Patels may have received guidance from their in-country advisors that they are likely to win the VAT case, and separately they may believe that Shanta will be awarded the former Winshear tenements next to the NL mine. These developments would be hugely value accretive to the company. However, there are valid reasons why such confidential guidance and predicted outcomes can legally be withheld from the market by the company - both points are clearly speculative and any discussion about these matters by Shanta could unduly and adversely influence the Tanzanian authorities' deliberations on these matters. Adding credence to this idea, you can see why the Patels are opting for short term bridge financing mentioned in the offer document - if the VAT settlement is awarded later this year, refinancing would be much easier with this substantial cash injection significantly increasing the Patel's equity. I think the Patels have identified a clear case of information asymmetry in their favour, whilst not breaking any rules by withholding information from the market, and are opportunistically seeking to take advantage of this with a bid. Not sure how Eric fits into this - maybe he has a juicy consulting gig lined up in return for his support (although his presentation on the matter sounded decidedly forced). Hopefully a rival bid will emerge soon.
Tibbles - just because Kees has been right in the past doesn't mean he's correct this time. The fact is that Kees' preliminary opinion is itself demonstrably "ill informed", as you put it, and whilst he has made some valid observations, he has also made obvious elementary mistakes. As others have mentioned, if Kees had read the latest RNS releases, even over just the last 3 months, he would have seen the interim financial results have been published. He's clearly not bothered to make even the most cursory review of the company's news releases, so how can he possibly comment with any credibility about the company's operational prospects? Furthermore, his views seem somewhat anchored on the New Luika Mine nearing its end of life. He goes on to make a throwaway comment about WK without ascribing any value to it, as once again he has clearly not taken any time whatsoever to look into it. WK is going to be a key consideration for any acquirer looking to add profitable gold ounces to a portfolio, given that the scoping study in 2020 suggests $2,000 tr.oz. gold price would yield a POST-TAX NPV (using 8% discount rate) of close to US$500m and an IRR of over 200%. My personal opinion is that the Patels have seen how Tanzania ultimately paid US$30m cash to Winshear Gold as settlement in Q3 2023, and the Patels may have assessed that the outcome of that case enhances Shanta's chances of recovering the VAT due from the Tanzanian government (which I do not believe is priced in at all to the offer price). Secondly, as Eric has mentioned, I think Shanta have a good chance of acquiring the former Winshear tenements subject to that settlement, which will add a proven gold resource immediately adjacent to the New Luika mine, thus potentially addressing one of Kees' primary concerns. Of course, both of these matters would not be known to Kees, as it's obvious he has no depth of knowledge about the company. However, for other potential acquirers, these will be known facts and will hopefully prove an incentive to counter the Patels' derisory offer.
I echo your thoughts Publican.
I hold 5,131,391 shares and will also vote no, although I suspect PI’s are unlikely to vote in sufficient numbers to have an impact on the outcome. Hopefully there is an institution or two that votes to reject the initial bid.
A seriously attractive portfolio of East African assets on the table here, so hopefully we hear from Shandong again, as well as the Endeavours of this world at the start of January.
My bet would be that we see at least 15p per share offered by the end of this process to get the deal done.
Really surprised that there's been no new opportunistic takeover offer tabled for Shanta given its very strong financial position and excellent prospects. I was convinced that was the reason Eric has remained at the helm for longer than expected, to facilitate a credible offer from an acquirer, as I simply didn't believe the messaging about how long it was taking to find a CEO.
ID78 - good post, glad to see someone else looking at EV comparisons instead of the usual repetitive comments about market cap which fail to understand the absolute basics of company valuations.
I think your estimate of SHG's net cash position is too high at this juncture, but I certainly agree that SHG is the pick of the two companies - I've done the same as you and bought SHG and avoided HUM.
One other thing I would add about HUM is that prospective investors should be extremely careful about their AISC figures. HUM are opening underground operations in their first mine, and it's not entirely clear whether HUM are accounting for those underground costs as sustaining (and thus part of their AISC numbers) or non-sustaining (which would help juice their AISC numbers above what they would otherwise have been). My bet is HUM are not including underground works in their AISC numbers, which is part of the reason their net cash position is so poor necessitating a refinancing. Luckily we can infer from SHG's cash flows that creating accounting of this nature is not a concern here.
This is a good article setting out the pitfalls of AISC and the merits of placing greater reliance on cash figures: https://www.cruxinvestor.com/posts/analysts-notes-week-5
Solid set of results in line with previous guidance. Good to see full year numbers reiterated. Without wanting to state the bleeding obvious, H1 2023 is the same as Q2 2023, so it's bizarre that some are complaining about the net debt figure which was previously communicated in the Q2 2023 operational and production update released weeks ago.
Noel, it’s pretty obvious Clive is just as clueless as the rest of us and is certainly no charting Messiah.
From his homepage, this article was published in May 2023 summarising his bearishness on Oil:
https://www.clivemaund.com/article.php?id=69
Remind me where oil prices are at the moment? Oh yes, highs for the year, the complete opposite to that suggested by Clive’s rather amateurish analysis.
Not exactly Druckenmiller is he:
https://www.clivemaund.com/about.php
I read a book, yada yada yada, then went on holiday, yada yada yada, then did an exam no one has heard of
I see this as entirely positive for Shanta's Kenyan operations. It is clear from various reports on similar issues in Kenya over the last couple of years that there are two main issues which typically result in mining suspensions, namely 1) loss of tax receipts from improperly declared mining operations; and 2) serious safety concerns resulting from poorly handled toxic chemicals used in the gold extraction process which often leach into the local soil and groundwater. Halting non-compliant mining activities is clearly the right thing to do to protect the local population. The solution to both issues is for Kenya's government to engage with and offer support to companies like Shanta, who have already proved their credentials in Tanzania, and for the government to encourage large-scale investment to develop Kenya's emerging mining industry. Far from being a concern, imo the reported interventions from the government demonstrate that Kenya is moving in the right direction to be supportive of Shanta's future investments in the country.
Alastair Ford is not a regular newspaper hack parroting a get rich quick stock at the bequest of a financial PR company. He is actually a decent mining analyst who has form for identifying high-potential gold exploration companies before the crowd has caught on.
By way of an example, here's an interview from 2017 singling out Greatland Gold. Share price at the time was about 1p/shr. This was shortly before it went on its bull run to over 30p/shr over the next 3-4 years.
https://www.proactiveinvestors.co.uk/companies/news/308296/-we-re-on-the-cusp-of-an-exploration-wave-mining-capital-s-alastair-ford-8296.html
"proves me right" - you outsmarted the gang Noel, well done.
https://en.wikipedia.org/wiki/Dunning–Kruger_effect
And another one.... lots of international M&A linked to gold projects in Tanzania over the last few months.
https://www.bloomberg.com/press-releases/2023-08-10/tembo-gold-announces-transformative-acquisition-and-landmark-investment-from-tanzanian-strategic-investor
noel, you have published nearly 5,000 posts - an astronomical amount of time must have been expended on this by you given the length of many of your comments. have you nothing better to do than to **** off other posters? are your posts more informed than others' comments? i would respectfully suggest not. you criticise other posters while you personally inundate this board with repetitive links to fringe ideas, with a questionable basis in reality and of limited direct relevance to the stocks commented on, complaining they are "swamping" this board. this demonstrates a staggering level of hypocrisy - something you seem oblivious to. time to take off your blinkers and have a good hard look in the mirror before being abusive about other posters, many of whom i personally find very useful . you are the very definition of "theoretical claptrap".