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Slowlyslowly given me one example of an AIM Company where the Board have created shareholder wealth!
Do you work for AMC's PR firm by any chance?
AMC has cash that the Board should have returned to Shareholder rather than gambling it on an RTO with a Pharma.
I suggest you have a look at the share price graphs of ValiRx, Sareum , Hemogenyx.
The Modus Operandi of most AIM Boards is to ensure they are well remunerated, then keep themselves in that job as long as they possibly can, award themselves lots of out of the money executive share options, take big risks with shareholders money, carry out highly dilutive share placings without shareholder pre-emption rights, then carry out a 1 for 100 share consolidation, then keep on placing shares!
AGE
You can just imagine the thought process that went on to say they decided on a Pharma for an RTO!
Must have gone something along the lines of:
What is a very risky sector to invest in? Answer "Pharmaceuticals"
Could we end up receiving a massive amount of Executive Share Options if the drug comes good? Answer "Yes"
What if we end up running out of cash? Answer "We shall do a highly dilutive share placing"
But that will destroy shareholders wealth! Answer "This is the AIM market, just think about the gain we will make on our Executive share options!"
Great let's enter into a Heads of Terms for an RTO with a UK Pharmaceuticals Company rather than giving back the Shareholders their cash and we will then try to convince them to vote to approve the deal.
If given a choice Turkeys would not vote for Christmas as we all know what happens to Turkeys at Christmas.
Do not let the Board convince you that is is a good idea to be a Turkey!
AGE
I provided information about Amur Minerals PLC to demonstrate what happens when AIM Boards try to do RTO's.
AMC issued an RNS this morning saying they have identified an RTO and they are attempting to move from having owned a mining licence in Russia that was sold for $35m and they are trying to move into the Pharmaceuticals business!
It is clear to see that the Board are desperately trying to keep their well paid part time jobs to say they are moving from Mining to Pharmaceuticals.
The notion that AIM Boards act in the best interests of Shareholders is laughable !
What do the Board know about the Pharmaceuticals business?
Just look at the share price graphs of some of the the small UK Pharmaceutical Companies and you will see that the share prices have been decimated by one share placing after another based upon the hope that the drug that they are developing will come good and be approved.
The Board did not even have the courtesy of seeking shareholders views on whether they should seek an RTO or whether they should return the remaining cash to shareholders.
They have looked at 17 opportunities and they have entered into a heads of terms agreement and no doubt incurred huge consultants fees to be able to do so.
The Board have completely changed direction from being a mining development Company that had a licence in Russia to the Pharmaceuticals business that is an even more risky venture.
AIM really is rotten to the core!
AGE
It is clear to see that the Board are desperately trying to keep their well paid part time jobs to say they are moving from Mining to Pharmaceuticals.
The notion that AIM Boards act in the best interests of Shareholders is laughable !
What do the Board know about the Pharmaceuticals business?
Just look at the share price graphs of some of the the small UK Pharmaceutical Companies and you will see that the share prices have been decimated by one share placing after another based upon the hope that the drug that they are developing will come good and be approved.
The Board did not even have the courtesy of seeking shareholders views on whether they should seek an RTO or whether they should return the remaining cash to shareholders.
They have looked at 17 opportunities and they have entered into a heads of terms agreement and no doubt incurred huge consultants fees to be able to do so.
The Board have completely changed direction from being a mining development Company that had a licence in Russia to the Pharmaceuticals business that is an even more risky venture.
AIM really is rotten to the core!
AGE
It is clear to see that the Board are desperately to keep their well paid part time jobs to say they are moving from Mining to Pharmaceuticals.
The notion that AIM Boards act in the best interests of Shareholders is laughable !
What do the Board know about the Pharmaceuticals business?
Just look at the share price graphs of some of the the small UK Pharmaceutical Companies and you will see that the share prices have been decimated by one share placing after another based upon the hope that the drug that they are developing will come good and be approved.
The Board did not even have the courtesy of seeking shareholders views on whether they should seek an RTO or whether they should return the remaining cash to shareholders.
They have looked at 17 opportunities and they have entered into a heads of terms agreement and no doubt incurred huge consultants fees to be able to do so.
The Board have completely changed direction from being a mining development Company that had a licence in Russia to the Pharmaceuticals business that is an even more risky venture.
AIM really is rotten to the core!
AGE
The Board stated the following in their project Raptor document:
The Company and the Directors are of the view that early-stage hydrocarbon assets remain a challenging investment space for micro-cap companies that ultimately lack the balance sheet strength or the depth of portfolio to absorb the range of potential outcomes for such assets. Additionally, the ability for micro-cap companies to access capital in the oil and gas sector has been significantly impaired in the last few years.
The Directors believe that the Proposed Transaction will be beneficial in the following respects: • if the maximum potential consideration is received, the Proposed Transaction will be a highly accretive deal for Scirocco, representing a premium of over 200% against Scirocco's current market cap (assuming a market cap of approximately £3.4 million);
What they did not say is that they and previous members of the Board had raised £37,414,000 gross by issuing shares and that the sale would be at a loss of £7.813m and that we would be paid the $16m USD out of our own share of the gas.
What they said is that it is a highly accretive deal for SCIR as it represented a premium of over 200%.
It is amazing how you can keep within the rules and yet still present a not so good deal in such favourable terms!
The Board did not have the funds to keep Ruvuma as they spent £1.293m on the aborted One Dyas deal and £2.132m to Gneiss Energy so a total of £3.425m
Now that Ruvuma is sold we hear there is a massive upgrade in the amount of potential gas so no wonder ARA were so keen to purchase SCIR's Jewel in the Crown!
SCIR are not going to make a profit from this extra gas as we sold Ruvuma at a loss of £7.813m
They also stated:
"Since entering into the EAG joint venture, Scirocco has supported and funded EAG's acquisition of GGL, which owns a 0.5 MWe anaerobic digestion plant located in County Londonderry in Northern Ireland. EAG's acquisition of GGL completed in October 2021 and was funded by Scirocco out of the proceeds realised from the sale of its shares in HE1. Since completion, the GGL asset has performed very well, exceeding EBITDA forecasts. "
They then sold EAG/GGL at a loss of between £725k to £875k so I would highly recommend that you remain sceptical when Boards use EBITDA as a metric rather than profit!
AGE
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In the latest RNS the BOD describe Ruvuma as large investment project which begs the question why did we get rid of it?
Vike Shareholders have the freedom to make up their minds on whether they should vote for the resolution to return monies to Shareholders or vote against and you have exercised that right!
You have made some good points however they apply equally to option 2 that the Chairman included in his document and that is it continue to invest in line with the Company's investment policy.
If the total Ruvuma amount receivable and the timings are uncertain then where is the Chairman going to get the funds to invest in another opportunity?
He might ask shareholders to vote to approve the issue of a very large amount shares of shares which will have to be issued at a discount to the prevailing market price so say 0.25p or even 0.20p and it is likely there would be no
pre-emption rights for existing shareholders.
To raise £3m at 0.2p you have to issue 1.5 bn shares and there are currently 900,496,088 shares in issue so there would then be 2,400,496,088 shares in issue.
The new shareholders would then get a proportionate share of the Ruvuma proceeds which has the effect of reducing existing shareholders pay out under the MVL but the new shareholders will only have paid 0.20p.
In my humble opinion the resolution is not premature as the MVL is carried out in stages with the Ruvuma money being returned to shareholders as it is received.
The Board AGM presentation includes a slide that shows that it cost £428k pa to maintain an AIM listing and the Ruvuma proceeds are going to be received over a number of years and the Chairman stated the $2m is expected no earlier than late 2025 and may be delayed into 2026. "
Knowing how long it takes to things done in Africa 2026 the $2m may well be pushed further out to 2027 or even 2028 as the contingent amount payable is dependent upon the well producing in excess of 50 bcf of gas!
5 years at £428k pa for an AIM listing is £2,140,000 and we have a current market value of £2,701,488 based upon a current bid price of 0.30p.
AGE
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I have voted AGAINST the resolution.
I agree returning cash to shareholders may be the best strategy, but this is not yet the time to decide. Until a Ruvuma develpment licence is approved and that project is green lighted, there is no material cash to distribute.
I am FOR giving mgmt maximum 6 months to see that project get approved, receive the next cash payout, and propose alternatives, including a full distribution. But we're not there yet and this vote is premature.
Information copied and pasted from the Chairman's document below:
As you can see the Ruvuma sale completed in October 2023 so there is no need to give the Chairman an extra 6 months to close the Ruvuma deal as it has already closed!
Look at my prior post when I supplied information about Amur Minerals PLC Board's RNS's telling shareholders they are looking into an RTO and they have identified 17 opportunities!
It is quite obvious that some Board's of AIM Companies do not credit shareholders with much intelligence to say that they think they can pull the wool over shareholders eye's!
The Chairman wrote:
"At the time of this circular publication, the Board does not have a mature prospective acquisition to present to Shareholders "
"With the completion of the sale of the Company’s interest in the Ruvuma field in October 2023, the Company expects to receive the contingent payments listed below linked to development of the Ruvuma field assuming it proceeds as expected:
•
US$3 million payable upon final investment decision being taken by the parties to the Ruvuma Asset Production Sharing Agreement or the JOA as the case may be (the “FID Payment”), which the Board still expects to be received in Q1 2024, although this may be delayed;
•
Deferred consideration of up to US$8 million payable in the form of a 25% net revenue share from the point when Ruvuma commences delivery of gas to the gas buyer (the “Revenue Share”), with the earliest expected payment from this arriving late 2024, although again this may be delayed; and
•
Contingent consideration of US$2 million payable on gross production reaching a level equal to or greater than 50Bcf (the “Upside Payment”), which is expected no earlier than late 2025 and may be delayed into 2026. "
AGE
CrustyPete there is the well known phrase which is"Past performance is no guarantee of future results!"
The above is true however I would rather my money be invested in a Company where the Chairman has a record of producing strong growth in turnover, profits, EPS compared to a Chairman that has not managed produce any of those metrics irrespective of what the Chairman has to say to shareholders re the future and what may or may not happen!
Just look at the statement below that is included in the document that the Chairman had produced which includes "believe", "anticipated" "expected" "unknown risk" etc!
The shareholders have given the current Chairman and prior members of the Board more than sufficient time as well as the opportunity to sell Ruvuma at a loss of £7.813m and then reinvest the monies into a change of strategy yet he has failed to create value for shareholders.
In a period of 13 years £37.414m gross has been raised by issuing shares compared to the current market value of £3.152m based upon a bid price of 0.35p.
So far the current Chairman and previous CEO have the following record
An abortive deal on One Dyas (cost £1.293m)
A failed investment strategy in EAG/GGL (loss of between £725k/£875k)
Spent millions on G&A and other fees (Gneiss £2.132 in just 4 years)
As I wrote yesterday I used to have annual review and if I had been set a target of increasing shareholder value and I achieved the above then my manager would not have been impressed with my performance!
I voted to approve the resolution to return cash to shareholders as with an MVL there is a good chance that we will get back an amount that is substantially above the current bid share price.
The above is of course subject to SCIR receiving the Ruvuma sales proceeds whose timing and total amount actually being received is uncertain.
Let's compare the MVL to a Chairman who has the above record and who has a document produced that includes a statement with caveats such as believe", "anticipated" "expected" "unknown risk" etc!
This document contains forward looking statements, including, without limitation, statements containing the words "believe", "anticipated", "expect", and similar expressions. Such forward looking statements involve unknown risk, uncertainties and other factors which may cause the actual results, financial condition, performance or achievements expressed or implied by such forward looking statements to be materially different. In light of these issues, uncertainties and assumptions, the events described in the forward looking statements in this document may not occur.
AGE
Is there any Country or Sector that they have left out as being yet another excellent opportunity?
AGE
They also stated the following
"During the course of our investigation, we have also been contacted by two non-mineral resource companies. Discussions with these more financially advanced entities indicate there is potential for us to move into Artificial Intelligence / Entertainment, Financial Services or other sectors. These warrant further investigation and we have therefore expanded our RTO investigation of opportunities beyond the mineral resource sector."
Well that should keep the Board busy for much longer while us poor old shareholders are waiting for the remaining cash to be distributed to shareholders.
You just have to love the AIM market!!!!!!!!!
AGE
Out of interest for members of the Shareholders Share Action Group have a look at the Amur Minerals LSE forum and RNS's
It paid out a special dividend of 1.80 pence per share and they issued an RNS dated 6 March 2023 saying the following:
The Directors intend to seek to acquire another company or business in exchange for the issue of Ordinary Shares in a single transaction (a "reverse takeover"), which will only be able to go forward with shareholder approval
They then issued a further RNS dated 25 September 2023 stating the following :
"The board of Amur continues to review a number of reverse takeover opportunities. Geographically, these have been located in Canada, the US, Scandinavia, Spain, Brazil, Peru, Chile, Ghana, Mali, Kenya and Australia. Commodities have included potash, silica, alumina, copper, nickel, gold, silver, metallurgical coking coal, energy fuels substitutes, lime and lithium. A total of 17 opportunities have been considered."
See RNS below dated 6 March re the sale of the licence and the RNS dated 14 March 2023 re the 1.80 pence special dividend and it is now the 27 February 2024 and no further information while the CEO earns $316k pa and the total remuneration for the Board for 2022 was $486k !
Those 17 opportunities are certainly keeping the Board very busy!
AGE
30 Nov 2023 11:41 AM
Amur Minerals Corporation NPV (AMC)
RNS
Annual General Meeting Results
13 Nov 2023 07:00 AM
Amur Minerals Corporation NPV (AMC)
RNS
Notice of Annual General Meeting
25 Sep 2023 07:00 AM
Amur Minerals Corporation NPV (AMC)
RNS
Interim Results 2023
07 Sep 2023 07:30 AM
Amur Minerals Corporation NPV (AMC)
RNS
Suspension - Amur Minerals Corporation
07 Sep 2023 07:00 AM
Amur Minerals Corporation NPV (AMC)
RNS
Suspension of trading on AIM
15 Aug 2023 09:30 AM
Amur Minerals Corporation NPV (AMC)
RNS
Cash shell update
08 Aug 2023 07:00 AM
Amur Minerals Corporation NPV (AMC)
RNS
Cessation of discussions with Ascent Resources plc
30 Jun 2023 03:05 PM
Amur Minerals Corporation NPV (AMC)
RNS
AUDITED FINAL RESULTS
02 Jun 2023 07:00 AM
Amur Minerals Corporation NPV (AMC)
RNS
Statement regarding possible offer
24 May 2023 04:28 PM
Amur Minerals Corporation NPV (AMC)
RNS
Dividend Declaration
14 Mar 2023 01:00 PM
Amur Minerals Corporation NPV (AMC)
RNS
Receipt of Funds
06 Mar 2023 09:34 AM
Amur Minerals Corporation NPV (AMC)
RNS
Completion of disposal of Kun-Manie for US$35M
Per the document in response to the resolution the Board stated the following:
6.
Recommendation, voting intentions of other large Shareholders and importance of voting
The Directors believe that the passing of the Resolution is NOT in the best interests of the Company and Shareholders, taken as a whole.
Accordingly, the Directors unanimously recommend Shareholders to VOTE AGAINST the Resolution, as they will do in respect of their Ordinary Shares in the Company, representing in aggregate 2.7 per cent (%) of the Ordinary Shares in issue as at the date of this document.
Based on discussions to date with other significant Shareholders that do not want the Company to pursue the MVL route, the Board believes a further 3.7% per cent of the Ordinary Shares will be cast against the Resolution. Given that the Requisitioning Shareholder holds 8.8 per cent of the Ordinary Shares, the Board stresses how important it is for Shareholders that support the Board’s position to vote against the Resolution to cast their vote."
The Board therefore has 2.7% and they believe 3.70% will vote with them, note that it does not say shareholders with 3.70% have committed to vote against the resolution, but it says we believe!
I would hardly call 3.70% excluding the Directors 2.70% voting against the resolution being great endorsement and support for the Board!
AGE
You go onto your stock brokers website and look for the section which says voting mail box .
On the ii website you press the button on the left which says vote and not the button on the right which says company site
AGE
Little_me your are correct.
What you paid for your shares is irrelevant as each time there is a distribution you receive the distribution per share multiplied by the number of shares that you own.
The proceeds from an MVL can be paid in a lump sum or through a series of installments.
Per the internet:
"• Members’ voluntary liquidation (MVL)
A members’ voluntary liquidation is a formal procedure governed by the Insolvency Act 1986 to close down a solvent company. Before the company is closed, its physical assets will be valued, sold and turned into cash by a licensed insolvency practitioner.
With an MVL, all distributions to shareholders are subject to capital gains tax.
I would imagine that the majority of the SCIR Shareholders will have an average share purchase price way in excess of the total amount they will receive under the MVL so if their shares are held in an ordinary share trading account .i.e not an ISA trading account then the amounts you receive on each distribution will reduce the tax base cost of your shares.
If you hold your shares in an ISA share trading account then as there is no CGT on gains or income from shares held in an ISA then you will not be able to use the loss.
So for example if your average purchase price is 5p and you get back 1p and you own 100,000 shares then you will receive £1,000 in cash and you will have a capital loss of £4,000
The majority of us will therefore end up with a capital loss.
AGE
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I assume if/when the remaining funds are returned to shareholders the payment will be determined by 'who holds shares' on a particular date, and no consideration is given for those that have been drained of their investment for 5 years or longer. Everyone will get the same share payout regardless of the 'age of the share'
ValdisereOily sorry to hear you have lost so much money!
I wonder how much the total loss would be if you added up the losses of the 100 or so members of the SCIR Shareholders Share Action Group it must be in the region of £3m to £4m perhaps more!
I agree it is very annoying that the Board try to blame shareholders when they are the one's who make the decisions about how to spend the money and what to invest it in!
If they had spent the shareholders money more wisely and not paid £2.132m to Gneiss Energy as well as other amounts then there may have been the chance we could have retained Ruvuma.
It is very annoying to think that the Board made the decision to change SCIR's strategy and to sell Ruvuma at a loss of £7.813m and to then provide a loan of £1.5m for EAG to acquire GGL having paid someone £100k to carry out due diligence on the acquisition to then sell EAG/GGL for £702k and make a loss of between £725k to £875k!
When I used to work in the Central Finance Team of a well known PLC I used to have to take part in an annual review and my boss would set me targets each year and then the following year he would evaluate my progress in achieving the targets and then set targets for the following.
I recall him sending me a rather funny email re comments that managers had made about the people who reported to them and one them was an absolute classic "This person is depriving a village somewhere of an idiot!"
AGE
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Fellow shareholders, I can accept a lot including my current losses of £145,000
I can accept that AIM is a gamble, that's fine.
However, I cannot accept the fact that the board continue to blame shareholders for their failings.
Therefore I have voted my 4.9m shares in favour of the resolution.
Good luck to everyone.
Some additional comments re my last post:
Why would the Board have been actively considering a number of pathways to distribute cash to Shareholders since Q2 2023 when the June 2023 accounts shows SCIR only has cash and cash equivalents of £295k and that they state that the Ruvuma receipts timings are uncertain?
If there is a pipeline of AD plants to acquire then surely you need to retain cash rather than return it to shareholders not only that you need additional sources of finance!
Why would the Board be seeking authority for the following which was one of the resolutions in the document issued on 14 July 2023 for the AGM :
"Accordingly, the Board recommends that, in accordance with section 551 of the Companies Act 2006 (the “Act”), the Directors of the Company be generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares of the Company: (i) in connection with rights issues and similar offerings, up to a nominal value of £1,199,460 which is equivalent to approximately two thirds of the total issued ordinary share capital of the Company as at the latest practicable date prior to the publication of the Notice of Annual General Meeting;
The Company has spent time and committed resources over the last two years to identify and secure investment platforms and pathways which meet the objectives of the investment policy. The Company’s investment in Energy Acquisition Group (“EAG”) and EAG’s subsequent acquisition of Greenan Generation Limited and identification of follow on acquisition targets in the anaerobic digestion and biofertilizer markets, demonstrate the steps taken in accordance with the investing policy. The investment criteria are to invest in cash generative sustainable energy assets which offer the opportunity for improvement/augmentation with follow-on investment. However, in order to execute the current and future opportunities which have been identified in accordance with the investment policy, the Company must have access to capital in order to complete follow on acquisitions as they arise"
Asking for permission to issue yet more shares but considering ways to return cash to shareholders?
AGE
As I wrote before I must congratulate who ever created the Board's response document as it contains what appear to be compelling reasons as to why shareholders should vote however for my 3m of shares I have voted in favour of the resolution to return cash to shareholders and I have previously provided you with facts so that you can decide if you want to vote in favour of the resolution or not!
The Board's response document provides reasons as to why shareholders should vote against the resolution however the reasons contradict the Boards 2nd option as well as clearly demonstrating that Shareholders should vote for the resolution and not against it!
For instance
"The Board has actively considered a number of pathways to distribute cash to Shareholders since Q2 2023."
Why would the Board have been actively considering a number of pathways to distribute cash to Shareholders since Q2 2023 when the June 2023 accounts shows SCIR only has cash and cash equivalents of £295k and that they state that the Ruvuma receipts timings are uncertain?
In addition the 2023 AGM presentation dated August 2023 shows EAG/GGL is going to provide a substantial return to SCIR via an sale eventual sale of EAG/GGL after they had acquired a large enough portfolio of AD plants.
If you look on Companies House and search for Tom Hamilton Reynolds you will see that on 8 February 2022 he was appointed as a Director of EAG Eglington Ltd/EAG Ardboe Ltd/EAG Loughall which are the SPV Companies set up to acquire three AD plants that are most likely located at each of the names of the Companies.
Why did the Board did not provide a range of costs for an MVL as surely they obtained two or three quotes rather than just one?
If you seek a quote from one of the top firms who deal with MVL's then the quote is going to be a lot higher than if you seek a quote from a firm that is quite capable of carrying out an MVL but they are not one of the top firms!
One of the risks identified is:
"For transactional options in particular, is the target acquisition in an area where the Board has appropriate experience and knowledge to assess the potential."
The Board paid £100k for due diligence costs to acquire EAG/GGL which was sold at a massive loss so it was a third party that had the knowledge rather than the Board as why would the Board pay a third party to carry out due diligence if the Board had the knowledge?
EAG
I thought the idea of running a business is that you have to buy low and sell high?
What would I know I only qualified as an Accountant!
So far Ruvuma sold at a loss of c 7.813m and EAG/GGL sold at a loss of between £725k to £875k depending upon whether the contingent consideration is received or not.
Per the Board's document below the keys word is potential and there was potential in both Ruvuma and EAG/GGL
"both these options have the potential to deliver value significantly in excess of that offered by distributing cash"
"To proceed down the path of distributing cash to Shareholders via a MVL limits the full range of alternatives to deliver value."
There is more certainty in a MVL and less risk!
Conclusion
To proceed down the path of distributing cash to Shareholders via a MVL limits the full range of alternatives to deliver value.
Taking account of the options available to the Company, the Board believes that the interests of all Shareholders are best supported by providing a defined period of time to end June 2024 to allow it to continue exploring transactional options in line with alternative 3, while also continuing to evaluate the potential of new investments in line with its investing policy, given the Board believes both these options have the potential to deliver value significantly in excess of that offered by distributing cash.
AGE
It is interesting to note that the expected net proceeds from Ruvuma were expected to be £11.828m on the 31 December 2021 however on 31 December 2022 it was expected to be £7.605m so a reduction of £4.223m in just a year.
The question has to be asked why did it decrease by so much!
It then increased to £7.986m on 30 June 2023
You will notice the wording Loan to ARA however ARA are providing a loan to SCIR rather than SCIR providing a loan to ARA.
The Board clarified the situation with the loan and that is that the loan from ARA to SCIR is not being paid out of the $16m it is going to be paid in addition to the $16m.
AGE