Member Info for Andrew4444

Gixxer

The $20M I mentioned was the min offer for 23% FB. I know its been a pain in the ar@£e! over the years and feel your pain as I've been here 6 yrs +, but I wouldnt want us to give it away!

For me, $30M min for all of manica. = 5.6p. I think 6p would be a bargain for all of it IMHO

One little bit of good news over the last 10 days is that USD/GBP conversation rate has increased in our favour.

So IF we get a $20M offer, that's now 3.76p equivalent, it would have been 3.3p early March.

Just a thought.

Lucky

That was my initial thinking but I'm coming around to LW's view now.

Would a PI think its sensible to sell at 0.45p with news due? Unless someone knows something we don't, it would seem madness to sell at 0.45p... I think..

1M sell gone through

Lucky

I agree that its a great time to buy so had a nibble first thing am at 0.625p. Pity a lot of my buys were at 3p+ !!

Wherever the sp ends up, I can't see it not going up from here at some point, even if its just a spike !

(Famous last words)

LW

Just seen your post yesterday. I don't think there is a placing coming (I would think sp would be manipulated up if that was the case), i'm only guessing that its being manipulated down for possibly, the issue of cheap shares for new MD /CEO.

I've seen this before in other AIM co.

It's a complete guess and may well be wrong but something strange is happening to the sp. May be its being manipulated down, as you say, to close a short. We may get notification of threshold being crossed.

12 Nov RNS

Maybe a reason????

''We have reviewed our management structure and are making several changes to meet the requirements of the Company's aggressive production development and new exploration targets in Zambia."

Lucky

Its showing on ADVFN

09/03/2020 0.89 1571517 14:32:19

I assume that was yours

I think the sells over the last few days are just a few PIs panicking. POG has been falling like a stone. If there was a big seller in the background we would have seen many more 500K sells (IMHO).

Down 10% today but against just one £3.5K sell.

LW

I respect you view, and you may be right, but I'm not too sure that I agree with your first two sentences.

I'm not too sure if I think CBs comments in the RNS are as pointed as some think re possible deal offer. I think you can read it a number of ways.

I do think there will be a deal for 23% of FB but that view is based on two things.

1. the deal was built into the CA agreement, so why have that option if the intention was not to trigger it at some point?
2. This will give CB his cash pile to start doing what he would prefer and be a copper miner again and develop Zambia copper plays.

I just hope we dont sell too much of manica and if we do start to sell some of it to MMP hopefully CB will have JV deal where we keep say 30% to 40% share of the rest of manica and pay same % of associated costs.

Whatever the news end of March, things should be clearer with CB's intentions.

Hello CE

I take your point that there wold be risk for MMP to activate the FB deal before they know what’s really under the ground, and ordinarily I would agree with you and therefore, that they will wait and see the production figures. But we are not in ordinary times and MMP will need to balance that risk with the risk of an ever increasing POG which will no doubt result in a higher NPV hence higher buy-out price.

I would be amazed if the plant was built this year so I think MMP’s first sight of what is under the ground will be in a year’s time. By then POG could, and I think will, be higher, possibly much higher, so MMP with be paying a lot of extra money for the knowledge of what they’ve got. I doubt the DFS is going to be significantly wrong so they may want to take the deal now?

I hope they see things your way and not mine, as I think shareholders will lose out, in the long run, if MMP do activate the deal now. Btw my understanding is they can unilaterally activate the 23% FB share deal against prior agreed calculation so we can't say ' no thanks', 'may be later'

Re your last point. Unfortunately IMHO any cast iron guarantees by CB won’t move the SP. Too many legacy issues and lack of trust for many to believe what he says. Most now want to see the money before they believe it. If the market did believe that CB would definitely realise the potential here then the sp would be way over 2p.

If this wasnt called Xtract, it would be over 2p !

Lucky

That valuation was for all of manica not MMP buy-out of 23% of FB.

The valuation doesnt mean we will get an offer for all of manica and it may not be for that price.

Tbh I hope we dont get an offer for either manica or the 23% of FB as I think the valuation will be much higher in a year so than now, due to my belief that POG will be much higher in a year or so time.

My main point was that this is greatly undervalued.

And agreement was reached on 26 May 2016 to sell manica for $17.5M. CB pulled the deal but that price was agreed.

Against the Fair bride DFS, profit margin was $400 oz (POG in DFS $1262 less $862 AISC = $400)

POG, at time of this post, $1685 so margin = $823 = x2.06 increase from DFS

Old manica valuation $17.5M x 2.06

= $36M

=£27.67M less debt (zero) = £27.67M

= 27.67/Shares in issues (457M)

= 6p

I know the AISC was only applicable to FB but in relative terms the potential profit of the other areas should have broadly doubled.

6p may not be an exact valuation, but its an indication of the manica worth and moreover shows there is a massive discrepancy between NAV and current SP.

NtM

As I think it is now likely that CB will sell all of FB and possible all / part of manica I am not in as positive mood as you may think!

For the reasons I’ve already given, I would prefer CB to keep as much as Manica as possible. Short term this will look a good deal with SP no doubt rising, but long term MMP will be the winners.

I suspect the pull for CB having one last go with his first love Copper, was too much for him and he wants the cash to fully develop Kalengwa. That may do well and CB may make a success of it with decent revenue streams. I just feel that manica (ie Gold) would be a better place to be for the future returns.

You are right that there are many possible scenarios that could happen and that a lot of it is guess work, but I honestly can’t see a realistic scenario that doesn’t see the sp rising substantially from current levels. Before we all get too carried away congratulating CB, if this 4 bags from current SP, it will only be back to the same 3p SP when CB took over the company.

Although I think it will at least do that, I’m not so sure that the full potential of manica will now be realised (because CB will probably sell some or part of it) and therefore I’m not as confident with my previous 6p+ prediction.

Hello CE

I agree that Coronavirus has obviously contributed to the rise in POG, however, I’m not so sure that the main driver hasn’t been, or will be other factors.

Without going into a 10 page thesis to explain my rationale, simply put, I feel that central banks monetary policy of QE and lowering interest rates has served them well in their main (or only priority) of avoiding an economic crash . However, these policies have an unintended consequence which will, eventually, debase currencies and lead to very high inflation. Basic economics says you can’t keep increasing the money supply without currencies being devalued and inflation rising.

When debasement of currencies occur, everyone runs to safe hasten assets. I expect the dollar to initially rise as this will be the ‘cleanest shirt in the laundry basket’ (for world currencies) but even then, the massive increase in money supply via QE will start to destroy the value of even the word’s reserve currency. Gold, Silver and possible bitcoin will rise substantially.

This has happened a few times in the past 50 yrs and when it has happened POG rose by between 3 and 7 times from low base. I won’t give my prediction for POG increase as you may think it’s ridiculous, but its substantially more than $2000.
When coronavirus is a distance memory, I expect POG to be in a bull run which will last at least until 2025. That’s why I really would like CB to keep hold of as much of manica as he can.

If the SP spikes on a good deal and most of manica has been sold off, I will probably be selling most of my holding here and investing in other Gold mining companies that are in production or very near starting production.

Which ones will give a substantial return in 5 years? Probably anyone that’s in or near production now!

Of course, AIMHO

In the big picture, I appreciate these may not matter as much now. However, a few observations for what its worth…..

A new line has been added showing the value of Gold produced thereby emphasising the value of unsold Gold. I think it’s about $100k to Xtract in this quarter alone.

I think there is an error in one of the group headings. It says Explorator share of attributed Explorator revenue, but I think that should read Xtract share of Explorator revenue.

If I’ve read this right, we still seem to be getting 50% of revenue but are now paying 63% of direct alluvial costs. The 63% share of cost seems understandable due to Nexus terminating the agreement in Dec, but I don’t understand why we are still only getting 50% of revenue (according to the figures).

We are now getting $1480 oz, highest ever. Although production has decreased over the last year, the increase in POG as broadly covered this reduction. A good illustration of this is Q3 2018 results. They were the best ever results in terms of production, but as POG has increased so much since then, Explorator income in the last quarter was virtually identical to the income of the best ever quarter (if we had sold all the Gold produced Q4 2018).

There is another 130 oz of unsold gold this quarter. Looking at all the results since the start of alluvial operations (Production v Sold) we had 158 oz of unsold Gold prior to this quarter results, so now have 288 oz unsold. Even at the old 50/50 deal, that equates to $213K for Xtract ($1480 x 288 oz / 2).

Maybe CB now intends to delay selling most of the alluvial Gold as he expects POG to keep rising??

Hello CE

I really hope you are on the right lines with some sort of royalty agreement. As good as a $20M deal would be to the sp, I really think we should not be selling the family silver (or should that be Gold !) on the cheap. IMHO cheap is anything less than $40M (just for FB).

If these results were released on time I doubt there would have been a flicker in the SP. They are broadly as expected with no surprises. So it baffling why CB waited so long before releasing them when he must have known the effect this delay would have on the sp.

I would expect the sp to rise tomorrow, for no other reason than to just to regain the lost SP ground due to the understandable fear that the delay was due to bad news.

Of course, if many are interpreting CB’s cryptic comments that a deal for FB is likely, then the sp should rise quite sharply tomorrow.

Coffee

I’d hold fire on the CB criticism until after the next RNS.

You may then find you owe CB an apology, or, you may find you have just gained many converts!