Member Info for BPat890

Everything rosy in the latest presentation but Hummingbird have it all to prove! Last years failed ramp up, cash raise and the depreciation of the share price has set holders expectations back considerably. The company has a history of missing expectations and failing to build on successes so it’s little wonder LTH and the wider market treats these presentations with a large pinch of salt. If total production is more than 40koz in Q1 then it should be sign as a very good sign. My expectations are tempered while we wait for actual delivery of improvements

Thank you for keeping track of PI votes, welcome to add my votes to the ‘No’ list - 133,500

Allocated my vote, good to see so many others actively participating in the comments airing their disapproval of this attempted coup

Event - Expected time and/or date (2024)(1)

Publication of the Scheme Document - 25 January 2024

Latest time for lodging Forms of Proxy for the Court Meeting - 27 February 2024

Court Meeting - 29 February 2024

Scheme Court Hearing

A date ("D") expected to be on or not later than 21 days following the satisfaction or (if applicable) waiver of the applicable Conditions set out in Part 1 of Part III (Conditions to the Scheme and the Acquisition) of the Scheme Document(6)

Announcement in respect of the Scheme to be published on a Regulatory Information Service: D

Last day for dealings in, and for the registration of transfer of, Shanta Shares and disablement of Shanta Shares in CREST: D + 1 Business Day

Cancellation of admission to trading of Shanta Shares - D + 3 Business Days

Latest date for despatch of cheques and crediting of CREST accounts and processing electronic transfers for cash consideration due under the Scheme by 14 days after the Effective Date processing electronic transfers for cash - Within 14 days of the Effective Date

Long Stop Date - 9 October 2024

Share your sentiments, market valuations are still heavily discounted compared to North American peers. UK market participants and particularly institutions are failing to curb foreign buyer demand of our most valuable companies.

Tony - your reply seemed to imply that correlation of Shanta Gold’s share price with its peers between 20th November and 18th December is indicative of where the share price will end up if the offer is rejected and that Saturn’s intention, in essence to buy all shares at 13.5 pence would cease to have any impact on shareholders confidence and buyers decisions following a rejected offer.

I’m struggling to see a reason why you chose to settle on November 20th as the initial date.

The two stocks you mentioned don’t appear to have moved in the same manner as Shanta Gold between November 20th and December 18th. I’m also failing to see the correlation with Hochschild as its share price was 108 pence on the 20th November and peaked before the beginning of December. Only Centamin follows a similar pattern, its share price on the 20th November 88 pence compared to 94 pence today so Centamin is still trading higher.

Arguably you’ve picked poor choices for comparison neglecting to mention the huge capital requirements being exhausted on mine development at Centamin and Hochschild, swallowing up operational cashflow. Both peers are depleting cash reserves and Hochschild in particular are piling on debt. Shanta were in this position 12 months ago but are not now of course, reducing net debt by around $10 million last quarter alone.

You may have chosen other gold producers like Serabi Gold, Metals Exploration or Resolute Mining that have limited capital requirements similar to Shanta during the current period. Their share prices correlate with Shanta over the past three months and they are all trading higher today than they were on November 20.

With that said there isn’t an ideal comparison to be made over such a short timeframe, both Hochschild and Resolute Mining performed stronger in the weeks leading up to period you mentioned, first movers in a sector that has been depressed for large parts of 2023.

Correlations are not indicative of future price action and especially those over such short time frames whilst discounting other major factors

It’s a stretch to believe that this company would be trading at 11p per share today without the 13.5p offer. Who got to you Tony?

The share price was 12 1/2p before this offer announced and the gold price has traded in its highest range since the company increased production to these recent record, highs of circa 25,000 ounces per quarter.

One only needs to compare the performance of similar companies to understand how the share price would have performed for this derisory offer and to be clear we should be treating 10 to 20% above the 11 to 12p level we were in during November / December. Perhaps Shanta would have outperformed its peers such as Serabi with it turning net cash positive during the quarter and expectations of very little capital requirements during 2024. Speculation over how the Board could have allocated more of this increased cash flow to exploration and dividends etc may be the next points of contention and subject to shareholder grievances but only if we retain our holdings in Shanta.

UK mining sector has been handicapped throughout much of 2023 and despite every positive update the interest here has been lacking. Are we finally seeing a revival off the back of a weaker dollar outlook?

At the last quarterly update CAPD reiterated revenue guidance for 2023 of $320 - $340 million (MCap: $220m) and further “positive momentum into Q4” as Ivindo and Reko Diq ramp up. Capital’s portfolio of investments are increasing at a rate almost on par with MSALABS and yet there is very little buzz here.

1plus1 thank you for that thought provoking analysis. I had typed out my response in full, largely in agreement with your thoughts but unfortunately clicked a link and lost the body of my message. Just to quickly add speculation on these matters if very much welcome as we continue to watch world leading institutions buy up stock at 13p.

There may be a bid. But there doesn’t have to be a bid for the offer price to increase. This I still think is the ‘plan B’ assuming the initial 13.5p offer is rejected, which it surely must be! There are clauses in the initial agreement that stipulate Bidco can switch from scheme to offer with agreement of Shanta’s board and the requirement for such an offer to succeed could be 51%. This is what I think the institutional buys are gearing up for, to vote no first time around and vote yes for a 15-16p offer.

And if a rival bid does emerge it would at the very least validate the investment decisions of us long suffering shareholders

1plus1 the point you raised over Winshear’s $30 million settlement is an interesting one although timeline of events may suggest the offer was being arranged prior to any of the interested parties learning the Tanzanian government planned to settle. Indiana Resources had settled their claim earlier in the year and there may well have been talks among mining executives operating in the region that progress was coming. Either way it should be seen as a positive operating in Tanzania and that may well have encouraged Patel to launch this offer and take full control.

There is the more interesting prospect of who will be best positioned to take over the license, it could well be our self proclaimed ‘philanthropist’ who boasts ties to Tanzanian authorities, institutional investors and financiers.

Tony you didn’t seem particularly perturbed by the claims made by Mr Tibbles. That you freely admit you’ve been in contact with them for a number of years is noteworthy but especially when you’ve previously known when to correct misinformed posters. Why not this occasion? I do agree with one thing you mentioned, we should continue to search for answers and be open to hard questions. There is a clear distinction that can be made though between hard questions and falsehoods spread by people who previously shared no interest in Shanta.

For what it’s worth i am more concerned with the holdings update today. Patel through his investment company Export Holdings declared their interest. Assuming that takes support for this takeover to around 21%

Thank you for sharing! 100% up in 12 months and long may this trend continue

Emotional attachment to the company or to the assets? It would be one thing to try to scupper a fair deal but I haven’t seen a single commentator here explain why this is a fair value deal. I couldn’t care less if the company was sold off but I do care it returns at least as much as what was promised all those years ago, pre-Covid, before Singida when they placed shares at 16p and the share price was 18p+ at that time. I don’t think it’s emotional attachment keeping me here, i could sell next week and not lose any sleep. I’ve simply weighed up the options and don’t believe Patel and Saturn will garner enough support to take control for 13.p per share. Once voted down they will likely come back with an improved offer having bought up shares in the interim at current prices. I suspect Saturn and the interested parties want more than 25% combined so they can vote down any other hostile bids from third parties (unless of course the deal is for the right price).

Call it conspiracy, it’s happening before our eyes. Once they have 25% they will be able to dictate terms with any potential suitors

Yes that was more aimed at those selling up. Nevertheless if you believed this offer would be voted down then you wouldn’t have sold two thirds of your holding correct? There are multiple competing parties buying up shares right now, Blackrock are surely positioning themselves to vote down the deal. A blind man and his dog can see the company’s assets are worth far in excess of 13.5p per share.

MrBond that’s all well and good, Serabi has been and remains a standout performer this year. Very much undervalued and currently one of my holdings however I wouldn’t dream of flipping my Shanta Gold shares.

Choosing to invest everything into one or the other invariably comes with more risk and we know how volatile junior gold producers can be. Personally I think they are both worth holding, the buy out is in no way guaranteed at this stage and with key institutional support likely to be knocked back at the first hurdle. There is very little incentive for our longer term major shareholders to throw in the towel at 13.5p having endured years of indirectly and directly bankrolling the second mine build. It’s now in production, performing better than forecast and generating substantial cash-flow! The fact this offer has been orchestrated in such a manner should make it plainly obvious for all Shanta are worth considerably more than 13.5p at this moment in time as most of us here know.

I don’t believe the share price will be pegged to 13p once the offer is rejected and that won’t take months. At this stage we have to assume they are taking shares from weak hands at 12.9-13p with the intention of making an improved offer around 15-16p only this time they will have more than the combined 19% share of the company. The share price would inevitably move up in anticipation of an improved offer so I doubt you’ll have time to flip back in..

Shareholders know Shanta’s operating performance this quarter will be record beating again (y-o-y) and cash build will swing us into positive territory for the first time in years.

Will an improved second offer materialise and garner enough shareholder support or might another suitor declare their interest? There are many variables but I can’t see any negatives except of course opportunity cost, missing out on Serabi or elsewhere.

I think a lot of people selling their Shanta holding chasing rainbows will regret it and end up buying back

If honesty and transparency is what you’re looking for on the markets you’ll be sorely disappointed again and again my friend. As what happened with the three takeover offers in October / November 2022 there wasn’t any retail support. Of course this time around the Board have managed to gather some limited support for this offer however anybody watching over the past year can see the offer price should be far higher.

Does anyone know for sure if the bid needs more than 75% to succeed?

I had assumed it was 50%. If it is 75% then it does seem premature to announce this acquisition with only 18.8% support at this stage.

As others are suggesting there may well still be other interested parties sniffing around that could snap Shanta up for 15-16p

13.5p is a given IF and it’s a big IF they secure enough support for a take over. But given the gold price environment and operational successes over the past year shareholders should NOT be voting for this to proceed.

I’ll have to reread it carefully again but on first glance this has only received approximately 20% of shareholder support. In the event it fails I’d suspect an increased offer will come but in the interim the company the liquid assets are increasing at a rate of $10-15 million per quarter.

Have been buying today and over the past few weeks. Not a particularly complicated proposition for investors to consider here. Highest gold price quarter since 2020, cash on balance sheet improving quarter on quarter, production on track, costs under control, market value disconnect unparalleled and scope for expansion with Coringa in the coming years. Discounting cash on balance sheet there’s barely 1 years forward earnings being priced in when it could be 3-4x in current market environment. Perhaps the move towards this level will come in time as global recession fears take hold and monetary loosening begins! The recent moves with gold making new highs are likely a glimpse of what’s yet to come in over the next 3-4 years.

Similarities to be found with Resolute Mining and the strategies they employed to tackle mounting debt pressures. HUM are in a better position however with the gold prices 300-400/oz higher and no indication of asset sales necessary so I’d expect once the raise is complete the interested parties carving up this company and the beneficiaries of the gold hedging programme will make very handsome gains. Resolute is up about 150% from lows. Never underestimate the negative impact of unsustainably high debt, particularly in a high interest environment. Sentiment will be much improved if Kourrousa production figures early next year are as expected along with a leaner balance sheet. Absolutely not excusing this cutthroat behaviour at shareholders expense but this will benefit the company long term, reducing debt as quickly as possible, assuming Hummingbird are not taken over in the meantime.