Member Info for buzzfromiii

I don't think that DB and others will be keen to sell as they bought lots of shares at a very high price at the initial share offering.

If an offer came in at 45p say the price might open lower at say 40p if traders do not expect a counter offer and to allow some margin should the deal not go through. On the other hand if a bidding war is anticipated then it might open at (say) 48p. I cannot see a bid lower than 40 a share simply because it hit that level earlier.

The US$ seems to be defying gravity at the moment and keeps increasing in value. What is crucial is the price in local currency. A low price will encourage buying, especially in India and China. The current price of about $1174 is particularly bad news for high cost producers. This price makes a dent in the profit that HUM makes but sub $800/oz production cost still leaves a huge profit margin. Each day that passes the fuller the HUM money chest, and furthermore the falling value of the £ to US$ make any repatriated remittances even higher.

The Buzz

Just announced - Mali election result postponed to Thursday:-
https://www.dawn.com/news/1427172/mali-presidential-election-results-postponed-to-thursday

At least the election has proceeded reasonably in 'good order' so far.

The Buzz

Price seems to have been moved down by the market makers today despite with most transactions shown as 'buys'. I bought 1400 at 194.25p and the price subsequently went lower so added 1479 at 192.3359p. The spread is very tight at 192-192.4p so seems to be a good me to deal and I would suggest that the price is interesting as well - as shown by my trades.

The Buzz

Mali Election now looks a forgone conclusion apart from the shouting:-
https://www.news24.com/Africa/News/malis-keita-on-track-for-second-term-in-election-runoff-20180811
"Malians vote on Sunday in a presidential runoff expected to return Ibrahim Boubacar Keita ......"

The Buzz

Quite a bit of money has already been sunk into Dugbe - that must have some value - eg APF gave $15m for the earlier studies in exchange for a royalty payment:-
https://www.anglopacificgroup.com/royalties/dugbe-1/

Dugbe will need to be a big investment - probably on the low scale of return on investment at the moment (with the current price of gold) compared to Mali, but there is a lot of gold there and plenty of nearby very promising sites for more gold ore to be identified. My perception is that HUM is progressively getting the ducks lined up on Dugbe so there is a clear investment case and indicative return on capital ready to consider when they have enough cash/ an investment partner. eg Converting the Dugbe ore to reserve status could be a key achievement. Mining in Liberia would also reduce HUMs dependence on working in a single country.

Things will radically change if more ore is discovered that is of a higher grade. Another thought is that some gold producers will be finding the going tough with the current price of gold and the cost of production with their low grade of ore, so production and mine extensions for them could be reduced as a consequence and in turn the supply of physical gold.

The appeal by the Turkish president to sell gold to Lira sounds like advice to me to buy gold to protect one's assets! The performance of the Turkish Lira does give a salutary lesson as to where one keeps one's assets and I am sure that observers must be thinking about having more of their assets in gold?

https://www.bbc.co.uk/news/world-us-canada-45123607
https://www.bbc.co.uk/news/business-45113472

The Buzz

Fully agree. I have been investing quite heavily in APF just recently - and again today. I don't think the increasing price of coking coal has filtered down yet:-
https://www.metalbulletin.com/Article/3825963/Latest-news/COKING-COAL-DAILY-Prices-spike-but-market-participants-unconvinced.html

Plus the low value of the £ v US$ means that the royalty remittances are boosted.
https://www.bbc.co.uk/news/business-45113862

My reference sites for coking coal and thermal coal are:-
https://www.cmegroup.com/trading/energy/coal/australian-coking-coal-platts-low-vol-swap.html
https://www.barchart.com/futures/quotes/LQJ18

Note the very strong price for thermal coal is holding up. Nickel has lost a bit of its shine recently
https://www.barchart.com/futures/quotes/LQJ18
but is really volatile and well up on the year. The price of V2O5 has really shot up of late:-
https://www.vanadiumprice.com/

New royalties - we are all waiting with baited breath. They assess about 100 possibilities each year - this list is quickly honed down to about 10 royalties and then due diligence comes in. I know that at least one APF person was abroad recently doing just that. I presume that the final decisions are made by the full board. If the meetings are held monthly then judging by the last acquisition RNS, a statement might be made very soon??

The Buzz

Bid abandoned
Spread 90-99p at the moment.
Value is in the eye of the beholder. Clearly this bidder has focused in the value to their business and gave up.
I think that the fall is over done, but who am I to say so!

The Buzz

update on Mali election.
https://www.aljazeera.com/news/2018/08/mali-election-keita-cisse-runoff-vote-180802230624319.html

It looks to me as if things are going reasonably smoothly? That will be very good news. Post 12th August hopefully things will calm down.

Oh gold is now down to $1207/oz,
https://goldprice.org/live-gold-price.html

but look at the value of the £vUS$
https://www.bbc.co.uk/news/topics/cx250jmk4e7t/pound-sterling-gbp
$1.3005 to £1 is really weak - (boosting value of the HUM assets and money transferred back to UK) - so with such a strong US$ it is hardly surprising that the price of gold in US$ has fallen.

The Buzz

Sometimes the market just seems to get caught in the glare of a light and not know what to do. eg A few years back I bought loads of Western Canadian Coal as the fundamentals were so compelling and yet the market seemed to be oblivious to it. That became a 30 gonger for me when the market woke up! There is no reason to suppose that anything changes for example I am currently puzzled why MCM is so undervalued - but I might be overlooking something. The same might be said for HUM. What are the risks and how does one evaluate them? Security/elections is a bit of a worry, but I put the risk to HUM operations as low - whereas others less familiar with the location might put the risk as high - it should be resolved one way or the other very shortly once the election results are out. Then there is the BOD - I have personally known the BOD for many years and got to know them reasonably well - for many years I was the only shareholder at the AGM!! So I have a high degree of confidence in the BOD and have seen them very skilfully steer round some of the major issues that they had a few years ago. They are very astute, very dedicated and will bite the bullet when needing to. They have always made sensible and sound decisions in my experience.

The Buzz

AS expected from previous RNS, turnover was down a bit.

HOWEVER read about the licensing income:-
"Whilst the Board materially revised down its expectations for licensing income in the current year, as detailed in the trading update issued on 24 July 2018, a number of new licence agreements were signed in the first half and licensing income in the current financial year will represent a substantial upward step change compared with last year."

Qoted spread much more respectable at 75-79p. With the $ so strong against the £ and apparent 4% GDP increase in the US, there is hope for higher exports to the USA. I also like the news about a strong market in Japan. Plus 11% increase in production powered by exports looks to me to continue to do well with the floundering £. Conclusion - WGB is a firm hold for me and will top up on weakness.

The Buzz

Price up 21-24p on opening and now 22-24p! .. with zero LSE turnover. Uitkomst news was very positive. A high production with the current high coal price will generate lots of cash for MCM. I am at last feeling quite bullish about the fture on MCM - just a few key RNS to come and things could really move.

The Buzz

These results seem quite solid to me. Key thing is monster fall in the pension deficit from £82m to £57m. Good progress in China and USA is pleasing. Looks like a major launch of the Fine Ultra product will be significant in Q2. I have been topping up quite heavily recently and nearly again this morning at £2, but refrained and now spread 199.2-201.5p. So far turnover is very low so I don't think that he market has done its sums yet. I had expected the results to be out tomorrow so was quite surprised when I realised that they were already out and I had not done my analysis before the market opened! No surprises and retained the dividend. DVO remains one of the mainstays of my portfolio.
Just noticed some big sells - I am waiting for the price to fall - if so it is top up time!
The Buzz

Really the number of shares being traded is absolutely paltry with the daily turnover under the size of my my holding!!..... and if anything is now the buy/ sell balance is evening up with a recent 169k buy trade.
As for the change in the price of gold - compare the $/£ exchange rate with the price of gold - it seems to me to be predominately driven by the change in value of the US$.

The Buzz

Chatting with a 'big' player at the HUM AGM (I won't say whom as I do not want to betray their confidence in me), there are institutions wanting to add but they will not chase the price up. They are quite content to buy in at the low levels as sellers appear. So yes there are some big buyers out there, but they are in no rush to push up the price. ie The current price is a support level and once the buying resumes, then the price ought to go up. I anticipate that things will really start to move after Q3 results when they will have more evidence of solid production and by then should have quite a bit of cash. Add in conversion of resources to reserves and HUM will look quite different to now

The Buzz

What many investors seem to forget is that PFD was effectively kept going to keep the pension fund going when the discount rate dropped resulting in the defined pension deficit rocketing. It was in a similar situation with WIN, but WIN was able to improve their profits so they got into a virtuous circle of paying down debt and pension deficit. Now WIN is a different company. I detect that PFD is on the verge of the virtuous circle with profits moving up and the debt falling - and the pension payments are now becoming more affordable. The increase in interest rates and discount rate will be a major help. Forget sales of bits of PFD - let the profit build up and the debt fall - and all of a sudden PFD will be re-rerated and soon above the 50p rights issue price.

Remember that the former chairman made a statement at the AGM saying that the former potential bid was a non starter due to the pension. Once the pension deficit position is in better shape, it will become a open field for new bidders. ie Think pension, think pension and think pension yet again!! - once that is sorted out then loads of options start to emerge.

The Buzz

RNS just out shows what a solid company CFX is. I have got to know the FD quite well over the years from my mostly solo attendance at the AGMs (Must recommend coffee and biscuits!!!). They are very careful with their expenditure and that is as always reflected in their cash generation. Share buy backs over many years has mopped up huge amounts of shares so there is tremendous value in the remaining shares. At one time WGB looking like they might make a take-over bid, but they have had a sudden fall from grace (just showing how more stable CFX is!). The CE must surely be thinking about spending more time with his family so there is an outside chance of a bid??

So although the frugal dividend of 5p a share is not a big attraction - one must remember that share buy backs are huge and any resultant increase in share value is a capital gain and not subject to the dividend tax.

The Buzz

Well things might not be as bad as fist sight. CFX is their big competitor and operate in similar markets.

CFX have just issued and RNS for their preliminary results. This part of the forward statement (from the always very cautious CE) ought to be reflected in part by WGB's future performance:-

""The Group has made good progress over the last twelve months despite generally difficult trading conditions in most of our major markets. Our largest market, the US, is showing signs of continued growth and this should underpin our performance in the current year. .....In our other major markets, the UK and Europe, we are experiencing increasingly difficult trading conditions and we expect this to offset some of the anticipated growth in the US"

The Buzz

Yes I have been in this share for as I inherited my grandfather's small holding. Saw loads of mess ups and realised when sub 10p that things had gone silly so bought loads and more upwards over 30p - this was a 20 gonger for me. Sold out completely over £2 as felt fully valued. The company was made by fortuitous purchase of Sanderson. They seemed to walk on water for quite a while. Even disasters worked well for them with big insurance clams and shiny new equipment. They even reached a point of possibly acquiring CFX - they were certainly doing better than them in the USA at the same showrooms much to the chagrin of David Green. It was only a matter of time before something went wrong and they would be bound to fall from grace in an uncomfortable manner.

That said the company has a lot more intrinsic value with a handsome royalty income - the company when I bought at around 20p a share was a much riskier company and short of cash - its like comparing a lemon then to an orange now. When I had tour round the NY shop I was impressed with the set up there and the unrealised potential. For what it is now worth the AGM RNS says trading is good in the USA. Now if they hit £10m profit that is still a good profit but one does wonder how Clarke and Clarke are performing... but my local village shop still survives selling WGB products - so there is still a good local following for quality furnishings. If one were to ask me, with this hot weather no one wants to do decorating, so I suspect that the recent trend is a bit of a short term dip in my view. I cannot see them dropping the dividend so the yield should be good.

What I am really coming on say was that I had a small repurchase of WGB this morning - 5k shares at 70p and another of 3317 shares at 72.94p still a shadow of my earlier holding. I expect that the share mark down to have been savage leaving plenty of scope for recovery else a good entry price. Strangely this approach has often worked out really well for me in the past. Current spear at 08:59 is 73-78p so I think that the price has hit bottom at 70p and has only upwards to go - and fortuitously I did not buy to see the price drift even lower so I am already more or less in profit already.
The Buzz

Surprised no one posted on the bad RNS sneeked out late today that caused the crash in the share price. By chance I posted on the ii web site saying that the share price was rather weak at around 101-103p (rather suspicious of insider knowledge!!) shortly before the RNS. There I gave my reasons for being cautious - rarely have I spoken such prophetic words so shortly before they became material to the share price!! Perhaps that was partly my long association with WGB - I had sold out above £2 a share as I felt that they were fully valued with the finances starting to look a bit stretched and too much growth in-built into the price. I am still waiting for the right time to come back. What is truely shocking is the speed of the change in the directors' opinion on outlook, so soon after the AGM statement. Hardly surprising that the share price bombed.

The Buzz

I had a look at the link thank you. It seems to stack up with my recollections. My policy is not to quote anyone but give my perceptions. After all these years the company now has income and it was great to ask Tom what it felt like having money finally coming into his coffers after all those years of scrimping and saving trying to get to a producing mine! My take is that a share should be a reflection of the current and projected risk/ rewards. The risks have diminished immensely over the last year. The rewards are still holding up with an improving outlook from where I sit - gold is still above about $1250oz, production in full swing with the ore grade consistent with the drill results - and an improving outlook for more substantial gold deposits - both found by HUM and by Cora Gold. In some respects it is irrelevant to me if there are sellers at this price, pity the old men in La Petite Mine d'Ore who sold out for a song as they just wanted some money now. My perception is that there are some big buyers out there, but it is not there way of barging into the market with a big order and bumping the share price. They are quite happy in soaking up lots of small sales at this price level - at some point this flow will dry up and I would expect momentum investors to move in. Half year results will be key. I suggest that it is worth a wager before they come out - they will be good, the current share price is low so there is scope for a quick rise.
As for III - I struggled with the new format. LSE does seem to have a melange of contributors some of whom seem worthy of the 'ignore' button. I look to a discussion board for a thoughtful analysis of things and share information. One last thing - going to the AGM one gets to know the board and obtains a confidence that one cannot get from just reading RNSs.

The Buzz