Member Info for cautionyourblast

I could see Dr Wardle in a Santa outfit! (Sorry, John)

If 22 pence were to be the best offer, I would vote against it and move to replace all the BoD bar JW.
Of course we, as PIs, will be likely to be presented with a fait accompli: still I guess many others would vote against anything under 25 pence.

I do agree that some of the predictions for any offer are somewhat fanciful, despite the clear and very large undervaluation of the portfolio of assets at present. People pay what they can get away with; that does not (necessarily) equate with FV.

https://www.controlhidrocarburos.gob.ec/wp-content/uploads/Prod-Mensual-Fiscalizada-28-OCTUBRE.pdf
They updated their site.

Useful insight, ragnar: thank you.
It’s always encouraging for us PIs that the “market” often totally mis-prices things.
Happy Monday.

Thanks, Tiger Catcher. You’ve taken the falling knife analogy to the next level; I like it!
The negatives on SLP are surely macro only (SA, global economic worries). The positives are all in terms of the bottom-up fundamentals which are generally excellent. Remaining lives of offtake agreements are not much of a cause of worry right now either (others will be more on top of this, though).

I think you were implying the same, but I have never been of the view that anything written on these bulletin boards has any real impact on price, even on a small cap.

The knife surely hits the floor fairly near here...

Good morning, everyone.
We now seem to have pulled back around 25% from the recent high of 45 pence or so. Perhaps that high was a bit too far too fast. However, I can’t find any particularly disconcerting news (apart from the remote issue concerning the Samancor agreement, which was dealt with and effectively dismissed by mgmt in the recent op update).

SLP continues to look a bargain to me and I’m tempted to buy more. Did I miss something? Why the pull back to this level?

I’d appreciate any thoughtful insight.

I think people are referring to the lifetime allowance, jasehem.

To chip in on the other conversation, the BoD has to get this away; they’ll be forced to quit if not IMO (perhaps not JW).

You’re right, jase, for equities.

https://www.gov.uk/guidance/capital-gains-tax-rates-and-allowances#rate-gain

He did seem a bit upset.

Hi liam

I’m sure that’s a head, shoulders, knees and toes, knees and toes formation. This must be about to rocket, blah, blah, blah.
Or is it and eyes and ears and mouth and nose formation?
[sigh]

A number of shareholders have offered well-crafted valuations for the take out on this bb: I’ve been grateful and well-informed as a result.

I think the final price will actual be determined by more crude dynamics. (1) the minimum price which major shareholders (Michi for instance) will have set as a “line in the sand”; (2) what a bidder thinks it can get away with, regardless of FV for the portfolio. I’m hoping that if it’s a bid-by-the-deadline process then we get a bid followed by a counter-bid or two, thus taking us into Q1 2020.

I know these matters have been mentioned before, but not for a while, so I thought a little reminder might be in order.

So my expectation is that we land in the high 20s or low 30s (despite that being a crazy bargain).

Does this make sense?
Thanks for so many informative posts here: I’ve appreciated it.

Sounds right, bigsmoke, thanks. Perhaps the catalyst would be diamond market traction or a little series of nice finds.

If I were a buyer, I’d be thinking “does the NPV of future cash flows (using my own cost of capital) from the assets less the net debt less the consideration payable for the equity give me a big enough margin of safety for the risk in taking on?” Or they might just be thinking “does buying this get me a big bonus payment?”

For a party that wants immediate size in the diamond market and has sufficient balance sheet to restructure the debt burden, I can’t imagine there’ll be a much better time to launch a hostile bid than now. Cheeky 11p first then it falls over for 13-15p? Are there more attractive targets out there?

Come on you M&A geeks: I’m sure you’ve got a view!

I think you’re right, Mr Big Bite. It’s just a rather unusual situation (for me at least).
Oh to be a fly on a Bogotá hotel room wall (actually, that sounds weird...)

Agree all, N2M

This is the strangest share I've ever invested in. If we are right and a sale takes place before year end anywhere near fair value, then this is effectively the easiest money that can ever be made (assuming one invested today).

If we're wrong, then we're all delusional. And me in particular as this is my biggest holding.

I suppose there's a third option. No sale. If that comes about, then I expect flying furniture at the next AGM and, of course, a new board in advance (with the possible exception of Dr John).

"proof of ownership"

Thanks so much, Zarro: I had not realised the points you make under number 2. This was really helpful for me.

The AGM on 29 Nov should be well worth attending. Questions should focus on debt and debt management IMO. It's at Cheapside. I'm going to get my nominee to provide a proof of letter so I can attend. I hope some others on this board may be there too.