Ah - just done quick Google search and Russian Central Bank are no longer doing this - https://news.cgtn.com/news/2022-04-08/Russia-s-central-bank-says-it-will-stop-buying-gold-at-a-fixed-price-193UijGzUqI/index.html unless I have missed the story that it has restarted.
Strike - you say “they make more money in dollars” but at the moment if the Central Bank are buying at 5000 rubles per gram, this is equivalent to $2,500 per Troy ounce.
This tallies with what JM is saying - it is not an issue of servicing operations by the subsidiaries as I assume most of the cash costs of operations are paid in rubles - it is getting that in dollars / pounds to service the debt at the group / plc level.
To show my working 5000 rubles per gram. There are 28.35 grams to an ounce and this morning 5000 rubles was equal to 78.71 dollars.
So the central bank buys gold at an equivalent of 78.71 dollar per gram x 28.35 to give the dollar amount per ounce gives you $2.231.43.
I did see before that the Russian Central Bank had offered to buy gold - in March or April when I think it was first announced - but at the time it worked out at about $1,500 per ounce.
The ruble has since rallied strongly and at current exchange rates, my calculations suggest that this currently works out at about $2,231 per ounce.
I guess the problem then is getting it back from rubles to £ or $.
Maybe for the moment though they are selling the gold to the Russian Central Bank?
I note the dollar price of the notes is 12.21 as per here:
This means that one could buy all $304m outstanding for about $37m. I seem to recall that POG had about $70m cash.
I am guessing that some of the notes are not available for public trading but couldn’t POG buy some of them in the market to reduce its own risk.
I am sure this was done previously in the Peter Hambro days?
I’d be interested to hear whether this is possible and whether the BOD would be considering it.
Maybe a question for the next email to John Mann?
I think this news sets Alexandrov up nicely for the capital markets day.
It strikes me that management just wanted to get rid of this legacy issue so they can focus on the bigger opportunities of the future.
The IRC guarantee was unusual and would no doubt have been putting off institutions - no longer a “beleaguered” gold miner as it is usually referred to in the press.
He can focus on the vision of the future with the reputation of having made a success of HGM behind him.
Anyway, time will tell, but having held HGM and having benefitted from Alexandrov’s management there, I am willing to trust his judgment and give him more of a chance than some others on here are.
I’d not noticed this article until today so thought I’d post if anyone else hadn’t seen it - interesting re proposal for name change + how the press see the company: https://www.ft.com/content/c1201438-5f66-46e6-81b2-35870aabfa43
Looking back at the 18 March announcement, POG only had a preliminary agreement with Stocken.
The signing of the actual SPA was conditional on the GPB consent.
It’s been over a year now - did they not have a timescale and long stop date on this preliminary agreement for obtaining the GPB consent?
There seems to be quite a tight timescale for getting the guarantee release once the SPA is signed but nothing on the timescale under the preliminary agreement.
Are POG now bound to enter into the SPA or can it just choose to - or choose not to?
Has POg entered into the SPA without referring back to shareholders?
What value threshold does the transaction have to be to trigger shareholder vote on the issue?
Does anyone have a copy of this preliminary agreement or know where to find a copy?
I don’t suppose anyone will know the answers but putting the questions out there all the same.
To me this looks like we’re selling well below value and the board should be looking at creative ways to get out of the deal?
IRC market cap 1.75bn Hong Kong dollars = £160m.
So the 29.9% stake in that is worth £48m.
So the difference is circa £38m - is that worth getting rid of the guarantee for?
POG market cap £795m so I guess not super material in terms of the value of the whole.
Surprised not to see a bigger move one way or the other on the announcement though.
Just when you though things were getting boring with POG…
Disclosure. I hold shares.
I thought I'd look at how the new divi policy would have applied to last year's figures to give an indication of future payouts.
I think its good that the board have declared a formal policy for the divi, which whilst generous didn't have any consistency. If this is now a policy moving forward, it may attract more investment into the stock.
This is my calculation, if my maths is correct. I'm happy to be corrected and I will show my working!!:
FY 2016 Net cash inflow from operations was $136m.
20% of this is $27.2m
In GBP this is £20.4m
There are 325.2m shares in issue so £20.4/325 gives the annual base divi
On this basis, I get a figure of 6.27p against 10.4p actually paid
The base divi yield at the current SP would be about 4% (on the basis of last years figures though - with the higher gold price and higher production the net cash inflow may be greater this year but DYOR)
Given the company's priority towards the dividend in the past, I expect there will be a regular special divi or maybe buyback of shares as well.
Full disclosure: I hold a long position in this stock and I'm pretty overweight in it.
I notice that Civitas, for whom Cenkos acting in the oversubscribed IPO last year, are doing another �350m fund raise by way of a C share scheme. All sounds very complex and time consuming and valuable) work.
This was announced by Civitas on 28 Sept.
I hold a long position in cnks.
I note Mike59's reply, which is of course correct - the dividends will run as normal until completion.
However, I think what johncharles15 was getting at is that BG. currently yields about 1.7% and RDSB yields about 6.5%.
It is anticipated that only one divi of a maximum of 14.38 cents (less than 0.85% at current SP and exchange rate) will be paid by BG before completion whereas RDSB shareholders will likely receive 2 x quarterly payment of 47 cents (more than 3% at current SP and exhange rate).
However, whilst this perhaps accounts for some of the difference, it does not justify the c15% discount in and of itself. The merger arbitrage and uncertainty of the deal makes up the majority of this.
Interestingly this discount has been running at about 14.5% but today the difference widened to around 16% at one point.
I note that at a BG share price of about 1065 or so, if the merger subsequently went ahead you'd get a yield (on your new RDSB shares when converted) of 8%.
Crazy - I can't see myself being able to resist a further top up at this level.
The deal is yet to be approved by regulators so it is still possible that the combination will not occur.
IF all the conditions are met and the deal is going to go ahead, the companies will make an announcement of when the transaction will complete and they will probably give a date (which will be "ex" something or other - like an "ex-dividend" date) and you would need to buy shares on or before that date to be part of the deal and receive your cash and RDSB shares.
So in short, you can still buy shares now and they will be part of the deal for which you'd get the cash and RDSB shares IF the deal goes ahead.
At the moment there is an interesting potential opportunity - if you want to buy RDSB shares, you can instead buy about 2.25 x more BG shares and if the deal goes ahead and the share prices of the two companies remain the same, with the cash return, you'd have picked up the RDSB shares at an approximate 15% discount and you'd be getting a 7%+ yield. This is known as merger arbitrage - the 15% discount is there because there is still some uncertainty about the deal going ahead.
IF and when the conditions for the deal are met, the price of BG and RDSB should narrow.
This is just my opinion and each should do their own research, but I believe the deal will go ahead and I think Shell will be a better investment for it. I have already picked up some BG shares specifically to acquire further RDSB shares and I am thinking of buying more.
BG and Shell have said they expect the deal to complete in Q1 2016, if all the conditions are met. You might want to set an RNS email alert which you can do on the London Stock Exchange website (I suggest you do RDSB rather than BG as BG has got loads of irrelevant Form 8.3 RNS things going through every day at the moment).
I hope this helps.
Very small comment in this video just saying that we may hear news this week:
I like Ben - he seems to be realistic with his stories and was proven to be spot on over Quindell.
I agree with this - our directors have shown themselves to be good at acquiring, integrating cutting cost and producing returns.
If they can come to a deal that they feel they can run with, I would be happy to back them on it.
Obviously, this is just my view and each should do there own DD and research.
As I understand it from the rns this would be a reverse takeover, which I believe would mean that from a legal point of view Bwin would acquire GVC or its assets - hence reverse takeover.
Given the size of the combined group it would be within the FTSE 250 and as Bwin is already registered on the main market it makes sense to use the Bwin corporate entity.
So this is probably better described as a merger or combination.
If it went ahead, I expect the businesses would end up in Bwin, which would be renamed. GVC would transfer its assets and de-list from Aim or its shares would be acquired by Bwin in exchange for new shares in bwin.
The only reason it's being done this way round is that Bwin has put itself up for sale last year so this is why the approach and offer has come from GVC to Bwin rather than the other way round.
The price for the deal would probably be dealt with in shares so there would not be any problems about affordability, either that or a large placing or rights issue to fund a cash element.
I think that's how it would work, but happy to be corrected.
Link to announcement as I note it is not on this site or iii:
Underlying EBITDA down slightly on last year on increased production - not unlike most other gold miners.
Statutory loss due to some impairments but they all seem to be none cash accounting items.
Divi slightly down but still 2p for a total annual divi of 4.5p.
Cash costs up but AISC down.
I thought we'd see a drop on the back of the statutory loss but appears that this + perhaps more of a dividend cut was already priced in.