Member Info for Daisan

Not me. Still holding BMN considering that it is still on a prospective PE of 5ish and strongly rising production profile and Vanadium price. Still holding here too but the time will come when I will begin to shift some here.

It has always been the same with CGNR. Interesting grades, decent jurisdiction (if slow) and a resource that can be built upon. Unfortunately it has a BoDs that make a snail's progress appear rampant. And a loyal core of shareholders that make them difficult to budge. Given the Prof's age he might soon consider that it is time to step down but 'soon' may be measured in years.

I understand your point of view Shakhtar and for an outsider looking at this in isolation you would consider that this does not have a hope of getting into production. I suspect that this couldn't be further from the truth. This will go into production. The only question is when. I don't believe either of the two options that you present are accurate. He is certainly not a cowboy (consider his background) and he has certainly put his money where his mouth is. Neither, I suspect, does he know anything particularly material that we don't. The reality is they have been quite vocal about what they believe they have at Tulkubash and Kyzyltash without specifically stating it. Tulkubash alone almost certainly has an exploration target of 5-8m oz even though they don't state it. Kyzyltash probably has an internal target of 30-40m oz. Again, they don't state it. But it doesn't take much effort to work out that this is what they believe they have and that is why they are so confident about the operation. Now, it is true that all of this is speculation and that most banks will only stump up on hard facts (and this FS will hardly encourage them to stump up). But this board is extremely strong and it would not be too much of a leap in the dark to consider that they have a few cards up their sleeves on this, Kumtor being one. The alternative is waiting another year or two to prove up another 4 years of mine life and see the economics transformed.

Funding will be interesting with that NPV (admittedly post tax but at a very low 5% discount which would seem a bit 'ambitious' to me). As I suggested previously, because they have gone for the higher production rate that the resource ultimately justifies, the capex has overwhelmed the cash generation from the limited mine life. I note that the IRR is not stated in the summary but comes out at a paltry 8.2%. It is also interesting to note that the study is based on a good price of $1300/Oz presumably because they know they can't get away with $1500/Oz if they want it funded. Let's be blunt. In isolation with the currently known facts this is poor and would not get off the ground if this was any other company. It is only because of the players involved that they have a chance and even then a lot will be taken on trust. I await with interest how this will develop but you have to say that the shares being suspended is probably no bad thing. It would not surprise me if the suspension lasted for quite some time yet. I can't help thinking that the previous regime left a right old mess behind. After doing nothing with the deposit for years they then went for a small pilot which would take forever to deliver the cash flows that would support development of the sulphide resource. From the resource statement released previously, this was built on foundations of sand. No wonder they are currently struggling to pull together an investible project despite on the face of it a fantastic resource. And yet even this oxide project has huge potential as all he evidence points to the fact that the resource is as much as ten times the currently defined size.

It's part of what appears to be a rollover from the day before.

Finncairn, Which company is this?

Well, I wouldn't put too much faith in international arbitration. I don't recall a miner winning that has gone through it!

Let's keep it civil. I am pretty sure that there are two sides to this story. But that is history and what is relevant is the present. The world is changing for mining from both a jurisdiction basis and a company basis. The days are fast fading where a company can fully exploit a resource and deliver the majority of returns out of the country. But in this time countries have to realise that, if they want to attract the capital to develop the deposits, they have to attract that investment. As such, I see a much more equitable split coming where the needs of the company, country and local populace all impact the manner in which a resource is exploited. High up on this list, especially in areas which are of global importance, are the needs of the environment. There will be many pitfalls and points of pain along the way but I am optimistic that there is a way forwards that is actually beneficial to all parties concerned. From an Asiamet specific perspective, I believe that a lot of what they are doing is conformant to this vision. Provided this continues, I see no reason why value accruing development should not continue.

We are missing something here. There has to be a purpose for CGH to release the offer at this point in time and it is unclear what this purpose is if the offer has already been rejected by the two existing stakeholders. So, we either have to conclude that the situation materially changed between the time the offer was made and the news release or there is some other reason for releasing this in full knowledge that it was dead before the news was announced. It certainly attracts attention and perhaps that is a justifiable reason. I would like to think, however, that the actual reason is that there has, indeed, been a material change.

I see no reason why they shouldn't be able to, although the FS, whilst important, must be considered lower priority than the bid (about which I am sure we still do not see the full picture). Actually the FS was originally due in Q1 but the last update suggested that they were awaiting the report in 'mid April'. We are pushing the definition of mid April but I suspect that this is when they were due to receive it. If this is the case, you would expect a period of time to review and revise. The figures will not look as good with the higher production rate simply because the mine life will be reduced resulting in less years for cash generation. As such, I expect the NPV to be relatively low. But this is the price they are willing to pay to go straight for a 'full production' operation and the continuity along strike suggests that, even though it is a risk, it is a reasonably low one.

No impact on the market makes it even more likely that this is a rollover. But a very large one indeed!

sparkyboy1, Easy things first. Dekel was not of the quality to have been a part of this kind of activity. Whether he knew about it or not, I don't know. As to the timescale, I have no idea. I suspect that we will find out relatively soon whether or not the deal is likely to proceed but the time to lift the suspension is dependent on preparation of the admission document. This is a big document and takes a lot of time and effort to prepare (hence, the reason why BMN did their best to avoid an RTO with their Vametco purchase). It may be that they have been working on this for some time and it is ready. Or they may be nowhere near it. An RTO can be measured in months but I suspect in this case we are talking weeks. They have indicated that there will be an equity raise as part of this process (I suspect that the institutions providing the debt will insist upon it). Given the size of the deal the raise will be significant. I would suspect that it will be at least the equal of the last raise, probably more. So, yes there will be significant dilution. But not all equity raises are bad. If this one effectively gives you access to annual fcf of almost $100m then that is money well spent. Better look at the situation as CGH buying half of a 500k oz per year operation plus a very close relationship with the government which should provide massive opportunity in the Tien Shan belt - one of the world's most prolific areas for gold deposits (read up on Muruntau as an example). If successful I would expect the share price to rise substantially despite the capital raise. (Caveat: I am assuming that the specifics of this deal are actually beneficial!).

Another one. Suggestive of a rollover? Biggest rollover I can recall if it is.

That must have taken some time to work given the volumes on this.

However, the Centerra share price has risen since this was announced whereas you would have expected a sharp drop at the merest hint that they were being shafted. It did not drop even before the Centerra rebuttal. Ergo, you have to conclude that the shareholders either think that this has no legs at all or they are sanguine about the impact. Consider that this is not being 'seized' and the value placed on it could be as much as �6-700m (I am guessing more like �400m) which considering the reserves and the fact that Centerra have been reducing capital expenditure for an asset that doesn't fit their strategy is not inconsiderable.

Well, they seem confident that the deal is in everybody's interest so who knows? Let's see how it plays out (we don't have a choice anyway).

Given that the approach was made a while ago, I wonder whether this had an effect on the timing of this release?

Of course, it has to be borne in mind that there are 'senior Kyrgyz officials' and the there are 'senior Kyrgyz officials'. Not all senior officials are equal!

Curiouser and curiouser. The government are clearly key here. I wonder what game CGH are playing if the government are not interested. Such approaches can destabilise the situation and lead to opportunity but it is unclear currently what outcome is on the table here if the government are definitely against.

Well, I am willing to admit that I did not expect this. I expected a rather smaller producing or near producing mine in the area around the existing property rather than go for something that is such a strategic asset for Kyrgyzstan. However, now that the initial salvo has been fired, it is not too difficult to see the way in which the land lies. The opportunity is huge but so are the numbers required to execute it. Despite the fact that the takeover parties are in a position to screw Centerra on this, we are still talking of raising a significant sum (I reckon at least �200m) although they clearly feel that they already have the necessary firepower at their disposal. Centerra's response will be interesting. Whilst it looks like they are in a difficult position on this I cannot see how they can just let this go without a fight. It is just too significant part of their business irrespective of the fact that they may see Kyrgyzstan as just too difficult to work with. They may find that it is about to get even more difficult. If an agreement is not reached reasonably quickly this could get somewhat messy.