Member Info for Daisan

Miaa99, Those technical analysis pieces are either neutral or bearish so I assume you are just reaffirming what I have written. To quote the second article "A move through $1280.40 will change the main trend to down". We are at about $1270/oz now, so well through that. Some analysts have suggested $1275/oz is critical and we are currently below that. Note that going through a support/resistance is not conclusive. You have to stay below it for a period of time and weekly/monthly closes are more significant. Whatever is the case, the direction currently appears to be down and North Korea has had steadily less effect, even to the point of little reaction when they said that America effectively declared war. Price is driven by sentiment and sentiment is influenced by a whole host of news items. At the moment sentiment is pretty positive in the world economy and negative on gold. The question is at what point does sentiment change and gold bottom as I think we are coming to a final bottom in gold. I would like to see it plunge and the whole PM space fall into despair as that will be the point to back the truck up and go heavily into gold miners. I don't feel as though we are there yet.

Well Miaa99. Whilst I am very optimistic in the longer term for gold, we could well see some weakness in the short-medium term. There are certainly some technical analysts that I have some time for (most I don't) who seem to be moving towards a bearish consensus, with one predicting a price as low as $890/oz. At that price most gold shares will be decimated, including AAZ. I would hasten to add that, whilst I foresee some weakness and believe that we could easily see sub-$1100/oz gold, I do not believe that we will go as low as the forecast mentioned above. But even sub-$1100/oz will put severe pressure on gold miners.

Vroom, They only announced the discovery of the Ugur deposit in October 2016 and have only recently released a compliant resource for it. The fact that they have gone from discovery to production is nothing short of miraculous.... and, on the face of it, risky.

'Doom' not 'room'. This spell checker is rubbish.

I don't want to be seen as the room and gloom merchant! In the long term I have high hopes for AAZ and see that they have performed impressively in some areas (e.g. Ugur). My issue, and the reason why I sold, was with the falling production levels and the consistently missed targets. Ugur as the saviour seemed to be a relatively high risk strategy given that they didn't even have a declared resource there at the time. They are clearly getting to grips with production at Ugur but it is still a relatively small deposit so I wouldn't base a company around it but as part of improved outlook elsewhere it would definitely indicate that AAZ are on the road to recovery. In the meantime the financial performance has remained reasonably robust although I still feel that gold is going to fall back short-medium term and this will put pressure on margins and the share price. One thing I don't like is the gold equivalent ounces. I would be happy with this when things were going well but they did this when they weren't and it smacked of covering over the cracks. I am gradually coming to terms with it now though. :-)

As if to add insult to injury, gold is looking weak and has fallen through some technical supports over the last few trading sessions. There is an argument for it to fall below $1100/oz based on technical analysis. Fortunately the hedge insulates Shanta from most of this but it won't improve sentiment.

I am still optimistic that Tanzania will come back from the edge of the precipice that they are threatening to jump off. However, until it is resolved this remains a punt. Brave investors are likely to be adding significantly at these levels as this is currently the cheapest gold stock on the market by a long way.

I should imagine that that was indeed the cause although it is printed twice here.

NicotineNelly, If they nationalised without compensation then this would to arbitration which would last for years. I have only seen it a couple of times on AIM and the companies both lost. Each case is unique however.

The Professor lives to fight another day.

sands1971, Based on the criterion specified, i.e. not diluting shareholders, I am not sure that HUM can be added to the list as it now has more than ten times as many shares in issue as it did in 2010.

Covered previously I believe. Certainly Tanzania are doing their international reputation little good at the moment but the audience this is playing out to is domestic rather than international. As I have said previously, any investment here should be viewed as a punt currently owing to the uncertain outcome of policies towards mining companies. Such a punt could be extremely lucrative or result in wipeout. I suspect the latter is unlikely but certainly can't be ruled out.

Junior miners are a very risky class of asset for sure and the difficulty in getting the mine up and running is a hazardous process. Lest we not forget, it was not so long ago that AAZ was priced to go bust and probably would have were it not for a very supportive director. If that support had not been forthcoming, the likelihood is that (guess what?) shareholders would have been 'diluted to hell'. Without a doubt this has been a huge positive for existing shareholders. I think that you will find that CEY has similarly not diluted their shareholders to death but this is not common and dilution is extremely likely in the scenario where a company needs to raise $100m++++ to get a mine up and running and even then it is likely that problems will be encountered (e.g. Aureus/Avesoro). Even when a mine is up and running, at what point is it deemed successful? I would suggest that it is the point at which it starts to deliver dividends as really this is the only indicator of a long term return on investment. Most junior miners will tend to see that their cash is better spent developing their assets and growing the resource base and shareholders tend to reward that process through share price appreciation which is where the reward tends to come from. If you look at PAF as an example of a dividend payer, it is still not that highly valued for its assets. I won't fill the board with talk of SHG (happy to do that over there) but needless to say that, whilst I can see some truth in what augustusgloop says, I can see a couple of inaccuracies in his calculations and do not completely agree with him. I would point out though that any company would struggle if the government suddenly stopped repaying VAT and significantly increased royalties on their product. How would AAZ fair if the government turned against mining? I hasten to add that I don't think that is likely here but it is always possible and is the reason why there is a significant premium associated with companies operating in companies with mature and predictable legislative frameworks (US, Canada and Australia being the obvious examples).

Manicminer22, It is hard to compare them currently, simply because SHG is based in Tanzania and the situation for miners is uncertain there at the moment. Whilst I sympathise with what they are trying to do there, the way in which they are going about it is poor and will lead to investors leaving the country. As such, SHG's market capitalisation has been hit hard by the situation there. All other things being equal I believe that SHG is probably the more attractive option based on resources and production currently. But you can't ignore what it going on in Tanzania at the moment so any investment there would have to be viewed as a punt.

Do people pay attention to this? Interesting.

Well, technically not as they "are now taking advice about the solvency of the Company". But I don't think that anyone seriously thinks that any money will make its way back to shareholders.

"However, speculative and specious market comment about the Company over the weekend of the 16/17 September led to the prospective Nomad revising its estimate of the time that it required to complete its due diligence". Interesting. I understand that TW's mob were having a go at the weekend. Is that the 'specious market comment' they are referring to? Anyway, it looks like the game is over on this one.

pablo2, This RNS and the previous one combine to present great progress for the company which, as usual, has gone largely unnoticed. The next step will be financing and at that point I am sure that this will be noticed. This is already a 7m oz deposit but I am pretty confident it is actually considerably more based on the last RNS. That's the sort of scale that will attract a major at some point. If Kyrgyzstan is supportive of mining going forward then this could be a serious option. Of course, if Centerra believe that the risks in Kyrgyzstan have decreased then they might look favourably at CGH. Given their operations they are the most sensible potential suitor. Given that they have been diversifying away, however, I am not holding my breath.

Hi Oli12, Actually, I think that everyone should have a little money in a company like OVG (and, let's face it, there is no other company like OVG) on the basis that, if they ever did actually do a deal, the likelihood is that this would rocket. Until it does actually do something, this is likely to languish in a perpetual state of limbo. However, it does have one advantage over most AIM shares. It is not likely to do a placing any time soon and the income from the POLY shares is enough to pay their salaries whilst, presumably, they while away their time somewhere.

I suspect that this movement today has little to do with the interims and a lot to do with the gold price reacting to Fed comments. It probably indicates that there was a fair amount of short term money coming in to ride the gold price rise and some of this is jumping at the first hint of a correction.