Member Info for Daisan

When I posted a while back about breaking out of the flag/ascending triangle formation I mentioned that the price will frequently move back down to the level of the break out - a 'back test' of support that was resistance - before moving higher. Well, it looks to be doing this currently. The odds are favourable that this will then move up towards what I consider the target zones (late 20s/30p) but there is a possibility that it could break below the support level which would invalidate the original breakout. From a TA perspective the back test is a relatively low risk entry point.

Convoluted logic DogTyred. The concert party have been accumulating for months during which time we have neither seen a news blackout nor pressure on the share price. I am not sure how a desire to buy millions of shares in the market should lead to share price pressure in any direction other than up. Just because someone wants a share price to go down doesn't mean it will and the suggestion that directors will sell shares to push the price back so that they can buy would seem strange indeed. The way that they might achieve this is to work closely with the market makers but that is hardly playing by the rules!

More gold! It seems like Shanta is playing battleships and hitting a destroyer whenever they guess. Ok, it's nothing like that but you get my drift. It seems to be the property that just keeps on giving. The interesting thing about this RNS is the opinion expressed by Toby Bradbury that this opens the door to production expansion and extension of mine life at New Luika. Shanta's aim is to become a mid tier producer. It looks like this is another piece of the puzzle.

Yes, the 9 month delay is related to the move underground but this is the first I have seen it stated explicitly although digging around would suggest an issue. As moving underground is a gradual process of ramping up, it is difficult to see at what stage this is so a statement like this is significant. I hope that they don't change names just to hide things! I suspect that the actuality is that the large shareholder is so dominant that these transactions tend to get lost in the noise. I would be concerned if this is treated as a subsidiary. Given that the major shareholder holds over 60%, this is always a concern and, I confess, the main reason why I haven't gone into this with a greater stake.

Does anyone have any information on the 9 month delay or the 13% $1.7m loan? The market seems to be ignoring it. Is that just because it has been missed or am I missing it?!

Hi Banksman, All losses are manageable. It just depends on how thin you are prepared to get! It's AIM and you win some, you lose some (usually more than you win). The trick is for your winners to more than offset your winners. For me BMN and CGH are currently big winners and have much more than offset my losses on DCP. I tend to ride shares for a long time - in my experience it is the only way to ride out the ups and downs and gives you the greatest opportunity to participate in those shares that rise hundreds or thousands of percent.

carvegyber, I am (was?) a long term holder here - supported them for years as I could see that it was a potential gem (pun intended). Unfortunately, the potential remains unfulfilled for now.

Annual report published at 4:43pm on the Friday before a bank holiday. Not the most auspicious time so I have skimmed it with some trepidation. All looked good until I noticed this bit in the Chairman's statement: "In order to continue with the underground development plans and move towards the targeted production levels the Company needs to raise further funds for capital investment in the underground development. As part of the process of engaging with potential investors the Company has instructed brokers and external consultants to actively market the company." Now, I know they have a significant capital requirement for 2017/18 and this has to be funded. However, the wording of this makes it sound like they are in an unexpected position. And then I saw this in the same statement: "The Company has made significant progress utilising the funding so far, and the transition to the underground mine is progressing well, albeit with a delay from the original anticipated schedule of approximately 9 months". Did I miss this? I have scanned previous operational reports but I cannot find mention of a 9 month delay, just suggestions that the ore mined is not quite as much as anticipated but you have to do a bit of work to work this out. If there has been a 9 month delay, this will materially alter the amount of funds required. Previously the remaining shortfall that would need to be sourced was $8-18m after the $12m convertible raise. Does this need to be revised? I suspect that it does. One more thing. This report talks about a $1.7m 13% loan from the major shareholder. I clearly haven't been paying attention as I don't recall the market being informed of that either! I confess that, as my holding here is small currently, I don't analyse the reports in detail so I may well have missed these things. If someone can point me to them to reassure me that these things are understood that would be great.

Visitor, I just can't believe that there is anything lurking in the accounts that we don't know of unless someone is 'doing an ASA'. There can't seriously be going concern issues given the cash on hand. I note a largish sale this afternoon. This could get very interesting. I am looking to free up some funds from elsewhere in preparation for this.

I've been puzzling over the share price movements here. Considering the performance of the company has been pretty much exemplary in terms of delivery, the price of gold is pretty supportive and significant amounts are hedged anyway, this does seem to be underperforming where I believe it should be. There could obviously be concerns that moving underground will hit snags (justifiable), the VAT may not be returned (I doubt it very much) and that gold may fall (possibly, although the long term prospects seem positive). In addition a number of gold miners are struggling, although generally speaking these are the ones struggling operationally as well. I have been looking at the trades over the last few days and doing the odd dummy trade me it seems to me that, despite the trades page looking like a sea of red, in general a large number of the trades are actually buys. Which suggests to me that we may have a significant seller on our hands at which point I recalled the fact that Odey were struggling and liquidating some of their assets. There have been no suggestions that Odey are bailing but it would not be a surprise if they did. Unfortunately few of these companies actually play by the rules in terms of disclosure so we may not know until they have gone. But if they are then this could create one heck of a buying opportunity. Ok, you could look at it as resulting in a share price fall but the business is sound and should be throwing off cash once operations have moved underground. If the share price does suffer this could create one of those singular moments in an investors career.

That really is very disappointing. There is fundamentally a potentially lucrative mine here. Unfortunately it has been lost due to a combination of bad luck and, it has to be said, mistakes by the stakeholders, primarily the directors who, for the best reasons, failed to raise sufficient capital when they had the opportunity. But the people sitting around the table during the business rescue process have not done themselves or the business any favours here. I really should stick to my rules of investment, one of which is never invest in South Africa! Too often things go belly up. Sadly the returns seem so compelling that the temptation is too great. I still have two other SA Investments where I am up one of which more than offsets this. Hmmmm.

Ha! Thanks pablo2. Of course, it quite often goes to plan until it doesn't. At that point you scratch your head and reach for Elliott Waves. They are great at explaining what happened but, in my experience, not so great at telling you what is going to happen, largely because there are so many 'ifs', 'buts' and 'maybes'. We all are in the process of learning.

I don't see any evidence of shorts in this (you would be absolutely insane to do so knowing that the Chairman and co. are committed to buying loads in the market) so a short squeeze is not on the cards. However, there is buying pressure and not much selling pressure. Those who wanted out around the 20p mark seem to have gone for now and it looks like we have broken out of the flag/ascending triangle pattern which gives a target for me in the relatively short term of about 30p. I would expect a significant pause at that point as it is another round number (the market fixates on round numbers) and this has been further reinforced by the convertibles. Of course, all of this is predicated on no significant news flow. Should there be anything of substance to bring to the market then the conditions could materially change.

Well, from a TA perspective, it looks like 15p should provide some support. If it bounces from here it could be carving out a rather large head and shoulders pattern which wouldn't be great if it completed. However, these can and do fail to form and if they don't it is actually pretty bullish. Too early to confirm if it will happen but if it does bounce from here then around 19-20p would be a critical point to break.

Actually, I do think bulletin boards and Twitter have a significant influence on the share price movements of smaller companies. Larger companies I suspect not but the smaller it is the larger the influence. There are many on social media who play the game. You and I have both clashed with at least one of them on LSE before. Totally agree that the share price is a disaster but then a number of companies in the gold sector are looking pretty horrible. The company can only do its best operationally. For Shanta that is to move underground successfully and continue to hit its production targets. It has been doing that pretty successfully for quite a few quarters now so for me the management have built up quite a lot of credit in the bank. If they continue to deliver New Luika will be throwing off loads of cash at today's gold price. I expect gold to go a lot higher in the medium to long term at which point I believe this will be throwing off more cash than the current market capitalisation.

I have received a very prompt reply from Shanta. Specifically I asked about the VAT situation and the 30% ownership situation. Firstly, the stance on the VAT is as laid out in the RNS, namely: "As announced last week, the government of Tanzania is dealing with issues of corruption across its various ministries and departments and this work is to be commended. There are on-going audits to flush out the problem areas and, while none of these relate to Shanta, the process has caused delays to VAT refunds........ Shanta is engaged in top level discussions with Government to release the outstanding VAT and is hopeful that this matter will be resolved in the near future." So, it is all bound up in the anti-corruption initiatives and, hopefully, should be corrected at some point but the wheels of government turn slowly. As to the 30% situation, there is some good news (or not if you are hoping to buy very cheap shares on the Tanzanian stock exchange). To quote the email I received: "In regards to the Tanzanian ownership impact, I can confirm that this does not apply to Shanta. It only affects companies with a Mining Development Agreement, which Shanta does not have at New Luika or Singida." So, the 30% is a non-issue which leaves the VAT issue to be resolved. To be frank, if the VAT refund is permanently withheld, Tanzania will suffer greatly as inward investment would dry up completely. I expect this to be resolved in due course. For information, the contact at Shanta has authorised me to pass this on but has requested that I keep his details private.

I have but only this morning. I have received responses in the past but there is usually a bit of a delay. If I find out anything useful I will post it.

You would have thought that was the case. However, considering they are well rewarded and the cash remains there for them to take at some point, they can live reasonably off of the Poly dividends and cash with the rest sitting as a retirement plan! Maybe I am being unfair on them but they may be in too comfortable a position to be hungry. Ideally, you would like your executive team to be lean and hungry in this situation. The fact that stasis has existed for quite some time does not give a clear indication as to when this will rectify itself. I have to say that your CGH profits were well taken. You made use of the volume to exit at a price that has become a bit of resistance currently. Whilst I expect it to break, I can see the advantage of you taking the profit considering the size of your holding there.

loskins, I understand completely. I am looking to build up more of a holding here as the price continues to fall. Q2 will be challenging without a doubt and we could see this coming up against a pressured gold price. With any luck this will fall lower! For me the longer term is phenomenal and the fact that Dibs is clearly talking it down is even more of a good sign :-)

Hi OLI12, In principle OVG seems like a gift of the gods with its huge pile of cash and liquid assets vs a tiny market cap (actually, a few months ago this was down at 5p ish so even more of a bargain). The problem, of course, is that this has been the situation for years and they have never done much with it. Their only real foray into asset purchasing led them to invest in a company that is now bankrupt and who they are in litigation with. I only have a very small amount in this as a play should they ever decide to invest the money or return it to shareholders. I actually suspect that they will not do this as the management, what little there is, seem perfectly comfortable living off the dividends from Polymetal and their cash. Given that we have gone through the worst bear market in commodities that anyone can remember, there was ample opportunity to pick up decent assets very cheaply. Just think what OVG's liquid assets could do for a prospective gold asset - they could pick up something in a prospective area with a couple of million ounce exploration target relatively cheaply (or for shares) and apply $20m in proving it up. As I recall the current CEO picked up his shares from the Chairman (someone correct me if I am wrong) which looked pretty much like a 'father to son' type transfer. It will be very difficult to force anything here as I believe that the executives have a large equity stake and influence over more. All in all, 'yes' it could be a great investment should they actually get around to doing anything. However, the evidence is that they won't so, as such, I would only pout in a minimal amount that you are happy to leave festering for a few years.