Member Info for Daisan

I always think that Switzerland is the closest to a democracy. We do not live in a democracy but rather a Parliamentary democracy i.e. we choose people to do things on our behalf. The US model is similar although it is a country where the deciding factor appears to be the cheque book.

MrEMC2, I refer you to the thread! Two gold miners that I feel both have a more compelling valuation than AUE after the MNG deal goes through. I should point out that I have investments in both.

Well, I suggest that you might want to look again as the final results clearly state the cash generation that is indicated in the latest presentation. I would also point out in a previous post I stated "I have no doubt that AUE could possibly make 5p in a year given a very bullish gold price" but I believe in such circumstances there are companies on a more compelling valuation that will outperform given the same price rise. That doesn't make AUE a bad investment and I believe over the next few years gold and, hence, gold miners in general will do very well.

Oky_3, Not sure what you are reading but if you look at the latest presentation you will see that they generated $22m cash in 2015 and $17m in the first six months of this year. But let's suppose that you are right. How do you explain that they are paying down debt at the same time as ramped up exploration and substantial capital investment if they have negative cash flow? Cash flow has a real impact on the short term operation of the company unlike profit so negative cash flow with limited cash on hand would suggest a rising debt profile and limited investment. Anyway, this is an AUE board and my point was that the valuation you were suggesting for the company is not one that is reflected in other miners currently on AIM.

They generated $17m cash in H1 2016 and with the current production profile and gold price it is not unreasonable to expect a similar performance in H2 2016. They can pay down debt, invest in new equipment and mines as well as extend exploration from the cash generated by the business currently. Long may it continue!

I think that they could have asked for a lot more. Never underestimate just how dim institutions are - it is not just PIs. Good that they have paid 9.7p. Moves the floor price that bit higher. You will still get the impatient selling below it though. I still find it incredible that this situation has gone completely under the radar for most people.

I agree. The average trade has grown hugely recently and may indicate stake building. However, trades of 50k are still in the realms of hnwis. If we start seeing several hundred thousand pound trades then there is definitely something going on!

Not sure whether it matters if the (alleged) crook or the (definite) racist, homophobic, woman hating (fearing) idiot wins. They are both awful and gold will do well out of both of the in the long run. The issues are beyond their control anyway.

I suspect that they won't need to go to 30p to take control although it would be great if they did. They will continue to steadily build their holdings until they have reached the ceiling and then take stock. If they carry on slowly and stop buying when the price rises too rapidly they can rely on the goldfish nature of private investors to get bored and sell to them. I would be surprised if they needed to offer more than 15-20p once their buying in the market is done. That is, if they intend to take this private at all.

No news necessary really. Keep digging the gold out, sell it at ever higher prices and the cash generation will speak for itself. Still re-rating to a reasonable valuation but no longer quite the bargain it was. Just undervalued now rather than massively undervalued!

9.92p paid now so some interest here even if the volume is only slightly up on the 'new norm' (I rule out the 'old norm' as that was akin to tumbleweed blowing across deserted streets).

Actually, I think they are very easy to compare, especially since you suggested considering EBITDA rather than profitability. This is one of the reasons why I have followed miners and specifically gold miners for many years. The reason for AAZ's loss in 2015 was due to depreciation and amortisation charges (the 'D' and 'A' in EBITDA) so cannot be compared with what is effectively the cash generation that you were considering. My comparison was not based on a projected price (for example, I have no doubt that AUE could possibly make 5p in a year given a very bullish gold price) as there is little doubt if AUE goes to 5p then AAZ will likely be over 60p and SHG likely over 30p. All of these are possible. I was merely considering the current situation where the market does not value these companies at 10x cash generation. If it did then SHG, for example, would have an enterprise value of 10x the current price based on the annualised rate of Q3 production numbers whereas they are actually valued at 2x. As for AUE being over 10p a share a year ago, it is worth considering the change in the number of shares in issue after the deal to get a current equivalent to that 10p

Pablo2, Sadly I think that it is very unlikely that you will get satisfactory answers to any of those questions. The first one will be answered blandly ('of course our relationship is excellent....'), the second the will suggest that they cannot say (and maybe that is true) whilst the third I suspect that they will suggest you would need to ask Labro 'but currently we have had no firm indication of an offer.......'.

Sorry, haven't been posting on here so much lately as seeing a major shareholder gradually building their stake for such a pittance can only be commented on so many times! It looks like there is slightly more interest here with 9.5p being paid but no doubt there will be somebody coming in to sell in the low 8p range as a result. I intend to stick this one out because, whilst I believe that there are companies on the market with more long term upside, I see it as one of the few opportunities on the market with limited downside owing to the recent rejected bid and Labro's continued interest in accumulating. If the bidding situation gets serious there is always the potential for a bidding war as there are not so many 6-7m oz gold deposits readily available.

Yes, awful. I really want to like KDR. The assets actually make a certain amount of sense but the BoD are the doziest bunch around. Very nice, very bright but without the dynamism to drive this forwards. The same argument could be applied to CGNR which has a defined resource to boot and clearly the prospect for more to come as well. But you just get the impression that nothing is going to change here (or there) as long as the same people are involved. I see little chance of the personnel being changed. Yet there is always the possibility of pulling a rabbit out of the hat overnight and see this immediately going up enormously. It is hard to consider such a situation investable but it could be considered an open ended bet as long as you accept the fact that you are likely to see it gradually disappear through long term dilution.

Oky_3, A couple of points on this. Firstly, I think that it would be worthwhile considering enterprise value rather than market capitalisation as there is a significant debt dimension here. Secondly, there are some similar companies trading on AIM and they are not on the valuations you suggest. Take a look at AAZ and SHG. Production numbers slightly lower at 70k - 85k but lower costs and similar cash generation to your example. In each case both the market capitalisation and enterprise value are less than the current AUE value if we assume MNG's deal goes through. On that basis I would suggest that the market is not currently valuing gold miners at anything like the multiple you suggest.

Sorry, I meant 'presenting'.

Clearly investing at the Zürich precious metals summit is appreciated by the market. Or perhaps it has something to do with the fact that gold is doing pretty well at the moment.

Kenj, You misunderstand me. I was not suggesting that he was not in a position physically to influence things as being one of three he clearly was. It was more from a psychological perspective as being relatively new on a board you are very careful not to to in with a confrontational attitude unless that is exactly the reason why you were brought in. Bearing in mind that in a 12 month period a non-exec will typically spend no more that 20 days working on the company business, it is difficult to see how after 6 months he would have made a major impact. I can well imagine that a new non-exec would lean towards the 'alpha male' in such circumstances. This may not be the right thing to do but it is certainly understandable. Anyway, enough on MIRL. It is largely of academic interest to me as I have no holding there and these actions are historical now. They appear to be in a much better position so hopefully a positive gold environment will allow them to come good. Believe me, I long ago stopped assuming that anyone on a BoD was working explicitly on my behalf. On AIM they are largely working for their own benefit and all you can hope as an investor is that their goals are aligned with yours.

Kenj, I see what you are saying and you are clearly closer to what went on at MIRL. I can see that Fryer's actions may not have been helpful but I don't know the inside story here. I think that your most significant point concerning Fryer's participation in events was the fact that he was in position for less than a year. You indicate that it was an impressively bad performance during that period but I would turn this on its head and suggest that he was not in such a great position to influence things as much as you would hope during such a time. It is easy to suggest that someone can just come in and rip up the rule book but in my experience that is not how boards work. They tend to be consensus led and very considered which makes the sacking of the guy on the ground quite an extreme act and, you would have thought, must have been one that was taken carefully at the time. Was there a relationship between Fryer and the CEO before he became a non-exec? Just to reiterate, I have no problem with Fryer on the BoD here.