Member Info for Daisan

It is incorrect to state that a placing is always at a discount. Whilst rare, I have seen several deals which were at a premium to the share price at the time. It is unlikely that DCP would get a significant funding away at a premium, however, given the financial situation, but I suspect that they wouldn't have to go down as far as 0.5p to achieve their target raise. If funding was proving that difficult I believe that they would put all of their efforts into a takeover although that is obviously no guarantee of success.

An interesting deal although not quite the one I was anticipating. From a strategic point of view the deal makes sense. It will be interesting to see how much traction they get as the company being invested in is an unknown brand (hence the very low valuation placed on it). Brand will be significant in what they are trying to achieve rather than just the technology platform per se. Still, interesting. Now about those Indian gold assets.....

I would support such a proposal and would be happy to go up to 400k shares. One thing though. The chances of getting the likes of Panmure Gordon to waive their fees due to the financial position of the company are zero. They will always take their fees. In fact, these companies generally charge more for companies in this position. I know that this proposal would effectively wrap up the financing in a bow for them but they will still find a reason to charge for their 'services'.

I am sure that there were some dubious goings on at MIRL but there are always two sides to an argument. You have glossed over the activities at their Peruvian subsidiary which were, at the very least, highly suspect. Who knows exactly what went on in the board dealings around that time? I suspect that Fryer will have a somewhat different viewpoint on it. Anyway, I suggest we agree to differ on this and I certainly wouldn't look on Fryer's position here as in any way a concern from SHG's point of view. I believe that, as a shareholder of MIRL, you may well get an opportunity to trade again although with what return on your original investment is impossible to say.

The most likely outcome from a 'no' vote will be administration with MNG buying the asset from the administrators. So I suspect that they will probably get their hands on the asset either through the front door or through the back. Unfortunately I cannot see a way where MNG does not win here. There is, however, a compromise where small shareholders just go along for the ride in the same way as happens at Goldbridges. That has a large majority shareholder but still trades on the market and it seems to be working reasonably well so far. Although it is never comfortable having a large shareholder calling the shots.

Yes, but bad times for the world :(

kenj, That is really harsh. If I recall correctly MIRL's problems were brought about as a result of what was effectively a declaration of independence by their operating subsidiary. Robin Fryer was a non-exec for a year and the trouble started very early in his period there. You also overestimate what impact an independent non-exec has on the operations of the business. They are there for strategy and corporate governance. Whilst you could argue that a coup constitutes a failure in corporate governance (the ultimate failure one might point out), it is difficult to see what he could do about it. Nevertheless, I am sure that he along with the other directors found their positions untenable as a result of the issues so they all went. I presume you were a shareholder, hence the anger. So the suggestion that they may re-list should be welcome news to you!

Well, you have to remember that there are something like ten times as many shares in issue now as then (late 2007). I can only see how many share were in issue at the end of 2009 so this is a bit of a projection but I suspect that it is about right. So 22p then would correspond to 2.2p now. I believe that new investors are playing a waiting game here. The movement to underground mining is fraught with difficulties (as is any new mining operation but underground generally is more prone to problems than open pit for obvious reasons) so some indication of ramping up operations from the new underground operations will materially add to the confidence. Still a bit of a punt until the operation is in full swing but the potential is very attractive, particularly given the level of resources this has.

I have been away for the last few days so haven't really been in touch with what has been going on here but it looks like trading has shifted somewhat. Looking at the trades indicates that there are a number of large amounts coming in. AAZ has traditionally attracted lots of small buys so it marks a change in the type of buyer. Friday - Tuesday's activity was somewhat odd and suggests either that a stake was being built (I am not convinced) that this was seen as a momentum trade, which appears more likely or that the latest gold discovery has actually put this on the scope of larger investors (hmmm, not convinced although the new discovery does indicate the prospectivity of the licence areas). Whatever the reason, the trades suggest that the new investors are willing to commit larger sums. I am not sure that we are expecting any particular news in the next few months, just a continuation of the activity that has been going on for some time now. Of course, it will be interesting to see how the new discovery emerges but the main aspect of this company remains low cost reduction and a continued focus on debt reduction. I see no reason why Q4 shouldn't maintain this barring any unforeseen shocks. Q1 will be lower of course because of the impact of the winter months. The future looks pretty bright here and it is clear that AAZ are well positioned to expand their resources and, ultimately, their production profile at a time when the outlook for gold over the next few years looks very supportive. Still the possibility of a pull back in the price of gold over the next few months which would impact AAZ's share price but this remains a core holding for me.

The market is readjusting to a company that now has its debt under control (actually falling rapidly) in a solid gold price environment. Maintain production levels and the gold price and this will continue to be the case. With debt levels no longer being the concern they were, the market can focus on the cash generation, the assets and the exploration upside. That should result in a continued re-rate, although there will be the usual ups and downs. Key things to watch with AAZ are production numbers and price of gold. I know that is stating the obvious for all gold miners but currently we are not likely to suffer a similar problem to AVM for example (where gold has been 'confiscated').

I also suspect that the offer was from someone else, although this is AIM so don't expect the rules to be observed! There could be a positive impact on the share price with First State now no longer selling in the market but I am not holding my breath. We saw first thing this morning that immediately there was a trade at 9.44, someone offloaded at 8.7. Amazes me that people can't see that there has been a fundamental shift in circumstances here.

For the market to ignore again today. As expected, First State are out but not all of it has gone to the concert party. As a result, they still have the option of purchasing over 11m shares in the market, which I expect them to continue doing.

oldpro, Good point well made about being insiders! I suspect that you are correct. They must surely be in a closed period and it is difficult to argue that their nominated board representatives do not have an influence over whether they buy or sell. There is a very good reason to sell as pointed out previously. The lower the share price, the more shares their loan will convert to and the greater percentage of the company they receive.

Well, I think if you look at the share price reaction since the announcement it is illustrative. The immediate reaction was a sharp (20%) uplift (the last trade before the news was 2.76p and the highest trade was 3.40p) suggesting appreciation that a deal had been done. Trading after this is suggestive of profit taking combined with the fact that people are looking at the next issue that needs resolution - the funding gap to full production. I suspect that the £700k is a bit of a side issue as it is a relatively minor amount in comparison to the market cap. I am surprised that the market is not more focused on the potential for a sale here but I suppose that the still parlous financial situation is preventing this from playing too much of a role - people don't want to bid it up and get stuck with a pup should no deal be done and funding being unavailable (I suspect that this will not be the case but there is still the chance). The other factor that may suppress the share price is one I mentioned earlier. Rasmala have the potential to control the share price by having a convertible agreement with a conversion price that is variable with the share price and owning a large number of shares. The share price could effectively go wherever they want it to go with the one caveat around a potential offer. It really is a rather complex and interesting situation currently.

jaf1948, In my opinion it would be extremely difficult for them to get such a loan. Apart from the fact that the last few years have been nigh on catastrophic in terms of funding for junior miners, they usually loan against property and cash flows. For them to loan on cash flows there have to have been evidence of a predictable stream of revenue over a period of time which DCP just haven't had. Hand on heart you cannot say that DCP has a derisked mining model yet. I am sure that it will come but it hasn't had the stable production that provides such a thing. Given DCP's situation they have left themselves open to pretty much whatever deal somebody wants to ask of them. With that in mind, the £500k funding they have got is relatively benign. No bank would loan DCP $10m currently in my opinion.

I think that it is reasonable to suggest that there has been insufficient planning here although it may be that, in a drive to reduce the amount of dilution, insufficient capital has been raised to cover potential overspend/delays. Or perhaps the capital just wasn't available at a level that they sought so they had to make do. I suspect that it was actually a combination of the first two. For whatever reason, we are where we are. I believe that ultimately they will be able to secure the necessary funding but at what cost? It is possible that the better scenario here is an outright sale now and I suspect that PL recognises this. I think that this will be done and dusted long before Christmas. The one caveat is the fact that there are a number of institutions who have shares at much higher levels who could potentially change the situation enormously if they could drag themselves away from their corporate lunches!

Webmoor, They do not currently have the authority to do so but even if they did, they would need to be sure that they could get the money from investors. If you look at their current situation, any investor would require a steep discount to get the placing away. I was expecting the £500k to be raised at 1p and I disagree with the poster who suggested the terms were onerous. They were a lot better than I expected (although much more complex which is what I think the market is struggling with). To raise £3m given the situation they are in is likely to prove challenging and will come with all sorts of strings attached, whether equity or debt. They are in a stronger position now to negotiate but I would hardly describe it as strong. If they get the £3m funding then they are in a much stronger position and can consider any offers without having to consider whether they are about to go under.

Because in the short/medium term AIM is driven by sentiment rather than fundamentals. Ultimately fundamentals will win through but it can take an age. Any particular company with nothing you are considering?

Webmoor, In terms of your questions, I would suggest: 1. The company have stated that it takes a period of time from mining the diamonds to money in the bank. They seem to like to sell their diamonds in packages. It is not quite clear to me how much of an impact on the price this is but they are best positioned to understand so I have to bow to their wisdom. Ergo, you have to assume that the funding need was more pressing than the time to receive the money. 2. The 'fire' sale! Quite literally, a fire started the fire sale, along with flooding, earth falls, etc. But I think that it is not quite right to call this a 'fire' sale. The 'fire' bit was the short term funding. There is a 'hot coal' bit related to the additional funding required before full production is achieved. But the sale process would appear to be opportunistic. It was not explicitly on the agenda I believe but it looks like they have been approached. If they have had approaches from multiple sources, it would surely be the duty of the board to consider the offers if that is in the interest of the shareholders. I do not consider this a fire sale but it may turn into one if they cannot establish an additional source of funding. 3. We have no reason to believe that the company is currently under offer. It is in a bid situation but currently we have not been explicitly informed of any formal bids that have been received. 4. Some of these PIs will have got in at a lower level than the current share price. A lot of traders would have seen an opportunity. These people know and care nothing about the fundamentals of the company but just see the share price movement and will take their profits and leave. In addition, there will be people that will look at the recent fall and rise as too nerve racking for them and sell as the opportunity presents itself. There are many reasons for doing so.

Appears to be trying to break 21p again. If it does then we haven't seen those levels since early 2014.