Member Info for Daisan

We have some interest today. Ticked up with 12.73p buy.

Apologies for not replying sooner. I only have a small amount here currently but am considering adding more. They are at that stage where there is a great deal of uncertainty about the production profile as they move to underground operations. From the news releases the process appears to be going well but we all know that this is not necessarily the whole story. So, on the downside there is the uncertainty of production which can have the obvious funding knock-ons. There is also political risk but whilst Kazakhstan is not on my bucket list of places to visit, it is relatively stable if far from democratic. And finally it is dominated by one shareholder which I am always a little wary of. On the positive side, Sekisovskoye is an excellent resource with a decent grade (in this era). 5m oz puts it in the 'large' category, although 2m of this is pretty deep. While the LOM production is stated as about 1.9m oz, it is clear that there is potential for significant improvement on this, probably through extending the mine life rather than significant production increase, although I expect this to be incrementally done as well over time. And then there is Karasuyskoye. Who knows what is there currently but they paid $27.5m for it and they have visibility of the historical drill results, sample, trenches, etc. The latest indications from the company suggested that they didn't overpay for it. Considering how much they paid for it compared with other projects around the world, the indications are that there could be something very interesting here although it is probably the right thing at this stage to ascribe little value to this. The Sekisovskoye operation, once complete, will easily justify the current enterprise value. However, I still believe that AAZ and SHG, at this stage of GBGR's development, are lower risk options whilst still providing a great deal of upside, dependent, of course, on the price of gold. Long term I am very optimistic about the price of gold (which implies very pessimistic about the world's economic prospects). I firmly believe that it will hit new all time highs in the next 2-5 years. However, in the short term it could come under pressure. The medium term uptrend looks under pressure and it is not clear that we have yet broken the longer term downtrend. That said, I don't expect a downside of lower than $1000/oz and the buying opportunity at that point would, for me, be phenomenal.

It's a side show. Such a small gold resource is not going to capture any particular interest, particularly when you only have 20% of it. There may be $90m attributable to KGLD but the value is much lower as you have the capex to develop it and then the costs to dig it out and process it. They should sell this in my opinion or just accept a steady dilution. I am much more interested in any new stuff coming down the line. Finland looks interesting and it will be good to see how it develops.

Rest assured that I won't be using First State Investment Management given their take on this. Some of these organisations seem to actively not want to make money but there you go. It is very difficult to predict what potentially is going to happen when you have organisations making decisions like that! As you say, Labro will take those, thank you very much and you would have thought that they would approach directly to take them off their hands.

That's an 'off market' trade - two parties have agreed a deal and exchanged. No way you could have got that through normal market trading. The seller would have decimated the market and the buyer would have forced the price higher. Interesting though. More interesting that it hasn't resulted in a TR1 which suggests that the buyer was new and the seller was under 3%. Or that they just couldn't be bothered to inform the market.

KNIGELK, For everyone that hits the jackpot investing in AIM, there are ten who lose, some significantly. I have heard of people losing their entire pension fund as a result of investing in a single AIM share (not to be advised). Equally I have heard of seven figure gains on one share. I personally have made and lost significant sums more than once in investing. The most difficult was when I was much younger and invested exclusively in warrants. It was great on the way up but not so good on the way down! But you learn that there is more to life than money. There really is. The people sitting on the beach or playing golf are probably retired and have the time to do so. Believe me, as you get older you would quite like to have a bit of youthful vigour back and would give up some of your time to do it.

KNIGELK, I disagree with a bit of this. You say "this is AIM and there are as many losers as winners". There are many more losers! You could also extend this to investors where most investors in AIM will lose money. We only tend to remember the winners though.

It isn't just one mistake though. If you calculate the number of potential new shares that would be issued they have got that way out as well. This looks to be pretty shoddy stuff.

Appears to be a director of Vigla Ltd. which looks like a small personal vehicle (with rather large liabilities as far as I can see). I suggest that this is just an individual rather than representative of an institution.

OliviaR, This made me laugh! We have had flooding, rock falls, fire, production suspensions (voluntary and imposed), reduced production targets, delays, emergency funding requirements, larger capital requirements, going concern issues, potential administration and a possible takeover/bidding was. And you say 'something is brewing here'! No kidding!

I would point out that if there are multiple bidders, and the diamond miners in the world would be mad not to look at this as an opportunity, then whether the company is in administration or not the asset will be sold for a sum that is closer to its true value than if it was to a single bidder in a fire sale. Administration makes little difference if several parties really want what is being sold.

Welcome back. By the looks of things, September 2014 was the last time 12p was paid.

Mentioned previously so I thought I would have a look. And it makes you weep when you compare the two companies. I suggest having a look but to summarise their resources and their market capitalisation in particular - 1.3m carats and £36m.

Visitor, I believe that their focus will be to maintain momentum in building value within the company rather than generating excess cash for dividends. They have stated plainly that they want to be a mid-tier producer and that is going to take a lot of capital. So I wouldn't expect them to take their foot off the capital investment pedal during the period between now and Singida requiring large scale investment. The deposits around New Luika are the obvious place to invest over the next couple of years in the run up to developing Singida as that will allow them to extend the life of the mine and potentially improve the production profile, although the capacity of the processing plant has to be considered in this process as well. Development of these deposits is going to require investment. They are paying off debt whilst investing heavily and I see that continuing for the next couple of years. However, I expect the debt profile to rise again (although with my expectations of the gold price rising, not as much as maybe you would think) from 2019 as they invest heavily in Singida. I believe that Singida and New Luika have the potential to jointly produce 150k+ oz a year in a few years time with a long mine life. That is going to be a very valuable asset in a supportive gold environment. If gold does anything like I think it is going to do, the investment will be well worth it in the end.

Well, personally at this point I think that this is more of a comment on the intelligence of CGH's shareholders than the BoD's competence. For goodness sake, they have just rejected an offer 30% higher and there is an admission that there is more than one party involved in the process (Labro and....). And yet some of the shareholders see this as a cue to sell! Let's face it, the chairman will be loving this.

Don't get too excited. There will be loads of these now that there is a potential takeover

Chinese are most likely but I would prefer it if it wasn't. They don't tend to pay brilliantly for assets! I notice that the share price has come off somewhat with some selling. People really are a bit stupid, aren't they?

I tend to agree that they will beat guidance but I am not tempting fate. The move underground is going to have its up and downs and I suspect that they will remain cautious with target production for 2017 for this reason. But I am hoping that the pilot production at Singida will give them the some opportunity to absorb any potential issues better than many companies moving underground (consider GBGR, formerly Hambledon Mining, for example who have stopped production as they move underground).

5-6p would be a disappointing price. If a takeover deal is done this week (I would be surprised but it is not impossible) then you may be right. However, I believe that a more likely scenario is that the short term funding requirement will be satisfied first which will put PL in a position to negotiate better terms. Remember that PL has put his soul into this project and doesn't want to see it taken out at what he considers to be a pittance. He will only do that if he has no other options.

Visitor questioned future capital requirements so I thought I would consider these and I welcome people's thoughts. Quite a lot of the current capital expenditure will come to fruition in the first half of 2017 (e.g. power plant and pilot project at Singida) and it is unclear what significant capital expenditure will take place immediately after this. There is one very large capex on the horizon - a large scale production facility at Singida. However, the announcement of a pilot plant at Singida indicated that this would last for two years, suggesting that we are looking at 2019 for the main event, which would give them time to update the original study, pull together a development plan and get the necessary approvals as well as complete the resettlement process. I do not expect the capital expenditure to be considerably reduced for the next couple of years, however, and I expect the area around the current production at New Luika to be a considerable target for that expenditure. The recent upgrade to the Ilunga resource is indicative of that process and I expect that to ramp up over the next couple of years. Exciting times ahead for SHG.