Member Info for Daisan

Whysoserious227, I notice you say that "The new TR1 holder doesn't lose money!". You should come over to the BMN board where I think people will beg to differ!

They do indeed. I do hope that participants in the convertibles are not dumping stock. AIM is such a depressing market!

There are 250k up for sale at 4.875p as well if anybody wants to take advantage of the drop.

Sales going through at just over 4.6p and buy price 4.75p. Not massive volume. I picked up 50k at 4.75p as I don't believe that the drop is justified. Am I missing something or is it just people giving up?

It would have been good if the 'long term supporter of the company' could have played closer to the market price. Although the dilution was not massive, the discount was unnecessarily large.

Well, for the asset I would suggest that the current market capitalisation is ridiculously low. All explorers have to go through start up costs but most start ups do not have anywhere near the resource that Chaarat has. Geopolitical risk is certainly a factor but let's not kid ourselves, serial misjudgement by the leadership is what has created this situation in the same way that Andrew Bell, for example, has ensured that RRR and RGM are worth very little.

I suspect you are right - a takeover is inevitable. However, I am not convinced about the price range. I still think that this will move to a premium once people realise that a takeover is in the offing although nowhere near the premium that people would have hoped for. I expect the price to be more like 10p (i.e. nothing like the value suggested by the asset itself). It is pretty clear that the project has been handled poorly and I tend to agree with a previous poster that Dekel's position looks perilous.

.... has see a third knocked off the value of the company so clearly the market is not impresses with the deal. I suspect that this is for a few reasons. Firstly, the asset is in Russia. Secondly, gold explorers are being marked down at the moment. Thirdly, and probably most relevantly, I suspect that many investors were eyeing a cash return as a result of the sale of Karchiga. It was never really on the cards that the cash was going to come out of the company and now it is a useful source of funding to quickly define a resource and move towards feasibility. Not many gold miners out there with such an asset and the funds to exploit it. I believe that the market is undervaluing this substantially but that is hardly unusual for these types of companies. It can also last a long time! On that basis it is difficult to judge when this will re-rate. However, with the cash on hand there is no likelihood of dilution so at some point I am confident that the value here will be noticed and realised.

With the admission that there is now a concert party at work, we could be in for interesting times. There is no doubt that these investors would like to take the project over and I suspect that, financially, they are in a position to do just that. At some point the view will turn away from focusing on Dekel's performance and move towards the next steps of the concert party. This could be coming to the end game here with the result being obvious. The question is at what price?

OK, last thoughts on the deal. Let us assume that Karchiga is brought to completion and the company receives $9.75m. In addition, based on the latest news, the company will have at least $3m in cash after transaction costs (i.e. with the payments in the news having been made). So the company will have a low risk opportunity to confirm a resource of 2+m oz in an established mining area with an open pit mine 300ms away from the limits of Orsu's property. At today's market price of C$0.04 and with 330m shares in issue, the market capitalisation on completion would be C$13.2m. For that you get a promising (with open pit/low capex potential) gold deposit and C$16.8m. So the market capitalisation would ascribe a negative value to the gold asset. Given the prospect for gold miners, I think this unlikely.

Agreed. Singida looks like it has the potential to be a significantly larger resource. Looking forward to results. It would be nice if they were delivered on time.

I don't see why posting that is an error! That is the news release we are talking about.

I have been giving this a bit more thought and I confess that I like it more and more. I am convinced that gold is the right place to be for the next few years (with the short term looking somewhat less certain) and this looks like a relatively low risk purchase of a potential 2m+ oz resource in a mature mining region with all the necessary infrastructure. With $13+m to exploit it. Once the deal is done, the market capitalisation will be less than cash. Actually it looks like it could be one of the best value gold plays out there if the Karchiga deal goes through.

And this one looks like it is more likely to go ahead. Whilst the asset is not great quality, it does have a reasonable defined resource that looks like it could support a mine, although the desire to ramp up to 100k oz per annum looks extremely optimistic. As do the timescales for development of the operation. A bit confused why anyone would accept shares from these clowns at a premium to the current share price but there you go. If the deal goes through they are looking to raise an additional £1.2m (after expenses that will be less than £1m) to provide working capital to actually do something with it. So the deal adds 81m shares to the current total which presumably constitutes a reverse takeover. Market capitalisation will be about £5.5m which looks to be about right. There is better value out the but also worse value. Gold is a good space to be in for the next few years and this looks like a better deal than the previous farce. It probably rates as OK rather than anything special.

I think that TW and SP were, quite rightly, against the deal. It was a ridiculous, value destroying deal.

So. Is it a good deal? I think the way that the deal has been structured makes it either a great deal or a calamitous deal. The key is Karchiga. You have to assume that the CEO or Orsu is confident that the deal will be done. If it isn't then this becomes not only highly dilutive but also requires additional funding i.e. more dilution. Karchiga not going through would make this calamitous. If Karchiga does go through, however, then this has enormous potential. Soviet resources do not have a value associated with them in the same way that, for example, a JORC code does. But they are usually indicative of mineralisation and do provide a low risk option for drilling to a western code standard. The fact that this seems to have a relatively low risk potential for an open pit mineable resource between existing open pit mines with one of them currently being bought by a huge Chinese gold mining company makes the potential of the property quite exciting. Orsu's cash resources mean that it can go a long way towards developing a mining operation without recourse to the market, so no threat of dilution like most other explorers. So, is it a good deal. I love the potential but the downsides are obvious. It is one for the risk takers. Stash a bit of money in it and you may lose the lot. Or it will go up ten fold.

Agreed. Neither Clinton nor Trump are bullish for the world! What a dreadful choice they have.

OK. Finally Orsu have done something and it explains why the shares have been so active recently (clearly this was known but, hey, who cares about insider trading? The authorities don't seem to). The deal is very interesting. The following can be taken from the heads of agreement. 1. It is a gold deal. That is the most positive thing as I believe gold will be the place to be in the next few years 2. An area that already has producing mines so the infrastructure is good 3. Sandwiched between working gold mines 4. It has an exploration potential of between 2 and 4 million oz 5. Other mines are open pit, bulk tonnage 6. A fair amount of drilling has already been done with positive results but no resource compliant with western standards has been produced 7. The transaction involves very little cash ($680k). Most of the transaction is through the issue of shares 8. The operating gold mine next door is currently in the process of being bought by a Chinese company. But not any Chinese company - China National Gold Group. There are regulatory hurdles to go through (huge ones!) but if they are successful, it is pretty obvious what Orsu would hope for. This is a long way down the line though. So, this is an interesting way of getting a potential gold mine. The market capitalisation nearly doubles on the issue of the new shares (unless the shares collapse) which will bring it more in line with current and future cash. But significantly, Orsu will have the cash resources to significantly exploit the property as it is not paying cash. So, what are the downsides? Well, obviously there is dilution but this is quite an effective way of doing it. But the big kicker is if they don't manage to complete the sale of Karchiga as they would then need to issue a lot of shares. This is understandable as the company selling wants Orsu to use its cash to progress the project. If they don't have the cash then they will not be able to progress it as well so the seller wants a bigger slice of the pie. On that basis, if the Karchiga sale falls through, the shares will slump. If it completes, the shares may well soar. All adds to the excitement. Don't you just love it?

What?

Yogi1, The market does indeed hate this company along with a number of other AIM miners. For good reason. They haven't actually done anything for years! It would be great if CGNR actually did manage to do something (and KDR for that matter) but this has one of the most soporific BoDs on AIM. The market cap. is not £1.2m - LSE is wrong. After the last placement they have twice the number of shares in issue, so current market cap. is about £2.4m. Still pretty cheap if they are ever likely to do anything but you may just be suggesting a JV in ten years time.