Member Info for Daisan

Hi zanthrus, I suspect that any dividend would only be a proportion of the cash they generate. There is loads for them to go for around their site and they have first mover advantage in Azerbaijan, so they are likely to have the pick of other projects. But there should be plenty of cash generated. I think that there is a more than reasonable chance that gold will face some headwinds over the short-medium term but longer term I expect it to be strong. If we speculate on an average gold price of $1400/oz over a year (I think in the next few years it will go way beyond that), then 75k oz per annum will generate $12.75m more cash than annual production at the gold price achieved in H1 2016. This is the joy of gold miners. They remain unloved for years but then every once in a while they have their moment in the sun and they take off. I suspect that the next few years will be one of those moments.

zanthrus, I got my figures for Rambler from their presentation in July - the latest information I could see. In between the third quarter report and the presentation they did a significant fund raise (in June) which probably explains most if not all the difference. Interestingly it was done at a 20+% premium to the prevailing price. I suspect that was due to the fact that the placement was done to a related party who now own a whopping 63% of the company. I'll have a look at the Keiser report. Thanks for the link.

And 0.05 still on the ask. Very significant volume for OSU. Let's see whether it starts to translate into a rising price.

And gold reacted accordingly. Looking for a reaction here.

And gold reacted accordingly. Looking for a reaction here.

You need to consider enterprise value more than market capitalisation. As regards CGH, the missing factor is the fact that it is a world class deposit. There is value in the ground even if it is not being pulled out. CGH is actually significantly undervalued on the basis of its resource but this is impacted by the fact that the people running it have not progressed it one iota for years! To my knowledge they have no debt so EV = £16m. I quite like CGH's resource but the management is not liked. As far as I can see on RMM the debt/cash position is somewhat different to what you state. They have c $12m cash and $2m debt. So EV = £15m. They are in the process of expanding production and would more rightly be considered a copper mine than a gold mine. Even so, the production numbers are pretty small. AAZ has net debt of $41m so EV = £48m. So, effectively AAZ is valued at three times CGH and RMM. Of the three, I would say that AAZ is the better bet in a rising gold market. For all three in that scenario the market caps. and EV should rise. However, as it pays off debt, AAZ's EV should translate to market cap., effectively providing a double boost to the share price. But I don't think that the valuation difference is as stark as it first appears.

Interesting update. Not great but not bad either. Clearly management realise the fact as they have gone out of their way to explain the drop in the $/ct figure and the fact that over the period we are exceeding the base figure. Given the impact of larger stones, it looks like we will be hanging on every news release for information about specials that have been found. $5k+/ct shows the significant difference in achievable prices and a very large stone will significantly exceed those figures and have a huge impact on the average sales price at auction.

This is true. However, it is also something that could be applied to any explorer. Look at SOLG for example. A fantastic prospect but there is no way it is going to be producing any time soon. And yet the shares have quadrupled recently (and up 12x ytd). The company has value and at least there is now a plan to move this forwards. Yes, it will require capital. But what AIM explorer doesn't? The ideal would be for this to be bought, but in the absence of that at least this is a decent option. The share price reaction has been incredible, albeit on still relatively low volume (£50k transactions have wiped several million off the market capitalisation). I confess I hadn't realised quite how negative opinion had grown about the management team here. Probably for good reason. But without doubt there is more value than some other hated AIM companies (RRR springs to mind).

Even more amazing is the fact that a couple of central banks (Swiss for example) have been buying gold miners. Although, I read this morning that the Swiss Central Bank now owns a number of large companies, particularly in the US, so perhaps this is part of that process. Even so, I am not a fan of central banks buying shares.

Korg, He posts as AIM_chaos and is actually a pretty good poster. He notified ONZ yesterday I believe and offloaded on strong volume there. I disagree with his position here as I think the last RNS said...... that they had moved offices. And not a lot else.

And just to clarify the RNS for investors. That was a positive one! Most of them for the last few years have been negative so it may not be clear to people!

Given the share price reaction, is it any wonder that AIM miners stick to doing nothing other than paying themselves? I really think that AIM investors should look at themselves sometimes. Then look at the horrendous cesspit that it Twitter. On the whole we seem to have the company leaders that we deserve!

Fundraisings are inevitable for an explorer. They have to get the funds somehow. At least now there is a real chance that they can do something positive with it rather than just keep the lights on and pay the salaries!

I think that this is extremely positive indeed. They have been sitting on their butts hoping that they would be taken over by a Chinese miner for so long that there has been precious little progress. It seems as though a light has suddenly turned on and they see the need to move forwards. The appointment of the Chairman is extremely good news as they will feel the need to get a return. Chaarat now needs to be seen as a potential miner with a world class resource and that should see a steady re-rating.

Banksman, I understand what you are saying and investment is always a gamble at any level. Even major companies can experience sharp falls. Who can forget the banking shares in the last financial crisis? For me there are differences between AUE and DCP, most notably the size of any potential cash shortfall as a result of the production delays and the immediate need to repay debt. For AUE the production issues caused a large shortfall at a time when there were repayment milestones which, as a result, could not be met (nowhere near). We are not looking at the same scenario here and any shortfall should be relatively minor in comparison to the market capitalisation. The tender will give us an indication of the diamond prices that Lace can expect going forwards but we will need a few to confirm consistency. As always with any start up, expect the unexpected! There are always issues that need resolving and it is how these are addressed that is important.

Apologies to jeansie7 as well!

Sorry zanthrus. I am being particularly thick this morning. It is in the interim report of course. My only excuse is age, infirmity and, by the looks of things, the onset of dementia. I believe I was even quoting from this report last week. Doh!

jeansie7, Understood that this is only dore but this makes up the larger share of production. But did I miss something indicating that the mill was not operational until the end of August? The Q2 update stated: "The agitation leaching plant's second semi-autogenous grinding ("SAG") mill is now in place at Gedabek and is being commissioned. It is expected that commissioning will be completed by early August. Once in operation, it will ensure sustainable production and assist in achieving our 2016 annual production target." I.e. the commissioning of the mill was anticipated in early August. Given that the update was in mid-July you would hope that they would be pretty accurate by then. Reading that quote again does indicate something else - it effectively reiterates 2016 production despite any loss due to the SAG mill introduction. September's figure will have to be very good for that.

Given that the Q2 update indicated that the second SAG mill would be operational in early August, initial thoughts are that this seemed to solve the problem. Alternatively installation could have impacted production in July. Anyone know the impact of installing the SAG mill in terms of suspending production? It seems unlikely that we will do much if any more than 18k oz this quarter (I'm guessing slightly less), which would mean that we would have to do a record quarter to make target for the year so it is likely that they will revise that in the next update. Whilst this would be disappointing, the fact that they appear to have resolved the issue provides a positive outlook for the future.

Correct. A troy ounce is not the same as an ounce. So: 142.1kg = 4569oz 177.5kg = 5707oz Which means that we are a bit light for the quarter so far.