Member Info for Daisan

Well, an easy explanation is that it has been a pretty bad day for miners, bar the odd exception/special situation. A less welcome explanation may be that gold and gold miners are topping out as the USD has bounced off of support. If that trend continues then gold and gold miners will find it increasingly difficult not to correct. Eventually fundamentals will shine through though and STI has decent fundamentals. But in the short term AIM is largely driven by sentiment, now more than ever judging by what has been going on in the last few weeks.

MTR invests in very small, illiquid miners. Puts a little bit of money in but there is little risk owing to the large number of warrants also issued and the adoring fans. The shares then get Twittered to death, others pour in and, voila!, a share success. Whether that success holds is debatable but the evidence is mixed (ECR for example). MTR investments tend to be good for MTR whether they are good for other investors remains to be seen.

Not sure where you got that one from Ando. All shares in isas are capital gains tax free.

Of course, shareguru, your post would have been improved by getting the name of the company right!

Hasn't cleared $1300 yet. The key is the USD as gold's rise has been inversely proportional to the USD so far this year. USD is currently sitting around multi-year support levels at 92ish (see DXY as a symbol). If that breaks then both gold and silver may well go parabolic. If it holds and the USD bounces from here then gold/silver could well sell off sharply, even to the point of $1000/oz region for gold. Currently on a knife edge and lots of money to be made in either direction! At the moment I am sitting slightly on the side of gold as this to me is the long term investment but my feeling is that the line of least resistance (and potentially most profits) could be with the USD in the short/medium term.

$1302 is a key level to break for the price of gold. I if does then it marks a new bull leg for gold. If the price of gold is going to rise strongly for the next couple of years (barring pull backs I suspect that it is), then AAZ is likely to be the biggest beneficiary on AIM owing to its borderline profitability and high debt. Higher prices translate straight to the bottom line, increases profitability enormously and makes the debt manageable/pays it off more quickly. Q1 is traditionally AAZ's worst quarter so the next quarterly updates should see appreciably better performance. I suspect in the short term that gold may struggle to get through $1302 and may even pull back strongly from here, but in the medium/long term AAZ will prosper enormously from a higher gold price.

They are due. In fact I would have expected them by now. Not sure they will show much that we don't already know. I prefer the quarterly updates to be honest because they show the current picture. But they are definitely due.

As pointed out previously, they have not yet forward sold 75% of their annual production. They probably will do so but so far this is not the case. I tend to agree with you stocks that it is prudent to do so when you are managing the debt. I would hope as gold prices rise and the debt burden eases that they will lessen the hedge programme. However, at the moment it remains a decent strategy. With the gold price rising, the unhedged portion is obviously benefiting and with production currently exceeding the required run rate to meet guidelines, this should materially benefit the bottom line. We should be in the position next year of having a low cost, 80k+ oz gold producer with very manageable gearing in a gold bull market. I suspect that this will be a pretty good place to be at that point.

Looking like it is going to challenge the 2015 high of $1302/oz. If that breaks then could climb rapidly. If it can't break that resistance then suspect a correction. Knife edge stuff!

You would think so. You get the feeling that Chaarat will be quite binary - permanently low until they surprise us with a deal and it rockets higher. There is no doubting that the asset is worth a great deal but you certainly doubt whether the incumbent management are capable of realising that asset. I have a reasonable amount of hope that the future gold bull market will be so powerful that this will overcome the obvious lack of management capability.

Highly unlikely that the share price would be at this level if they were going to remain on AIM. 1.4p gives you 5p worth of current assets, assuming the deal goes through. It will be interesting to see what they will do with that cash. The TSX tends to be more supportive of explorers but they do need a property to explore! It's not a bad time to pick up an asset on the cheap at what could be the early stages of a commodity pick up. I'm sticking with this as I feel the price does not accurately reflect the assets. Could be some while of course before they do!

If they have Garamjav on board then that is seriously impressive. There is nobody with a better CV than the guy who discovered Oyu Tolgoi and I doubt whether anybody knows the area better than him.

I find it difficult to believe that is a sell. You don't rise 16% over the day with sells outnumbering buys by 3.5:1. It is either a buy (I suspect that it has been worked all day) or there is an even bigger buy going on in the background!

As Dibs has me filtered he won't be able to read this. However, I would like to comment on a couple of his points as I believe that they are either inaccurate or misrepresent the situation. Firstly, on neither a gross nor net debt basis is the current debt 'over 50% higher than last year'. On a gross basis, current debt is $74.7m compared with $52.7m a year ago (41.7% up) whilst on a net basis current debt is $58.4m compared with $43.5m a year ago (34.3% up). But the debt is not being used to shore up a failing business, it is being used to invest in improving a well performing business. The key facts are that institutions are willing to lend the money (they are - pretty good considering the lending environment for miners) and whether the debt is supportable. It is and I have complete confidence that they will be able to repay the convertible next year. Secondly, the amount of hedging by my calculations is less than 75% of production. It was 30k oz Jan - Jun and 32k oz Apr - Sep. So to my calculations 47k over the 9 month period. I accept that this is at a rate of 75% of annual production guidance but it would be wrong to say that this amount is already forward sold. I accept the fact that it is likely this process will continue. But hedging makes sure that the business can meet its obligations going forwards. Surely at this stage of the business it is better to be sure you can cover your commitments than run the risk that the gold price will go against you? One thing that is not pointed out is that current production is running ahead of guidance. Q1 production at 24.3k oz is massively up from Q1 2015 at 13.5k oz and well ahead of the run rate required to meet the annual production guidance. From my perspective I see a gold miner that is increasing production, investing to make sure that the production moves forward in the future at reduced costs and is prudently managing its revenues to ensure that the debt can be managed and repaid. I consider that to be a pretty good company to invest in going forwards. That said, with the seller in the background it is true that there will be pressure on the share price. I suspect that the gold price will be volatile as well to further make the environment unpredictable.

Ha! Quoting from my statement: "This will undoubtedly keep the downwards pressure on the share price". If that is 'ramping' in your words I shudder to think what is 'deramping'. 'Over leveraged' implies too much debt for the company to effectively manage, 'highly leveraged' implies a significant amount but not too much. I do not think that they are 'over leveraged' as the debt is manageable. Cash flows are strong at the current gold price even with the perceived high percentage of hedging. One of your statements is incorrect. 'Net debt is nearly twice as much as market cap'. Net debt was $58.4m in the last report or just over £40m. Market cap. is currently just over £35m as a result of the fall today. So net debt is about 1.14 times the market cap. by my calculations. I would not call that nearly twice the market cap.

Could well be. Unfortunately they have a lot to sell! This will undoubtedly keep the downwards pressure on the share price if it is the case. That pressure has been there for some time. I don't think that SHG is over leveraged at all and the hedging at this stage is a prudent thing to do to guarantee the cash flows. If some of the technical analysts I follow are correct, they may well be in the money with their hedges anyway! (Like all technical analysts, there are others who say the complete opposite of course).

Not what was expected but explains the activity a couple of days ago.

I think that you are probably right that the Chinese buyer has gone and is now selling out of the company. Whilst that is disappointing, Chinese companies do have a habit of bidding low so perhaps maybe we can look at the possibility of other bidders emerging. I understand the frustration of long term holders as I have been in the same situation (look at OSU and ARS both of which have had a similar history of bright futures and non-delivery). AIM is riddled with companies with crap management that have overseen shareholder destruction. Dibs should know - he is a big holder in one of the worst culprits. But CGH does have a significant gold deposit and this will be of interest to a buyer at some stage of a gold bull market.

Wow! 16,000 ($2bn worth) futures contracts were sold in the market.

Interesting. A battle between east and west is building! $1260 was a key chart point and trading in the east eased through it. Only for the NY markets to absolutely smash it. You couldn't make it up.