Member Info for Daisan

Well, if they produce at the rate they did in the last quarter, with the gold price being on average about $90/oz better overall, they should generate an additional $2.5m. Last quarter they improved their net cash position by about $8m to $19m. On that basis it would not seem unreasonable to see that improve to approaching $30m, assuming like for like capital and operational expenditure. All very vague, I know, but this does not seem unreasonable. Should take the net debt position down to the mid $30ms even with the new facility. Even if we do get a final shake out in the gold price (and I expect one), SHG should be in a good position to ride it out, leaving it in a great position to benefit from what I expect to be an exploding gold price over the next 2-3 years. At least that is the theory! Alternatively Governments around the world may magically get their acts together, the world suddenly realises that peace is a pretty neat concept, debt around the world spontaneously disappears and the world economy shifts into top gear.

Do people see this as a long term option or a momentum play? Looking at the news releases they appear to need to raise about $5m which is more than the current market cap. On the plus side the price of zinc has risen considerably this year but on the minus side base metal companies are still finding it extremely difficult to raise funds. I notice mention of a gap to be filled. Are charts pointing to a positive outcome here? The momentum seems to have stalled somewhat currently so I was wondering whether people feel the turnaround story was compelling.

Strange reaction by gold to the news today. Firstly it sold off and then it rocketed before settling back down. Still unable to break 1280 currently but you have to say it is resilient. Personally I thought the news should have been bad for the euro/good for the dollar. Does anyone believe the ECB when it says that that is its final stimulus? The European economy is in deep trouble and they will do whatever they can to save the euro. Once the market digests this properly I suspect the euro will weaken. At this point it will be interesting to see whether gold holds up. Currently, pretty much all chartists are calling for a drop in gold but pretty much all of them have been caught out by the resilience! To quote Chris Vermeulen: "Gold is overbought and technical analysis is pointing to a drop in gold price to the $1150/oz. level, a good 10% lower from the current levels". A lot are agreeing but at least one is calling for sub $1000. All are very bullish on gold in the long term.

Bizarre response. I don't care what your investments are. You just mentioned a bunch of companies and I responded to them. I have followed ECR since before it was ECR. It was unfortunate what happened to it but their actions since have been far from successful and a complete disaster for shareholders. It is amazing that NYO are still operating given their past. Another disaster for shareholders. MTR are a small scale metals investment company. To give them their due, it is an unusual model but they are hardly a significant player. If they invest heavily in the gold sector I suspect that they will do very well over the coming years and your investment will pay off provided they stick it out. So. One again I have not insulted you despite your insults. I post where I like. Some I have shares in, some I don't. Some I am positive about, some not. Can I suggest that you might want to take yourself a bit less seriously?

I forgot to mention political risk. Always a concern but at the moment it appears reasonably stable.

Timeless, I understand the technical opportunity although I am cautious about being involved in these kind of situations - you are liable to get burnt. I don't rate the fundamentals of ANY of the companies you mention - ECR, NYO or MTR. Although ECR has an interesting asset - a A$80m tax loss which could be worth up to A$24m to somebody. The fact that there are common names to all of these companies does not give me a warm feeling!

Tommo, I confess I have been a little bit removed from AAZ so forgive me if some of this is no longer the case (it is taken from their latest presentation from September 2015). At Gedabek (the main mine), AAZ have about 1.5m oz AU in the measured and indicated categories (680k oz reserves) at 0.73g/t (1.03g/t). Add to that 144k tonnes of copper @ 0.23% and 10m oz silver @ 5.3g/t. Enough to keep them going for a while at 70k oz production. There are reasonable exploration opportunities nearby. The scale of the operation suggests that they are unlikely to be a takeover target of a major so the main drive behind the share price will be the price of gold. Given the relatively low grade of the operation and the debt situation (net debt just under $50m), this is an almost perfect vehicle for exploding gold prices as this will create a very significant increase in profitability. Historically AAZ has been valued lower than other operations. For me this is due to the royalty arrangement with the government in Azerbaijan. This is 12.75% of revenue until all historic costs are recovered. Thereafter (expectation is from 2018) Government royalty is 51% of production after costs. Sounds very much like 'tax' but without knowing the details of what is in and out of the scope of costs, it is difficult to compare it with what we call corporation tax. Whatever, it is quite high. So, for me, AAZ is effectively a heavily geared play on the price of gold. If gold goes down then AAZ gets hit hard. If gold goes up then AAZ benefits enormously.

Begs the question of where the shares are coming from if the orders from two weeks ago haven't been settled. There are a couple of sells on now so the market may be freeing up a little.

I have done a little research on the (erroneously stated) 'short squeeze' previously mentioned on here. I have had a look at the letter posted on Twitter and it does seem to be a highly unusual situation - not one that I have seen before. As far as I can see this is related to the settlement of the trade rather than the actual transaction, meaning that the trade has been agreed but the company involved has been unable to settle. As far as I can tell this is referred to as a 'short fail'. There is not much information available to examine further what might happen although from what I have read it appears that the transaction should be null. The letter clearly states that the transaction has taken place and will be honoured which suggests that they are effectively underwriting the transaction. This gives them an open ended liability although, given the size of the trade, not a company threatening one! Given the fact that there have been enough shares traded (sold) in the market to cover this one, I would assume that it will be rectified in time. You can only speculate on how many of these took place though and how long it will take to cover them all. It does seem like a bit of a shambles. An interesting situation though.

Timeless. Good grief. I KNOW YOUR BUY ORDERS HAVE NOT BEEN SATISFIED. IT IS HARDLY UNIQUE. IT HAPPENS QUITE A LOT IN ILLIQUID SHARES. IT HAS NOTHING TO DO WITH A SHORT SQUEEZE (as you even now seem to admit). This could go on for ever but I am hopeful that you will live up to your promise of not engaging.

Timeless, I was in no way 'disrespecting' you and have never resorted to personal statements about you or anyone else here. I was just challenging your use of an accepted phrase in investing. I saw no evidence that the market makers were shorting Kolar and would be amazed if people were shorting a share like Kolar - it is just very hard to do and extremely risky! I am in no way frustrated at missing a buy in price. It would be lovely to have bought a share at precisely the right price/time but it would also imply that I have deviated from my investment strategy which experience has suggested will lead me into trouble. Anyway, thank you for not engaging with me.

Timeless. I understand very well what a short squeeze is. And I'll quote Investopedia for you: "A short squeeze implies that short sellers are being squeezed out of their short positions, usually at a loss." For that you need short positions i.e. you have sold shares (or used instruments) that you don't have with the aim of buying back at a lower price. If you are short a share and the price goes against you, i.e. rises, then you may be forced to buy back in at a higher price than anticipated, thus driving the price even higher. The description that you used was that the market makers didn't have any stock to sell. This does not constitute a short squeeze. Anyway, be happy that your share price is rising! Not much point in bandying semantics at this point.

Dibs. Agreed.

I don't I'm afraid. Wish I could say that I bought yesterday and will sell at precisely the right moment but that is, sadly, not the case! It is an interesting company, mainly for its location, and the story is touching but it doesn't fit the profile that I am currently looking for. I am more interested in small, undervalued producers currently as I feel that these will benefit most from a rising gold price (which I expect to go in substantially lower in the short term before rocketing in the longer term)

I should have said that I never said that there was NOT a stock shortage. Doh!

Dibs, I never said that there was a stock shortage. I was arguing with Timeless when he said there was a short squeeze, which is entirely different. Good to see that this is moving. If it is based on progress on recommencing mining then it should have some legs.

Timeless. One flaw in your argument. Why on earth should I trust you? I don't want to appear aggressive but you are just a faceless, nameless individual on a bulletin board. As am I. Trust is not part of the equation I'm afraid.

I can understand there being very few shares available in this which could well result in a dramatic increase in price (although beware being stuck in it with a large position that you find you are unable to sell - I learned that the hard way) should there be a sudden interest in buying. I don't understand the Market Makers being short of stock to 'cover their positions'. No reason to use this kind of language. A simple 'there are no sellers' is good enough!

Blinking heck! That's fairly grim reading. 1500 died of starvation since the closing of the mines! And they are talking about 5000 employees. I assume it is going to be pretty low tech on that basis. This could well be an interesting development for KGLD.

Short squeeze? Where is the information that this share has been shorted? I find it hard to believe that anyone would short this even if it was possible. Just because you can't buy does not mean that this has been shorted. It just means that people aren't selling! The fact that it is not rising suggests that people aren't buying either. Perhaps if you issue your buy without price limits you may be able to fulfil it. You might end up paying a lot more than you wish though. By the way, why 999,999?