Member Info for Daisan

Hi, jcorb - do you post on iii? I come on here occasionally for a peek, although I tend to post more on iii and sometimes ADVFN

Chaarat looked like an interesting long term proposition a year ago. However, the market cap. now is not far short of Norseman - a company with a very similar amount of gold that has been producing for 70 odd years. Chaarat needs to build the infrastructure which will definitely dilute current shareholders. Whilst an interesting company, that valuation mismatch doesn't stack up as a value proposition for me so I am staying out.

Share price is heading up in Aus as well - up to 88c overnight. This is not just catch up as that equates to 53p. Looks like today could be another up day with Aus having a positive affect for a change.

Riddler, I posted this on iii yesterday: "One further thing, looking at the price of Norseman over the last six months or so, two things are obvious - it is strongly correlated to the price of gold in US$ and it is nowhere near as strongly correlated to the price of gold in A$." It makes no sense but is true, I'm afraid. Still it works for us when gold is moving in the opposite direction as well, which is good as the A$ tends to appreciate as commodities increase.

Tonymcd - apologies, my misunderstanding. 40k oz is possible for the half, of course but I am being cautious and going with target production. Hopefully if they did come in at 40k oz for the half that would arrest the decline somewhat which is causing me discomfort!

I don't think that there is any chance at all of 40k oz for the quarter. Even with the two new mines on stream they would struggle to produce 40k oz and OK, the most advanced, is not due on stream until this quarter. As an illustration, the mill is capable of processing 700k tonnes a year and the grade has been achieving around 6.5g/tonne with, say, 98% recovery. Filling the mill (which they are nowhere near doing) would give a quarterly production figure of approx. 35.8k oz at the grades/recoveries. The only way they would get to 40k oz for the last quarter would be if they hit consistent and truly startling grades from the Perch reef. As they have not come out with any statements recently regarding the production, I am assuming there is no negative news but the implied warning about development in the first half of the year from the most recent reports suggests that on target production might be the safest assumption - i.e. 19.5k oz. I leave myself open to being pleasantly surprised!

I forgot to mention - if you compare Norseman with its peers you will see that it is significantly undervalued relative to them. A good comparison is Dominion Mining which is probably what Norseman will look like in a year or so - Dominion produces more, is somewhat lower cost but has significantly less gold currently. When the mill is fully utilised Norseman should be producing a comparable amount at closer to Dominion's costs but still with more gold. Dominion has a market capitalistion about 8 times as high as Norseman. Lots to go for, in my opinion.

The float was priced at 45c on the ASX to guarantee success but this had a short term negative impact on the share price - to be honest, it was due a rest as it has risen rapidly over the last few months. Peaked at about 40p intraday. The listing was fully subscribed within the first morning as I understand although it smacked of shares for the boys! The listing was not primarily to raise capital but rather to expand the share offering to Aussie investors who, let's face it, value their own mines more highly than we do. Norseman did not need the cash to develop a third mine but it can't hurt.

The opening day of trading on the ASX led to a closing price of 54c which equates to about 26p. Clearly some took the opportunity to 'stag' the launch. On the basis that this has held up pretty well, considering, I would expect the ASX to come in somewhat higher

I bought 270k at an average of 2.2p in January and still hold - I thought then that, with the price of gold in Aus$ high, they were likely to survive and, provided they did, fair value was over £1. They have diluted since so I think fair value is about 70p. But I did spend about 2 months researching them and nearly missed the start of the rise. I almost bought at 1.75p but just decided against it at the time!

Somebody suggested that a quarterly report was due in June. This is not the case - the report for Q1 operations was published in early May and the next one isn't expected until August. Whilst the share is still in the process of re-rating (it is still valued significantly lower than directly comparable companies in Australia) and doesn't seem to need much news to for share price appreciation, the next significant event that should add impetus is the listing on the ASX, which is due to start trading on 22nd June. This will attract a new set of investors who tend to value their own miners a lot better than we do, so expect some significant growth potential from that.

NGL has been outstripping all of those companies for months. I bought in at around 2p in January, since when it has increased close to 20 times. None of those other companies can get anywhere near that rise.

The current incarnation was created as the result of a reverse takeover by Davos Resources in Q1 2007. Is this what you are referring to? Apart from that I cannot think of anything. However, interestingly David Steinepreis has indicated that he expects consolidation in Australian gold mining operations and, judging by the last announcement, is on the lookout for opportunities. They may also have put themselves in play. Considering the amount of cash NGL is currently generating, they could potentially bring a struggling operation into profitability if all they require is cash. My preference would be for them to develop what they have got as there is quite a bit to go for. Bringing on a new mine would boost production at relatively little extra ongoing cost, resulting in a significant reduction in cash costs and a commensurate boost in margins.

I wouldn't put an enormous amount of faith in the 'buys' and 'sells'. I have just checked and I could buy for 13.98 - below the current mid price which would be classified as a 'sell'. I prefer to see which trades stick out from others to determine what is a 'buy' and 'sell' - in this case I would say the 300,000 was a 'buy' (although that was a good price at the time) and a later one of 50,000 as well.

Those mentioned have sort of bought into the company recently. SVM was on behalf of clients, I believe, and Ocean Equities maintained their stake but fell below 3% as a result of the placing. UBS and JPMorgan was as a result of the share placing - and very nicely they have done so far since they picked them up at 8p.

The market capitalisation is roughly equal to the value of 31k oz of gold.

I agree with your summaries. NGL had a rather tough gestation period owing to the general under investment in the mine over the years. The final nail in the coffin for the share price was their reporting of Q3 2008 production which was below expectations with higher costs than expected. This led to a quarterly profit and focused people's minds on the fact that repayments on loan notes were due this April. Result - share price went to 1.63p and stayed around there for quite a while. Three things initially transformed it to move the share price up to 10-12p ish: 1. Production targets have been made more realistic and, hence, consistently achievable 2. Action has been taken to ensure competitive costs at the stated production levels 3. (Most significantly) The price of gold in A$ terms has gone through the roof Further transformation has been achieved by clearing the debt which has led to the latest uptick in the share price. A new source of ore would once again transform the picture. I think the clearing of the debt should lead to a target price of around 55p within a 6 month timeframe as the market re-rates the share. The third source of ore should result in a further re-rating. If the price of gold increases significantly, which I believe is possible as the value of most currencies decreases against gold, then another re-rating will occur. The bottom line is that NGL was fundamentally undervalued once the gold price ensured its survival and this is being r

I should imagine that this is an announcement (one of three so far) associated with the placement of shares to raise the funds to redeem the convertible loan notes. They came onto the market on 9th March

As much as I try, I can't make their figures add up for y/e June 2009. NGL would have to perform appallingly in Q4 for those figures to be realised. Their revenue figures seem too low (by about A$10.5m by my relatively conservative estimates) and their cost of sales too high, bearing in mind that they have got down to A$701/oz cash costs. They also overstate admin costs (which they state as A$15m/year in the text but only A$5.2 in the table, neither of which are what I would go for - about A$6.5m) and depreciation (but not by enough to quibble). All in all I just can't agree with their estimates - they are just too far from what we can see currently happening on this!

Yes - I've got these special ones I swapped my cow for!