Member Info for Daisan

Whilst the 20p per share is a magnet now, I suspect that it will only get there with an upswing (breakout) in the gold price. But the investment, should it happen, opens up some very interesting opportunities, hopefully without suspension and RTO documents.

Further to this, if the deal does go ahead and the market values the assets at pre-deal levels plus cash, then the share price will be about 15.5-16p.

Of course, the markets don't operate in logical fashion, so expect deviation from this with the direction depending on whether sentiment is good or bad (judging by most of my mining shares, not that great).

In the longer run, the determining factor will be what the company actually does with the money. They have clearly been looking to add production ounces rather than develop the Kyrgyzstan assets so I expect more deals to be done. Once the ounces are added they will seek to develop their other assets. So keep an eye on what deals are announced.

Of course, the first announcement to look out for is finalisation of the deal.

The market is currently discounting this deal happening. Should it actually go ahead, the current share price would value the company at cash, essentially throwing all the gold assets in for free.

These things seem to come up regularly but this one seems to be more of a mess than normal. They tend to get challenged in the court which throws out the worst of the rubbish. In fact, I suspect that a lot of the senior politicians in the country let these things through to garner popular support, knowing that the courts will neuter them.

The courts are about the only thing in SA that function reasonably.

My comment was purely associated with share price movements HarChris. I don't disagree with your comment as regards the operations of the business itself. It should also be pretty clear that fundamentals influence sentiment - if a company is generating cash hand over fist, it is difficult to remain negative for too long which is why the commodity price is so significant for a miner.

As long as WK requires funding for development, let alone construction (which is some time yet), it is unlikely that you will get any significant buybacks. Anyway, I am not a great fan of buybacks - people just sell into them. I much prefer the route that Shanta has chosen to go down - dividends. Considering the dividend only costs them $2m a year, if they are producing 100k ounces, they can afford to double that with just a $20 rise in the gold price provided the money is not more usefully employed in developing the asset base.

That is true but my point was that they were moving up and down together.

But with a 10% yield which helps! The longer term chart suggests this is just corrective but some of its primary products are suffering price falls.

For miners I do find that price of the products produced are an extremely strong influence on share price - consider that BMN and LGO were pretty much in lockstep until about a year or so ago, arguably due to the price of Vanadium. They have deviated more recently though.

I have found over the years that there is no direct link between company fundamentals and the share price, at least in the short term. Ultimately fundamentals assert themselves but the short term is all about sentiment and sentiment is notoriously fickle.

Whilst quarterly updates have not been well received in the last few years, this one coincided with a sell programme that appears to be continuing judging by the large trades printed on a regular basis. Were it not for those sales, I suspect that the update would have been relatively well received, although I doubt that the share price would have run away in euphoria. Unfortunately this large seller has washed everything away in the last few days/weeks.

Thinking about the inventories, we are in a similar situation currently to when BMN bought Vametco. At that time there was a great deal of admiration that the deal virtually paid for itself with the inventory on hand. The book value of the inventory from the interims up to 30th June 2022 was around 70% of the current market capitalisation. That inventory increased considerably in the second half of last year.

I think that it is important to differentiate between profit and cash generation. The former is often misleading as it can include any number of things that the company wants to chuck at for whatever reason whilst the latter is, for me at least, far more significant. The cash generation should be reasonable from sales although this has to be offset by committed expenditures. As these are predicted to reduce somewhat, this should bode well for future cashflows but I would like to see this actually reflected in the figures.

It should also be noted that the cash costs are based on 943mtv production whilst the revenue received is based on 1028mtv sales, so the cash used to produce 85mtv of this had been spent in previous quarters. I would be surprised if the cash position was not considerably improved on the back of this and it is something that could be repeated over the next few quarters as there is a considerable inventory available. It should also be noted that the inventories before this drawdown had considerable value in themselves (and still do so) based on costs that have previously been incurred.

It is ok if both SHG and HUM go up you know. It doesn't have to be one or the other.

There is a tiny spread but it is possible to distinguish the buys from the sells.

Perhaps this explains the price action this morning. Lots of sells but the price isn't budging. Have to assume that there is some significant buying on the other side thst we can't see yet.

It is worth pointing out that Largo is down 85% from its all time high in 2018. That despite being in a country without load shedding. Oh, and obviously with much better management! :-)

AISC and profit are not specifically relevant when assessing the debt repayment situation. More appropriate (but still not totally!) is the cash cost which is lower than the AISC. In reality, somewhere between the two is more reflective for a profitable company. So the situation is more favourable than the AISC/profit calculations imply assuming there are no other cash draining activities.

Fine for me.

The key part of this is "would constitute a reverse takeover". This is a long winded process in which they have to produce an admission document - a very large beast indeed. Usually takes months.

To be fair to BBN he has said that he sold half of the position he took last week as a result of this RNS.

I suspect that we have all felt like investing Gods on occasions as a result of a lucky punt/good stock pick that paid off handsomely. We mostly believe our own hype until we are heavily brought back down to earth by catastrophic failures! To be honest, the failures are better learning experiences.