Member Info for daramuda

Far far from impressed with either Sisay or Numis is promoting this company. All I can say is thank goodness for M & G JPM and Neon. If it were not for them Pala would gobble is up for a song. But having seen Investec throw I the towel for cheap amounts (and suddenly mysteriously appear as Nomad) anything could happen

It appears to be a July 2015 article. Gibraltar - I am becoming cynical about events. I do not have level 2 but I suspect that there might be a sell order on the book because why else has the price been marked down today with no trades either way?

Spangel note - I have not seen it - please copy. I think that Pala are still adding hence the 50K buy yesterday and I suspect that comes from Investec. If I had not worked out that Investec were no longer a significant shareholder we would not be the wiser that Pala's additions came from Investec. It was never reported by the company at the time. I feel sure that investec being who they are would have notified the company of them no longer holding a 3% interest and it was the company's job to notify the market. On the basis that investec did just that then it was quite wrong for the company not to make the announcement naughty Sisay and naughty then Nomad if I am right. I stand corrected if I missed an RNS. I hope that the other iis hold their position and insist on a proper exit price. A 40 pence exit will not amuse me.with the time that I have held the stock and added. Gibraltar has gone quiet.

but I think that you will find that there have not been any new cases for four weeks. The quarantine will be because of the fear of use of out moded burial beliefs.

Why the change of Nomad? Anyone got any idea/s?

Thank you for your views. The Pala website under "track record" gives two examples of Pala exits from companies in which they had invested, In each case the return was between 2.5 and 3 times the purchase of their interest. If one were to take that as a benchmark which I do not necessarily accept in the case of SRX, one then has to track their entry point. This is a bit tricky in the case of SRX in that their original entry price when they acquired a 30% interest announced on 15.09.10 was not specified but the share price at the time was about 7-8 pence. As we know they have since added and the latest addition in April 2015 was at about 17.5 per share. But we are talking about an extra 25% in all since September 2010 and I cannot tell what average price they paid and when for the whole of that 25%. It is therefore difficult to evaluate what their overall average price is if one were to then apply a multiplier of 2.5 to 3X that average to get to a takeout price which would be acceptable to Pala. History tells that Pala sell their interest rather than taking over the company in which they are invested. So there are then two questions imo A) who might buy the interest B) what sum would the other iis accept. What we also know is that there was a third party interested in November 2013. There were talks between the company and the third party but no price was disclosed which is not unusual, We know the then prevailing price before the November 2013 announcement was about 60 pence. The suggested price may have been 70 pence or more but we do not know what the board would have recommended at that time. In the spring it was announced that talks had concluded with no deal. You may be right that there might be a bracket of 85-95 pence or indeed £1 to £1.25 per share. On the other hand Pala may make an all share offer and seek to run the company itself leaving John Siday in situ as ceo.

without wishing to pry are you much under water. You should google Pala : investments and se what other investments Pala have. I may be wrong but Pala do not appear to ever own companies but will develop them and sell their interest. You see that is where I would disagree with Gibraltar in that I cannot see Pala doing a deal to acquire 100% but they might try and trigger a bidding war. In my view 50-60 pence minimum since you are obviously looking for some idea from someone but I am no guru and you must DYOR. There is no certainty with any stock.

I am not going to advise you but as Gibraltar1 says the price is depressed. I was talking someone who is involved in deals with companies dealing in base metals - the feeling is that prices for copper lead etc have bottomed. Also one has to consider whether a particular metal is lacking in availability and for rutile sands the same argument applies. I can follow precious and base metals but I find it hard to follow rutile. Maybe Gibraltar1 has a better handle on that. research will tell you that SRX are sitting on vast amounts. Prices maybe depressed at present but prices go up and down. Al it needs is for the sale price of rutile to increase $100 per tonne multiply that by say 120,000 tonnes per annum and you add $12 million to the bottom line. The key may be what the iis are prepared to accept to settle quietly. If it is 50 pence per share so be it. But it may well be higher. It is no point relying on the fact that the price touched 80 pence in the autumn early winter of 2013; historic figures are not necessarily an indicator of where this may end up but Gibraltar1 clearly saw an exit of £1 to £1,25 per share a few months ago but that was before we knew that Investec had sold a chunk to Pala. I remain with my holding and wait to see Gibraltar's answer to my earlier post. He holds far far more shares than me!!!

but will the iis be as soft a touch as Investec appear to have been or have Investec adjusted their portfolio to slim down on resource stocks in your view; hence selling at such a low price?

Ebola did have some impact but that largely related additional costs imposed by shipping companies plus you are right a curfew at one point closed down parts of Sierra Leone and there was that lock down for a while so that the lanti open mine could have some works. The main drift of my argument relates to the price per tonne .that the company are getting. When I spoke to John S at the 2014 AGM the company had not broken into the Chinese market, He explained that the Chinese needed to modernise first. I do not know if things have changed. They seem to be confident that they will have satisfactory production and sales for H2 but that does not mean an increase in sales prices obtained. With the dip today came some interesting off market trades (550k) I reckon Investec have sold more to Pala, Gibraltar 1 could be right and Pala might try a cheeky bid. As with their offers about three years ago, the board are bound in that case to refer the matter to independent consultants. Also there is the question of the three other main institution holders; one has to hope that they will not have the same attitude as Investec and will press for a decent price for their stock. However things have changed somewhat since Pala last bid. A) Pala have a bigger stake B) Investec are largely out of the picture. The inherent value of the company has not changed however; the only problem as I see it is the low price that SRX are getting for their rutile. But as with any commodity, prices go down and go up and are cyclical.

I do not think that the fact that we have a half time loss which is almost the same as last year lies as much with ebola as other factors. I never find that one can look at a srx result without reference to quarterly reports - that is insufficient clarity. Turnover in rutile sales by the tonne is only 2,500 down in H1 2015 than H1 2014 and for the purposes of the argument I take it that ilmenite does not figure in rutile sales (otherwise with a total of 77,846 tonnes of sales for all three product we would be on target for 140,000 tonnes for the whole of 2015 when guidance is for 120,000 to 130,000 tonnes). Therefore why are we in loss with costs again reduced. It lies with the prices obtained which are down on H1 2014 and they in turn were down on 2013. In my view H2 should have us in profit in that half and we could be in profit for the whole year. An increase in price per tonne would really improve matters and there is where the key lies imo. Can you imagine if the price per tonne of rutile improved by $500 per tonne? That would add up to $60 million to the bottom line at static costs and same turnover. Just an improvement of $250 per tonne would add £30 million to the bottom line. But until that happens I cannot see an end game happening this autumn at a takeout price of say ! to £1.25 per share and although Investec appear to have sold a large chunk of their holding in April to Pala share, I do not think that the other iis would be happy for a takeout at a low figure. That leaves us with a patience game adding whilst the share price is low for when the sale price of rutile improves or the possibility as mooted by Gibraltar of a full offer by Pala at a low price and then referral by the company to experts and either acceptance or rejection. Which leaves us with why Numis were brought in. The version I was given for the introduction of Numis was to boost the share price and attract other investors. They do not have many tools to play with this set of results and unless all goes as forecast by Sisay in today's H1 report I doubt that there will be enough in the kitty at year end to declare a dividend.. That would be a decent carrot.

opportunity to join an investors conference call at 8.00 am today - not much notice and I am off to a meeting, If anyone does call in please report any additional news here if you feel able.

Your comment about free float led me to look at the 2014 report and the current significant shareholders. I might have missed an announcement but Investec at year end had 25.7 million shares or 4.92% but the current list of significant holders does not include them . A mistake or did they sell some to Pala in April? I cannot recall an announcement that Investec had reduced if that was the case.

FMF is free market float or in parlance those shares in fee hands. Best if you study the composition of the board of directors - you will find that many are Pala men. Pala have a large stake in the company. Pala are turn around specialists - they have imo undoubtedly given SRX good advice. This has led to new mining techniques being employed (construction and operation of dry mines - initially Lanti now a new one being built. But they have not invested time and money without expecting a return - Pala have their own shareholders who want a return. They bid 30 pence per share some time ago - this was rejected on the advice of independent consultants. A third party made an approach in late 2013 - terms could not be agreed but the share price went to 80 pence then came back - then dropped right back because of Ebola. Pala added at circa 17-20 pence as did some SRX directors in April 2015. Pala want a return and that is what Gibraltar has identified. His rational is that the other large shareholders will need to be satisfied as to a take out price and then either a third party will take out the company (and Pala's interest) or Pala if hey know what the other large shareholders wil accept might bid for the whole. Therefore in short as I understand his position it is Gibraltar's view that the shares are undervalued given what might happen. He will correct me if I have misunderstood his thinking.

Thank you for correcting me. I had worked out, evidently incorrectly, that after the "significant shareholders and board/management there were still 50 million shares uncommitted and in the free market. My message however still stands in that imo it may take more than a Numis note to drive the shares to the level that John Sisay mentioned to me at the AGM

The nudge that I have referred to is either excellent half term results and /or the declaration of an interim dividend. This board are good at giving themselves undemanding options which they cash in despite the fact that they do not reach the option price for maturity. In other words undemanding annual bonuses for the board, John Sisay, Michael Barton and the remainder of the board need to deliver. There is nothing that we can do, because Pala hold the purse strings in the form of votes but I guess that Pala are rather fed up that they are having to wait for a return on the money and expertise invested by them. Having said that, Pala will not wait for ever - worth following the posts of Gibraltar1 and add where you can. At some time this will pop. Accordingly I add where I can and am sticking them away. SRX are a tight market because there is no liquidity but not as bad as Gibraltar1 thinks (no criticism intended) since there are circa 50 million free shares available to be traded out of 512 Million. There are stocks like Greggs which have just 100 million shares issued. Greggs which I sold too early turned on a sixpence. At least SRX has no billions of shares issued and could do likewise.

Last year's half year results were released on 17th September and so this year's are likely to be released around the same time. As Gibraltar1 stated China is taking its toll on world wide markets and the FTSE is no exception. It is possible that Numis will come out with a note after the half year's results are released. I think that if finances allow the company should be looking to commence dividends, albeit modestly. I do not know the company's contracts for sale of rutile but there has been a rout in commodity prices. Interestingly the London Metal exchange is restocking metals like zinc having run stocks down. Nothing stands still and what goes up comes down and what comes down goes up. If the results are decent and Numis release a note and if the company can see fit to declare a dividend then this stock will rebound. It does however need a nudge and we cannot just rely on highs of recent times without a nudge.

Yes Gib. I was told by John Sisay that Numis had been appointed to boost the share price. Also his aim is to get it to 45 pence by end September. We will see. Interesting buys of 45K last Friday. 15,000 buy on Tuesday and a 23K buy today, although recorded as a don't know. The stock is undervalued with production up and costs down. I agree that Pala want a get out but it could come via an ipo with an increase in the issued capital of the company, new investors, listing on the main market and a sale by Pala of part of its stock at a higher price than today's at the same time. However I do not rule out your route and Pala may sell out more quickly if the sp goes much higher. Would it not be great if there was a fast increase in the sale price of rutile?

Have not checked out the name of the CEO of Numis but have that of SRX and his name is John Sisay. I did make touch with Numis (head of research) a couple of weeks ago and asked when Numis were getting a note out. I got a reply to the effect that FCA rules prevent him answering me. Double speak for not wanting to answer me. I therefore cannot understand why Numis have been appointed although I have little doubt that they get a fee for having been appointed. In any event there have been buyers these past two days. The stock is undervalued in my view although dgod may be right when he said that at current rutile prices the stock is fairly priced. I do not agree because with production increasing and costs down SRX should be in profit and if there were a lift in rutile prices albeit slight there would be a decent lift in profits. And then there is the new dry mine coming on stream Q2 1916. I posted earlier that Ebola not registered in Sierra Leone for the last 6 days and of course we have the announcement today by WHO that a vaccine has been developed that is very effective. Good news because the peripheral extra costs should reduce if not disappear. Could see an advance in the share price.

No new cases in Sierra Leone from 26th to 30th July inclusive.