Member Info for dictumdedicto

A late financials RNS and an opaque Xweet does make it a more interesting Tuesday than usual. If you are an optimist you take the view that it means a deal is in the bag and that's why the financials are being delayed - so that mega news can be released at the same time.

On the other hand we have just had a long weekend and the financials are only slightly delayed vs. last year. Also, the bag and handshake might just mean that we should just wait a bit longer for a deal to arrive and an agreement to be made i.e. just wait for updates on progress. It could be just to allay the general frustration that we all now have.

It's a coin toss on what the situation actually is. It will keep me keeping an eye on Condor's feed for the next week or two, but I certainly haven't concluded that we are there yet.

In the meantime I've seen all sorts of estimates on what the share value equivalent of an asset sale might be. My take is that we are currently trading below balance sheet NAV and that 35p - 45p would be a miserable return on time, money and effort. 60 - 65p is still my best estimate with 80p - 100p pretty optimistic, but not completely out of the ball park.

It will be hard not to say something price affecting when the financials are released, even without confirmation of a bid (or deal), so this week could be pretty volatile on the share price. However, given the slow trading we might have to wait a bit longer yet. The market doesn't seem to have sniffed much out yet.

I'm still keeping an eye on things. I mentioned a couple of months ago that August might just surprise us. It's usually the silly season but given the amount of time that has elapsed since the 'For Sale' price was put up, something could happen any time. Having said that I'm wary of these sudden jumps. As a thinly traded, hardly liquid, stock it would take much for a P&D operation to be launched. Nonetheless, with half year results news imminent it could be speculation on something more than the financials.

There isn't much point posting unless there is something tangible to discuss. At the moment I'm as in the dark as everyone else. All I have is an opinion on when the bid will come in, and one that is more than likely to be wrong.

I haven't bought or sold anything since April and fully intend to see it through.

Historic NAV is cost based so not very helpful other than establishing a reference point. Bidders will submit their proposals on the basis of DCF on the proven assets plus a speculative 'possible' element, less a discount for the fact that they will need to raise the project finance to fund the actual mine build.

I don't think you need a site visit prior to submitting a bid, although common sense tells me that you would undertake one as part of the due diligence process. Also, the chances are that any loan provided to the bidder would probably require it.

The silly season is almost upon us. Anything can happen while many take a summer break.

An aspect that is not really talked about is the nature of the bids.

My assumption is that all the bids are for the assets of the company rather than for the shares of the company. Indeed, I'm not even sure what the LSE rules on a 'non-binding' offer might be. An LOI maybe but not a forma offer. Whenever I've seem an offer for shares of a listed entity it's always been announced and (usually) rejected as too low, pretty quickly.

In my mind the non-binding offers are still for the assets, but the final offer(s) might be for the equity. The initial bids are just to flush out the company reaction; to figure out where the ball park is, and to advance discussion.

Today's RNS is useful in that it signals to all interested parties that the game is still on. The problem is that no one wants to be first. Maybe they think that someone else should come in with something firm, and that they will trump what is on the table with their own. Perhaps they still need finance and approvals for a hard bid. It's not clear.

What is clear is that at some point someone will blink. A firm bid will be submitted and the race will start.

I've not really seen anything to suggest my 65p share equivalent value is wide of the mark, albeit it looks like the mms were spooked by some low volumes in the last few days. They do seem to like these dramatic drops in price.

My interpretation of MV vs NBV is that MV at 20p is about 25% below book value. And book value is of course cost based rather than valuation based. I'll stick with 65p, although as others have already said, it's a 'pin the tail on the donkey' exercise trying to identify anything close to the price the assets will go for. In people's minds it's worth less when the SP goes down, and more when it goes up. In reality the takeout price will be what it will be.

I can't pretend I'm not frustrated by the whole exercise though. At this point I think I would rather a decision be made on raising a chunk of project finance, rather than maintaining a seemingly interminable wait for hard bid to appear. Having said that it would not surprise me in the least to see a bid appear in the middle of the silly season, August.

Today's drop just looks like the mms trying to figure out where the buy/sell momentum is. Versus the last few days, spooked or not, it looks like they got it right. Some of these new investors could stand to make a good chunk in a relatively short space of time when the bids appear.

A bit of light reading.

https://www.kitco.com/news/2023-07-07/Russia-confirms-BRICS-will-create-a-gold-backed-currency.html

I could have added one or two other things.

10) He talked about companies being sold between 3% and 8% of PoG per oz.

11) Condor's per oz value is around the $28/$28 point.

Let's take $1900 as a reference point. 3% is about $57 and 8% is $152. The Nicaragua factor takes is below the middle of that range which is likely where we'll be valued. Maybe $80 - $85 if we are lucky, say 3x current value.

It's a bit of a pin the tail on the donkey exercise at this point.

I found that informative.

My own takeaways were:

1) We still have about 10 NDAs in place, despite some of the earlier ones dropping out .

2) It looks like interested parties seem OK with the quality of the data room material.

3) A couple of the non-binding bidders appear to have recommended having a go at Condor to their own respective boards. I assume from that they are now chewing it over.

4) MC is "very confident" Condor will be sold this year, albeit plan B is to start small scale production should that not happen.

5) JM is adamant that CNR will not be sold off cheap.

6) The Americans are almost certainly not going to be in the game - put off by the Biden sanctions on Nicaraguan politicos.

7) Odds on that it will be a Chinese entity who takes the prize.

8) It's still an asset sale. If it does turn into a company sale we will be informed, and FSA regs will kick-in.

9) There is no BoD decision on how proceeds will be distributed, although MC thinks they should all go back to shareholders. He mentions dividends given it's the most likely process.

It doesn't look like there is anything Condor can do at the moment to accelerate the process. The bidders will submit a bid when they are ready. I'm guessing the holiday season will slow things down.

Looks like it's back to enjoying the summer, or if you are a worrier, getting concerned about short term fluctuations in the share price.

I was. Bizarre, or what?

Well, that was interesting. It looks like LSE have demoted me to lower case only. Perhaps I'll be reinstated with this post...

i had been in the habit of dropping by on a daily basis to 'take the pulse'. from what i can see there isn't much going on.

the share price went up and then went down, both on the usual low volumes.

mc and the bod are unable to say anything, either because due diligence is still under way and there isn't anything to say, or, errr, there just isn't anything new to add.

shorter tern investors are getting really frustrated because they thought it would be easy and quick money.

us longer term investors are yawning our way through another day, another week, another month, another year, wondering if we will live long enough to see this thing through. but not daring to sell because then the last 5, 7, 10, 12 years would have been a waste of time.

the de-rampers continue to find innovative ways of trying to undermine confidence, while the rampers just get irritated and like a verbal duel now and then.

meanwhile, the mms continue to do their best to make a market. if we drop the price then people will buy. after all the shares will be on sale. unfortunately, like gold, the enthusiasm for buying gold miners is usually fired up with a rising price vs. a falling one. but dats wot we got and dems the breaks.

i can't actually think of anything useful to add, but felt that i had to fill the space with something.... not that it stops certain other people from penning ******.

what what i can see absolutely nothing is coming out of condor, nada, f-all.

maybe we could talk about the weather, or climate change...?

I could be 100% wrong here but my sense is that greed is the dominant thinking on Condor at the moment. A significant drop in price over the last week has hardly moved the dial in terms of volumes. What does seem to move the dial are price increases, at least that has been the order of the day over the past couple of months.

My interpretation is that those of us who hold are sitting tight. We all know that a bid RNS could drop any day, and that the price response will likely be dramatic. Those that are not in Condor, and have no, or limited, knowledge of the situation just see a risky junior explorer peddling gold at the end of the rainbow. Without some in-depth, and time-consuming, research they will not see the value embedded in Condor's resources. Why bother, when there are more easily digestible/understandable investments around? Thus, what I'm seeing are perhaps the effects of stop-losses crystallising when the mms drop the price, and the occasional speculative investor taking a punt on a maybe.

We are stuck. Maybe the mms will drop the price again in an attempt to attract interest, albeit I'm sceptical about whether it will have any greater effect that the last two or three times they tried it. Then again, what do they do? It's like the BoE with interest rates and inflation. When you have a hammer, everything looks like a nail...

A mm conundrum.

Nobody wants to buy at 27p and nobody wants to sell at 26p. Will dropping the price encourage buyers in a no-news environment (let's face it we all want to know what's going on), or will increasing the price get some volumes moving. If the mms do have surplus shares on hand will they want to encourage more selling, which a drop in price in a no news environment might encourage, or will they want to bring in more buyers?

It's not as obvious a call as many might think, albeit I suspect the default action will be to knock another half a penny off in the next few days.

5 trades today.

The MMs dropped the price to get some volume - it had the opposite effect. Those that are in are staying put (we all know news could drop any day) and those that are not remain sceptical, with wallets glued shut. With slow summer volumes the SP could drop another 10% and still have not much effect on current market psychology.

The real problem is that there is no new news to speak of. DD is underway and we just have to wait and see. My guess is that if we don't see anything in the next 3 or 4 weeks, it could be September or October before a hard bid drops. I could be wrong but I think the summer vacation season will likely slow things down further.

A couple more from Jesse Livermore:

'The stock market is never obvious. It is designed to fool most of the people, most of the time.'

'Men who can both be right and sit tight are uncommon.'

'It never was my thinking that made the big money for me. It always was my sitting.'

'Don't give me timing, give me time.'

Of course there are some about taking a profit, fighting the tape etc. but these seem more apposite for now.

It's just not worth checking CNRs SP on a daily basis. 7 trades today. It looks like the MMs are having trouble getting people to part with their shares. They've certainly tried with some pretty large price reductions, albeit the volumes seem to increase more when the price goes up vs. down. Gold still looks wobbly which may explain the preference to reduce the price vs. increase it. Having said that, there doesn't seem to be much of an appetite to buy from prospective investors. The ducks might be paddling furiously underwater, but nothing seems to be going on at the surface - nothing to announce.

The silly summer season is almost upon us. Holiday time, people away, eyes off the ball; fun is the order of the day. For me the least likely time for a hard bid would be August, but given the elapsed time already, anything could happen.

Current prices (mid 20s) imply not much more than a break-even valuation. In other words a zilch return for the last dozen years. I still can't see MC/JM finding this even remotely acceptable.

I've not been posting because there really isn't anything helpful to say. All we have are a few naysayers on one side and speculation on the other. The MMs don't give a toss what we think and will play the SP as they think fit.

Frustrating innnit?

'It's always darkest before dawn'. Don't let impatience, or the MMs working the SP, force you to part with your slice of the company. Anything can happen at any time. Sure, it might be September, but then it could be tomorrow.

'Money is made by sitting, not trading'

Jesse Livermore

Alas, it does look like the mms are facilitating the rinse and repeat brigade. Well, it worked once; why not again? If the hard bids are delayed much longer I suspect we'll see this again during the summer months. Then again, something has to break at some point...

Are the market makers sniffing something out? Volumes are still not off the scale, and yet the SP trend implies demand is being managed.

Discuss.

A few points on the options front.

Firstly, if I can buy at 27p and on the market I certainly wouldn’t pay 42p just to prove a point.

The BoD don’t know when a hard bid will come in. When it does the SP will re-rate. That’s when option holders will seek to exercise; essentially when it’s de-risked.

It’s been a long time since I had any options. But when I did it was to take an immediate profit, rather than hold for a longer term gain. I suspect many holders still think this way.

If insider option holders did exercise, you might find that instead of promoting confidence it causes a lot of people to point a finger of suspicion. Dammed if you don’t and dammed if you do.

Personally, I would prefer that none were exercised. At this stage, without the prospect of value add from mine development, it’s just pure dilution.

Looks to me like it’s just the mms moving the price around to stimulate trading interest. Looks like they have found a buy point for now, although I don’t see any large buyers, or sellers, coming through. As ever Condor struggles with UK AIM to generate interest, even when a large payout is in the works.

I can’t get my head around why any rational person would exercise 42p options when the market is 20s. We all know that there is risk until a hard bid is on the table, including option holders. There is zero meaning in out of the money options being unused.

Looks like another uneventful week at the moment.