Member Info for flundra

bit of arbitrage going on maybe

one hell of a "side show" !!!

Malcy's blog today:

"Cairn has announced that all written submissions have been made by them and the Indian Government and final arbitration will commence in The Hague on 2oth August and last for two weeks. With a result not due until next year Cairn shareholders will have to wait a while but as I have always said this is a bit of a side show given value created particularly in Senegal in the last few years. Having said that I find it galling that the Indian authorities have not only seized dividends from Vedanta but also sold off a stake in the company which must be against both the letter and the spirit of the law, as if that mattered….

Very aggressive approach from India on the face of it.

The award will presumably be (hopefully) just a massive ****load of cash, or in posh language "The reparation sought by Cairn in the arbitration is the monetary value required to restore Cairn to the position it would have enjoyed in 2014 but for the Government of India's actions in breach of the Treaty"

I like that the award is "binding and internationally-enforceable" but somehow doubt enforcement will be straightforward even if CNE win hands down.

Good. It was like a schoolteacher refusing to take class because she hated kids. Wrong person, wrong job, wrong result. Hopefully we'll get from the CSN technical facts and technical opinion about nuclear safety and radiological protection, as per their brief.

Hopefully the governance of CSN has been sorted out, and it will produce an impartial technical report like it's supposed to, not influenced by politics or personal moral opinion. BKY should keep a close eye on that. It was surely a conflict of interest for Cristina Narbona to have been a board member of CSN if she finds uranium mining "morally repugnant".

Noted by Malcy today too...

"BP has announced that it has bought a 16.5% stake in the Clair field West of Shetland from ConocoPhillips and as part of the transaction sold it some Alaska production. BP now has 45.1% of the giant Clair complex and tenuous as it is just shows how hot the West of Shetlands is right now…"

I read in the Sunday Times yesterday that SGRF are looking to buy into BCN (UK listed lithium explorer transitioning to producer in Mexico). Further diversification away from oil and a route to securing lithium supply presumably, to go with their interest in BKY.

A very welcome RNS imo. It's about time we started hearing more from BKY on progress in the permitting process, what the opposition are up to, and how that's being addressed.
Keep them coming please BKY, and hopefully this is a sea change in the PR approach. Previously their approach has seemed to be it's better to say nothing at all, and not give oxygen to opposition views, but that rather left us all speculating too much.

Great news about CF Salmantino UDS, but I do wish the BKY BoD would give us a proper steer on these news stories about delays and challenges that emerge periodically. How on earth is the ordinary PI supposed to know what the real impact and risks are? Is there a problem or should we just yawn and roll our eyes at the Byzantine machinations of the Spanish authorities?

Thanks easyp
No idea to be honest. I imagine the tribunal hearing will be held in camera, followed by a few months of deliberations, while everyone waits nervously on the ruling. I guess there is always the possibility of an "out-of-tribunal" settlement at any time, but I guess we should assume for now the dispute will run its course through to the ruling.

I also imagine resolving international tax disputes under investment treaties is far from straightforward, without too much relevant precedent. That might translate into a less favourable outcome for CNE, rather than an outright "win", eg yes CNE get back access to the Vedanta shareholding but only if they pay some of the tax demanded. Enforcement is another issue altogether, and India might just try and find reasons to ignore the ruling if it loses. I don't know but they might be able to appeal the decision further?

I suspect India will keep the fight going for now.

Where does your best case $400m fig come from?

CEO on 15 May:

"We remain confident in our position regarding the Indian tax dispute. International arbitration proceedings are well advanced with the final hearing of our claim under the UK-India Bilateral Investment Treaty scheduled for August in The Hague with an outcome expected in Q4 2018."

From Final Results 13 March 2018 RNS: CNE's Indian interest (ie its 5% shareholding in Vedanta) valued at "$1.1bn as at 31/12/2017."

This has been effectively written off and is not reflected in SP.

The last commentary I saw (Sunday Times in April) had the success-case as $1.5bn (equating to a 70% uplift) to CNE, presumably calculated assuming the increase in value, plus interests and costs etc.

So aren't we looking at 400pps in the $1.5bn win scenario? Outcome by Christmas.

Good post lurker5

ORM's in a good place atm imo. Funded, permitted, enjoys local support, agreed off-takes, its product is in demand globally with a high price and rising, exploration/resource upgrade potential, it's progressing well and on the cusp of commissioning/production, and a number of the competing projects outside China are off the pace. So it's de-risked to such an extent, the gap to Davy's NPV figure (itself calculated at a late stage in the project (Nov 2017) so hopefully more realistic than some early-stage NPV calcs) will surely close from here, and fast. If today's SP is 3.7p, that's just 30% of Davy's 12.2p NPV figure. Kind of fits with your 1/3rd of theoretical NPV observation, although it still feels grossly undervalued to me.

ORM's history of project delays and limited info flow to shareholders, and how Oaktree will exit are worries, but we must be looking attractive now to Almonty and others.

I looked at the geographically close BKY Uranium mining project early last year (pre main funding and with incomplete permitting, and with the uranium market at rock bottom). I appreciate there's no valid comparison or conclusion to be made, but anecdotally its average broker NPV price per share then was about 120p, with the SP around 55p, ie 45% ish of NPV.

Is there any broad rule of thumb about how a natural resource share's share price usually trades relative to NPV?

Add the management fee?

I couldn't find Davy's 2017 note when last rooting around the internet. This proactive article puts some meat on the bone and Awax kindly posted a bit more a few weeks back, which he'd got from another chatboard. http://www.proactiveinvestors.co.uk/companies/news/190375/ormonde-mining-poised-for-a-seminal-year-in-2018-190375.html

In Nov 2017 Davy calculated NPV at 12.2pps assuming APT price of $350

I agree cp. The RNS seems to be confirming the project remains on track since the last update - "we've actually done what we said we'd do" basically. And that current tungsten prices still support the decision to expedite. A small sp retrace seems to be de rigueur for an AIM natural resource company on this kind of RNS. And ORM still seems a bit under the radar perhaps? With more newsflow 6p+ by Christmas hopefully. Trumpy's trade war with China might further tighten W supply, and Barruecopardo seems to be the new (resurrected) mine making the best progress in the world at this critical time. Should all help ORM.

http://www.proactiveinvestors.co.uk/companies/news/199103/ormonde-mining-still-on-time-and-on-budge-with-barruecopardo-development-199103.html

I'll take a rain check on the hard hat thanks (!). Re the assets, it was nice to see confirmation in the AR that HALO also retains decent interests in FG and SADR (through the various vehicles), as well as Netherlands and Philippines. On the betting, how about an accumulator - Eng for the world cup, and HALO to re-list @ £2. Should pay for Christmas lol!! Good weekends all, fingers crossed for Mon