George Frangeskides, Exec-Chair at Alba Mineral Resources, discusses grades at the Clogau Gold Mine. Watch the full video here.
It’s a favourite of one of the larger Telegram groups as well, which is probably why we’ve seen so much volatility - was the same a while back when it went up to over 7p prior to the new shares hitting the market. Could do with it rising on some real volume as that will give it a chance of holding the rise and a change of trend - it had done a 25% odd rise in recent days on not a lot of trades either.
Reading all the posts on here and the way some seem to have completely changed their mind since this time yesterday! Unless you’re day trading this then the share price movement today is irrelevant, as was the rise yesterday, and the important thing is that the Toscana vote was in favour of the deal. A drop today when pretty much the whole market was down, energy stocks in particular, isn’t going to change what happens here long term - either they’ve timed their acquisitions at a good point in the cycle and it will recover (as the IIs seem to think judging by their positions - Bybrook will have a much higher average here than many PIs on their 29%, even allowing for their 0.01p warrants, and also own a fair bit of the junior debt), or oil and gas prices stay low for a few years and it will struggle. Other than the trade at the end, most of the volume was just PIs trading a few grand, or even a few hundred quid in some cases! Obviously it is nice to see the share price rising rather than falling, but if anything the fundamentals have improved since yesterday based on last nights news, the market just isn’t reflecting that currently.
Always best to wait for actual confirmation - although it makes little sense for them to vote against it given that the company was in default and I3E own all of the debt that the assets are secured against, so by voting against this, Toscana shareholders would effectively be voting to get nothing anyway! Much better for it all to be amicable though with a vote in favour, and the integration of Toscana into the new Canadian side of the I3E business.
Kingivor - out of interest where are you seeing that Toscana are the operator for the Gain Energy assets? I was under the impression that gain was operating its own assets up until the recent acquisition by i3e, and that the Toscana deal is totally separate, but if it does go through will then see some integration of the Canadian side of the operations?
By my reckoning the deal values the Toscana shares at around C$340,000 for the entire issued share capital. Yet it’s market cap is showing as being around C$1.45. Not sure if it is actively being traded though at the current price other than tiny amounts?
True - only around 25% are currently held by IIs. May well see that increase once funding is finalised and signed off and that possible risk has gone.
Problem is that this share isn’t ‘fashionable’ with all the Telegram and Twitter groups etc! They would rather push some total junk that is easy to move and look for a quick profit, rather than trying to find companies which actually have potential based on fundamentals. It’s just the way the market is these days - shows how crazy it is when UFO can hit a similar market cap level off the back of a pump to rinse the warrants!
TradeUK - they have just acquired assets that already produce, in Canada! North Sea has been largely a failure for them thus far - Liberator didn't live up to their modelling and Serenity needs more drilling to the west to prove up reservoir thickness as you move in that direction. As I see it, the play here now is that hopefully the company has acquired producing assets at a good point in the cycle and for the right price, but that still remains to be seen and hinges on oil prices recovery.
Best thing to do is to read all the recent RNSs, including those relating to the Gain acquisition (completed) and the proposed Toscana acquisition (I3E own all the debt, which they purchased earlier this year). Then you can make your own mind up about the potential. I'd also take note of which IIs funded the recent £30 million equity rise.
They do have John Woods (think he was Ithaca?) but I've always got the impression a lot of the overly bullish stuff was pushed by Majid and Graham previously. Hopefully that will stop now and they will focus more on the operations than the promotional stuff. They won't be the first to turn things around with a change of strategy and geographical location, if they do manage it - I3E being a great example (screwed up in Indonesia, then bought North Sea assets at just the right time and price).
They drilled Serenity too close to the edge of their licence area - although the real test there will be when they drill further West and determine the reservoir thickness as they move away from the Tain field boundary. In terms of Liberator, they were too optimistic in their interpretation of the data - the CPR highlighted the risks of the impact if the vertical data was even slightly out, and if the structures identified were actually below OWC. There wasn't a lot of leeway from OWC to the top of the reservoir/sands structure, even at the 'high' points on the seismics. It is something I still kick myself over as I'd read all of the CPR and the potential risks, but still invested based on what the company stated themselves, and the potential for near term production (rather then the pilot/appraisal drill we actually ended up with). I was also swayed by the fact that they secured a junior debt facility, which is almost unheard of on AIM for this type of drilling. I see potential for a turnaround though if they've managed to do these deals at what turns out to be a very good time and got a bargain as a result of the low oil prices - providing of course oil price recovers to a reasonable degree over the next few years. Buying a producing asset at the right time and price can work out very well for small resource companies if they're lucky with their timing.
I think what they actually need is someone onboard as well who is much better at the operations side of things - basically an operations director. Majid and Heath seem to be good on the funding side of things and doing deals, but I'm not convinced by their ability to run and manage producing assets - or even the drilling side of things, as we saw from their handling of Liberator previously. Not many could have raised the funding that they have, and from the sources that it came from - but they did screw up the North Sea drilling (including Serenity by drilling where they shouldn't have done!).
Tonynorstrom - not sure how it works in Canada exactly, but am guessing that many PIs hold shares in a nominee account via a broker, rather than certificated shares in their name. In which case any shares that are held in this way and where the beneficial owners don’t vote themselves, will most likely be voted (by the broker) in favour of any motion recommended by the BOD. It’s certainly how it tends to work in the U.K.
I won't complain if it does but would be amazed if that was to happen - could see a decent rise if it gets a bit of interest again as it is so illiquid, but can't really see 8p. Toscana isn't really all that major anyway in my view - certainly not why I invested - as the amount of production and reserves it would add would be useful, but still relatively small compared to the Gain ones. It is pretty much a foregone conclusion that I3E will acquire the Toscana assets - it just depends if it is with the blessing of their shareholders, or via a default which would be a longer drawn out process.
Toscana holders should be grateful they’re getting anything at all out of this - if they vote against the deal, I3E will still end up with the asset anyway when it puts the company into default, but won’t have to issue any shares in addition (as per the current deal!). This is all just a useful addition anyway to the Gain assets, given current production of circa 1,000boepd for the next 15 years odd. It certainly isn’t critical to I3E nor is it why the IIs invested £30 million recently!
I3E owns all of the senior and junior debt facilities associated with Toscana - which it purchased for around C$3.4 million earlier this year - that debt totalled around C$28 million and was sold to I3E by the previous lenders. Basically, if the shareholders of Toscana were to vote against the deal, I3E could put the company into default and take the assets which the debt that it holds is secured against anyway.
Also worth noting that liquidity here is now low - given how many shares are in the hands of IIs, and barring further warrant exercises (Bybrook hold a lot of the 0.01p warrants and can’t exercise without selling some shares, or it puts them over 30%). This type of share can move up just as quickly as it dropped and if it does get decent volume and interest it could do well.
The failure in my opinion was their overly bullish COS estimates and failure to highlight the risks on the structure they targeted at Liberator (was in the CPR but not something they needed ruined). I was also disappointed when what was originally going to be a development drill at Liberator subsequently became a pilot well instead. That’s all in the past now and although they’ve got a lot to prove, the IIs wouldn’t have put up that amount of money - especially in the current market - if they didn’t see good potential from the new assets, with expectations of an oil price recovery over the next few years.
For me it’s very much a play on the typical oil cycle we have seen in the past and hopefully they’ve acquired a producing asset at a good time in that cycle for a good price. Usually a lack of investment in new projects at times when oil prices and demand are low subsequently leads to a spike in the oil price a couple of years or so later - certainly if you look back at the oil price chart over the past 20 years or more