Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Hey TB,
Like you I’m frustrated by the salary hike of some of the executives, though the net pay to executive directors dropped 2016-2017 with the resignation of W Thompson. My concern again like yours was that a transformational deal not supported by director buying and weighted with heavy salaries looks like drawing money from the company now rather than waiting for share revenue further down the line.
However, I’ve changed that view and think your point about the directors going on a cash grab now is wrong. My main reasoning for that is the appointment of Keith Phair who I believe has invested more in Aminex than he has earned from Aminex. Tbh I haven’t checked the numbers on that so I could be wrong - but the point stands he is an investor first and an earner second and does not draw a high salary.
Have we also considered that the directors may be inside and their window of opportunity to buy was small, now closed?
If the extreme negative view is the directors are creaming the company for cash before its handed over to the Zubs, you could say the extreme positive view is the directors are presenting a clear and protracted buying opportunity.
I must say I’ve found this hard to read, being u derwater for years with Aminex. But at these prices I’m starting to consider buying again - it’s so volatile there are a number of news items that could boost the share price. It’s the CH-1 drill I’m really waiting for though...
Regs,
hardnose
Thanks all for your feedback - it was insightful and pleasantly measured ;-)
I've actually been invested since 2006 and am really looking for an exit strategy, which I should arguably have taken during the drilling of NT-2. But I'm starting to think the ducks are lining up for an opportunity to exit when CH-3 is drilled, where I'm expecting excitement to put froth on the price and momentum pulls us away from a realistic, sustainable MCap.
Terry, your comment about 5.2p equating £187m is interesting and stark. But during the drilling of NT-2 the SP touched near enough 7p giving an MCAP of ~£250m. I recognise that we will have farmed down a significant percentage of the Ruvuma asset since then, but it also had a significant resource upgrade since NT-2 was drilled, so you could argue we have actually retained a much larger % of the asset when looked at through the pre-NT2 drill numbers. What I'm trying to say, is that the share price during the drilling activity was driven to ~7p under the assumption it was a much smaller target than has since been evaluated.
For me, that means there is still potential for a reasonable upswing in the SP during the CH-1 drill.
I think this view is compounded by the fact that MCAP is reflective of Aminex as a whole, not just the farmed-down asset. Therefore the closer we are to monetising Ruvuma, the closer we are to Nyuni getting on the radar. When we compare the sizes of Nyuni against Ruvuma, then farming down to 25% of the Ruvuma doesn't seem so drastic - it seems like a very sensible way to get us moving towards the much bigger Nyuni. That said, I’m pretty sure I’ll be drawing a pension before anything tangible happens with Nyuni so momentum opportunities to release my equity are the view I’ll be taking.
I think given the comments from people here I’ll not rule out lowering my average price but only if it continues to dip further.
Thanks again to everyone who’s contributed on this discussion; it’s helped clarify my viewpoint.
Regs,
hardnose
Hello,
First post here so please go easy... for the record, I'm not into personal attacks and think a different view can be discussed reasonably or on an agree to disagree basis - tackle the ball not the man kind of thing.
So, this deal right?
Conceptually I'm OK with it. We needed a bigger partner to get us closer to the Ruvuma prize and myriad options weren't forthcoming. So to be funded as we are gives some security and removes a burden of financial risk. In many ways it sounds too good to be true and I can live with delays until it is formally ratified as it potentially gives a clear window of buying opportunity while the market errs on the negative.
That said, it's not been supported by a decent level of director buying, and the salary increases bring grave and serious questions when measured against their justification in the annual report and the decimation of share holder value (that sentence was very difficult to type without emotion).
So can anyone help me develop a clear understanding of where the risk now lies? Why shouldn't I be lowering my average price (currently 5.2p) by buying more at these levels? On the one hand I'm seeing a lot of upside and de-risking, on the other I'm seeing little commitment from the management team, a cagey looking investor presentation from the CEO and a history of false starts and missed deadlines. I wouldn't be here if I can't cope with delay to some degree - but I need to separate out what is frustration over delays versus tangible risk - what could still send this t***-up?
2 major Risks as I see it:
- The deal may still not happen
- The development licence may not be granted
Either of these could spell the nail in the coffin for Aminex as I see it. But, if they're removed then it's a race to CH-1 drilling which I believe is what's really going to get the share price moving again. Can anyone help me spot other tangible risk that would leave us high and dry? I'm trying to take out the emotion and develop a clear risk/reward profile.
KN-1 laying flat, while holding the price back is already facgtored in - nothing worse can happen there, right (or am I being naive)? That is, I'm viewing Ruvuma as the prize here and what we are gunning towards.
Regs,
hardnose