Member Info for HawaiifiveO

Quite frankly the Co is significantly undervalued, the poster on A@dvfn 'coyone' has a point about the drop being on tiny volume.

My view is Colin Bird will deliver a run of news that will restore confidence, that could start as quickly as next week.

I have added more shares at these crazy levels.

I believe the biggest issue here is AST and partner do not have the necessary contacts to 'influence' the Slovenian authorities.

Most serious O&G companies have contacts close to Government or such decision making authorities, I am sure any interested party will have the experience to overcome the difficulties the existing regime have.

In a nutshell Ascent needs to be run by experienced O&G company personal, that is not the case currently.

I expect to see an offer for the company in due course at a decent premium to market, my understanding is anything less than £40m will not be accepted.

Except he said to a group of investors at UKIS that he would only use XTR paper when it was 'worth something' at the time the SP was 2.4p.

Remember he has put his own cash in and taken taken in lieu of salary £250k of XTR shares at 3p and 2.85p

Cash in bank currently £1.15m

Whilst on the face of it this is good news the RNS is ambiguous as the market has no idea at what price SEPCO will acquire their stake in Kibo.

Unless it is at a significant premium then all this deal does is dilute existing shareholders further.

The Chinese are exceptionally hard negotiators so I suspect the buy in will be at or around market price, perhaps a small premium but when?

How nice it would have been for shareholders today if there had been a price escalator formula available for all to see with a smaller initial up front tranche at, say, a 50%-75% premium to the market.

As ever one must wait.

The poster that has appeared on A@VFN has the persuasive & confident writing style of Simon Cawkwell (Evil Knevil) not suggesting it is but I recall Colin Bird is liked by the Tom Winnifrith posse of which Cawkwell is one.

Could a big hitter like SC get involved here I wonder? He and his chums have the cloat to move share prices fast.

It is annoying this Co continues to miss it's self imposed deadlines, shareholders should be kept updated.

On the plus side IF the RTO with the house builder/developer completes it could offer multiple returns on the suspension price.

If the deal had broken down then we would have been informed by now, on the other hand if it completes the re-listing could occur in Q4 or late Q3.

thecoyone2 Jul '18 - 18:52 - 307 of 307

augustusgloop

Xtract Resources

I am a exceptionally experienced investor and have made significant money out of the AIM resource space over many years. I am fully aware of the shenanigans of the market not withstanding certain 'individual' directors.

Colin Bird does have his faults the same as just about every company director in this space at some time or another. I am not interested in such matters.

What interests me is timing ones entry point into a stock. I look for stocks that have fallen beyond what I consider to be fair value. I look for stocks that have historically attracted 'herd' like volume and investor interest. Xtract fits my criteria ideally.

For the neutral reader of this post I would draw attention to volume, in Q4 Xtract stock ran up to 3.5p on weekly average volume of 35m shares, the recent fall from 2.5p to current has been on weekly average volume of only 10m shares.

Conclusion.....

Xtract is undervalued at fundamental/asset level, it is oversold on a technical level, most importantly a fast 50%+ adjustment has occurred on exceptional low historical volume.

I am loading my position accordingly however I will not exceed 10m shares for declaration reasons, I have some way to go.

My exit point will be around 3p, equating to a market value of £10m, undemanding, would not rule out a bid for the company either.

At the AGM he said 2nd week of July but I would not be surprised if they come sooner, he seemed anxious to deliver them ASAP.

I would not be surprised to hear about a new alluvial contractor either.

The poster on the other website makes a good point about the Fairbride mine, the market has not considered the value uplift if Xtract can reduce cap-ex spend by $20m as Colin Bird stated at the AGM. That would significantly increase the already stated NPV of $53m

I re-iterate the current £3.5m market cap is an anomaly, I will continue to buy at current levels, if Colin Bird announces a deal at Fairbride I would expect to see a significant value uplift.

Another attack on Kibo from CB on Shareprophets today, talking about securities fraud etc.

If anyone thinks the MM'ers do not read BB's just look what happened after the negative article was posted here.

On AIM manipulation is rife.

Andrew4444

I would have thought Sino Minerals who produced 1200oz in Q1 under exceptionally poor conditions (heavy rains) would be able to increase production more than 20% in excellent conditions. Also bear in mind there are 13 weeks in the period which should assist the numbers.

Being an avid follower of Gold Rush, a series about 3 different sets of alluvial miners in the US, they regularly deliver 150oz to 200oz per week. Anything around 100oz is considered poor.

I cannot believe Sino will only deliver an increase of 20oz per week in such good weather conditions, at the AGM Colin Bird said that in May alluvial production had covered head office costs for the 1st time.

Point taken on the gold price. Our workings do show how alluvial income could quickly deliver decent cash returns, we need to await Q2 numbers and news on the new operators.

I have added stock at current levels, the current £3.5m market value is an anomaly in my opinion, I take no notice of the bashers here, they were kicking the company before but went quiet as the share price moved from around current levels to 4p in Q4 last year.

Assuming Sino Minerals produced nearly all the gold in Q1, production described as disappointing in the 27th April RNS due to heavy rains I think it may be prudent to have a stab at the realistic production numbers in Q2 based on the recent comments of improved production.

Worst case scenario I am going to suggest that alluvail production will be up from 1200oz to circa 2000oz for Q2 (13 week period), a 65% increase or 150oz per week. On a best case scenario, assume 200oz per week, would equate to 2600oz.

At 2000oz for Q2

Based on the existing formula 500oz to XTR @ $1275oz = $637k x 40% net share = $254k less costs $110k = Free cash to XTR = $144k for quarter.

At 2600oz for Q2

650oz to XTR x $1275 = $828k x 40% net share = $331k less costs $110k = Free cash to XTR = $221k

It is clear the operations are profitable at these levels, it is also clear if XTR could double these numbers based on a 2nd competent operator then the alluvial production would deliver circa $1.1m to $1.7m free cash to the Co annually.

These numbers are a guide based on previous reporting but could fluctuate up or down dependent on exact gold sold and changes in percentages.

DYOR etc

Posted on A@VFN by coyone

thecoyone29 Jun '18 - 12:04 - 303 of 303 Edit

Having taken time to research this company, taking account of present market conditions, I feel the significantly reduced market valuation to offer a exceptional entry point. I admit to buying in with an initial 1m shares acquired over the last few days.

I cannot recall an instance where a company that has a SAMREC compliant resource of 1.2moz of Gold, completed a DFS that shows excellent economics with a Direct Cash Cost of $550oz, trading at a market valuation of only £3.5m

It now seems the company has suggested that it can reduced the capital spend at the Fairbride project from $43m to only $20m-$25m as reported by AGM attendees, if this is the case it would clearly attract a plethora of both finance providers and/or third party operators.

My view is Xtract should be trading at a far higher multiple, peer groups on the TSX have valuations ranging $15m-$20m

Another aspect is their postal address, many mining companies are now looking towards Zimbabwe as an investment proposition, Mr Bird has already implied their Mozambique resource is likely to extend across that border.

I would not rule out a bid for the company, what I do know is that the current £3.5m valuation will not be around for very long.

Please DYOR etc etc

Making money on AIM is all about timing, buy low and sell high, the share price was hit 4p in Q4, the main asset, the Fairbride mine, where a full DFS has been completed with outstanding economics remains.

If this was being floated as an IPO on AIM right now it would have a value in excess of £10m (2.85p a share)

DYOR, especially on IPO valuations!

Despite what some would have you believe this Co is worth far more than the current £2m enterprise value, the RSI is under 20 equals hugely oversold.

Cash in bank is circa £1.2m and could even be growing v current £3.5m m/cap

Buy when there is blood on the streets.

I do wonder how may entities that are bashing away here are working for a certain broker(s) who are hoping to replenish their likely short position(s) from a capital raise, no matter how long it is delayed for?

If you read this Colin remember bucket shop brokers do not work in the interests of EXISTING shareholders but for their own interests and their favoured clients!

Remember you said you would not dilute until XTR paper was worth something, that needs re-iterating right now PLAIN & SIMPLE !! That may give certain entities something to think about.

Page 15 of the Annual Report is a clue, 11.5m shares as Trading/Market Maker account, this stock can be loaned for shorting purposes.

I am buying this drop, when it bounces :-)

DYOR etc

What I find incredible is the fact that LC has decided not to attend one presentation event in London since the last UK Investor Show in April 2017. Basically it seems he does not want to face shareholders.

A few years ago he was over here almost monthly, the absence of presentation events seems to have started with the tie up with Sanderson Capital some years ago.

I would have thought the larger retail investors would forcibly ask him to attend a shareholder event, I have been to a few recently where just one company presents to its shareholders and interested parties, these are far better than the likes of Proactive etc as you get 2-3 hours to really grill the CEO.

Surely something like this is warranted.

True to his word

https://audioboom.com/posts/6909008-versarien-vrs-xtract-resources-xtr-and-malcy-on-echo-rose-trin-eco-eme

The Moz plant was on show at the UKIS, it looked impressive from the photos, it can separate gold but struggles with fine gold that is present on the western side of the claim. He explained this in detail at the AGM, he added it could be leased out if necessary.

These pieces of kit are expensive so I fully believed Colin Bird when he said it could fetch £800k on the open market, the CFO and Nomad were present and he could not make such a statement if it were untrue IMO.

We have to take the RNS in context, they had to announce Moz Gold going, what they cannot say is how much their plant is worth (Colin Bird said new £4m and used circa £800k) that covers the loan, nor can he say anything concerning a replacement contractor until a deal is done.

We have to take the word 'modest' in context also, so far the alluvials have delivered around 100oz per week, that is modest, he stated that the last month (May) was the best month they had had, this was confirmed by the CFO so it has credibility, so clearly they have exceeded the 100oz average, hopefully by a decent margin.

Today's RNS is typical of what Colin Bird complained about at the meeting re AIM rules, he is not able to say how much the Moz Gold plant is worth, how discussions with new contractors are going or how much Q2 production will be (still 8 days remaining) these are all forward looking statements.

In my opinion, based on what was said at the AGM, the company is in a far better place than the market is giving it credit for, cash is a healthy circa £1.15m, discussions ongoing concerning all three 'silos' Omnia hard rock, Fairbride mine and the alluvials.

The junior space is somewhat irrational at this moment in time, lots of companies have halved in value during a period of low liquidity. I tend to accumulate in such circumstances.

DYOR etc

He said cash in London was £1m (Pounds) and in Mozambique they had $200k sitting there.

The point concerning reduced Capex at Fairbride, offers him more leverage in discussions with third parties as their costs (to build the mine) would be significantly lower than the $43m in the DFS.

In closing the meeting he wanted to reassure shareholders present the company was in good shape and in a FAR better position than many peers. He was bemused by the drop in the SP but acknowledged the market (and shareholders) want to see progress and news.

Hopefully some clarity from his AGM comments have helped the cause, he did say he wants to do a podcast or a Q&A via BRR, in any case I believe the alluvial update, due in mid July will be something to look forward to, the fact the CFO backed up CB's comments was key IMO.

Personally I think the current price is a buying opportunity but that is just my opinion.