Member Info for HawaiifiveO

Bashers out in force across all bulletin boards this morning, from a technical perspective the shares are heavily oversold (RSI 24) this company is a conundrum to say the very least - before Pelham/Lombard started selling their combined 30% stake the share price was stable for nearly 18 months prior kicking around 4p.

AIM is a mysterious place, no doubt at some point this will have a very strong % rebound, question remains from what level ?

I suspect the 29m trade that occurred on Wednesday 5th at 15.12pm was a worked buy, the bid the next day hit .13p, if so someone has picked up just over 1% of the issued capital which has to be positive. If the trade was a sell there is no way the bid would have strengthened so quickly.

I retain my view they are looking at some corporate initiative, the CFO seems to have finally woken up to the fact that equity dilution IS a problem and they are looking to fund via other means. The icing on the cake would be a Tembo style JV (with Barrack) if that happens the SP will rocket.

In the results interview we had more clues when he said they are looking at project finance and/or they need a long term supportive shareholder in the business (might this be a Fund?) These are other potential options.

All I know is I see little downside from current levels and the real potential of a significant rebound in the share price. I also believe the sector is on the turn after falling for over 2 years - buy the lows IMO.

beardozer

Aside form the potential of a JV one of the reasons I have been building a position is the fact they have FINALLY acknowledged the market value of the company has been (and still is) severely affected by continued equity dilution.

Comments in the Annual Report by Eileen Carr directly contradicted the CFO who, somewhat foolishly, suggested around 18 months equity dilution was not a problem.

So there you have it, they have admitted that raising cash via equity has destroyed value on the ground, they would look totally stupid if they placed stock at current levels therefore - I am convinced they will not.

A JV partner or a outright sale of the Central Licence Package in Cameroon makes total sense, as for the authorities what a boon it would be for them to have a major like Barrack in country - I see no issues there.

So IMO no equity dilution combined with a corporate deal inbound, an ideal scenario for investors but not for anyone who may be running a naked short, make no mistake that happens a great deal in the small cap space, usually by brokers and market makers.

DYOR etc.

There are synergies with ORR and African Barrack - Tim Livesey worked for Barrack, the Barrack deal completed with Tembo, former Stratex (now Oriole) directors involved (Bob Foster) Barrack have a stated aim of expanding their gold footprint in Africa.

I feel the kind of deal that took place at Tembo could be replicated for Cameroon/Oriole - $60m+

Is it time to buy ORR @ £3.5m m/cap, you bet it is, the fall from .40p, in particular, was on very low volumes.

DYOR etc.

The Gold bull rush, and why investors cannot ignore Australian #Gold companies.

https://twitter.com/JessicaDAmir/status/1643808700346531841?s=20

A reminder of details on the Tembo (then a $3m m/cap company) and Barrack deal, Barrack bought 6 unexplored licences from Tembo Gold in Tanzania for a potential value of $60m

https://tembogold.com/investors/barrick-gold-corp-transaction-highlights/

The interesting aspect was that NO gold had been discovered on these licences.

Tembo received $6m in cash
Barrack to spend $9m on exploration
Tembo to receive a maximum of $45m in staged payments if gold was discovered above 1m ounces in any category of resource.

Tembo shares 7 bagged on this news - this is the kind of deal I expect ORR to deliver in Cameroon except ORR has 9 licences in the Central Licence Package and are applying for another.

Given this peer deal (which was completed in late 2021 when markets were poor) one simply cannot understand how Oriole can only be valued at £3m.

If this deal was replicated where would ORR shares trade, I would expect 1p to be attained comfortably giving a market value of circa £27m but given the volatility on AIM (where everything over/under shoots 2p a share is entirely possible.

This is why I have been building a position !!

It is worth noting that on April 12th last year they received a tax rebate of £401k, I seem to recall the CFO suggesting another one was expected around the same time this year, I think the size may be smaller this year but nonetheless the cash is more than handy.

Today's volume was the highest since late December, volume spikes in ORR have usually resulted in a very meaningful uplift in the share price.

I feel tomorrow could be equally bullish, there appears to be a trend reversal occurring.

I notice the other bulletin board has come to life, I wonder if this is relevant, as we all know the City is full of leaks, speculation and rumour, the last time volume kicked in from around current levels the price doubled in quick time, if it doubled from here the m/cap would still be a mere £6.7m.

I have taken a few more early doors and will continue to add, it is worth noting that there has been some M&A activity in the sector and one or two of the minnows are selling projects and doing deals once again.

As the buys flow in the market makers will cut down limits and make it harder to acquire stock - that is worth remembering !!

I am building a position here at current levels, I simply believe the pathetic £2.75m valuation of the company is purely as a result of equity dilution and not the project base, for example Chesser Resources in Senegal are still valued at £25m (A$47m) Remember their licence is one fifth of the size of ORR's nearby Senala and their major discoveries are only 10km east of ORR in the northern licence area.

I know all the comparisons have been covered, discussed and talked over and over but at some point as an investor you have to take the plunge. Had I bought my current position in Q1 2021 it would have cost nearly £40k - it has cost me circa one tenth of that currently.

I mentioned in an earlier post what happened in 2008, I recall buying an oil stock after speaking to the company and completing some research, their share price had fallen from 65p to 9p, the company was so distressed financially they even talked about selling the pipe they had bought for a 20km pipeline, everyone thought it was the end, within 18 months I sold those shares for 45p.

I have read continued reports from the likes of Eric Sprott and other market commentators that the time has come to buy the juniors, so far the market does not agree but better be in before the herd arrives than wait and potentially pay 50% more to build a decent position.

ORR like others will rise again, the AGM is approaching, I cannot believe they would issue equity at current levels 6-8 weeks beforehand - I still believe something is going on in the background, time will tell, if that JV comes and their dependence on the market for cash evaporates you just know where the SP will go, it could bounce to 1p+ in a flash, the clock is ticking down.

DYOR etc.

JV's for the juniors are starting to happen, MILA made this announcement after hours........

https://www.investegate.co.uk/mila-resources-plc--mila-/rns/stmnt-re-share-price-movement/202304031646422129V/

I estimate since the new BOD came into being (around April 2018) they have raised circa £5.5m via placings, warrant conversions, tax refunds and the sale of Tembo shares. Out of this number I would suggest £2m has gone in salaries, with corporate costs (Nomad, PR, Legal, travel, rent, etc) amounting to another £1m (conservative number) the share count has gone from 475m to 2.7b.

From the above there is a disproportionate amount of cash not going into exploration, for every £100 raised only £45 finds it's way into projects.

My view is that a BOD salary base of £450k a year is unsustainable in the current environment as are continued issuances of stock to themselves in lieu, unless the stock is issued at a significant premium to the market. IF the BOD really believed they were going to deliver significant upside they should be happy to drop salaries and work to increase the value of their own shareholdings.

I suspect if shareholders were to put this matter to them they would point to the fact they have significant experience and could attain far higher salaries elsewhere, in fact Tim Livesey actually stated this in his early days, in actual fact I am not so sure they could now for a number of reasons.

I have noticed the CFO does not like to see the cash position drop below circa £300k, the treasury must be closing in on this level, we will soon see what the plan ahead is.

Having experienced the woes of the 2008 crash there were many junior exploration companies that were on the edge of going under, the market dropped the capitalisations of most sector minnows to £2m-£3m over time, it was nigh impossible to raise cash, most companies had to cut costs to the bone (including BOD salaries) projects had to go into care and maintenance and so on.

The conclusion was that £2m-£3m market caps were the floor - nearly all companies survived by hook or by crook.

All these juniors that sit on my monitor are now in the £2m-£3m category, I am sure there are others.....

ORR/PALM/BZT/CHF/RRR/ROCK/SRES/TYM

The question is will history repeat, after the 2008 crash some 18 months later many juniors multi-bagged, we have had a 24 month sector bear market, buying any of these bombed out juniors is now a binary bet therefore.

The circa £475k BOD salary base at ORR is unsustainable, I checked the BOD salary of PALM, it was £175k, shareholders have every right to be critical of salaries especially if the company is not delivering on the corporate front, no-one can be critical of the progress made on the ground but very critical of failure to deliver on cashing in legacy assets and non delivery of value creation due to persistent equity dilution, mistakes have been made for sure.

If they fail to deliver a JV or introduce a funding partner in Cameroon then shareholders need to take some form of action - at the very least cut the salaries by 50% until such a time the market recovers.

Over the next 2 months we will know about a JV, my bet is they will deliver something simply because they have to.

The interesting and frustrating aspect of all of this is why the BOD did not seek a JV partner at the time they entered Cameroon, did they really think they could fund exploration across a licence package of 4,500sq km alone? This question was asked historically BTW but was batted away.

They also fell victim to their own naivety in the early days of their reign (some may suggest they still are) as to how AIM works, before Livesey & Co they never had to place stock in the market for 5 years prior as they had, at one point £30m in the bank.

Let me just say their choice of broker 1st time around was hardly inspiring, a fellow who knows the market would call this outfit, using polite words a 'bucket shop' - others would use even stronger terms. Using this type of broker sets the company in play as a 'rolling short' market participants count the cash burn and forward sell the next raise, it happens it really does. They (the BOD) had no clue.

It seems to me we are at a litmus test point of time, the majors are flush with cash, ORR has said they are seeking a JV partner for Cameroon, a new gold frontier Livesey (the CEO suggests) If they cannot get a JV partner after all this time (they must have held historical discussions ) then it is an abject failure of management and maybe shareholders should consider action.

I am mindful to attend the AGM this year depending on what happens over the next month or two (it's on 8th June) remember this BOD are happily taking £450k out in salary each and every year ahead having recently increased the BOD numbers by making a promotion. This is one of the highest salary counts on the AIM exploration sector space based on peers.

For the above reasons they have to deliver, will they, I think they will deliver something different but what ?

RNS today clearly shows a 3km long corridor of high grade gold in rock samples, also a very upbeat message from the CEO suggesting this could be replicated in the large Central Licence Package in Cameroon.

News like this adds weight to the prospect of a JV being secured, once again I refer back to the comparison with the Tembo/Barrack JV deal where the $3m valued Tembo received a $6m cash payment, a commitment for Barrack to spend $9m on exploration and exploration upside to the value of $30m based on future gold discovered on the licences.

Worth noting that Tembo had not made a discovery of significance on their licences the scale that Oriole has to date, the Tembo share price multiplied 10 fold on the deal - it could happen here !

Never mind, the major shareholders support AB to the hilt, you have to wonder why, I estimate that largest shareholder is down £750k on his investment, he is also being 'Belled' namely his previously meaningful stake being diluted from circa 20% to 14% so far.

Are they living in a parallel universe, are they receiving incentives for their support, are they just blind stupid, every vote of consequence they support Bell.

Yes the market is atrocious, truly atrocious, but Bell has in place here a web of projects without any capital to progress them, in a lot of ways the criminality of the theft of RRR's licence stake now seems the only way out IF this so called court ever makes a binding award.

Bell has never properly explained the process of the arbitration court, so he has seen a draft decision but why the delay in its legal finality, how can so called 'slippery' characters influence a court judgement, if the award goes in RRR's favour we have been told the Para State company is prepared to pay, so why is the court not finalising the judgement ?

From Helpful (one of the gang of major shareholders btw) all you get is slippery this and slippery that, buzz words around the Congo situation, totally confusing.

Having been a follower of this company for many years I have a gut feeling they are progressing a JV which, due to the approaching field season and current cash position, may be near conclusion. I suspect they have been talking to preferred entities over a lengthy period of time, much of the groundwork may already be in place therefore.

If anyone can remember I called the last placing correctly as I noticed increased ramping from 'new' bulletin board 'names' this combined with increased volume and a near 40% increase in the share price, the placing followed - there are no signs of this activity currently, brokers often bump a share price ahead of a placing to get it away.

The longer there is no strange activity in the shares the firmer my belief they are about to complete a corporate deal, one wonders if a deal will come at the project level or whether someone takes a stake in ORR at a significant premium to the market price.

I have continued to add to my holding, I see the current SP as the floor.

The CEO is presenting in London tonight, maybe someone here is attending, it would be nice to get some feedback if so.

Freeport status for Anglesey is very good news for AYM.

The company is due a R&D tax refund, it was paid in April last year, they received £400k. I am pretty sure I heard the CFO say this years would not be so much but if it came in at £200k it would tide them over for a few months.

I have not seen anything to indicate a placing is imminent, they cannot raise under .10p unless there is a capital re-organisation, they would look exceptionally stupid if they raise around current levels given what has been said in various interviews etc.

As others suggest it is getting very serious for the Livesey and Smeeton's credibility, they will have been in office for 5 years in April, in that time they have issued 2.3 billion shares at ever lower prices, it really is about time they delivered a corporate deal like the one Tembo extracted out of Barrack.

Another thought, why did no-one else ever consider Cameroon as a gold destination, if it is as good as they suggest ORR should have multiple offers on the table from major mining groups.

The clock is ticking.

I have kept quiet recently to see if anything positive develops but of course nothing.

In Q4 last year I predicted that none of these would happen this year......

Elephant Oil would not IPO
The Congo cash would not come
New Ballarat Gold would not get listed
No meaningful JV/event for Kenya

Now close to 25% of 2023 being completed and the prediction is still intact unfortunately.