Member Info for hazrat

Hi Tiger,

Maybe as we have been here for a while we should explain where the company really is. I will give it a go:

1. A year after production commenced the tonnes mined run rate has decreased significantly compared to the first quarter of production.

2. They have managed to acquire a fleet of vehicles that are not suitable

3. The much vaunted high % veins have turned out to be tiny and so vast sums of money have been spent for no return

4. They have found a fairly big low % area but the capex costs to exploit are likely to exceed the revenue generated.

5. The fixed cost base is too high for the tonnes produced and even a doubliing of RE prices won't make much of a dent.

6. Unless the company makes a big find, it is likely to chase its tail across the licence area.

7. The offtake agreement is a killer, as are royalty payments and transport costs, which are going up despite promises to cut them.

All in all, this is no different to a day at the races. Gamblers will be saved if they discover a lopolith, otherwise endless dilution awaits.

Why would they do a placing? Have loads of cash.

Smoke, "stragedy" is the perfect way to describe investing here

Why is almost everyone (except TBTT) ignoring the fact that the company has so far only found some ceappy little veins that are not economic to recover and 1 area of low grade ore that will require significant capex to develop for little return?

So much work has been done to date that so effectiveness that I thing the chance of success is >50%. I am more concerned about management's ability to do a deal.

OK so how do you get to that price? Generally accepted but not based on any hard numbers as far as I can tell. Not saying I think the future is bleak, just trying to work out if your comment is mindless ramping or if you have value to add.

Generally accepted by who?

For me AIM investing is all about red cards. Aside from the numerous ones that caused me to sell earlier, not releasing the report this Q is the final nail in the coffin. This company is dead and buried.

Against my better judgement I bought back in here at 14p having sold out on the way down at 13.5p. I was going to buy more after the IC article but expected the usual trough that follows the initial flurry.

Question is, given we now face 6 months or so where there may be very little information, will the SP drift lower or is now the time to buy more.

Given the Ceo's terrible track record I am inclined to be patient. Greed hasn't been good with the company for long term investors

On website

Looks like I was right after all. He has been selling his stake and now below 3%. Hopefully mark an end to downward pressure.

Might work for Lind but monthly dilution with no near term end in sight doesn't work for me.

I have sold out as I no longer think sustainable cash generation is possible. So far the mining areas are small and so have a limited life. I can see a future where the cash generated from one area goes into establishment of the next, rather than being paid to investors. A game changing find is required to break that cycle but a huge drilling campaign is required to find it. I will continue to track and hope for that big find.

Even worse than I expected.

Initial thoughts are that it is a good deal. It secures funding for the next few years and at a much smaller discount to the SP much than would occur if regular placings were done. As and when the mine is generating sufficient cash the deal can be terminated and so hopefully most dilution will not occur.

This selling into the update worries me.

There was a pattern building of updates on 24th of the month but then the last updates was a week later so who knows.

I don't expect the next update to be particularly positive as new mining areas needed to be opened up to reach the target run rate. So i think this one will show fairly poor mining rates again but will hopefully set the scene for the target to be hit in time for the next update in April.

All valid points and i do hold shares here. I am just cautious because I estimate another placing will be needed, even if breakeven on the mining can be achieved soon because of further exploration and development.

Hope I am wrong but I don't see production having achieved the breakeven point in the last quarter. If it has then that is amazing as there was a long way to go.

That has been my hypothesis but the selling has been going on for a long time now. Can't be much more left in the tank.

I fear it is because the market predicts a debt blow up and high default levels. Financial stocks have been hammered and a company this size doesn't have the firepower to survive a big mess.

However, I think it will be alright and so continue to hold.