Member Info for homebrewruss

Sorry, cut that post a bit short. What level of production (tonnes) is that based on?

Is that for the year ahead (2019)?

Thanks Graham. Yes they've definitely had their share of 'bad luck'.
I'm still hopeful they can do ok as the grade is increasing and they are getting into the good stuff now plus the valuation is still very low but this year is pivotal.

graham are you a holder and if so what are you hoping for/expecting here?

graham, I see your point. Have you been through the interims in detail - I think I need to take a closer look to work out which of the costs are and aren't one off costs.

graham have you read the presentation?
It has mining costs and plant costs per tonne which assume a regular feed of 40,000 tonnes of ore per month.
This also assumes 24/7 operation.

graham, yes but really it's all about the grade.
If they can get the fixed costs down even better but with the current grades as they are (and increasing) they should be profitable going forward and more tonnes mined at a profitable grade = more profit.

It's all laid out pretty well in the latest presentation - whether you believe those figures of course is another topic

graham, costs will of course increase but costs per tonne should (apparently) not and they will of course be mining more tonnes with more hours.

Anyone want to have a bit of fun with forecasting production, grade and profits for this year?
Probably easiest to go for profit in dollars at this point.
I'll start with:
325,000 tonnes at 4.75cpht giving approx $9.5/tonne profit = $3m profit approx for this year

£6m profit seems unlikely especially for this year but they could certainly do over £4m profit per year if the plan is executed well and the diamond grades are good.

If you look at the newest presentation (slide 16) you can see that if they did 400,000 tonnes in a year at a grade of 6cpht then that would give $5,448,000 profit (or just over £4m).
http://www.bluerockdiamonds.co.uk/assets/BRD%20Q1%202019%20Presentation%2011.02.19%20FINAL.pdf

Yes the email address is on the website contact page. Definitely worth letting the company know your thoughts

They issued some warrants at the same price in November's placing but it wasn't quite as bad as only 1 for every 2 shares and with the same strike price of 0.4p so about 100 million in total then (added to the most recent 200 million).
Those were also only exerciseable for a year.

Previous warrants issued were earlier in they year at a much higher strike price eg. 3p so those aren't much to worry about.

Good post redbaro.
They were a late addition to the investor evening and I was slightly wary when it was announced as Turner Pope have a bit of a rep with discounted placings. Anyway their appearance might have been so some of the placees could find out what they had bought into :)

I've sent an email with some questions/observations about the placing to the company with the general message of considering existing shareholders when looking for more funds. Worth a try..

It's still a lowly market cap at this level with lots of potential but we potentially have a large stock overhang with the current placees and then any warrants that are exercised in future.
Not sure why anyone would sell at this level though - least of all the placees.

do you have limited time?

One of my points will be asking who took part in the placing and are any of them interested in the company longer term. There are no holdings RNS's so far after either this or the last placing but it's not very hard to get a holding over 3%.

I still see lots of value here but obviously not quite as much as before.
I'd almost like the price to stay at this level for another 9 months or so at least the first lot of warrant holders don't get a chance to exercise and create more dilution.

I'm going to write an email to the company once I've gathered my thoughts making a few points about shareholder value destruction and to consider existing shareholders in future. Not sure if it will make any difference but will at least provide some therapy :)

This is the key paragraph from the RNS: 'The recent recovery of large, high quality gem diamonds has encouraged the Company to look at ways to fast track its production targets. Further investment in the crushing circuit will be necessary to achieve this and discussions with industry partners are taking place to address this. A number of options are being considered including outsourcing and external funding from industry partners.' Fast tracking is great in theory and if that is the reason but not at any cost.

Tom winnifrith post highlighting the pump of the shares prior to the placing: hTTps://www.*************.com/views/40940/blue-rock-diamonds-a-month-of-pump-and-now-the-dump-a-case-study-in-how-the-aim-casino-operates Not sure if we will ever get an answer but I would like to know at what point they realised they needed more funds and why. Is it because of these large new diamonds? Is there loads more money required? Has the new chairman identified operational issues? Is this how it will always be?

Would love to go tonight now but sadly cant make it. If anyone is going would love to hear more information about the improvements and why they couldn't wait until later in the year when they had more revenue coming in and the share price may also be higher. Do they think these improvements will quickly pay for themselves? The big diamonds may genuinely be coming through now but I have heard from other CEOs that placees almost always demand some kind of discount on the share price so the company has to try and pump up the price one way or another. At least the placing isn't below 0.3p!

I don't have a problem with them raising cash for relevant improvements etc but it's disappointing that they have to do it at these low price levels and I'm sure the company feel the same way given that the CEO has shares and has also loaned money to the company.