Member Info for JohnNth

Gold price now nearly $300 oz higher than average for 2023. If maintained, through 2024 the sold Russian business will add another $600m+ on its $1bn plus EBITDA achieved in 2023.

Of the sale, Nesis said the following in February:

"Your investment certainly has been decimated, but management was not the root cause of this destruction."

Management may not have been the root cause, but their performance in managing the sale fell considerably short of what holders expected to say the least.

Gold price is now trading at record levels but SP is moving backwards. New strategy and sense of direction for the scaled down business can't come soon enough.

ARE YOU LISTENING MR NESIS?

"No mention of dividends at all"

At the last meeting, I sent in the following question:

Has POLY deciding not to pay dividend anything to do with lack of funds or the fact that shareholders register is incomplete?

Nesis did not address this question at all. I believe it is to do with the shareholder register which is all over the place. In the UK, Mem & Arts makes it very clear it is the company's responsibility to keep the register up to date, and I'm sure laws are similar in Kaz. In fact without an updated register, the shareholder votes don't count either. Nesis knows if he answers questions regards the register (which is hugely inaccurate/incomplete), he risks himself landing in deep waters. It would bring into question decisions made to sell Russian business where many holders were not able to vote etc etc. I'm sure a token divi would have been welcome, but how do you get this paid?

IMO divi will only be paid once register is up to date and accurate and it can only be brought up to date once POLY relists in London and hence it will be given priority.

Not looking good for Z...picked this up from another board

https://www.hindustantimes.com/videos/world-news/macron-warns-of-ukraines-quick-fall-at-russian-hands-nato-has-this-advice-for-zelensky-101711101968440.html

However, it doesn't mean the end for FXPO.

@E.Pensfold...yes you are a bit out and I should have spotted that when I responded to your earlier post on earnings in 2024.

You used single AISC guidance figure provided by POLY. This figure was an average incorporating both the costs in Russia and Kaz. Cost of producing gold in Kaz is much lower than in Russia, but I have not seen POLY provide separate AISC figure for Kaz. Further point to note for 2024 is the inflation in Kaz which currently is running at about 9% and the US$ to Tenge exchange rate is holding at about 450 to US$. If the exchange rate holds in 2024 (like it did throughout 2023), the inflation will eat into the profits leaving POLY with lower earnings.

No divi proposal is disappointing, a token divi would have gone down well. IMO POLY would have paid the divi but the shareholder register is currently all over the place, and its difficult to see this corrected without POLY relisting back on the LSE.

"Will they declare divi?"

I hope so; only obstacle I can see is that so many holders have still not properly registered their holdings after POLY redomiciled to Kaz. IMO these holders may be giving POLY an excuse not to pay divis.

" can someone please tell me why court proceedings are not happening in the UK?"

Cos the alleged offence was committed in Ukraine and Ferrexpo Poltava Mining company is a subsidiary of FXPO in Ukraine which does all the ore mining.

Both Rus/UKR war and Whether good/bad deal is now behind us; POLY has been de-risked with net cash position of at least $130m. I personally think it's bit more than this in view of gold price and hence POLY can afford to pay all of it in divis.

Up to now, Russian business weighed heavily on sp which did not react to factors such as rise in price of gold or the exchange rates. Discount in sp will persist whilst POLY remains solely listed in Kaz, but I expect it to rise to narrow the difference in relation to its peers in the West in the coming weeks and months.

Fingers x'd........

@E.Penfold...good ballpark figure to work with; bit conservative imo, both average price ($2,050 YTD average) and production will be a tad higher, taking EPS to just over $1.00 which puts current sp at under 4x forward earnings multiple. Of course, we are excluding including any income from Russia.

Fingers x'd........

No you are not occupying my brain. I long predicted $2,100 oz by year end and $2,300 by end 2024. Only delays in interest rate cycle prolonged that to Feb 2024. Further, I don't think wars are weighing heavily on gold either as they are contained; but general geopolitics and de-dollarisation is and this will continue for a good few years. Of course, the most important immediately is the trends in interest rates.

Also, just so you know, if you read my early posts from last year, I have mentioned separate listing for POLY Rus and POLY Kaz and holders be issued shares in both. I still think this was worth exploiting even though significant risk attached to POLY Rus including nationalisation. As it turns out, risk would have been 70 cents, cos that is what we're getting net from sale of Russian assets.

Anyway, all that is behind us and soon we'll not be talking about Russia/Ukraine war either on this board as it is no longer relevant.

@jotom750...you most recently said the following in response to my predictions on gold price:

" I did laugh (internally) when some here were raving about gold going to $2100!"

Bet you're not laughing now!

@Moorscloud...I think Nesis did say restoration of listing on the Western exchange should be a priority, and that in his view total net proceeds should be applied in achieving this objective. He said this can only be achieved by bulking up the company through investments in assets.

He said the paying of divis would delay this process; made it sound as though the two (paying of divis and bulking up the company) were mutually exclusive, but this would be discussed once transaction was all complete.

My view is that shareholders have not had any divis since 2020, POLY Kaz has very little debt and gold market is very buoyant with gold appreciating by full $100 oz since Nesis made the statement; there is ample room for both divis of say 40 cents (total cost $200m) and bulking up using remainder proceeds, extra income due to increase in gold price and borrowing.

IMO there will be a divi payment as early as May.

"If I ask you to list all the sanctions by the west against Russia...you won't have a clue. Hint: Russia is the most sanctioned country in the world (take a minute and let that sink in)"

Actually, my daytime time job for the past 16 years partly involves monitoring of sanctions as the company deals with clients in the Mid East, Africa and West Asia; so I think I do know a thing or two about sanctions.

Further, Russia is not the most sanctioned country in the world...Iran is!

Resolution passed with 43% shareholders voting in favour and about 2% voting against; over 50% of holders couldn't vote or bother voting. Impact on sp has been muted.

As I've said before, the whole deal stinks and raises lot of suspicion as the sale was concluded by Alex Nesis who sold his shares to a small Russian company dominated by a single shareholder at a knockdown price of $3.6bn; about 3.6x 2023 EBTIDA and way below 3x projected 2024 EBITDA given current trends in gold price.

I don't believe it was the best deal/offer POLY received or could have obtained.

Further, given recent events surrounding both the sale of POLY and shareholding by Alex Nessis, POLY is failing spectacularly to adhere to reporting/transparency commitments it made just prior to redomiciling to Kaz. IMO there is significant scope for improvement.

Looking ahead, restoration of listing on the LSE must be a priority to restore shareholder value of what remains of the business which IMO is much higher than the current sp.

Deal raises lots of doubt cos the sale is to a small privately owned company with one dominant majority shareholder.

In view of the backlash from retail shareholders, I think there will be a divi; possibly as early as May subject to completion by end March which now looks certain. The fact POLY have not paid any divis since 2021 despite buoyant gold market will weigh heavily I think. I wouldn't like to guess how much, but I'd be disappointed if it's less than 40 cents a share.

Saying all that, POLY Kaz is worth a lot more than current market cap..........

@Moorscloud...I've not been in the loop for a while now, but view recent developments as follows.

My opinion is it’s a stitch up, and wouldn’t be surprised if there’s backhanders flowing from Sergei Yanchukov to parties past and present within POLY making it happen. A Nesis selling 2 days before Q4 update quickly followed by this deal has all the hallmarks of a stitch up…it stinks. IMO A Nesis all but agreed sale with Mangazeya before he sold his shares. There’s even a possibility bids from other potential buyers may have been higher than that from Mangazeya, but we’ll never know.

Mangazeya Plus JSC is a structure created for the implementation of the transaction by the Russian company Mangazeya Mining, which produces precious metals and has been operating in Russia since 2011. The company is part of Mangazeya Group of companies privately owned by Yanchukov Sergey Valentinovich, hence he will be full beneficiary of a substantial upside resulting from this deal.

Any such back hand deal would not be possible had POLY done the deal with a prominent company listed on MOEX as benefit would be shared with wider shareholder base and disclosure requirements would be more rigorous...think about it!

I fully accept the need to divest away from Russia. IMO there is another option (if possible) whereby POLY Kaz could have borrowed $1.151bn to settle inter-company debt, floated POLY Rus separately on the MOEX and given shareholders shares in the new company. Then it would be up to individual holders what actions they wish to take. POLY Kaz would have severed all ties and be free of all potential sanctions and shareholders would end up with stake in both POLY Kaz and POLY Rus. I accept potential holders in POLY Rus would not be able to sell their shares or receive divis until conflict ends, but I think it would have been risk worth taking given penalty the holders will be paying once sale goes ahead. I would much prefer this than the 70 cents per share we will get from the deal agreed.

I intend to vote against it; not that it will make any difference as Omanis will back the deal and Blacrock won't bother voting. Last time a shareholder vote was taken, approx 30% holders voted and Nesis owned nearly 25%.

I am very disappointed with the deal and believe POLY Rus is worth way more. Sale value of POLY Rus is valued at 3.6x 2023 EBITDA of $1bn, when its peers in the West are valued at over 14x. Although I am still up by about 80%, it’s the long term holders who will suffer most.

On re-domiciliation to Kaz, Nesis did say POLY will continue to adhere to highest levels of corporate governance, but unfortunately this has not been the case as situation unravels. I have noticed many contradictions from what he said previously on future divis, business valuation, interested parties in China etc and now he lays blame on worsening trading environment surrounding Russia which I believe has always been there since conflict started.

Of course, possible net closing in on Alex Nesis in Cyprus from sanctions imo is also a factor in selling his stake. But if sale in Russia was close, I think he may have held off from selling. Anyway, we'll see what happens tomorrow.

Good Luck

@Moorscloud.....in response to your comment, first and foremost would be to hear Mr Nesis say its business as usual as far as he is concerned, that he is still in control and committed to the job as long as shareholders want him, despite his brother (Judas) selling up. Nesis understands the business, understands Russia and the region better than anyone else and so is pivotal to the success of POLY navigating the current situation and re-establishing itself on growth path once again.

I am of the opinion that there’s been no progress on the sale of Russian business and that is why his brother Alexander sold out. Think about it, why would you want to sell out so low IF realising ‘value’ from Russia assets was around the corner? If the news we get is to the contrary, then that would make my day.

Bytheway, I have already submitted questions including one on your behalf asking…What is proving more difficult in exiting Russia; is it finding of a buyer willing to pay a fair price or negotiating fair settlement with Russian authorities on the proceeds?

Moving onto figures, I’m looking for a very positive trading update with production increasing by 10% year on year, EBITDA at around $1.5bn and Net Profits at around $1bn; assuming inventory has been wound down to normal levels of course from high figure as at end 2022. I think this would put a solid floor under the sp going forward and set it on upward trend once again.

Divi is impossible without divesting away from Russia, so I would like to hear the huge cash flow arising in Russia been used to pay down costly debt. Given healthy trading in Russia, I’m looking for debt to fall to quite a bit below $2bn at year end as compared to over $2.5bn at ye 2022.

Like many POLY holders, I’ve been shaken a bit since news of Alex Nesis selling out yesterday and resultant impact on sp, so will be looking for reassurance.

I’m out all day tomorrow and so will hope recording is available after the event.

Fingers xd………….

Yes...I didn't know 2 were different people. I hope Vitaly Nesis does hang around cos he has done a magnificent job.