Member Info for johnpwh

Not sure what happened to the quote I was trying to post from Mining.Com. Try again.

I would have thought Ariana/ Rockover would be considered advanced in terms of time and money already spent as a result of the assumption of a framework. So although Zimbabwe may demand a partnership it may well not be free carry but negotiated, and may possibly be a source of the required funds and better co-operation. The ex Rockover directors may enable constructive dialogue with Government too.

“Obviously when you have decisions which were made some years back and decisions were made on the basis of a certain framework, you cannot just willy-nilly go and change that,” Kunaka said. “It takes negotiations.”

Kunaka did not disclose the minimum value of mining assets in which the government would want a shareholding, saying that details will be released later. The policy would be introduced from next year, he said.

Zimbabwe has a 15% free carry shareholding in platinum miner, Karo Resources, according to its website.

Hi Stranger, I found the quote I was looking for on Mining.com. Based on it, Shortarms rose tinted approach does have merit.

It sounds as if blank paper projects will have to plan from outset based on compensation free carry (at whatever % is decided upon

Oh OK, the green messages were from NoelSheepPen or whatever is name is. Still, its Christmas and if someone called Noel doesn't post his nonsense them when can her?

I don't agree in so much as they are a Government and Governments do daft things. You only have to look at Rachel Reeves Employer NI decision which will probably lead to unemployment in the unskilled and inflationary pressures particularly in the hospitality industry.

On the gloomy side Zimbabwe could simply nationalise the mines without compensation, run them (badly), and short term make a lot of money. And commit inward investment suicide just as the country is emerging from a dark period of their history. So no, that wont happen.

I think the 26% is an opening gambit, I saw some item in one report that said a 15% free carry is already in operation at a platinum mine in the country.

A 26% figure, if that means without sharing any operating costs or buy in, would put a massive brake on their mining industry, at a rough guess of the consequence to miners would be a 40%-45% degrading of the value of their resources (a very rough guess). I cant see that happening as new projects would dry up.

But looked at from another angle why should Zimbabwe not benefit? Some Western company bowls in, digs bloody great holes in (sometimes) beautiful landscape, uses noxious chemicals, then when the resources are exhausted get in their private jets and bugger off leaving great scars.

So I agree, we are in Africa here and a balance between the mining companies and the State has to be struck, but struck at a level where both parties are happy and continue to be. You need an ongoing co-operative relationship. Given the 25%+ rise in Gold price in 2024 I'm sure that most AAU investors today facing what appears to be bombshell news would happily agree to a suggestion of around 10%, especially if as you say that guaranteed a fast track with no barriers being artificially created. Maybe, dare I dream, Zimbabwe could help sourcing the finance?

The 26%, which seems an enormous figure, will effect its feasibility. It increases the prospect of greater dilution from the imminent ASX listing and any further ones in future due to the capital cost of building plant. Why? Because the placing will be against a weaker price and also because a lower price for any fund raise is likely because the flagship project requiring that fund raise is less financially attractive. Happy to carry on this conversation, in fact encouraged by your other posts I have access (and and currently watching) the Engage presentation, but let's stay civil!

Shortarm

We discuss surely all scenarios, hence this is a discussion board, it not here just put a rose tinted view on everything.

I know you are a passionate investor, and respect that, with a sizeable holding here so of course you are engaged. But even you cant be happy that the SP is back to where it was in August 2019.

Lets agree to differ, but looking at both boards (here and ADVFN) the groundswell of doubters amongst investors in AAU is indisputable. People are just seeing this as a jam tomorrow company supporting the lifestyles of its Board. Time and time again we see this. As I have said before if it wasn't for the progression in Gold Price in the past 5 years from $1500 where the hell would this share be now?

Shortarm

Its not much point playing this down. It's not a rumour started by someone seeking to short mining shares. Something, not sure as yet what, is happening. There are quotes all over very respected financial media from Zimbabwean Government officials.

Most of us, including me, are not 100% sure what free carry means. Does it mean the State simply takes 26 % of production with zero investment or payments sharing of production costs? Does it apply in addition to Royalty payments and taxation?

This 26% could just be an opening gambit and the reality the percentage may prove less, after all if too severe then companies will not look at Zimbabwe for future projects and they descend again into chaos just as they were coming out of the Mugabe years.

But its daft to think that Dokwe is exempt from this just because holes have been drilled in the ground. What is an existing project? Could well be those in production, where feasibility decisions were made based on the Zimbabwes Ts&Cs at the time. To assume Dokwe is exempt is naïve. I hope just as much as you that isn't the case, but now is not the time to bury your head in the sand.

Claret

I agree with basically everything you say. The Ozaltin deal was appalling as I thought at the time and I have always avoided the corrupt cesspit of Africa when investing like the plague. And then Ariana dumps me in it.

Ariana Resources, 2 steps forward, 1.99999 steps back, year in year out. At least they are consistent.

Hi Nonegs

Think you need to catch up with the news that Zimbabwe has announced that it wants a 26% free carry on all mining operations in its country. Welcome to Africa.

A glance at the fundamentals isn't inspiring. Market cap equal to a mid range flat in a half decent London suburb. Lots of ideas, an admission the other day of effective inability to be sure of defending their intellectual property. Weak balance sheet, negative net assets and the likelihood of repetitive placing at every decreasing share price to stay afloat At a high level looks good but in practice just a toy for academics who don't seem that interested in investing their own money. Put a couple of hundred quid in for the punt but please don't bet your granny on it because it has eventual administration writ all over it.

He will just keep saying it for months and months then if it happens then will say 'told you so, {'m a brilliant investment guru'.

I have not gone through Strangers post in great detail but his conservative approach is sensible especially as none of us can have any real confidence in PoG. In 6 months time who can confidently say whether it will be $3250 or $2250, which long term would lead to very different valuations. The only area I would query is the assumption that Dokwe will stay 100% owned. I doubt personally that it will, and given the capital expenditure required I'm not convinced that 100% ownership is ideal as I would like to see production asap. Who knows?

The NI change will overhang this until the affects become clear well into next year, OR the management pre-empt the effect by announcing a business model change to narrow the discount offered to consumers compared to its rivals outlets. Just my opinion. My average is around £7.10. Think it may be a long time until break even. I just hope that under the new taxation landscape profits will allow continued dividends, not that I particularly want them but it does open up the market a bit.

I suppose there must come a point where this becomes buying as an investment. Wonder when that will be? Many years ago (30+++) i saw an investment article on Jaguar when they were still a quoted in London as a stand alone entity. It concluded 'buy the cars, sell the shares'. Is this the same?

There are 2 ball mills at Kiziltepe now too. I don't know how robust these things are, presumably they give many years of reliable use. It's a good start, just getting some production going at Salinbas would be a big boost, even if the plant would need expanding in due course. Don't think much over 25,000 ozs per year ever came out of Kiziltepe, with over 1 million ounces to extract they would surely need an extension!

Yes I remember the final processing plan at Kiziltepe idea for Tavsan but that stopped being mentioned years ago. Think Tavsan was always intended to be heap leach, certainly there wasn't a question of trucking all of the ore which they are doing now but only with the higher grades. My understanding is that Tavsan is an extensive, shallow but mostly low to very low grade deposit. Good in a way for the future Salinbas production as it means there is a plant available in a couple of years, though moving it wont be cheap.

I agree, an excellent post by Stangerstill, but is the additional drilling at Salinbas and its satellites funded by Zenit, which would potentially consume much of the cash not needed for loan repayment during the Tavsan ramp up period? An obvious gap in my technical knowledge but how exactly does the heap leach work? After the leaching process does the plant being developed at Tavsan produce an impure dore which is refined elsewhere (but not the Kiziltepe plant)? Would be interested to know. I believe that decommissioning and prettying up costs at Kiziltepe have been reserved, this was a question that came up at one of the London meetings pre Covid.

VanVan, Stranger

Interested in you views. Despite what some may think I don't regard myself as doom and gloom, but as a realist who put his rose tinted specs away many years ago with AAU. It is one thing to miss an isolated development deadline but when it happens time and time again you cannot ignore a pattern has emerged.

I was pretty much the only one I think who voted against the Ozaltin JV, and my posts are there in November 2019 onwards to prove it. Sadly I believe I was right to oppose it but I would much rather have been proven wrong. However what worries me more now than the poor price received for the assets ceded (ouch, 26.5% of 300,000 ounces at Tavsan plus 26.5% of Kiziltepe output since early 2021), in some ways more worryingly is the ceding of voting control in the JV. Why else did Ozaltin want a little over 50%? Potentially AAU cannot demand any dividend payments from the JV even when Tavsan is throwing off large amounts of cash after production in ramped up. Like the development of Tavsan from Kiziltepe profits, Ozaltin may demand all future JV profits go to Salinbas, why won't it as Ozaltin is not interested in Dokwe (yet). Then what does the board do? More equity? Debt on the AAU balance sheet? Being forced into another poor JV with Ozaltin as it cant develop Dokwe otherwise? It's worrying, and judging by this share price unless there is clarity this SP isn't going far despite the gold price. Like Van I hope our new major shareholders from Rockover, especially considering their ages, will have significant influence here. I trust Proccea, I don't trust Ozaltin.

Hi Moneymaker

Thanks for the comments, sadly the SP reaction when the Gold Price is showing signs of bottoming and rising again says a lot about how the RNS is being received by the market.

I assume the green message was one of the children who take pleasure in sniping at other posters. I wont be losing sleep about it!

That went down well. As someone said today on ADVFN it felt like a holding message, delaying Tavsan yet again until early 2025. When of course weather will provide another delay as usual, you'd think that by now they'd realise it gets cold and snowy in winter.

Trouble is no one thinks the stab in the dark estimates for Dokwe will be anywhere near met, I cannot recall anything they have ever done coming in on time, let alone early. 10 years for Dokwe? Of course first gold from Salinbas in 2025, at least according to presentations a year or 2 ago. The only comfort we can take is that provided Gold price keeps rising then its an advantage that the stuff is still firmly sat undisturbed and sleeping in the ground.

Hopefully this mornings gold price indicates that sell off is tempering now. If so then a level of $2600 is good news for a relatively low cost producer. News on Tavsan would be welcome and may provide a modest boost, constantly waiting for news that doesn't see to ever come isn't good for sentiment.