Member Info for Juxtapose

DIM

The most likely explanation for the sell of a share that is performing well is common fund manager practice.

When any share in the fund appreciates substantially, its % of that fund obviously rises accordingly and the fund manager has to trim the position to stick to the mandated risk assessment. Were that not to be done as a matter of routine practice, a single share could end up accounting for most of the fund: we, as individual investors, usually hang on to our winners, but fund managers rarely have that option.

HUM will have done very well for Sustainable Capital on its recent purchases and historically (Q2 2018) it only had about 3%.

For those who are being stressed about the nomad situation, there are other alternatives and most companies in this situation relist on NEX, where a nomad is not required.

An extract for those who want to research further and GLA:

"As costs squeeze small caps off AIM, other ways of obtaining a listing are having their day in the sun.

Requirements such as maintaining a NOMAD, an accountant, a lawyer, a broker and financial PR, are racking up eye-watering costs for small caps trading on the junior market

The rise of the standard list

Given the financial hurdles that need to be cleared to list on AIM, small companies are increasingly being drawn to a standard listing on the London Stock Exchange’s main market, which is being seen increasingly as a viable alternative.
According to the AIM CEO, preparing for a standard listing will cost around £300,000, considerably less than AIM, while core running costs would be a minimum of around £100,000 per year.
The reduced float and running costs are mainly down to the fact that companies on a standard listing are exempt from many of AIM’s regulatory requirements, including the need for a NOMAD.
NOMADs are the gatekeepers of AIM, as they are responsible for making sure companies abide by the market’s rules. If a company cannot find a NOMAD, it is effectively game over for their listing.
A standard listing is also a useful main market alternative to a premium listing, which have their own set of stricter rules, as by contrast a company on the standard market need only comply with the minimum legal requirements for a listed firm.
Since becoming available in 2009, standard listings have become increasingly popular, with the number of companies now at 161.

The NEX level

Small companies are also finding opportunities on the NEX exchange, an independent growth market often referred to as AIM’s ‘younger brother’.
Like the standard list, NEX does not require a NOMAD, and its IPO costs are cheaper than AIM, while core running costs are estimated at around £75,000 per year.
NEX also offers similar benefits to an AIM listing such as being able to trade company shares and offers avenues for funding, while the time frame for a listing is considerably shorter at between two to three months.
The exchange also has no restrictions on the types of businesses that can join, and as such has made it a magnet for companies operating in unconventional sectors like cannabis and cryptocurrency. Its current total of listed companies since its foundation in 2012 is now around 89.
However, one pitfall of the NEX is that it is relatively illiquid compared to the other exchanges, meaning there is a lower amount of shares being traded."

Correction.

I should have said a year and a half: it seems to have taken the SP down from a high of 258p down to 190p in the September 2018 period.

You are quite right, Shortarm: it is always a relief to have such a key issue put to bed. Whilst the likelihood of a "no" was virtually zero, the effect would have been the end of ATYM and such a risk will always discourage the more cautious.

It is exactly as the head states

"07 May 2020

7 May 2020

Atalaya Mining Plc.

("Atalaya" or "the Company")

AAU granted by the Junta de Andalucía

Atalaya Mining Plc (AIM:ATYM, TSX:AYM) is pleased to confirm that further to the announcement on 30 January 2020, the Junta de Andalucía ("JdA") has issued a favorable resolution (the "Resolution") which validates the Unified Environmental Declaration (in Spanish, Authorization Ambiental Unificada, or "AAU") granted to the Company on 27 March 2014 in relation to Proyecto Riotinto.

The Resolution ends the legal process announced by the Company on 26 September 2018 in relation to the judgement made by the Tribunal Superior de Justicia de Andalucía ("TSJA") in connection with the AAU.

This announcement contains information which, prior to its publication constituted inside information for the purposes of Article 7 of Regulation (EU) No 596/2014."

It ends an uncertainty that seriously dented the SP: quite extraordinary that it has shadowed the company for over half a year.
Upward movement in the price of copper is welcome, particularly with the increased capacity.

It is a single mine, but not a single pit: Komana East and West, Saniomale East and West and Gonka. Additional pits may result from the "initial reconnaissance drilling on high priority near mine greenfield targets".

One of the main attractions here is additional pits, at exploration cost only to be processed through the plant.

It will be interesting how the situation with Cora develops, particularly Tekeledougou, which is only 8km from the Yanfolila plant.

No, DIM, that is not the point.

You specifically said

"I dont think Dan wants an empire, there was a time, but not now".

That was misleading, as Dan has recently spoken for himself and specifically set out his vision for a gold company and how he is going to achieve it, using Yanfolila as the platform.

That begs the question of your reliability as a poster.

You continually assert that "the shareholders that count" do not support management and this again is completely misleading. Are you unaware that our largest shareholder, Sustainable Capital, increased their holding from 3% in mid 2018 to 13.1% at the last count ( March 2020)? Are you suggesting that a major shareholder, having quadrupled their shareholding, is not wholly on board with management and fully endorses the plan forward (particularly as, unlike you or I, will be in regular communication with management)?

For your information, buy back of shares is the province of a company with excess cash and no decent investment opportunities. In the case of HUM, management is choosing to deleverage according to plan and the surplus cash is deployed into exploration. Given that we have an already built mine and that POG is through the roof, I would suggest that the IRR on this is will be off the scale.

Once LOM has been attended to, then, to repeat myself, I agree with you that we, along with our much increased II base, Sustainable Capital, Ruffer, the Odey/Jupiter connections etc. will be looking to dividends.

The point I was making is that your "speculation" was misleading, at odds with information recently put in the public zone and that throws doubt on your credibility as a poster..

On your new point, why would he need to do a fund raise?

Organic growth is happening now and funded out of internally generated cash: all those rigs on site with multiple targets. If a distressed company is taken over, it is usually done by an offer for peanuts, in cash terms, plus a few shares as a sweetener.

Clearly, our debt providers were very happy and provided the funding for the second ball mill. Debt funding, is of course, non-dilutive and therefore the preferred option for shareholders and this would be the alternative financing route. For this reason, shareholders would not be happy with an equity raise at this juncture (unless it was a superlative opportunity).

If an fund raise was required, then the current SP would make such a raise extremely easy, simply because of the undervalue.

There is no disputing that this share is grossly undervalued, but rather than bash the company, it seems better to accumulate more shares and wait for pay day when the market catches up.

In the recent VOX market interview we have information straight from the horse's mouth, showing Dan to be an empire builder.

"Clearly ambitious, now the ship steadied: looking to be a gold company, rather than a single mine and Yanfolila seen as the platform, with its robust numbers, to move forward.

3 best things.
Full exposure to the price of gold
Debt coming down
Growth, both organic (LOM and greenfields) and in a position to look around for opportunities".

Dan the Man has a plan: growing HUM into a gold company, both through organic and external means and in this he will be supported by major shareholders and many of the longer term PIs. As Golden Bull rightly says, he has a track record of delivering a gold mine and that puts him in up there with the elite of the mining world, that select band who completed the course.

The issue is that there are always 2 categories of shareholders, investors and traders.

Investors have little impact on share price movement, as they are by definition, long term holders. the exception to that, of course, is when one of the IIs either buys in or sells out and they certainly do move the market, unless another II takes the opposite position (as happened here, back in the Autumn) but it still causes churn.

Currently, there is no reason to suppose that anyone major is exiting, because overall volumes are tiny and there have been no hodings RNSs. On the volume, analysis shows that in April, "false" volumes were less than 1 million per day for most of the month, with a number of days as little as 200,000 a day and a few days whch did spike up to the 2 million mark. All "false" volumes need to be divided by 2, as each transaction is recorded as both a buy and a sell. Once that has been done, it can be seen that this is very lightly traded.

That leads into the second category, traders, who constitute the majority of activity and are doing rinse and repeat, the 10% ers, working a volatile and nervous market, along with the market makers, a slightly more sophisticated form of trades. It is in their interests to do these quick drops (often triggering the traders' stops) and reload, for the next demand and the spread is their friend.

It is helpful to use TA skills as that assists in interpreting what is really going on. What we are looking for as validation of this share is higher lows: eventually that will push trader sales above 30p as they can no longer get the lower entry point to make their margin under this level.

Fundamentally, this is a well run, profitable company and eventually, the market will reflect that fact. It is difficult to see gold retracing by much and the current margins for HUM are spectacular leverage to the POG. Meanwhile, I have been tempted to buy a few more.....as one does!

For those who have not followed the whole story, management were proactive in reorganising the company capital to facilitate a payout as follows:

"On 25 September 2018 the Company received court approval for the cancellation of the Company's share premium. The cancellation has the effect of creating distributable reserves."

The dam wall disaster then intervened and the direct consequence was to put wise old heads on young shoulders. Instead of pandering to shareholder wishes and making payouts/buybacks, the company has used available cash far more wisely, paying down debt and installing the second ball mill, which makes every ounce produced more profitable.

As far as I am concerned, that has made this company far more investable, both because of the risk reduction and the harsh management lesson, which they appear to have learnt by experience.

The question, now that they do have better cash flow, is should it be returned to shareholders or spent on the vigorous drilling program to upgrade resources and exploration? Personally, I think that they have allocated the scarce resource of cash wisely, but it is, of course a matter of opinion and others may have preferred the short term approach of having a minor dividend or a share buyback scheme operating to enhance the SP.

Once the drilling is complete and debt eliminated, of course, like everyone else here, I do want to see funds being returned to shareholders by whatever means: I do not dispute that it enhances value, but the right timing is key.

Most here will not have run the school tuck shop, let alone an AIM listed company and so the fair comparison is with the peer group, companies such as Kefi, Condor and Herencia, companies that set off in the noughties, most of which have not survived at all.

One of the key factors in most of these companies was their ability to drop their "pet" project and snaffle a bargain: Kefi refocussed on Tula Kapi, Condor moved from silver to gold, Herencia refocused on a quick return on Picachos and Hum dropped its monolithic Dugbe for the "turnkey" Yanfolila. The decision made by management at that point was key to the ongoing success or failure of the entity: in the that decision, management showed sound judgement and financial acumen.

Unlike others, HUM simply got on with their new project. They bit the bullet on finance with a substantial equity raise, which then emboldened debt financiers to step forward. The delivery of the project was handed over to the experts, Seneca: that was a sound decision, since it resulted in an on time and budget delivery of the project.

Shelving off much of the exploration into Cora was an interesting decision, but it has to be acknowledged that focus on Yanfolila has given us a cash cow.

Bunker Hill is a similar decision. The rational behind that investment is that it is a near term project, which, like Yanfolila, could be delivered by the experts. The jury is out, since the project is still work in progress.

The second ball mill was a courageous decision at a difficult time and has contributed to the current profitability by delivering economies of scale.

Life is always a mixture of luck and judgement, but the HUM management, unlike most of its peer group, have delivered a profitable gold mine into the perfect storm.

Why complain, other than at the SP, which is in the gift of the market, not management? Look across to SLP, seriously undervalued by the market and only recently reflecting the real achievement by Terry McConnachie. It is for the market to finally recognise what has been achieved by the HUM management at Yanfolila and that may come with the ongoing drilling campaign.

Thanks for that, Soutie, albeit a bit dull.

"Steadily to plan"...in guidance...running smoothly...lots of precautions re Covid...planning for the worst and hoping for the best.

Clearly ambitious, now the ship steadied: looking to be a gold company, rather than a single mine and Yanfolila seen as the platform, with its robust numbers, to move forward.

3 best things.
Full exposure to the price of gold
Debt coming down
Growth, both organic (LOM and greenfields) and in a position to look around for opportunities.

Clearly current SP a mystery to both Justin and Dan, particularly given that the "printing presses" are clearly at full production and that should translate into a solid gold price going forward.

Lebon

For a mining company, it does not get any more "fundamental" than production and cost.

Production
Q1 23,807
Q2 27,466
Q3 30484
Q4 33892

In summary, increasing production and meeting targets

"Hummingbird is pleased to announce that it has achieved its 2019 full-year production guidance of 110-125,000 ozs, having produced 115,649 ozs in the year."

AISC $
Q1 1297
Q2 998
Q3 849
Q4 839

That second ball mill significantly decreased cost per oz due to economies of sale (high fixed costs) thus increasing profitability at projected POG: the enhanced POG is jam on top, the leveraging effect of being invested in the miner rather than the metal.

Additionally, debt has been reduced and now, with the improved balance sheet, the main asset life is being addressed.

What more should we expect and how soon?

Unlike so many juniors on AIM, this has has come good, into production and at a time when gold prices are well above those used in the NPV projections.

Recent management decisions have showed increasing maturity. I would single out two in particular, implementation of the second ball mill to improve AISC and the options to cover a fall in the POG, but without giving away the upside, which we now of course, are enjoying.

Now, having dug the company out of a financial black hole, every effort is being to address the next important issue, LOM., both with the drilling program and 3rd party options.

This is a good company, prudently run and we should all see the benefits of management endeavors once the market acknowledges just how much chaos has been created in the financial system, where helicopter money is a daily necessity but no longer any store of value.

Perhaps think of the market cap, rather than the SP: at £6 million, it is not even reflecting the 2p reserves, let alone the prospects at Serenity or Liberator West.

It may well be that there are separate farm ins for Serenity and Liberator West, followed by the announcement of a decent drilling program: such news flow could, incrementally, rejuvenate this SP to a more realistic level.

My view of what will happen is guided by the recent RNSs.

They are in the process of farming out Serenity and/or Liberator West (hence the site survey to cover the remaining areas of Serenity and Liberator West's Minos High structures not covered by i3's 2019 site survey to ensure that all potential drilling locations remain targetable during the Company's planned 2020 drilling campaign).

That should boost the SP such that the warrants are in the money or an equity raise is possible to fund Liberator 1 (along with some assistance from the drilling outfit by way of deferred costs).

That would then realize cash to fund further exploitation of Serenity and/or Liberator West, post the farm in free carry.

The curved ball is a bid for the whole company and that has already been discussed here , with strongly opposing views.

Yes, great post Harel.

Bleo Holm will largely be fixed cost and that is why full capacity brings down the unit cost, the economies of scale to which I referred: as you have succinctly set out, Serenity can be the game changer for Repsol.

GGG. I invested for Serenity and am still here for Serenity, regardless of whether it is connected, in communication or proximal. This not for widows and orphans, but potential rewards are high, given the current market cap.

Clearly a rollover: evident from timings and no significant price movement.

A critical week ahead.

Not only results, but results which may determine whether or not FRES bounces back into the FTSE 100: difficult to predict amidst all this carnage and gold prices making no sense at all.

http://www.stockchallenge.co.uk/ftse.php

Tony

The word is "rational"

SP's on AIM are rarely rational: therein lies the opportunity.

You don't appear to be supporting the farm out taking place at the moment.

You object to the placement and debt financing of 2019.

You don't seem to acknowledge any of the innovative financing along the way.

So, tell us how you, sitting at Majid's desk, would have financed I3E or would you have just sat there and done nothing other than draw a fat salary for doing nothing, the curse of AIM?