Member Info for Juxtapose

It is worth comparing current prices with the average prices actually achieved in H1
The average realised silver: US$15.2 per ounce in 1H19,
The average realised gold price remained flat at US$1,320.7

At guided levels of production, every $1 per oz on silver adds $60 million and $100 per oz on gold adds $90 million to the bottom line.
Added to production improvements (including Herradura) coming through in Q3 ( Q2 was already trending up from Q1) and confidence will be restored here.

DC2007
Stock on loan was 26.63% at the end of August 2019 and that stock is loaned for the purpose of shorting.
What was extraordinary, was that this increased by 8% in August 2019, a time of improved PMs and expected better Q3 results, which gives credence to TBTT's theory that this was a concerted push to get FRES exited from the FTS 100.

That, of course, failed and Q3 results will be published before the next possible attempt, which makes it quite unlikely to be successful.

My expectation is that as the shorters are not an single entity, some will buy the dips and the overall position will reverse over time.

It is important to understand just how extreme the shorting is of this stock and the distortion of any semblance of normality: had it not been for shorting activity in August, this would have bounced back to 900.
At the end of July, stock on loan was 18.93% and that has INCREASED to 26.63%:
GB00B2QPKJ12
FRESNILLO USD0.50
34,854,103
184103070.13
18.93%
by the end of August stock on loan 26.63%
GB00B2QPKJ12
FRESNILLO USD0.50
49,032,776.18 shares

So in the month of August, 15 million of the shares came from shorters using third party stock on loan to suppress the share price.
To put this into context, at the end of August, FRES is in the top 20 (at No. 13) out of 1209 LSE and Irish SETS traded stocks.
Shorters are now completely offside in the PM trade where miners are leveraged to accelerating PMs: to hold this back, they will soon run out of stock to borrow!
I do buy the TBTTail theory that this was an attempt to push FRES out of the FTSE 100, but that plan now has "loser" written across it, with improving production in Q3 and these metal prices.
This level of shorting has to be financial suicide in the current climate, particularly for the recent shorts, which will have been taken out in the 600s. Mad or desperate, the Nick Leeson syndrome?

The only sellers over the last month have been the shorters, desperately trying to keep a handle on this
We have seen individual positions increase in August, but the smaller positions have also gone up by nearly 50%. as shown by the stock on loan figures at the end of August as follows:

GB00B2QPKJ12
FRESNILLO USD0.50
49032776.18 shares (which is 26.63% out of those in public hands of 184089814.45 ie excludes Penoles).
They have increased their shorts from the dire position of just shy of 20% at the end of July, obviously in the attempt to get this out of the FTSE 100.
Given volumes, there is simply no chance whatsoever of them being able to close out those shorts, even on pullbacks.
The window of opportunity i s closing: Q3 will show the production improvements and we can all see the effect of precious metal prices already banked for two thirds of this quarter.

Ross DOES speak dross.

Take the last post, for example: we are Brent pricing not WTI. Whilst not of itself a hanging crime, it is indicates a poor grasp of key company data.

TBTT

Stock on loan is close to 20% of the shares excluding Penoles.

The question is, whether they will try and keep the SP suppressed, by increasing shorts (as we saw in early August) or close out the shorts. Usually, when the position is so extreme, the market knows something that we do not, but the curved ball here for shorters is the increase in free cash flow in H2, which will negate any need to place, to fund the capex.

As you say, at some stage, a classic short squeeze.

I used the word "usually" for a reason: I am not in regular contact with HUM management (although I have met and emailed Bert Munroe on occasion).

It is the normal principle of matching goods produced, where stock is excluded at the lower of cost and net realisable value. Without matching cost/AISC becomes meaningless. particularly where there are seasonal fluctuations requiring stock piling.

What will make the significant difference to AISC will be the 2nd ball mill, as much of the cost is fixed (eg same staff to run the process, regardless of throughput/security etc) and will now be spread over more ounces. A good call by management and brave in the face of the dwindling cash heap in H1. That will be well rewarded in Q3, particularly with the current POG and payback should be quick.

It does not usually work like that.

Stock, including ore, would be adjusted in calculating AISC: otherwise there can be gross distortions. The exception tends to be stripping costs and those may be capitalized, expensed in the period or apportioned: that will be applicable, when HUM start on the high grade Gonka.

A "risk off" market is pricing in the worst possible case, no deal.

Volume is low, indicating that the market is following the BOD's advice, to hold. Some selling is taking place by funds who have to liquidate stocks to fund cash withdrawals. There have been brilliant buying opportunities on AMER and so many of us will be "maxed out" on AMER. It is the prudent balancing of greed and fear: there simply is a limit to how much one should have in any single stock, whatever the potential near term upside.

As PP says, the house broker is going to be close to the mark.

PP

There is no OXY cash: the $19 million for PUT 8 will have been paid by us out of OXY's prepayment and the $93.25 million will be largely "pay as you go" ie they stump up for the seismic etc. as the contracts are signed (mirroring the financial prudence in the PUT 8 scenario). It is not in the year end accounts, but then, of course, the farm in still required approval ANH.

One of the issues overlooked with the warrants is that the funds to the company at the exercise price exactly cover the junior loan notes.

From the perspective of a holder of the JLNs, if the warrants are sold pre drill, then the company has in the bank the funds to repay the JLNs.

If it is not successful, then the chances of selling the warrants to cover the debts becomes zero.

We are only guessing, but I don't see IIs are going into this drill with such exposure.

Obviously, like us, they have done their dd and see the high COS, but they usually have a strategy to minimise their losses, as much as maximize their profits.

Just a different take on the warrant theme.

At some stage quite shortly, they will set a date.

In terms of division, I doubt if the OBA can be split off Platinillo, since it is on that block, as are all the interconnecting pipes .

Oxy may not worry about Plat/OBA going to someone else, as they have their agreement, but given their interest in Put 8, it seems that any bid from them will be for the core, Put 8 balance, Plat/OBA and the other 4 blocks (plus probably our 60% of PUT 12 and Put 14)

Some of the other scattered blocks might be separated, but hard to see any sense in splitting up the contiguous blocks, so carefully put together. Apart from anything else, the interpretation of the basin is easier as a single entity and can make the difference between success and failure.

CPO-5 is so valuable in its own right that is not much short of 50% of the overall value: separation of this obviously enables the smaller (and often more bullish entities) to participate in the bidding process. Using CD's analogy, few can afford the farm, but every man and his dog can bid for a shed.

Thanks, Bumbling Fool

So Q2 for Geopark making EBIDA for H1 just shy of $200 million: despite operations in a number of countries, mostly LL34.

That should provide some clues as to the BOD's thinking re the value of CPO-5, next door to LL34 and considerably bigger and with the Mariposa and Indico fields already producing.

IMO, Geopark have always been one of the contenders (perhaps in conjunction with the outfit with whom they bid on the new blocks). with those sort of results, they would be able to buy us out of cash flow!

Most of the "big cheeses" with whom we might be dealing are probably in Bogota sipping guaros (or something a little stronger) and enjoying the altiplano.
Given the opportunities in Colombia, by comparison, St. Tropez would seem quite dull. It generally seems quite hard to winkle JW out of Colombia, to make a trip back to the UK.

With the sale of Sepura, in accordance with a set out timetable, the money just popped up in my account once the process (including merger approval) had completed.

The situation is a bit more complex and it is worth looking at the Beaufort scandal: investigations there (by PW) were undertaken at shareholders' expense (some statutory instrument passed enabling this). For the smaller investors, no loss was suffered. as the amounts were clawed back via the compensation scheme (as I understand).

I was appalled: it was an abuse of the nominee scheme, which should be no different from any other deposit holding entity such as a solicitor's client account. Without looking up the details, I think it was only because of the fraud and not just the administration/liquidation. The problem is, however, in my experience, entities going under are the most likely to commit fraud, the last ditch attempt to survive.

It is a pain, but more than one broker is the answer, the same as multiple bank accounts for large cash holdings.

It is not just about the due diligence.

Anyone making an offer will also have to sort out the finance to back any such offer.

Commiserations , Leas and thanks for sharing. More and more of these two bit organizations are going to close/be closed and it was a timely warning to spread risk. Someone mentioned Interactive Investors and I have to say that I would be quite worried about them after the collapse of their recruiting ground with the website debacle last year, closely followed by the hike in fees .

Shares not in public hands has been in that ballpark up until RH dropped through 10% and then ever since Michinoko increased from 8% to 11%.

"Not in public hands" includes any holding over 10% (currently Michinoko) and the BOD.

Still placing my bet on OXY.

The obvious explanation is that potential investors are worried that POG and POS may reverse as quickly as they rose and that concern is warranted, given the way in which both rise and are then smashed on a regular basis.

It is important to FRES because they need a good H2 to fund the capex.

We are now half way through Q3 and already have significantly better POG and POS for that period.

H1 was skewed by the poor Q1 and it was then that the market should have punished the share.

Instead, all the analysts missed the warning signs at the appropriate time and proceeded to market this down at the end of July, despite the improved Q2 and all the signs of a better Q3.

This is heavily shorted and it will be interesting to see if those positions are defended or closed: if the latter, that could have a significant effect on the SP.

To be fair, JTD, that is what the market is currently pricing in.

If a sale was 100% nailed on, this would be closer to the eventual take out price.

That is why it is important that there is also business as usual and why I want to see the Indico 2 spud and something happening on Put 8 and Put 9. From recollection, at the AGM, permits were due on the latter in August. We need to start seeing some operation announcements and more drilling.

JTD

Stock on loan fairly static at 7.5 million (0.63) well below its highs, when it was closer to 20 million (city riding on the back of the known RH disposal).

No single individual over the disclosure thresh hold.

Much funnier is FRES. In the top 25 (out of over 1200 companies, along with Thomas Cook, sundry estate agents such as John D Wood and Foxtons and a few of the other big miners) and stock on loan at 18.93% of the publically held stock ie priced to go bust or a major placing and then along comes the hike in precious metal prices...........oh dear!

Shorters must now be adding to the buying pressure in both: two good example of the expression "caught short" and I would expect the AMER shorters to be closing out this month, rather than chase rising prices up to the bitter end.

Where has that rig got to? Surely by now it will have traveled the few kilometers back to Indico?