Firering Strategic Minerals: From explorer to producer. Watch the video here.
Hi Joe, you do make me chuckle. If I had $1million, we would be retired right now and living in the South West of France, growing veg, drinking wine and travelling around France, Italy and Spain as and when we get itchy feet. If I had any spare time left over and nothing better to do, I could always continue to research and contribute here for the fun of it!
Cheers, Ash
We will indeed John! Should be an interesting few months and perhaps worth reminding anyone who is unsure, that if the deal goes ahead, the new JV arrangements will not be applied retrospectively so this year's JV profit will be shared between Ariana and Proccea under the current JV arrangement. It would be good, if some surplus cash could be paid out as dividends to group before the new arrangement comes into effect.
On the subject of dividends to group, I am now happy that there is an exemption on the 15% withholding tax when a dividend is paid from one Turkish company to another and from a Turkish company to an international holding company that has held the investment for more than two years. See the last section of the following article on holding companies and the Turkish dividend tax in particular.
https://www.lawyer-turkey.com/dividend-tax-in-turkey
This means that any dividends paid by Zenit to Galata are exempt as are dividends paid from Galata to Portswood Resources Limited, which is registered in the British Virgin Islands. Thereafter, there would be no withholding tax as dividends continue to be paid up through group to Ariana Resources Plc.
Cheers, Ash
Hi John, please don't do that. Your contribution is as valid as anyone's and I am only thinking out loud, as it were, and not trying to start an argument. It is after all a forum for debate and consideration of all points of view, which will differ from time to time.
Your thinking makes sense and by the same logic, I guess, the share price should rise in advance of the anticipated dividend, if the deal is agreed, although by how much remains to be seen.
Cheers, Ash
I noted in the RNS re the MoU that part of the $8m earn-in by the propose partner will be used to acquire freehold land and having purchased a property in Turkey, I was aware that there are restrictions and hoops to jump through. There are several articles on the subject, including the following one, which summarises the restrictions in item 13 of the article:
https://uk.practicallaw.thomsonreuters.com/8-619-2433?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
Essentially, if a company, incorporated outside Turkey, holds 50% or more of the share capital of a Turkish company then there are restrictions on the amount of land that can be purchased and its location together with additional permissions required before the Turkish company can acquire any land and the restrictions apply to the total amount of land and not each individual transaction.
It would appear that in order to develop the new business into one of the largest gold mining operations in Turkey, which will not only require the raising of finance, but may also require the acquisition of land, the ability to do this could be greatly enhanced by the new JV arrangement as opposed to a go it alone approach.
Of course that does not make it conditional that Ariana accepts only a 23.5% share, but if that is the deal on the table and it results in the ability to fast track both Tavsan and Salinbas into production together with further projects, maybe it makes more sense to do it this way than was at first apparent....
Cheers, Ash
Over the course of the last week, a number of contributors here and elsewhere have expressed concerns over the change in ownership and the risks this might present to their investment.
Worth considering the following article:
https://uk.practicallaw.thomsonreuters.com/0-558-9867?transitionType=Default&contextData=(sc.Default)&firstPage=true&bhcp=1
In particular, read the section on shareholders and voting rights. It seems clear to me that in addition to the statutory protections afforded to minority shareholders under the Commercial Code, the BoD have it within their remit to ensure that the Articles of Association and any Shareholder Agreements enhance this protection so as to minimise any risks to the company and their investment, as well as ours.
Cheers, Ash
Morning Benjie and John, not sure why the share price would drop by the amount of the dividend, unless you are assuming that the market valuation is based on the amount of cash the company holds because it hasn't been up until now.
I accept that there will be a drop as some will buy in anticipation of the dividend, then sell and others will sell because the price is expected to fall ex-dividend and hope to buy them back at a lower price. The drop could be higher or lower than the amount of the dividend, but to my mind is not conditional on the amount.
I also don't accept John's contention that it is pointless to pay a large one off dividend as this is unlikely to followed by regular dividends. Whilst much of the cash received will be used to fund further acquisition and exploration, the continued sale of these projects into the JV at 3x exploration costs will supplement the remaining 23.5% profit share and cash flow from the JV. Absolutely no reason why a regular dividend cannot be paid, albeit probably at a lower level than the special dividend.
As for the share options, it will be in the Directors' interests to increase the share price after the ex-dividend drop over the next year by adding value, if they wish to exercise them at a significant gain. It is also conceivable, however, that the options will not be exercised. They received a lot of criticism when they were awarded and consequently have never awarded themselves any options since. They would also have to raise a significant amount of cash to exercise the options. Doing so by selling shares to raise the funds would send entirely the wrong message at this time and almost certainly lead to a drop in the share price, potentially below the exercise price.
With regard to paying tax on dividends on shares sitting outside a pension or an ISA, it will be taxed as income tax at whichever marginal rate applies - 32.5% in my case (after the first £2,000, which is tax-free) as I am a higher rate tax payer (lucky me!) - and I will simply transfer the tax due out of the cash received in my fund and share account. No need to sell any shares to pay the tax. I can then, if I wish, re-invest the remaining cash and buy more shares. If everyone else does the same, it will potentially increase the share price.
Just my thoughts.....
Cheers, Ash
Hi John, you have raised a number of issues and questions that each individual shareholder should consider, as I have done. I have always wondered and sometimes asked what your timelines are for Ariana and I sense that your patience is wearing thin. For me personally, I will revert to some of my very early posts regarding what this investment means to me - I have not staked my future here, i don't need to be rich and despite Noel's allegations, I have never predicted a share price - a projection of potential profit giving a market cap and a possible share price based on an assumed PE is hardly a prediction, but that wouldn't fit with the raison d'etre, would it?
Ultimately, I defer to VanVan's analysis of the potential earlier - it's not always about what might be. Sometimes you have to recognise that it is wise to take what's on offer, knowing that you may struggle to achieve the dream. I am sure your life and future do not depend on which way this goes so why the angst?
Cheers, Ash
Incidentally, it's also worth knowing that the Strategic Investment incentives in Turkey include rebates of VAT for the purchase of certain capital items related to the mine investment. This type of incentive also applies to other countries so anyone who is invested in a mining business elsewhere in the world would be wise to spend a few minutes researching the incentives offered.
Cheers, Ash
Cheers, Ash
Hi John, just wanted to pick up on your questions concerning the corporation tax (CT) payable. The tax rate in Turkey is 20% and it is effectively 20% of net profit as, unlike the UK system, it is a lot more straightforward.
The Strategic Investment incentives mean that the JV only had to pay 10% of the standard rate on profit up to 50% of the capital investment, which I take to mean the mine investment cost of £32m i.e CT is payable at the full rate of 20% once cumulative profits exceed £16m, which it will have exceeded this year.
This is completely separate from any cumulative tax losses within the Plc, which will pay UK CT once it's own profits exceed tax losses b/fwd.
When it receives dividends from within the group resulting in taxable profits, after it has utilised any tax losses, any foreign tax already paid on profits before payment of the dividends will be treated as tax credit at the rate paid e.g 20% and used to offset the tax payable.
Say, if Ariana has £5m taxable profit at UK CT rates of 19%, but this is as a result of receiving £4m of dividends from the JV plus other income less expenses, it would be recognised that this is after the JV has paid 20% tax on £5m of profit so the foreign tax credit of £1m will exceed the UK tax payable at 19% on £5m. A bit simplified, but it illustrates the point.
I hope that clears matters up?
Cheers, Ash
Quote from the wise and worldly, knows everything about investing aka the fake Noel Shempsky on the SHG board - "a couple of years ago they alluded to dividends soon, so I topped up - it never happened. See what I mean - this share has loads of promise - but never delivered."
Well, Noel maybe if you understood anything about investing, you'd know that with retained losses of close on £60m, even after £8m post-tax profit in 2018, it's going to be more than a few years before SHG pay out any dividends because it's only permissible to pay dividends from retained profits. And you have the nerve to come on this board calling people suckers! Pot and kettle...
Surprised you haven't followed your own advice and moved your investment elsewhere. Bet they're over the moon you haven't posted on the Board for a couple of days. Lucky sods!
As for your comment about sneering earlier today, you are clearly the biggest sneering, most self-important ****womble I've had the misfortune to come across. You say "I am now retired, but for about half of my working life I had boring jobs with un-challenging work and few promotion opportunities." Boohoo! Probably says more about you than anyone you worked for...
As Joe said, we'll probably get censored by LSE and I expect a few regular posters here are getting a bit fed up with this, but you made it personal so I'm happy to take the spat elsewhere. Maybe on the SHG board as you seem to talk Klingon over there as well? I'm sure they'll really appreciate you're reappearance and what I could add to their knowledge. Not sure it will help your investment, mind. Or maybe I'm bluffing? Up to you....
Hi all, not invested here, but invested in AAU and we've had someone posting on the board over the last couple of days called Noel Shempsky suggesting that AAU is a dead duck and there is money to be made elsewhere. Noticed that Noel often posts here and it seems he is a shareholder so I guess this is what he is talking about. Any thoughts?
Glad you added that bit John. Corporation tax at 20% of JV profit to be taken into account as well.
Also noted in the RNS, the one-off costs in the quarter for pushing back the southern pot wall at Arzu South & stripping at Arzu North & Derya. Perhaps not so gloomy.
Also noted that production at Arzu North will supplement Arzu South, which is coming to the end of its current life, but not there yet. Together with the stockpile calculated by Cornishknocker, I anticipate reasonable grades for some time yet.
Cheers, Ash
Ah! So you're the fake Noel Shempsky. Bit disappointed there. Never mind, you might meet Bill Gates one day. When you do be sure to tell him that his Klingon translator is a load of carp. Glad to hear one of your other shares is doing really well. Pleased for you mate. Hopefully, one day they'll all be doing really well. Look forward to you coming back and telling us all about it when the time comes. Cheers, Ash
Evening all, excellent news. I have found a translator that translates English to Klingon and vice versa. Now I might be able to understand what Noel’s talking about (apologies if you don’t get this - if you google search Noel Shempsky, you will).
Cheers, Ash
Evening all, clearly a good deal of animosity between some of our regular posters & Mr Shempsky. Having back tracked through his posts I can understand why.
For my part, I thought his post was unnecessary and disingenuous, but I suppose everyone’s entitled to their opinion.
Moving on and following on from my reply to Joe, I just wanted to try and encapsulate where we are right now, given that the share price is somewhat stagnant in comparison to many other companies right now and try and identify the key drivers over the next 2-3 years.
1) Tavsan - targeting 50k oz per annum with increased sales & profit.
2) Repayment of borrowings combined with increased profits, generating sufficient free cash flow to allow further dividends to be paid to group that will eliminate retained losses, which will in turn allow dividends to be paid to shareholders.
3) Continued expansion of the portfolio with extended LOM on the existing project, addition of satellites & fast tracking of pipeline to demonstrate continuity of resource and income.
4) Continued alignment of shareholders interests with those of the BoD, including greater transparency in reporting and communication.
No doubt it won’t be a straightforward path because there are many factors, not least the price of gold and silver (or even copper). We may see a drop in output over the next two years, if the throughput of ore grade declines without an increase in capacity, but that may present both an opportunity to trade or a willingness to ride things out for what’s around the corner - each to their own.
Like many others here and on the ADVFN board, I’m in this for the long term because I do believe it will be a success story - not life-changing perhaps, but worth staking a sensible amount to make a difference.
Nuff said, too many beers!
Cheers, Ash