Member Info for M20ASH

Sorry ‘highly conservative’!

Hi twogoals, the bit that stuck out for me in amongst all the spiel was the phrase ‘extremely conservative’. Sounds good to me!
Cheers, Ash

Thought I'd do a little bit more research on SC's investment in HUM to see if there was any rationale. It would appear that the first significant tranche was acquired back in 2017 when the share price was up in the 30's with the 4% threshold crossed in October 2017 at around 38p, but reported in Feb 2018 so they were underwater for some time afterwards.
Then when the sp dropped in 2019, they bought in big in April/May and increased up to 12.13% at prices from 15-17p. Average is probably about 23-24p on all this.
I'm also guessing that they are in a similar position with GEMD, SEPL and ORAS. So now there is an opportunity to repeat the exercise to try and buy at the lows and eventually turn a profit, they are liquidating their holding in HUM at a profit to invest in the others where they see a potential turnaround. Maybe easier to do this with HUM where support is fairly strong than if they were to try and do it the other way round and liquidate the other holdings to invest more in HUM. Who knows, horses for courses...
Cheers, Ash

And this one. Bored now!
http://tools.euroland.com/tools/PressReleases/GetPressRelease/?ID=3780797&lang=en-GB&companycode=services
Cheers, Ash

Here's another one they've been adding whilst selling HUM. Orascom reported a 26% drop in profit last year, but does pay a dividend of around 5%
https://www.orascom.com/media/cms_page_media/2020/6/3/Shareholding%20Disclosure_JnQe91D.pdf
Cheers, Ash

Hi Juxtapose, no worries. I think your posts are excellent so please keep then coming. Interesting though, if SC are moving funds from HUM to GEMD. Would be a big gamble on rough diamonds as a recovery play further down the line, but nothing I've read suggests this is likely any time soon. Not invested either, but perhaps one to keep an eye on later this year.
Cheers, Ash

Hi Juxtapose, not sure that's right. I took a look at the RNS you referred to dated 15.06 and they have increased their holding in GEMD from 20.11% to 21.01% - have they been simply reallocating capital? Seems to be a strange strategy given the state of the diamond market atm.
https://www.bloomberg.com/news/articles/2020-06-07/the-great-diamond-glut-miners-stuck-with-gems-worth-billions
Having said that, GEMD has had a nice bounce in the last couple of days following it's H1 sales RNS, but will it last.....
Think I'd rather be here with the demand for gold and the value gap.
Cheers, Ash

Hi VanVan, I agree. It's just that I was never too bothered about Salinbas. It's always been beyond my time-frame for what I actually need and Tavsan was always achievable within the current JV.
Cheers, Ash

Hi Paul, I agree with you on the level of investment for the time being, although I am more comfortable with the proposed JV now I have a better understanding of the ongoing production levels and capacity together with the extension of timelines to additional production from Tavsan. From a short-term point of view, I would probably be more concerned, if I thought the new JV was not going ahead, despite the potential that is clear to see, but from a longer-term point of view, I feel comfortable either way.
Cheers, Ash

Also worth noting that the share price touched 3.5 back in February after a fairly long arduous climb and then dropped along with everything else back to where it was a year ago so the rapid rise over the last 3 months is far from the whole story.
Cheers, Ash

Hi Jettydog, I agree with VanVan that there is plenty of news to come and huge potential here with the proposed JV, cash in the bank and a likely one-off special dividend to reward shareholders. Maybe future cash generation will also allow an ongoing dividend policy. We are still waiting to hear, however, whether the mechanics are now in place to allow a dividend to be paid by the Plc.
At the same time, however, some patience is also warranted as Tavsan production is now looking likely for early 2022 and currently Kiziltepe is producing at maximum capacity from the current resource being mined, although this could be improved, if either underground mining or higher-grade satellite resource are added in to the JV, but currently it is not possible to have it all without increasing capacity and no plans for this have been announced yet. The fact that Tavsan will likely be a stand-alone mine supports this view.
Cyprus will move along and again there is considerable potential there, but probably a way off yet given the outstanding earn-in requirements.
The 2019 results will be good and probably at least double the profit of 2018, but this will be historical and 2020 profits are likely to be lower, but with more cash generation.
As a result, I am taking a more balanced view, but anticipate future rewards by holding.
Cheers, Ash

Hi jwhitw, last notification was a drop from 12.78% to 11.99% (about 2.8m shares sold from 18 May to 1 June). Next one would be when they drop below 11%. Maybe later this week or early next, if they are selling at a similar rate. Volumes have been higher though since 1 June.
Cheers, Ash

Should have said Red Rabbit & not just Kiziltepe.

Hi VanVan, I think you’ve hit the nail on the head in the last two posts. What is the true value for a 53% share of Kiziltepe. It must be more than $50m with the increased potential and how can we expect that potential to be realised over time. That is to say, forecast production levels over the next five years from each resource.
Cheers, Ash

Hi, anyone know what the AIM rules are on share buy-backs and informing the market? The Company has authority to purchase up to 10% of the issued share capital in the open market and coincidentally will be issuing just under 10% to acquire Kouroussa at 28.4p per share. If it were possible to do so without having to inform the market, would it be a smart move to buy back shares at the current depressed market price, hold them in Treasury and then issue them at a premium.
Feel free to shoot me down in flames for suggesting something really stupid.
Cheers, Ash

Actually, thinking on, does the $630/oz include a credit for silver, which would make a difference between cash cost and AISC. Sorry, if I sound like a broken record!
Cheers, Ash

Agreed, 2022 seems a distinct possibility from the RNS wording, which is a shame, but can't be helped. If MDV thinks there is little difference between the cash costs and AISC, I'm happy with that. I think I'd already identified the main issue with my numbers, which was the silver credit being double-counted. Onwards and upwards, as they say.
Cheers, Ash

On the Capex question, the only relevant knowledge I have is that the mine construction loan for Kiziltepe was $24m, but the fully capitalised cost, including exploration and presumably other costs incurred such as FS and EIA was £32m. I think that suggests that the Capex cost will probably be on top of costs incurred up to the point that mine construction commences.
Cheers, Ash

Hi VanVan, were they not estimating a 4 year mine life at 30k oz from the previous JORC resource of 169k oz in the November presentation. I'm not sure its as simple as dividing the total resource by the annual production because of pit optimisation, etc, but it still suggests a 50% increase will give rise to a 6 year mine life, which is good news. I also noted that the target resource was 300k oz with 200k oz or 2/3 in the open-pit.
It will be interesting to see the feasibility study and what that reveals regarding Capex and updated costs. I would still like to see AISC being used rather than C1 Cash Costs of $630/oz as the LOM average per the Scoping Study as it is difficult to get a proper understanding of the final reported costs. A lot of figures being calculated, but proof of the pudding is required.
Cheers, Ash

Hi Harry, seems about right. I did some numbers based on $975 AISC and $1675 POG, but upped the sales to 120k oz to get a slightly higher number. There is a one-off cost re the payment to Taurus of $2.5m plus $723k of legal fees that will drop out this year and you need to allow for a bit more amortisation for the increased number of oz. Overall though, looks good.
Cheers, Ash