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Hi GamblingAddict, it is still possible to vary the terms of the legal agreement before it is signed, but my guess is that it is more likely that the agreements are currently being drawn up on the basis of the terms agreed within the MOU. The presentation may contain further information regarding the legal terms and safeguards for Ariana as well as further detail on the contribution to be made by Proccea, but in essence, I think the deal will be as proposed. We can only wait and see.
Cheers, Ash
Hi VanVan, sounds reasonable to me. Cheers, Ash
Evening all
https://en.wikipedia.org/wiki/Memorandum_of_understanding
My understanding from the above is that essentially, whilst the terms of agreement are in place it is non-binding as their is no contract as yet.
Cheers, Ash
Hi VanVan
I think most people are still expecting the timeline to be based on the wording of the original RNS as follows.
'The proposed joint venture would be subject inter alia to due diligence, entering into binding agreements and shareholder approval, no later than the end of February 2020'
If it has changed, should we expect to be advised at some point.
Cheers, Ash
Evening all, still on the radar - 5th most viewed share on HL today. I’ve now seen the full piece written by Nigel Somerville thanks to Paul280i. I think Nigel’s got it right at about 4p as it accords with some other views, but I guess you never know. So many shares achieving great momentum recently on the back of sod all.
Yesterday’s posts were off the back of some very thought provoking research that evolved the more I looked into things. It’s strange how different searches throw up things you’re not anticipating.
Anyway, having had time to reflect, I genuinely think that if you have a timeline that allows you to stick a few of these in your SIPP or an ISA, the potential of the proposed JV with the right partner and complementary skill sets should allow you to sit back and reap the rewards in time.
That’s about as ramptastic as I’m going to get, but let’s hope for a good week.
Cheers, Ash
Ha! Obviously used a banned word there, but it’s an anagram of heart shoppers.
Cheers, Ash
Evening all, not a subscriber, but still get daily email updates. Nigel Somerville, who is a big fan, has written a further piece.
Cheers, Ash
Hi VanVan, I would do, but expect the usual problems with the links not copying across correctly. Please feel free to draw attention to it, but noting that it is only speculation!
Cheers, Ash
Here's the link to the International Mining article re the transportation infrastructure that has been put in place to help overcome some of the environmental objections at the Cerattepe copper mine. Rather neat.
https://im-mining.com/2018/02/05/ropeway-transporting-people-material-cerattepe-copper-mine/
Cheers, Ash
Morning all
As there's not much else to do with the weather like it is today, thought I'd do a bit of research. A couple of interesting articles, one in particular written by Kerim Sener for Mining Turkey magazine a few years ago, which may explain some of the thinking behind the proposed deal - see the file share link below as the online magazine is subscription only - and another from Global Business Reports. One key aspect is that there is a definite trend for domestic investment in mining with Turkish construction companies having considerable amounts of capital to invest, but they are less willing to take the risks associated with early-stage exploration. The articles also highlight the difficulties and complexities of permitting, which aligns with the view that a partnership with a major Turkish construction company will give greater clout.
https://1drv.ms/b/s!Art3fOvTbZE8snXuvuOi5qjVgqji?e=UB3D8m
https://www.gbreports.com/article/turkeys-mining-industry-looks-to-the-future-with-hope-for-an-easier-ride
I am also going to throw my hat into the ring and suggest who the possible partner may be. One name that crops up in both articles is Cengiz Holding, who already have major interests in copper, aluminium and phosphate extraction and processing, including the Murgul copper mine in Artvin province, but limited exposure to PMs. There is, however, some history - in December 2008, they signed a letter of intent to enter a JV with Mediterranean Resources Limited, a Canadian Company, to develop the Yusufeli gold project in Artvin province in North Eastern Turkey, but this was allowed to expire in February 2009. The Mining Turkey article written by Kerim also refers to Cengiz having an interest in the development of the Cerattepe copper/gold mine, also in Artvin Province. A bit more research reveals that the development of the mine was hindered by environmental protests, but the copper mine has now been developed with transportation infrastructure designed to mitigate the impact on the environment. I have not found out whether the gold mining is in operation.
I also came across the following article from 2016 in relation to the problems surrounding the development of the mine. Most revealing is the following paragraph.
'Cengiz Holding is run by Mehmet Cengiz, who has close links to Turkey's ruling party, the AKP. According to Bloomberg, Cengiz sits with Turkish President Recep Tayyip Erdogan’s son on the board of a charity at a university named after Erdogan and is originally from Erdogan’s hometown.' Now that is some clout! There are also some references to the Panama Papers!
http://www.minesandcommunities.org/article.php?a=13513
Here is a link to the Cengiz Holding website just to give you an idea of how big a company they are.
https://www.cengizholding.com.tr/?lang=en
Given all this and the fact that Salinbas is also in Artvin province, I think Cengiz Holding is as good a guess as any. Hopefully, we will know more next w
Evening all, haven’t posted for a while, but I’ve been keeping track. Just wondered if anyone has any thoughts on who is advising the directors on the prospective deal. Haven’t seen too many thoughts on this. Still can’t help feeling that this is being undersold, especially given the rising POG and recent grades from Tavsan.
Cheers, Ash
Hi mbingo, reduction of current JV share from 51% once construction loan is paid off to 23.5% plus reduction of 100% ownership of Salinbas to 23.5%. No question it works for Salinbas being developed sooner, but some doubt as to whether AAU needs to cede so much of the current JV given the current profitability and the potential ability to bring Tavsan on stream by the end of 2021 without an additional partner, which would increase annual output to 50K+ oz from Red Rabbit with that 51% share.
$30m cash up front and an immediate return to shareholders is a plus, but decreasing profits in the next few years vs better mid-term profit from Red Rabbit and a steadily increasing sp, assuming an increasing gold price, is a negative.
Opinions are divided as to how this will play out, but ultimately it should be a bigger prospect. Everyone has different timelines and views so you have to weigh up the differing scenarios and make your own mind up.
Cheers, Ash
Morning all, yet another positive RNS! So much more potential to come from Red Rabbit that I really do wonder whether giving so much of it away as part of the proposed deal is the right thing to do.......
Cheers, Ash
Evening all, I’m with VanVan & Scorscribler on this one.
Say $5m at GBP/USD at 1.30 gives £3.846m divided by 1,060m shares is 0.00363 per share. At a sp of 0.028 is 12.96% gross yield.
The yield may well be less, if the sp rises, but that’s a win win.
Also worth remembering that the first £2k of dividend income is exempt from income tax, I believe (please don’t shout if I’ve got this wrong), so if you’ve not earned any dividends so far this year (assuming the dividend is paid out before 5 April) and you’re fully subscribed in your ISA and don’t want to put extra money into your pension, a dividend at the above rate on 500,000 shares in a trading account would still be tax free.
Just saying.......
Cheers, Ash
Btw, just following up on my dialogue with dropinmonkey regarding the tax, etc.
Having re-read the tax charge note in the 2018 accounts and the deferred tax note, I confess I didn’t read it properly - the tax charge for 2018 was the minimum of 1% of turnover so there are tax losses b/fwd to offset taxable profits for 2019 - see the deferred tax note. Apologies for the error.
Also, the $2.5m settlement to Taurus, assuming it was made pre-year end, should be allowable as a tax deduction i.e. a net cost of $1.75m. The gross cost would also explain how some of the cash was used.
Still working on the net debt numbers, but at least we now know what the cash position is, which would have been the hardest number to calculate.
Cheers, Ash
Evening, not sure that any of the suggestions on ARX Resources Limited so far are correct.
Ariana (AAU) have a subsidiary called Portswood Resources Limited registered in the BVI.
A quick search on the name brings up a website https://en.datocapital.com which will give you info on Portswood. A search on ARX Resources draws a blank.
Maybe it has only been recently created as a vehicle for the potential acquisition. Maybe the name chosen is relevant or just designed to put anyone off the scent of the real potential buyer. Who knows....
Cheers, Ash
Morning,
I get the impression that a lot of regulars here don't fully understand the Financial Accounts and some of the information they contain. For example, the $15m royalty liability relating to Dugbe is fully explained in note 22 to the accounts as is the provision of $13.7m, which relates to the rehabilitation of the mine at the end of it's life, as explained in note 18.
Leasing liabilities of $13.3m are a little more complicated, but in essence the operating lease commitment is now treated differently since 1st Jan 2019, under IFRS16, so the notional asset is capitalised and the lease payments due treated as a liability. Payments are then offset against the liability rather than being expensed to P&L and the new asset is then depreciated, which partly explains the big jump in depreciation charges in H1.
The tax charge for 2018 incorporates a credit at 30% of the loss for the year, which means there is no tax shield of b/fwd losses as far as the P&L charge for 2019, although there will be in cash terms.
Yes, the Plc company does take advantage of the exemption to file it's own profit & loss statement, but the full year accounts provide both a balance sheet and cash flow statement with supporting notes at the end of the accounts and discloses that in 2018, the company made a loss of $5.4m out of the reported group loss of $12.8m.
I personally think that the detail is a lot better than that provided by a number of other AIM mining companies.
Lastly, it would also be beneficial to take a look at reconciliation of cost of sales to cash costs and AISC on page 20 within the Financial Review section of the 2018 accounts, which will give a much better understanding of what is and what is not included in AISC. Too many calculations on here seem to assume that AISC is a measure of total costs with resulting wild assumptions about potential profit levels and cash.
Any other points raised that I haven't addressed, please feel free to ask.
Cheers, Ash