Member Info for M20ASH

Very nice!

Good evening GoldenBull, you state that costs are around $800 and we are currently doubling our money on every ounce produced, I assume you mean AISC is likely to be around $800 per ounce in the 4th quarter? Nothing wrong with that assumption, but you need to bear in mind that AISC is only a cash cost of production that includes capital expenditure to maintain production capability.
However, it does not include depreciation & amortisation, non-mining administration costs and finance costs/income, all of which means that total costs are considerably greater than $800 per ounce. Consequently, the subsidiary company is a long way off doubling its money on every ounce produced and, furthermore, only 80% of its net profit is attributable to shareholders of Hummingbird Plc.
Having said that, the results for 2019 should be a considerable improvement over 2018 and I anticipate that 2020 will take the company to another level.
Cheers, Ash

Hi Joe, just to break the ice on that one, I wasn’t worried one way or another. Recent events and news have convinced me that the BoD have the right ambitions for this Company over the long term and, in my opinion, recognise that whilst there may be a step back in the short term, the long term plan is to take Ariana towards the stated goals.
It just remains for investors to decide how to play this, based on their own timelines. Having reviewed my own personal circumstances, pension arrangements, etc, I am now happier with a 3-5 year progression here than I was a couple of weeks ago, but I have had reason to consider other opportunities so I have taken the decision to diversify my share portfolio and will now continue to do so to try and maximise the potential, both here and elsewhere.
Cheers, Ash

Thanks CK, informative as always. I shall build those stats in to my numbers & see what that looks like.
Cheers, Ash

Hi Willowman, very bullish and it would be an amazing achievement. I just hope I’m around long enough to spend it, as it seems a long way off right now. Even with 3 mines up and running, the reduced profit share is going to require a lot more than the current POG and current projected outputs to get to that sort of MCap so greater capacity, further expansion of the existing resource and additional projects will be required, in my view. Not impossible, but a tall order.
Cheers, Ash

Lol! I suspect the car cost more than £3, but it may have paid for a cheap hammer & sampling tube back then. There are a few errors in the article - it is not Northern, but Southern Cyprus, Ariana is not sat on £30m in cash as yet and it's the first time I have heard of doubling output from Kiziltepe to 50k oz in advance of bringing Tavsan into production - but it is a compelling story nonetheless. Great credit has to go to Kerim for what has been achieved to date. Clearly, he is a man on a mission.
Cheers, Ash

Hi RD2U, my own thoughts are that with nearly £4m in cash returned from Galata earlier this year to be used for exploration/development/acquisition (Salinbas, Kizilcukur, Cyprus) plus holding company expenses, together with cash generated from JV profits over the course of the year, after repayment of loans, funding shouldn't really be a problem right now and if the deal goes through, there certainly should be no requirement to raise cash in the short term.
Cheers, Ash

Evening all, have to say it’s been a while since we’ve seen some relatively steady buying in anticipation. Hopefully, this will be the pattern for the next month or so until further news of the proposed deal, LOM & reserves update and that special dividend.
In the meantime, I’d like to wish all fellow investors here a great Xmas and a prosperous New Year!
Cheers, Ash

Hello Rd 2 U, thank you for your kind words. I shall do my best to try and add to the existing contributions here once I have done some more research. In the meantime, I wish you and everyone here a great Xmas and a prosperous New Year!
Cheers, Ash

Hi VanVan, looking good here. I have taken a position and will be working on some forecast numbers between Xmas and New Year. I have high expectations over the next 12 months, assuming gold prices remain steady and production remains in line with targets and I particularly like the fact that the Court Order allowing the cancellation of the share premium account and conversion to retained profits in 2018 opens the way for dividends to be paid from surplus cash going forwards - something I was not previously aware was possible (doh!), but I am fairly hopeful of some reasonable returns here.
Cheers, Ash

Evening VanVan, John, Joe and everyone else here. I have read this weekends‘ posts with great interest and agree with so many of the points made and fully understand the different views.
The bottom line is the proposed deal is very divisive when I’m sure many of us would have wanted something with a clear benefit that we could all agree on.
Just to add something else into the mix, which has crossed my mind, is that the deal could be considered as a hedge against a fall in the gold price. That is to say, if the price were to fall, then future profits would be lower and the deal would be viewed in hindsight as very much in the interests of shareholders.
However, if the gold price rises, then the deal reduces the exposure to the value of the increasing gold price.
In that sense, it comes down to where you believe the gold price is heading and maybe we will have a clearer view on this over the next couple of months before deciding whether to vote to approve the deal.
Interesting times....
Cheers, Ash

Hi Paul, I think Benjie is correct - the JV that Ariana are looking to earn in to will be based in southern and not Northern Cyprus.
Cheers, Ash

Hi Benjie, on the face of it, the cash is a positive and the special dividend will be welcomed (apart from the tax), but as you say, what then?
It is after all just cash and is not going to generate any immediate benefits. If it’s going to be used for exploration and development in Cyprus or elsewhere, I agree with Willowman that it might be as well to not do the deal and use the retained profits and cash to develop Salinbas to a point where the potential value of a deal is much greater.
The numbers don’t really tell me anything in as much as the cash & foregone profit pretty much balance out rather than there being a clear incremental benefit.
Where I find myself now is stuck on the fence, having formulated a strategy to hold and at some point partially cash out with a free ride on the remainder and now I am uncertain whether the new proposal fits with my previous timescales, I am having to decide on something that I basically did not want to have to make a decision on without a clear view of the incremental benefit and I am having to formulate a new strategy based on what I think may happen in the short term, medium term and long term. Ok, so there will be events such as the recent Syrian skirmish and movements in the gold price that were always going to throw in the odd curve ball and it would be foolish of me to think that everything would go according to plan, but I still feel a bit miffed and underwhelmed by what is on the table, a bit like John, but hopeful that in time, we will all be better off as a result....
Cheers, Ash

Evening all, tick up from me today on Stangerstill’s post and a lot of others recently, including yours John, because I think there is still much to debate.
I’m still going to play Devil’s Advocate on this as I still don’t see a straightforward path given the current options. Obviously, I have looked at the numbers, highlighted reasons why a JV on Salinbas is advantageous, how the company can mitigate the risks of having a partner with a controlling interest, but for me and, no doubt for everyone else, it comes down to a decision on whether they think the deal is right for Ariana and each shareholder’s investment - whether to vote for or against, whether to buy, hold or sell.
I agree that the proposed deal puts Ariana at a crossroads with two choices. The question I want to put is whether these are/should be the only two options? In other words, is this the best deal Ariana could get? Is it the only deal they will get? Or, is it a possibility that a better deal could be reached, either with the proposed partner or a new potential partner on Salinbas.
I would prefer Ariana to retain more of Red Rabbit with protection built into any agreement to ring fence it from the potential risks with Salinbas, but recognise that a JV agreement on Salinbas is the right way forward.
Ultimately, how much pressure is there to commit to a deal right now? If LOM at Kiziltepe can be extended for a further 10 years together with a similar LOM from Tavsan, is there any rush to accept the first deal that is put on the table?
Answers on a postcard.......
Cheers, Ash

John, I would add that I am in agreement that it would probably be better for shareholders, if the deal involved a separate JV agreement for Salinbas with the terms as agreed. I would, however, be amenable to some sort of arrangement on Red Rabbit, purely as a sweetner, but not on the same terms as proposed and given my thoughts below, it would make sense to ring-fence Red Rabbit so that any risk of failure to bring Salinbas into production does not impact profit and cash generation from Red Rabbit.
Cheers, Ash

Hi John/VanVan, I think you are both right. Of course, the finance to construct the mine will be repayable by the JV. The new partner will organise this and will presumably be more capable of doing so than if Ariana were to go it alone, given the scale.
Where the open cheque book comes in to play is in respect of any additional funding required beyond the earn-in contributions of the new partner and Proccea in order to get Salinbas to a stage where the construction loan can be taken out and construction started. However, given that the respective shareholdings will have been established by that stage, I would expect the money to be loaned to the JV and ultimately repayable.
The difference between this agreement and the current JV is that whereas Ariana and Proccea both loaned monies to the JV, which are now being repaid, there will be no requirement for Ariana to draw on cash to support this additional funding requirement.
Why is this advantageous to Ariana? Well, firstly it means that the cash they will receive from the deal will not then be required to support Salinbas so it can be used to pay a special dividend and fund additional acquisitions, exploration and development, which will potentially multiply that cash as projects are sold into the JV.
Secondly, there is also a risk involved for the new partner in the JV not being able to bring Salinbas into production and recover the expenditure. Whilst that may be small risk right now and the loan may be recoverable from the JV as a whole, Ariana will at least have received a sum of money equivalent to its market cap prior to the deal being announced and will have cash and projects in pipeline that will allow it to continue.
I think that is essentially what is meant by a free carry on Salinbas, but I recognise that it is not the be all and end all in this debate....
Cheers, Ash

Sorry, 1.5% NSR, not 10%.

Hi Benjie
I'm certain the 0.6m euros would have been spent by Ariana themselves or the subsidiary, Ariana Exploration, rather than by the JV.
With regard to Venus Minerals (Cyprus) Limited, there is a bit of a potted history with ownership of the company by Oxiana (now OZ Minerals), then Semerang Enterprises, then EMED Mining, which became Atalya Mining Plc. Most of the expenditure was by Oxiana and Hellenic Mining many years ago with some follow up by EMED, but it has been on the back burner as a project for nearly 10 years now, particularly with Atalya's interests' in Spain. The company is registered in Cyprus so would not file accounts in the UK. My understanding is that more modern exploration techniques will enable the JV to identify potential deposits not previously identified due to the lack of technology. Historically, there were a number of mines, but only one currently operational at Skouriotissa.
Semarang re-acquired 90% of Eastern Mediterranean Minerals for 100,000 euros from Atalya and changed the name to Venus Minerals (Cyprus) Limited. As at 31 December 2018, Atalya still held 10% of the company with an option to convert their holding to a 10% NSR or contribute 10% to further development costs.
The new recently formed company that Ariana are earning into is Venus Minerals Limited. What is not clear is the ownership structure and how Venus Minerals (Cyprus) Limited fits into this and whether Atalya still has an interest in the Cypriot company or not.
Cheers, Ash

So $5m or £4m cash from the sale of 17% of Salinbas ear-marked for dividends?
Salinbas to be fast-tracked, but into production a few years after Tavsan?
Existing business relationship between Proccea and the proposed partner.
Three years to be spent on Cyprus earn-in? What else is going to happen in that time?
These are the key points and questions I picked up on from listening to the interview.
I have to confess, I had hoped for more and still want to know who holds the 10% of Venus Minerals (Cyprus) Limited, which presumably still holds the licences in Cyprus.
Cheers, Ash

Hi GamblingAddict, might be worth your taking a look at my posts of 10th November regarding the possible Cyprus target, now confirmed of course. Quite a few links to various bits of information.
What I am keen to understand is if Ariana have an earn-in to Venus Minerals Limited, registered in the UK and incorporated on 13 August this year, how has ownership of Venus Minerals (Cyprus) Limited (formerly Eastern Mediterranean Minerals Limited), which is the company that held the licences, been transferred from Semarang Enterprises Limited, which held 90% and Atalya Mining Plc, which held 10% as at 31/12/18 with a potential NSR of 1.5%.
Food for thought.....
Cheers, Ash