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Switched out of here. Yes it’s undervalued but it’s a tricky unpredictable jurisdiction with majority shareholder whose intent isn’t clear but has left POG trading sideways since the coup. Moved into pure gold PUR With my pog holding and over last two days I’m up 20%. It hasn’t produced any ounces and when it does it will be around 100k pa or 1/7th of POG but it’s market cap is half of POG already!
Good luck to holders I’ve been here since 2011 and only got my money back with a profit this year mainly due to gold price. So undervalued but it has this habit of shooting itself in the foot too often.
I really hope we get closure on this episode. As others have said it doesn’t matter how you vote on the audit (19) as prosperity UGC and Everest all want it so that is more or less a given bearing in mind their ownership share. Hopefully no one fell for the trapdoor of 18. Whatever happens we should get some transparency from the audit even if short term it would be a pressure on SP.
Replaying the last few months with PM doing an interview on a merger with UGC only for the greater board to quickly dismiss it sounds like the beginning of the issue. Maybe paying shares for the TEMI stake was to get another more friendly shareholder on board. This maybe didn’t fit Strukov plan . He still says he doesn’t want to takeover pog but thinking about the merger. What better way to merge than to stack the opposing board with friendlys. So is the game from UGC to get a cheap merger with a take out of all pog management... quite probably in my opinion. Merging in at current market cap when it could be worth 2 to 3 times over the next year or two is a deal (or steal) of the century. Just me processing some of the recent moves but only speculating here.
https://www-thisismoney-co-uk.cdn.ampproject.org/c/s/www.thisismoney.co.uk/money/markets/article-8583893/amp/Hambro-lets-settle-bitter-feud-gold-mining-giant.html#
Bit of background reading on where the Everest money came from
Extracted from the circular on pog website
“ Only those shareholders on the Company’s register as at close of business on Friday 7 August 2020 or, if the meeting is adjourned, on the day which is two days prior to the time of the adjourned meeting, shall be entitled to vote at the RGM in respect of the number of shares registered in their name at that time.”
So votes probably won’t count if you sold your shares before cob Friday 7th August...
https://www.bloomberg.com/news/articles/2020-07-31/fortiana-buys-out-abramovich-in-1-billion-bid-for-highland-gold
It mentions selling 5% here and I recall other articles at the time. Who knowS who owns it now. Friendly to UGC or not? We will have to see
Correction 4.62% . It’s on pog website 30th June...
Lawrence it’s in the press today and articles at the time. Approx 3.5% of total
So fortiana votes with UGC at the AGM then promptly sold out and bought highland... interesting that it Only produces 300k and is valued 1.4bn... pog is twice the size and has pox so we should be north of 70p??
My votes came up today so reviewed what prosperity have done. By withholding on certain Everest motions I guess they have taken 20% off the table that would have voted out some of UGC reps on the board they also aren’t voting the investigation so we are likely to see an unhappy board and an investigation. For what it’s worth I’m voting 1-6 for, 7-19 against even though I know it likely that 19 is foregone conclusion with UGC Everest and all prosperity going for it.
KenJ / Rusty .. thanks yer I get it now.
Kenj something wrong with that vote with held number... if 73% voted 2.4bn out of 3.3bn there can’t be nearly 2bn votes that weren’t cast...
But one of the parties that voted against with Everest and UGC immediately sold up so their starting point is 35% not 39%. Then the big unknown is how many bond holders outside of UGC are in league with them and will they also convert diluting not just our shares but also UGC and Everest shares. That 35% starting point could dilute to circa 25% Then they get another 5-6% from conversion so actually the potential concert Party UGC/ Everest are still in the 30-36% zone. If other bond holders don’t convert then it enhances that but that isn’t a given that everyone will or won’t convert = uncertainty but not a slam dunk game over. If takeover panel agree with prosperity that Everest UGC and potentially another are a concert party with over 30% it could be very interesting... my view is this is far from easy to call as a win for either side but no one is throwing in towel yet.
How to you get to 45%? UGC had what 23% before the conversion and get another 6% but get diluted I think I saw someone calc they would have circa 26% in their own right with Everest on 12% before dilution and 9% after roughly? The other Cyprus party fortiana sold out their 3.5%?
Assuming they have been buying in the market still seems a stretch at 45 ... of course we don’t know how much other bond holders have or how they would vote But if you were a bond holder you wouldn’t want to convert only to devalue your shares and give them to UGC on the cheap... so you would assume they would vote against Everest / UGC at the EGM? Just an opinion but the reason this will be close will be down to how many investors actually vote.
But we have less USD125m in debt and we don’t have to pay 8.125% premium for another 4 years that just be worth USD 10m pa to bottom line. So what’s the NET dilution?
926m of new shares would by calcs dilute current holdings by 26% however on the plus point we would have a lower share of a business with USD 125m less debt. It doesn’t cancel out the dilution fully but must mitigate it a bit. Maybe a net 15% dilution ? Not really sure to calculate against capital ? but that part of the debt is gone so better for medium term prospects?
So if I read the interview with PM correctly we now know who is behind aegestinia
“Q.: Perhaps they weren't happy that the holder of the blocking stake in Temi was not disclosed and they suspected some sort of affiliation?
A.: Literally days ago I received permission from the owner of the stake to mention this in the interview and, in the situation that has unfolded, I am very grateful that he agreed. It's Sergei Stefanovich, shareholder and managing director of Orsu Metals. He's a very good man, he's worked in the gold industry for a long time, and is in no way affiliated to us. We were interested in his Sergeyevskoye asset. The scene straightforward but we might even continue. But we are in no way affiliated. So speculation on this matter is simply inappropriate.“
Redrobb that RNS only refers to 200,000 out of 125m of bonds. Only one holders information there...so if all did it we would be looking at 900m + of newly issued shares...
KenJ. I agree probably not enough in kitty to pay all in cash but nothing to stop company doing 50/50. If they do issue all in shares it increases UGC vote by between 5 -6 % of shares depending on how many other bond holders convert.
Rusty the bond stuff is on LSE website from 2019. http://www.ugold.ru/en/press-center/press-releases/detail.php?ID=239
Which would we prefer I wonder UGC with 210.3m of extra shares or USD 28m... no brainier for us or the board
Uzhuralzoloto Group of Companies ("UGC") today announces that it has acted to exercise its conversion rights for its holding of 8.25% convertible bonds due 2024 issued by Petropavlovsk 2010 Limited.
UGC has converted bonds of a principal amount of USD 28,400,000. UGC expects that the Company will not exercise the cash alternative election but will allow all shareholders to convert into shares and to be treated equally in accordance with the recent Court Order.
Mr Konstantin Strukov, President of UGC, stated
“UGC recognises the potential of Petropavlovsk, but we believe that one of the company's main issues is its large debt load. To confirm our commitment to the strategic development of Petropavlovsk, we have decided to convert the company’s bonds into shares. This was intended specifically to reduce the debt load and facilitate the adoption of a progressive dividend policy by Petropavlovsk in the interests of all shareholders, especially minority ones’.
‘UGC, as the largest shareholder of Petropavlovsk, regrets the actions undertaken by the former directors who were not re-elected at the Company's AGM, and believes that the purported temporary directors, even when combined with the directors duly elected by shareholders, do not create a Board that meets the independence criteria set out in the UK Corporate Governance Code.
We hope that the current forensic investigation initiated by another Petropavlovsk shareholder, if approved at the forthcoming general meeting, will lead to an objective assessment of all of the issues being examined. We remain ready to support and engage with the Management of the company in its development and anticipate productive engagement in ensuring a beneficial outcome to the Company’s current shareholder issues”