Member Info for Montmuzard

The green ghosts really haven't got a clue. Even on the basis of definitively confirmed assets - WK and MT - we know we were looking at something like £2bn in a full company sale. That's a minimum of 50p. So, literal worst-case scenario in a distressed sale is a 100% increase from this point. But we also know that our BOD is in a powerful enough position to resist this, and, in extremis, activate Sinosteel and take it all to mine. We also know that there is a lot more than the 2m oz at MT to get our teeth into over time. And we also know that the company has strong support from the Russian state. There is no scenario in which currently invested shareholders can lose here. It's as simple as that.

Sorry Dore, you're clogging up this board with nonsense to the extent that I'm wondering if you're actually one of the jubbing disruptors. Either way, I'm waving Hoochy's Kermit Finger at you and sticking you in my green bin.

"Look it's not lack of research...you can take all the research you want...its communication and execution. It's the relentless drag and war of attrition....you have to wonder what the heck is going on"

Communication: they've released endless RNS's, a major one pretty much every month. Execution: they've literally signed a massive deal with Rosgeo more than doubling their resources that nobody saw coming, as well as bringing on board the Japanese, also which nobody saw coming. All in the past six weeks. If you can actually read the RNS's and think intelligently, it's fairly obvious "what the heck is going on".

"How do you know they are about to unleash the motherload mont? You dont know nothing...nobody does"

How do you know they're not?

Besides, I didn't say they were about to immediately. I said the FSP is ongoing, and it's fairly obvious that it's in a pretty delicate stage. They've already received binding offers which they were progressing to binding at the start of the year. That in itself gives a good indication both of the stage at which we find ourselves and the fact that it's going well. I think it's fair to describe it as pretty close to the end, but, of course, it could have some time to run yet. If so, I'm perfectly comfortable with that, and the BOD are, in my view, perfectly entitled (arguably legally compelled) to maintain a strict silence on the FSP. I mean, for heaven's sake, they literally said in the last RNS that they would update on their three major workplans (resources, Rosgeo JV, FSP) when appropriate or practicable. What more do you want? If you haven't got the stomach for it, maybe go find a lifestyle company where the CEOs send out rampy RNS's every other day. There are plenty of them on AIM.

"We must call them to account..."

Which you'd be entitled to do if they hadn't dropped a succession of massive RNS's over the past few months or if the FSP had collapsed. But, given that it hasn't, and is evidently still ongoing, you really can't complain. The BOD are literally at the vinegar strokes of the biggest deal of their lifetimes in which they have an enormous vested interest themselves as major shareholders. It's like you want them to stop at the most delicate moment, when shrouded in NDAs, just to put your mind at rest? Like a child wandering in on his parents when they've got fruity for the first time in months screaming that Nickelodeon isn't showing SpongeBob Squarepants. I fail to see how that would help in any way whatsoever. It could collapse the entire thing: "Yes, sure Mr Toyota, can I just stop you there, a few nervous PIs in Britain would like me to release some hints about our highly technical secret negotiations on which billions of dollars are resting, which we've only reached because of the months we've spent building trust and confidence in each other, is that okay?" For the second time today: get a grip.

"what weve had a few hints its been bad in my view"

Yeah, the multiple binding offers, the WK resource upgrade, the 104m oz platinum-equivalent PGMs in the Rosgeo JV (and implied first-mover benefits over the entire region with unwavering Russian state support), the establishment of an Asian office with a major (unanticipated) Japanese interest in the existing assets, and the ongoing FSP which has taken nearly a year due to what can only be a significant bidding war as PGM prices go through the roof at the beginning of a major commodity super-cycle is, er, bad news. Get a grip.

This discussion demonstrates why people should always seek professional tax advice. You don’t have to have sold everything as Kira suggests: I was non-resident for a long time while retaining assets in the UK, but I actually had a full-time job overseas. The various tests have definitely made it harder for people to claim non-residency, but it’s not impossible. You will just be taxed on some UK assets (primarily land and rented property) and will remain liable for UK income tax on any income earned on work done in the UK. Usually you can avoid CGT on shares, but depending on where you are resident you would be liable there. Also, domicile has very little to do with how you’re taxed: residence is the concept that matters for determining whether you’re liable to be taxed in Britain or not. If you’re British, chances are you’re UK domiciled even if you’re non-resident and it’s impossible to change this unless you move abroad permanently (ie never to return). NB: not advice, just info I’ve picked up from a long career of living in and outside of the UK.

Is Billions back? Must be desperate to be posting negatively on a share he doesn’t own. Times running out. Gotta make them 10 pences before the company gets sold and his paymasters can’t accrue any more shares from nervous PIs. Mug.

Er, yeah, sorry, I’d had a few shandies last night and when I checked in I could see that our resident disruptor had been disrupting so I thought I’d try and provoke him. Made the mistake of coming down to his level. But at least it’s seen him walk the plank to go for a swim. Hopefully he’ll get eaten by a shark before re-materialising on the galleon under some other moniker in due course.

Pete - I would gladly take £1.83 for a full buyout right now. Let’s hope you’re right. Or if you’re wrong, let’s hope you’ve under-estimated. Happy sunshine rums to all shipmates!

Hey Tom “Jub” Winifrith aka Billions. I don’t know what you’ve been saying because you’re in my green box. But nobody cares. You’re a moron. We’re all gonna be rich and you’re not because you’re too busy eating your mum’s special parts. Loser.

Holdings: enough to be life-changing all being well, but not as much as some on here.
Price: somewhere between £1.50 and £2.70 (with a 10% chance of it being higher if full sale all the way up to £4.76).

@Crusty – Sorry, I completely misread your message. I thought it implied 22p for 20% of MT but realise you meant 22p for MT, of which 20% is worth much more than £50m (i.e. £120m worth of shares). For EUA to take the 20% of MT it would cost 450m shares rather than the 250m issued. I get it now: I hold my hands up and apologise.

But… it also got me thinking. Who holds the power in this transaction and do everybody’s interests align?

Let’s leave WK aside for now. The board have 250m new shares: about 8% of the fully diluted share capital of 3.25bn (including outstanding options etc.). EUA is presently worth about £770m based on 28p (not MM joke prices). So, those 250m are worth, give or take, £60m.

Whoever owns the 20% of MT therefore has shares with a face value of £120m according to Crusty’s calculations, but the prospect of taking £60m for them tomorrow. Sounds rubbish, doesn’t it?

But, what if the BOD have two offers: one with an MT asset sale for £2.5bn followed by a very complex series of JVs etc which, in all, value the company relatively low now, but rising over time. Our MT 20% percenters walk away with £500m.

However, offer two values EUA at £9bn after costs but only for a full 100% tidy buyout. In this scenario, 250m shares become worth (at £3/share) £750m.

So, would you swap something that is worth £120m on paper for £60m now, knowing it will increase your potential gain by 50%? I would, and £3 seems a perfect compromise where everyone walks away happy.

Except, perhaps, for whoever owns the 20% of MT.

Which makes me wonder: do they also own a lot of stock in the company? Coming back to the “whose interests align?” question – who were the 300m shares that voted against the EGM resolution yesterday?

Neither of the two scenarios above allow them to maximise their gains: in the first, they get a fraction of MT’s value while EUA goes on to make billions from the Rosgeo JV; in the second, they get a decent payout (plus, if they do own shares, whatever they are worth) but it is still shy of the many billions a producing MT will generate for them over time. By contrast, if they are patient, they can afford to wait for 20 years to crystallise the full value of billions from their 20% of MT, holding the board to ransom every step of the way.

I might be way off the mark here, but this could be what the BOD meant by strengthening their negotiating position: i.e. not with the purchaser, but the partner that controls 20% of MT. If so, the EGM puts them in a golden straightjacket: choose between £500m or £750m because that is all that is on the table at this juncture. There is no scenario in which you get to cling on to your 20% of MT for the next two decades while someone else bears all the risks of getting it to production. Just a speculative theory, anyway. But the more I think about it, the more plausible it seems.

Coming full circle, it also potentially explains why 250m shares could well buy 20% of MT.

@Crusty, can you do sums? If 20% of MT is worth - on your calculations - 82% of the current MCap or 22p of 27p, how do you value the remaining 80% of MT presently as a proportion of the MCap?

Green boxes out in force today. Means the end is nigh. Except you’ve already reached the end green phantoms, because nobody can hear your screeching.

As someone said the other day, YOU CAN'T UNFIND A MINE, and this one has (a) $200bn+ of PGMs in it which could be worth two or three times that by the end of the decade, with (b) the lowest extraction costs on earth, and (c) EUA has first mover advantage on all of it with full Russian state backing. The green boxes should just give up. You've lost guys. It's over.

@Tigra - Great post. The only thing that makes me doubt the JV part is the line in an earlier RNS about Monchetundra remaining the cornerstone project of the entire region. I'm still anticipating a full sale, possibly to a consortium in which the Japanese play a significant role.

Practicable = "able to be done or put into practice successfully".

They've chosen that word very carefully. Sounds to me like there is much to be said about both existing assets *and* other matters, but for some reason something is holding them back. The question is: what is that thing? Could be as simple as a few signatures on some legal documents. It could mean they just need to get back to the office first. Who knows? I for one wouldn't be surprised to see another RNS after hours today, or even sooner.

Market maker games. Just like when they dropped it during the Dmitri interview a couple of years ago.

Back up to 28p. Looks like there's little in the way of stop losses to be raided and some buying pressure at 27.

If the FSP has failed, UBS would have walked by now. If UBS had walked, and EUA tried to pretend they hadn't, the NOMAD would have forced them to RNS it. If they'd still refused to, the Takeover Panel would have intervened and, in extremis, UBS themselves would have informed the market. I'm still holding strong.