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David, you wrote earlier 'the shares already purchased would be substantially more than todays price, maybe £20-25 equivalent.'
That's just wrong. What have I misunderstood? The average price so far is £12.19.
Yes, the company has changed from giving Stifel periodic instructions to telling Peel Hunt to get on with it regardless of what else is going on without further instruction from the company. The total program will buy back up to 10% of the issued capital (from last year's numbers, about 8% to go) at a total average of up to £20 a share. Which is I think what I said. The lower prices achieved so far mean they can pay up to £22 a share for the balance of the buy back program.
Interestingly not one share was bought for more than £20 so far in the buy back program, despite what you posted earlier.
David, happy as ever I see.
Since the buy back was announced last year the company has bought back (the equivalent of) about 990,000 shares at an average price of 1219p for a total spend so far of about £12.2m.
That gives Peel Hunt the ability to spend another £85.2m buying 3.8m more shares at an average of up to around £22 a share.
That's up to10% of shares in circulation they have just told Peel Hunt to buy, but did anyone notice the maximum value? Not to exceed £97.4m.
For those hard of calculating that's buy10% of the shares for an average price of up to £20 a share. AVERAGE price. Given they are going to buy the first lot for under £10 a share that gives plenty of room upwards for the buybacks to execute.
Also instructing a third party to do it without company control means no closed periods or share black outs. Its in Peel Hunt's interests to buy every one of those shares.
Below 600 again, ready for the 10% wash cycle.
So here we are, sitting at the value the company has sold just the European business for.
There are only two possible outcomes here:
1. The European business sale goes through and the company continues to trade and focus on growth in the US, the market value for that business should be more than the current mkt cap given the removal of any perceived liabilities.
2. The European sale goes through, and the company follows up with a sale of the US business maximising short term value for shareholders and ceasing to exist. The US company would sell for a multiple of the European Business given the growth and revenue, and also the fact a US buyer would pay a higher multiple.
Either way, a moderate level of patience here should be well rewarded for holders.
Crypto..
Share price depends entirely on investor sentiment. All the miserable posts here since the raise hardly reassure new or existing investors about putting money in do they? So far today we have had George called basically a fraudster, the share a falling knife, and some whinges about endless dilution.
The reality is they are always going to raise cash after each stage in the development is passed, because that's when the iis putting the money up are satisfied enough to do so.
What we should all hope is that new and existing investors see the progress for what it is, an increase in the probability of success and corresponding overall value increase of the company. But unless someone sees that and wants to buy shares because of it then the share price is going nowhere.
ALBA is small enough for the price to be influenced by BB posts. A high percentage of the investor community is likely reading these boards. I'm not saying we all have to be happy clappers, but some realism has to set in at some point.
George doesn't set the share price, I know that may seem to not be the case, but he is hostage to the investors who are putting the money up. All he and the rest of the team can do is the list of exercises that enable them to raise the next round of money. Private investors are not going to fund this, neither are the management team. Institutional investors who are expected to put their hands in their pockets for millions will want some certainty about what they are going to get back.
So yes, in order to raise the cash to process waste tips the company will have show there is sufficient gold in the waste tips to generate a return. That means pitting and lab samples. If that comes back positive then you can expect a raise to fund processing the waste tips.
I've no idea how rich George is. When I was last working as an exec for a big co that was issuing shares I was roundly criticised for not buying in. I just didn't have the spare cash, that was the end of the story as far as I was concerned.
This is not a falling knife or anything like one. This is a speculative investment.
Those stages I put in the message below, passing each one successfully adds to the enterprise value and reduces risk.
For example proving 'X' number of ounces of gold in place makes investing further lower risk than having no clue how much gold is down there. Proven resources are worth more than wishful thinking.
Similarly a mine that is dewatered and has shown gold to be present at localised high grades is worth more than a dead mine full of water.
What exactly are you expecting to happen?
The thing is your investment is worth what it is worth today, and today is the day you have to make a decision whether you think it will go up or down in future. If you think it will go down why wouldn't you sell? If you think it will go up why wouldn't you hold or sell more?
The price you paid is nothing more than an emotional constraint, whether you are up or down is completely irrelevant to whether the investment will be worth more or less in future.
Personally I think this will be worth more in future, and have bought more as a result. If I thought there was only down from here I would have sold not bought. What I paid for my first tranche of shares doesn't matter a hoot in all that.
There is a lot of whinging here about raises and no instant price gratification. So I thought I might post a thread to help set some expectations as there is a lot more 'stuff' going to happen before we (maybe, possibly) arrive in the promised land of Clogau production.
1. Raises
Alba does not have any income. Their only realistic way of paying for day to day operations plus any new activity is via issuing new shares in rounds of raises. The approach they are taking to raising money is piecemeal, that is possibly several times a year they will need to issue shares. The alternative is that they take a wild assed guess on the whole project funding and try and raise it all in one go. They have literally zero chance of succeeding with that whilst extensive regulatory barriers remain, and the ore body remains unproven in value.
2. Proving the ore body
Sampling that is happening now will show that some gold is present. However extensive and expensive drilling will likely be necessary if they need to prove the in place resources in order to raise a proper level of capital. The only way to pay for that drilling program is #1 above
3. Planning Permission
Assuming they find enough gold to be worth their while reopening the mine, and it is not guaranteed they will no matter how hopeful we all are, they will have to apply for planning permission to do so. Given how long it took to get permission to dewater the lower levels, we can't expect this process to be quick, and possibly not even successful without appeal. Locals may protest about increased traffic, noise, blasting, displaced bats, otters with too much water to swim in, or even that George doesn't speak good enough Welsh.
4. Funding
Once they have a proven resource, and all regulatory approvals to reopen the mine, they will need to buy mining equipment and employ miners. That will mean a more serious level of #1 than before, likely to involve raising millions rather than thousands. Depending on how they approach this, the minimum level would be maybe £5m, but could be as much as £15-20m. I can't see it being more as the mine is already there, they don't have to sink shafts or build access roads etc. It will all be about extraction and processing machinery which will probably be relatively small scale.
5. Commissioning Opex
Even when all the kit is bought, there is a period between buying all the stuff and getting it all working. That may last 6 months to a year, and be subject to regulatory oversight. Employing lots of people and having lots of kit lying around before you actually start generating much money is expensive. Expect another £5m at least needing to be raised.
So in terms of time from here to a working mine I'd guess a minimum of 3 years. In terms of money needing to be spent, as a guess I would say a minimum of £15m and possibly up to £30m to get the mine back in action.
The trick is that the underlying enterprise value should increase as each stage abo
Take it out now if that's how you feel. If you think it will only go backwards why are you still here?
If you no longer believe in the reason you invested then stop investing, simple really.
The new shares are not on the market yet. I wouldn't expect a company that has taken up the placing to short sell a week in advance.
"Application will be made for the new ordinary shares to be admitted to trading on AIM ("Admission"). It is expected that Admission of the new ordinary shares will become effective at 8.00 a.m. on or around 5 April 2024."
Placing shares have not been admitted yet have they?
£1753 per ounce , £5.61m mkt cap = 3200oz , raise is £380,000, 217oz.
At the grades published the other day of 4oz per ton of rock, the whole mkt cap of the company translates as 800t of rock to mine and process. Of course that would be if mining and processing was free....
Market makers buying their own shares @ 0.8 , they are allowed to do this to make the market active but gives a properly skewed view of today's prices. The fall is actually much higher than the numbers shown given we can buy sub 0.7p
Real price is over 30% down.
Even so not many actual sells going through, the market makers must have a large sell order on hand to keep the price down here against a lot of buying.
That 3.4m that just went through was me, my third trade of the day. Yes it was a buy. I've double my holding here this week.
I'd expect to see treble that at some point this year. It spiked that high last year on less progress.
Ahh... That would explain today's rise maybe. Just checked ii, it is in my account too, weirdly wasn't first thing.
Isn't payment day tomorrow? I thought you would receive it on Tuesday after the bank holidays.
Don't talk nonsense either. Spike pulled in traders who may wander off. The amount of cash being raised still matches the mkt cap of the whole company for only 1/3 of revenue, and less than 10% of growth.
Don't get distracted by gloomy traders, value here is still be be realised.