Member Info for Pondering

Yes - how many shares and at what sp in the capex deal? The main advantages here should be: IML not yet factored in sp, economic report values, in demand resource, ?more than one competitor may be interested, large investment of CEO and others at higher sp. £1 not going to happen, but needs to be holding the line for the at least the original 12p placing price imo. Worst scenario is £M++ shares given out at single figure sp. I think that’s partly why the market is waiting here, as well as the IML. Need to see the deal. Ultimately value should out here, but there are different routes -?possibility of being bought out at different stages after the IML. Only £12m mcap at this point and sp. Peanuts for some. Just musings, not to be weighed in decisions.

Thanks for doing that.
just standard fluff again, I guess, though possible read positivity into it - not just 'active', but 'very active' and 'when in a position to do so' ?= 'we're just awaiting final drafts and signatures'...
Looks like at least one lost patience today and gave up at 0.65p.
I'll just keep imagining an interesting RNS, with this getting back to over 2p value in a month and 3-5p within a year.

Certainly possible Uksteveg. Reasonable likelihood it's still Duferco. The RNA from 5/522 hasn’t been re-issued, indicating they sold 14M shares from 1/3-4/3/22 when the sp was ~11.3-13.5p, leaving 35M. We don’t know how many they sold in the subsequent ~8 days when the volume remained high and sp in the 12.5-14p range.

They got their second tranch of shares at a value of 9.97p. Having sold lots at 12p+, they may be happy to let the last go in the 9’s. I was wondering also if they might have a deadline to clear, explaining the 'insistence' with the sells over Thursday/Friday. But as you say, there are other possible explanations.

And a reminder from the RNA of 29/3/22: "Obtaining the additional exploration license ... We worked closely with the GSMB to obtain this licence and are encouraged that they are getting back to being fully operational as they are also the authority that will grant our Industrial Mining Licence".

A quick tot-up shows only 2% of the company shares traded by volume over the last month. With the right 7am RNA, that many could be gone, even before the market becomes available to ordinary investors.

There are two basic routes upwards for the sp e.g. back to the 38p suspension level (and above).
1) 'Ordinary' investors with all of the shares bought during/since the placing, lots of trading, repetitive churning -> months
2) Institutions/others with big pockets -> buying such pressure that those who want to trade get only get one sell point on the way up to the new baseline -> days/weeks
Handing of the RS, CUDA, finance etc needs to target the latter investors now, not us.

Aims of the CEO have be to control the controllable, convince the convincible, advance the advanceable. I believe he's made the business case and indicated 'ready to go' to the SL authorities. From the Proactive interviews -the figure of $100M government tax and royalties and 300 new jobs mentioned. Export earnings. Foreign currency (at a time when the local currency is significantly devaluing).

He had met 'different officials'. There was the change in Chair at the GSMB in February this year - that could be a factor in going over there. The Chair and the DG (second on the list on http://www.gsmb.gov.lk/web/index.php?option=com_content&view=article&id=89&Itemid=56&lang=en seem to carry the GSMB sway from what I have read. Whether there is higher level political involvement now needed, because of the current SL situation - we don't know. I suspect whatever is going on is the kind of 'behind closed doors' discussions that are not going to be aired in detail, even if questions are pressed directly. An official response from GSMB would need RNA of course.

He looked very calm in that interview - though that could be just because feels he's doing what he can making the economic case, and is good at being calm.

Some speculation, though...
If Golden Summit sold all of their 65M shares beginning from ~May/June 2020, and Duferco are about to complete selling all of their 104M shares (two tranches), that averages at ~330,000 extra shares sold per trading day over the last two years.
That extra supply to be turned off and coinciding with news flow...

The additional exploration license was granted by GSMB in March, so have been active enough get those through.
This from April: https://www.parliament.lk/committee-news/view/2543 (and also news stories from Feb/March about internal wrangling in GSMB) could have indicated further more IML delays. However, the political situation has changed since then ofc. The most important communications probably - those persuading SL authorities that it's in their interest to get this project underway asap. The market should follow.

Re the timeline for the offtakers, I was thinking particularly about the general organisational challenges in setting up the facilities, more than any remaining bureaucratic issues that the SL authorities will hopefully be on board with i.e. whether the organisation issues are left essentially to the local subsidiaries/contractors, and how much additional CMET planning, supervision and progress monitoring needed.

Also, re the finance deal. If they were awaiting this report to progress the ongoing discussions, I guess looking at some weeks to get the agreement(s) and legal ;) stuff sorted. Though some possibility that's it's all largely 'in the bag' and was just awaiting this report, and then the IML to be confirmed.

Also just watched it. A bit behind on the detailed research, but still keeping an eye. Similar interpretation to you guys.

Good answers and reinforcing confidence why invested. The wider market still no doubt awaiting signatures on dotted lines - IML and offtake financing. Having had a long wait in the red, really hoping he can get this done with pure offtaker money (no cheap shares) arrangement. That seemed implied, but not certain, from what he said. The off-takers will presumably be applying timeline pressure for first deliveries if they have the high/urgent requirements - he will have to convince can be delivered. The staged approach seemed not unreasonable.

If (when) the IML is signed-off, and (particularly if non-dilutive) financing deal achieved, then I will be expecting a very quick and impressive move upwards. Then the longer-term hold potential would be even better. Still not quite there yet though. Hopefully, a few weeks more, says me optimistically.

I was just thinking there has to come a time soon when sells at this level run out, just on the basis that there can only be so many placing shares / other people prepared to sell here with all the prospects, and in the face of the persistent buying pressure. Hopefully, heading towards that stage now. A reverse conspiracy theory says must go up to 24p for starters, so the warrants can be exercised.

I suggest people adjust to the idea that there is probably not going to be anything particularly great or impressive in next weeks info - only to 31/3/22, and likely just reiteration of forward view that has been outlined already. If there is anything new and substantive, then a bonus.

Thanks R_Dunc for those really knowledgeable posts. Probably should print them out and stick on the wall.
(The expected posters all in green boxes, except Ironhide who I do respect for politeness).

ARCM101 - I'm sure many have had worse timing.

There have been two rises in the last 18mths - 12p to 22p, and 8.8p to 14p, both of which occurred in a matter of days. I'm expecting something similar when the seller is out, but more persistent and not just a spike. Very comfortable holding because I believe the sp is artificially low due to the seller who wants out for non-BMN reasons.

I am wondering if there is going to be another 'blockage' to reaching fair value of the time time beyond @~17p-20p due to Orion. Trying to read back and remind/understand their position in this - if anyone has a better understanding...

Anyway, even persistent 17-18p would be >=85% improvement from here and presumably see many people out of the red.

Yes, Oiler, the warrants actually seem a blessing from here, as they suggest - with any ability of the company to actually stimulate the sp - that it should go (just) above 24p in the not too distant.

"They may be trying to clear by tomorrow to hopefully have a nice green day on Monday."

Or alternatively, placees may be have been informed of a placing in another company where they can get a 'guaranteed' 40% return in a few days, so dump these for a bit of a loss to buy the new placing. Who knows with this, not us 'ordinary' investors.

Nothing to do but buy, hold or sell as always. Hold here.

Detail could help, though market confidence only potentially comes with situation 1 being detailed, not information that might suggest situation 2.

Being invested, I want to assume all of the work they have already done successfully getting the EIA etc, (and the positives for the Sri Lankan economy), means that getting the IML should be close to a "given".

It's 2 and a bit weeks since the "working diligently" RNA. I will continue to check in each morning for a hopefully more conclusively positive red dot.

Wishing a good weekend to all.

One other mug at least is still here. (Not forgetting the big investors and the CEO holding).

The crux from the 20/4/22 RNA: "we are continuing to work diligently with the Sri Lankan authorities in order to progress the issue of our first Industrial Mining Licence ("IML").

I expected the IML to be granted fairly quickly after the EIA approval - the RNA 23/11/21 said "...discussions with the GSMB will now be focussed on obtaining the Company's First IML targeted for Q1 2022.

"Working diligently" is essentially a meaningless term. They need to get the IML issued ASAP. And the rest.

Yes, looks like good news to me. "Sale ends soon".

End of this month will be 6mths from the new CEO being appointed. I guess that could...should, prompt an update. 6mths would probably be actually fairly short to get something fully to the dotted line. But some positive words of encouragement would not go amiss.

On the placing, my initial thought is never to buy any more shares of AIM companies that are not operating in profit until after a placing, probably some weeks after - the new shares not being admitted for about 10 days of course. Drift after that seems quite likely, unless good news flow. Only been involved with one company where they did a placing that really respected existing holders, and this isn't it.

On the positive, the potential here is unchanged, and they have some more cash.