Wentworth CEO sees both capital and dividend growth opportunities in Tanzania's Mnazi gas field Watch Now
What wonderful news to receive on Tavsan this morning, de-risked and projected to commence production late 2021, with the caveat if these were “ordinary circumstances”. Interestingly KS proposes that all capital requirements for the development of Tavsan be funded from the Kiziltepe cashflow, before any spin on the mystery partner's value to the new JV. The obvious question therefore is why do we dilute our share of this asset down to 41.5% from 50%, as well as all the other assets particularly Salinbas, assuming my maths is right! After the RNS I feel far more comfortable with the prospect of going it alone, or at least re- negotiating an improved ownership percentage given where the price of gold is and potentially likely to be over the next 12- 18 months. Especially after the comments made by the Fed regarding monetary support being “lower for longer” as Jerome Powell forecasts recovery glimpses in to 2021 for the USA, with great uncertainty, e.g. a second wave of Covid- 19.
As a shareholder I do not believe that we have enough information to definitively make the right call. Perhaps I/ we should ask the board to provide us with the project values based on 1) with the mystery partner included and 2) without them. If we can raise the finance for Tavsan, why are we unable to raise the finance for Salinbas? Possibly this could be financed in stages? A) Ardala, B) Hizarliyayla etc. I believe we need to have suitable feasibility studies completed for 1) & 2) above to make informed judgements. We are not at this point as shareholders and instead are being asked to take a “leap of faith” based on what we have been given thus far. VV highlights how difficult it will be to judge how much value the DEAL will add. VV we agree on something so no argument there, I think.
I wish to draw the reader’s attention to Hummingbirds’s proposed acquisition of the Kouroussa Gold Project in Guinea which provides illustrative pre-tax project IRR, NPV and cumulative free cash at a range of gold prices, see this link:
This is what we need in order to make an informed decision.
Best wishes and keep safe
Hi VV & M2015,
We know this asset is perhaps the single most crucial component of the MOU given its potential value. I expect the final JV Agreement to be crafted in such a way that we obtain full value for this potential asset which we own 100% in both the short term and long term. The Proposed “partner” still remains a mystery. Could their identity influence a shareholder’s decision, as to whether they wish to approve the transaction or not, due to ethical considerations?
The website refers to “with over 1Moz defined, exploration”. What does this phrase mean exactly?
I have been unable to find an RNS referring to JORC compliance, or is it simply a best estimate? I recall KS wished to undertake a drill campaign starting in Q2 2020,see RNS 15 October 2019, to prove up the asset, however given the current situation with mystery partner coming on the scene, per RNS of 25 November 2019 (just 41 days later). Has this drill campaign been abandoned for the moment? Importantly the mystery partner is undertaking their own due diligence comprising the services of drilling engineers to satisfy themselves of the grades and potential ore bodies. Given that the mystery partner is the majority holder, I presume it is they who will be calling the shots. Ideally the partners are working together seamlessly and are not duplicating or wasting efforts, given that it is the mystery partner‘s financial contribution being spent. Perhaps we will be surprised with an RNS announcing that drill tests have been conducted and we await assay results in due course. Remembering of course that the deal is not signed and delivered.
VV I have moved on” re change of auditor. Although may wish to come back concerning good corporate governance, as I am uncertain as to who are the independent directors on the board who are looking after us PI’s?
Best wishes to all
Hi VV & D99
Thank your comments posted on this matter. FYI I emailed the company on 31 May (9 days ago). I have not received a reply to date. We await the receipt of the RNS advising shareholders that the 2019 final results are available hence the reason why I have not received a response as yet. As regards the change of auditor appointment brought about by cost considerations, it is in my experience customary to put the audit out to tender and select the most appropriate tender bid given the evaluation criteria e.g. cost, meeting time table requirements, which has been raised previously by Ash. I refer you to Rio Tinto in which a similar scenario arose, whereby subject to shareholder approval, KPMG was appointed from the financial year beginning 1 January 2020. PwC remained Rio Tinto's external auditor until that point and will undertake the audit for the 2019 financial year, subject to reappointment by shareholders at the 2019 annual general meeting. See the link below:
VV, regarding the delays in the finalisation of Ariana Exploration & Development Limited’s accounts to which you refer, I have scoured the 2018 financial statements. Incidentally I notice that Hummingbird Resources PLC who use RSM UK Audit LLP have issued their audit opinion on the 2019 Financial Report on 24 May 2020 i.e. their accounts are finalised, yippee.
VV, I recommend you have a look at Page 13 of Ariana Exploration & Development Limited’s accounts for 2018 to obtain an appreciation of the scope and level of changes brought about which you refer to as “reformatted for some reason”. I presume you are able to access UK Companies House Registry and view the information I refer you to.
Trying to be a champion of good corporate governance.
Thank you Ash for your reply and message of 4th June 2020 at 20.04. I accept that you are happy with the decision of the directors in connection with the change to the auditors. However, my bone of contention relates to the overall time line of events and the inference I draw into what are the underlying causes for the removal of the auditors given the delays which were, I believe, caused by the auditors sticking to their position that in order to provide an unqualified opinion then significant accounting adjustments would be required. I note the following dates:
• 4th June 2019 – PLC company’s accounts were signed
• 28th June 2019 - The AGM was held whereby all resolutions were passed including the reappointment of KPMG as the auditors
• 8th July 2019 – PLC company’s accounts filed at Companies House
• 28 February 2020 – the subsidiary’s accounts were signed
• 3rd March 2020 – the subsidiary’s accounts were filed at Companies House
• 17th March 2020 – an RNS was released to inform shareholders that the auditors had been changed to PKF Littlejohn.
I understand that there are a myriad of factors as to why audit firms are replaced such as adhering to the Sarbanes-Oxley Act and it may well be that this is the driving force behind the change of auditors but my question is, if the BoD were aware that KPMG’s tenure as auditors were due to cease shortly, why were they then reappointed at the AGM in June 2019 and the shareholders not made aware that the auditors would actually be changing??
I concur with your view that the company/subsidiary should apply for the extension to filing due to the impact of COVID19. I note from the website that this ordinarily is 3 months, i.e. 31 December 2020.
Best wishes, RD2U
I was looking at Ariana’s home page and I notice that the old “interactive investor” website from which I migrated from to this BB, records II Services Nominees Ltd shareholdings at 8% of the issued share capital of Ariana. Should I assume that there are other posters here who also started out life from this website and still use this website for share purchase etc.? As we know those that migrated from the old www.ii.co.uk , the website and its BB I recall deteriorated to such an unpleasant extent so that I and many others simply abandoned it and have found refuge on the LSE website, which I daren’t use for holding my shares! Are there others of a similar origin? I have copied the website info ’below.
Major shareholders ( > 3% ) as of 2 September 2019
Shareholder Issued Share Capital (%)
Hargreaves Lansdown Ltd 18
Barclays Direct Investing Ltd 12
Interactive Investor Services Nominees Ltd 8
Share Nominees Ltd 6
HSDL Nominees Ltd 5
Eldorado Gold 4
Vidacos Nominees Ltd 4
Hi Ash, once again I am indebted to you for showing me the errors of my ways, thank you. You are truly a gentleman and scholar. Also to Shortarm for the extra reinforcement. I will now have to concentrate and monitor the trades on this exchange. I notice that there is little discussion on this epic BB. Can anyone confirm that the info’ under the fundamentals tab on LSE (this site) includes the trades activity from the next exchange. Are there any other exchanges I need to concern myself with? Ash, in the fullness of time I will post again regarding our on-going discussion re: on change of auditors, fearful that I may raise your ire which I assure you is not my objective.
Hello shareholders, as we know last year’s announcement was on 5 June 2019, who believes that the RNS advising final results 2019 will be provided on or before Friday 5 June 2020? Any guesses please. Ash, do you think we shall meet the 6 month deadline i.e. 30 June 2020 pressure is on!
Not sure I can add much value to what you have already stated. I have always understood the silver credit for cash cost purposes to be an offset in the mine production costs. The accounting rules would require the revenues to be quoted gross i.e. gold and silver sales added together for the accounting purposes in the audited accounts. The rules would require production costs to be adjusted for opening and closing stock movements i.e. not a cash item, the latest RNS also advises the silver was not sold! So cannot help you definitively, clearly not part of revenues! Here is a link to Yamana Gold Inc.
How are these items being dealt with? Maybe a question to Mike de Villiers as chairman of the audit committee, and chairman, expressing shareholders concern that the information provided in the RNS is not clear thereby leading to possible confusion.
FYI I have written to M DE V regarding the change of auditor. As I was similarly not satisfied with the explanations thus far provided. Apologies Ash as I know you are adamant that the changeover was entirely satisfactory due to amongst other possible issues, KPMG’s tardiness in meeting deadlines.
Looks like you have not received a reply to your concerns. Correct me if I am wrong, as you have chosen not to state your concerns instead relying on posting a link to an al Jazeera article from an unknown date. Posting what appears to be everything to do with the financial crisis besetting turkey. Perhaps your posts are, if I may say subject to spurious correlation and rely on the reader to guess what you mean thereby laying themselves open to criticism for not understanding your point.
Regardless this is my reply to your al Jazeera link:
Please clarify your point. If this does not satisfy your concern, please spell it out.
Isn’t the internet a powerful tool? What is the effect on Ariana? You cannot kill the golden goose, yes it a risk that we know about called sovereign risk and could impact in multiple ways.
I hope that this has been helpful.
Going to enjoy my beer in the garden with all the sunshine!
Hi Paul1d, I hope you don’t mind me taking your message of 23.17pm. By the way which time zone are you in? This is way past my bed time.
By giving it its own subject header, hopefully the BB will rally and provide you with the information necessary to allay your concerns, as it is something that you say has bothered you for a long time and clearly still does, however your concern appears to me to be about a shortage of US$ to be paid to Ariana. AAU, instead being stuffed with TL which it cannot exchange. Or is it about the exchange rate per se or is it the price of gold that AAU gets? Or is it to do with Turkey’s sovereign wealth position and foreign currency reserves .Can you please clarify your concerns?
Let us as a board talk it through and try to respond to your specific concerns and thereby allaying your fears so that all BB members gain knowledge about their investment!
You describe your concern as by always selling to the Istanbul refinery in lira and converting to dollars. I read somewhere Turkish holdings of US dollars are reducing. So what does this mean for Ariana if they struggle to convert the lira’s into dollars if they are not there? Can you post your link re:” read somewhere” that would be helpful?
Atb and have a great weekend as lockdown is lifting all over the world.
Going to enjoy my weekend!
For Ash, to keep the BB light hearted and focus on what is truly important.
Hi evening Ash, thank you for such a prompt reply. I believe filing deadlines are 9 months for an ordinary limited company and 6 months in the case of a public company. Given they signed the audit report on 4 June 2019, your explanation doesn’t seem to match completely . I suspect there is more to this story, particularly the level of costs that can be capitalised or be written off causing much angst if there is a difference of opinion between the bod and the auditors!
Can anyone who attended last year’s AGM add some colour to the reasoning behind this change? I am particularly sceptical of any impairment charges that should or should not flow through the P & L account in future accounting periods! In addition to usual audit activities i.e. P & L and B.S. for 31/12/2019, they will also, as you say, need to look at comparatives, the treatment of Venus Minerals, as well as the impact of the new J.V. arrangements as a post balance sheet event. A lot of work! William Payne hopefully has this all under control together with M de V as we know KS is stuck in Perth. These remote working locations and virtual meetings must be extremely testing for all concerned. I trust that the audited results will be true and fair, especially as shareholders, we are responsible for their appointment by law and auditors are required to report to us thereby keeping the BOD honest!
I am pleasantly pleased that the quarterly results were received favourably by the market. The wobble in the SP, I put down to the overheated gold price as well as AAU’s relative strength index of 70. Therefore the SP was due some correction as it bobbles around the 4p level, held captive by the gold price. The Ask price now sitting at 4.20 (down from 4.25) and the Bid at 4.00 with plenty of buys coming through and gold has moved back above the $1,723 handle.
Two other points I wish to make: your estimate of quarterly results appears to confirm the veracity of your model as reasonably accurate. How should we use this information given gold and silver prices and so on especially we are now holding silver bullion in stock? Others have commented potential costs are not being accounted for, I will leave this discussion at that.
My best wishes to everyone, keep safe.
What an eclectic bunch. We welcome the recent new arrivals, both traders and committed bull believers (sic), as well as the committed lth’s of both the fundamental and technical persuasions.
Yes, there have been so many posts on a range of subjects in the past few days. It is too difficult for me to post in real time given my limitations; we can’t say the BB has been quiet.
Ash, I share your anxiety regarding the timing of the 2019 delivery of full year audited financial results being reported. Hence my desire to open this as a dedicated topic header, to see where the weight of opinion lies. I cannot imagine the 5th June is realistic, given issues related to Covid-19 et al. I wonder if it will coincide with the next RNS update relating to the MOU update which is scheduled for end of June which is worthy of much more discussion since we shall be called upon to vote on it. So still some uncertainty as to when that meeting will be held, before the AGM or as part of the AGM. Are we all going to tune into Zoom and have a virtual meeting? There is a lot of news that could impact on the SP during this window. In addition, we have to evaluate the impact of Covid-19 & the various responses to it at the macro and micro levels. I am sorry PAUL1DEANO did not respond to your question regarding gold contracts. Essentially, this is to do with future contracts which have a closing date and how these are responded to. These are usually rolled over. However, just as possible on the long contracts there could be a requirement to settle with physical product. P1D referred to issues, without elaborating his concerns. As you may recall the problem with oil prices recently where too much oil flooded the market and prices crashed as traders had insufficient storage capacity for the physical product. This was also compounded by the lockdown, courtesy of the global pandemic. Perhaps P1D is concerned about a possible shortage of physical gold to satisfy all of the outstanding contracts, both shorts and longs, and their impact on derivatives’ traders as they set about closing or taking new positions etc, especially during this time when air travel is limited.
As you know I prefer to look at the technicals; in the case of fundamentals there is simply too much noise! This link may help explain. I don’t think this gold action will materially affect the SP Oimo.
Ash, your analogy of a James Bond film is most appropriate and I support you in this, re: Johnny English. An important matter to me which I don’t believe has received much commentary was the appointment of PKF Littlejohn LLP as auditors in place of KPMG (see RNS 17/03/2020). Presumably this was done as part of the “good practice” of changing auditors on a regular basis, i.e. say every 3-5 years, or possibly due to cost considerations, etc. I note that KPMG have a global ranking of #4 and have been replaced by a much smaller firm.
My apologies if my previous messages did not meet the quality of posts that you expect. The Panmure Gordon flash note of 23 April recommends a pe of 11.5. Why should we reinvent this information? And an ebitda of 6.5 for their projection of 2021 estimated no’s.
P.S. Still a stroke survivor and doing the best that I can. You know I like my eclectic side. Here's a link to further help you to evaluate my humour and state of mind on this lovely sunny day- - I presume you did not see the comedy of "our ways" by watching Dr strangelove- as we all prevericate, and then press the button to either buy, sell or hold.
Hello everybody on this fine public holiday.
Hi Ash, thank you for your reply of 23 May 2020 18:45, re: the dark arts and the buy signal indicator.
I am not familiar with this platform. Are you a paid up subscriber? How often do you review this site, daily or more frequently? How often do they update? Do you pay attention to the candlesticks? As you can tell I have gone over to the dark side and use this information as part of my decision making. As you suggested I looked closely at the site and notice a disturbing health warning. “The market is approaching overbought territory. Be watchful of a trend reversal”. In my post of 21 May I made reference to the chart pattern “shooting star”. This pattern is a strong reversal indicator refer to this link:
Enjoy the rest of your day, with markets closed. Ash I will look more closely at your spread sheet info and time and mental strength permitting I hope to post my comments hopefully adding value.
It will be interesting to see how markets react tomorrow. I presume the big news we await are the financials when will this be? With the pandemic and KS, in Perth, should we expect delays compared with previous years. I wonder how the auditors are coping with their work.
Now for my bomb, queue Dr Strangelove and In answer to your question, Ash, there is lots of news to expect next week on the macro level as economies try to further minimise the devastation that is being wreaked. Most importantly we should recognise Monday is a public holiday as well as in the USA memorial day. Of course more political jousting will continue, so keep watching developments on the USA/China trading arrangements.
Given all of the above I thought it would be prudent of me to de-risk my position slightly by selling a parcel of shares for a handsome profit with the added advantage that I may be able to take advantage of any pull back in the SP e.g. if the results announcement does not meet market expectations, or any downward movement in the price of gold as we await the news regarding the MOU, end of June.
During my period of contemplation I also spent time evaluating the Turkish economy and its major players (sic) I will record my findings on this and post in due course once I have got the further support of my life partner to assist me with the drafting so that hopefully I can post something of interest and not laced with errors. As always keep well everybody and stay safe. My apologies for errors and confused grammar in case the BB police are out and about.
Its all in the technicals, I hope!
Ash you will recall an earlier comment made by me regarding the dark arts. I presume that you similarly will have noticed these technical indicators which I trust you will agree have been on a remarkable upward trajectory during this pandemic period and the resultant wide ranging impact on all things from money printing, debt financing/interest rates and other monetarist and fiscal actions. You would have noticed Ash, that the upper Bollinger band has been pierced. These economic measures to protect the global economies and minimise the impact of job losses which has proved to be nectar to pm prices in the global markets, yet tempered by the devastating impact of covid-19 at the individual level. Hopefully the bod and our workforce will remain unscathed and there are no nasty surprises that will affect us negatively either directly or otherwise, as we await the quarterly results. While aau has not quite got into the overbought territory, it has breached the Bb’s with an RSI of 68.5. Did you notice the chart pattern that formed on 21 May-a “shooting star pattern”, no less.
The comment by DJoe regarding his leader, sure enough he the (potus) came to the party with his announcement of further disharmony with a fresh wave of attack on all things Chinese! This was all too much for my brain as I had fleeting memories from the film Dr Strangelove. For those of you who are not familiar with this plot I strongly recommend that you google and watch the you tube clips of the various actions played out, a great watch particularly if you are a fan of peter sellers and the days of the goon show, oh dear I must be showing my age.. Queue China for Russia or maybe still Russia after the news item in which the USA threatens to tear up historic nuclear treaty with Russia on blue skies, see Fox news. The reported news that the USA was going to rip up the blue skies treaty together with their response to the political events impacting on Hong Kong and the potential reactions played great importance in sustaining the gold price in the 1730 range. Having found the 1747 resistance level, being too much for gold to break through so far this year, with the resultant fall back to the 1720. A great movie well worth watching as well as using up the time as we while away time waiting for lift off from the lockdown cells! That we have kept ourselves cocooned in for the past 4 months or so.
Excuse my eclectic behaviour which I put down to a number of factors, not least of all my health condition; rising age; and my overall general mental state which has been augmented superbly during this period of personal sacrifice, for the good of not only me and my loved ones. For the entire population/country at large as we help to safe the NHS! Living on an island, with limited access to a barber or something similar these factors have rendered me to become the veritable Robinson Crusoe resplendent with a healthy collection of red wines to toast the daily movement of aau, au/ag prices with the concomitant effect on the SP’s of the various Goldie’s which are available to evaluate for potential investment purpose, if not already in my portfolio..
Ash, your latest header “all quiet” has sent me into an interesting period of contemplation and reflection which I can say has given me a bit of time to consider the DNA profiling of the various posters! My objective being, to provide me with hopefully a clearer understanding of their respective stratagems as they contribute for the greater good of BB members (sic).
Hi Ash, and all the other punters/posters, especially the new ones. Due to limitations I am unable to post as freely as I would like, which I assure you that is a blessing for all, (this message I am sure will make up for the lack of posts during this momentous historic time as the SP breaches the 4p level a record high from memory in the past 10 years)? Apologies Ash if I have advanced your competence values to stratospheric success levels (you need to google the meaning of this to avoid any misunderstandings) of the 5 laws of success thereby placing an unfair burden upon your shoulders, especially when you mentioned the extra degree of time pressure that you have been under recently. I am glad that CK is lending a helpful hand especially during this period when you have been called upon to meet your deadlines. I am incredibly grateful to you for your post of 21/05-thoight for the day, switching the discussion away from the thread ” hot maden” as I was becoming a little exasperated by the content of the postings that this attracted, following on from the postings under the header relating to the “Weekends virtual conference” and chat discussion. Apologies if anyone is offended by my remarks, I was told to be wary of those who post without original thought that instead rely to a greater extent on the copy and paste technique, without reference to source. We even had discussion on polo shirts, pens, etc.
Enjoy the rest of your long weekend!