The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
So we now have a broker! Is this in preparation for the relisting of the shares? Is something actually happening? I may need to sit down and steady my nerves!
Judge, when you said binary I had a different second option in mind. My worry remains that the licences will be returned to the state and that will eliminate any value. I know all the subsidiary companies are Russian but the beneficial owner is British. Any foreign company operating in Russia would have set up a Russian subsidiary on the ground for day to day business.
You're right Del. Things definitely appear to be in a less advanced state now than they were in September, which is concerning. I would love to be privy to the full history of what the resources actually are and who has suggested what offer and when.
What worries me is the time it is taking for the transfer of the licences. Without them we can't sell any more than MT and Flanks and WK. I expressed a similar worry when we were waiting for the Flanks licence and was shot down in flames by, ironically, GFD. We have that licence now of course.
But the same worry emerges again. We have paid what, 35 million, to Rosgeo for licences which we expect to sell almost immediately for 5 billion or so. What is in this for Rosgeo? What is in it for Russia? Should our buyer turn out to be NN the same taxes, job opportunities etc would be created if Rosgeo had sold the licences directly to NN for 5 billion.
We may feel we have signed a contract for those licences and are therefore entitled to them in law but two things would seem apparent. Firstly, if it was such a done deal why didn't we get the licences essentially the same day. Secondly, Russia is currently showing it has little regard for any international law.
I've thought for a long time that it was the transfer of the licences which was holding things up and in the current situation I can't see it happening any time soon. I hope I am wrong. I've mentioned before that I am on the cusp of retirement and I could do with knowing one way or another what is happening here to enable me to plan.
I empathise Roger. As a police officer in the West Midlands I'm in the position of not being able to have a summer holiday this year due to the impact on the police of the Commonwealth Games. I'm also getting on a bit and would normally retire from policing in 18 months. I was hoping to go at the end of May instead if this comes good, as I'm sure it will, but can't plan until I know for certain. The share price has shown that it won't move until we get some figures of a monetary value in an RNS. I'm positive it will come good and all we have to do is wait but that waiting is now having a tangible effect on me at least.
Mugwump
You also need to bear in mind that the 100 million ozs is platinum equivalent which is less than half the value of the palladium value you have used.
Too right. I've decided to put anyone being abusive straight into the green bin whether deramper or not. I've now got as many green boxes as posts but it is a much more pleasant read.
They are super researchers on telegram but they are currently questioning their own findings about this. It is very complex in terms of layers of company ownership - made even more so when translating it from Russian.
No worries Mac! Regardless of the origin of the 1.7 I am confident we are all onto a winner here and I would be slightly disappointed, though grateful, if we only ended up with Tilly's £1 a share!
Mac
I only asked a genuine question! The increased tbroughput in the Monchetundra mining plan I read to be volume of ore processed - not increase in actual amount of resource present. I've just read it again and still believe that to be the case.
I am hopeful that the JORC will indeed show an increase in resources but i was just interested to know where the 1.7 figure had come from and how it could be applied across the entire area. I still don't see it from what you have quoted. I do indeed hope that the increased amount being paid to Rosgeo is because there are more resources than the 104.6m oz but I don't think that comes from an automatic 1.7.
And please don't think I am a deramper or bot. I sold another holding I had only yesterday, at a loss, to put it in here and the only EUA shares I have ever sold were bed and breakfasting into an ISA.
Mac
Could you remind me where the 1.7 upgrade factor came from in relation to JORC as opposed to current resource estimations please? I recall the rate of production being upgraded by 70% and I also recall a resource upgrade of 43% at WK as a result of operational product extraction figures but I can't recall an upgrade factor of 1.7 being mentioned anywhere for actual resource figures.
Genuine question.
Thanks
MrYFronts.
Interesting points raised. It makes me wonder why the BOD did this. Much discussion has been raised by this RNS and again it is one which has left us asking questions. I must admit I was a little underwhelmed by it, though it is still a positive one, but I will be glad when 'THE BIG ONE' finally arrives and we finally know what is what.
I remain convinced we will still make big profits from here but I will be happier when I definitely know what they are.
Clintek.
I wish it were the case that there is 70% product but that isn't what the RNS said. It is simply being dug out of the ground 70% faster. It is important to make this clear as it is fundamental to the value of this mine.
This has been pointed out a few times on here now but there are clearly some who are under the illusion this was a resource upgrade - it wasn't.
Sean
It's been said before - the resource hasn't been increased by 70%, only the rate of extraction.
You had better lay off the pork scratchings as well Ian! I absolutely love them but have broken two teeth with them in the past!
I'm glad it's not more serious for you, bad enough though it is.
Best wishes from me.
Stevo, what I said was that if I have interpreted the RNS correctly in the worst case scenario we would get 60p per share more than we would have got before the RNS. If Rosgeo have the rights what on earth is horrible about that deal? We have something where we may have had nothing.
On 27th July I asked what was in it for the Russian state if they gave us a mining licence and we sold it a couple of weeks later for a billion quid. If I have read this RNS correctly the Russian state has now addressed that point.
As I see it we now have the right to mine an area including 104.4Moz of platinum equivalent. We will have 75% of the proceeds. However, we will also have to pay 75% of what the Russian state says is the value they could have auctioned the assets off at and this is set in Russian law. The key question is therefore what is this value? If the value of the resources when extracted was £70bn we may be looking to sell the right to mine at an in ground value of 10%, so £7bn. However, if this is what Russia would have been looking to auction the assets at then we only get a 25% discount so the proceeds to us would only be £1.75bn.
The value of the new JV would therefore be in mining it and extracting 97.5% of the value of the assets (minus actual mining costs) rather than just 2.5%.
Therefore I think a sale of WK (probably only worth about 4p on the share price) and Monchetundra and pay a dividend on the sale but commence mining the new area with share price rising massively in time and big annual dividends is a distinct possibility.
Even the former should be worth a minimum of 60p plus whatever we were looking at for Monchetundra and WK before this RNS so it is a cracking RNS in any case but maybe not as mind blowing as some initially thought if they are focussed solely on a complete company sale.
Reefles
Based on the figures given for WK and flanks if we are considering 15m, 22m or even 40m oz for Monchetundra I would definitely hope for £1 or more.
Reefles
The figures I have given assume a sale. Extraction costs are 300 to 400$ an oz but obviously a buyer will not give us full price for each oz when it is still in the ground. The value would be about 28p if we mined it ourselves.
Here are some figures from today's RNS for discussion:
4477kg of PGMs in the area already licensed.
32 troy oz per kg equals 143,264oz
Multiply by 1.43 for the 'actual'mining output equals 6400kg
Add in the estimated 21000kg from the flanks (licence applied for but not yet granted) gives roughly 28000kg
28000 x 32 equals 896,000oz
Multiply by $2500 for an average PGM per oz (Palladium is $2400 today) equals $2.24bn in ground value
Divide by 1.39 (dollar to pound) equals £1.61bn
Multiply by 0.68 as Eurasia only owns 68% of WK equals £1.09bn
Allow a generous 20% as an 'in the ground' sales figure equals £219m
Divide by 3bn shares equals 7p a share value of WK (and flanks when licensed, and a sale at this stage may necessitate a further discount if prior to completion of licensing) if sold.
I would be grateful if anyone could point out any errors in this as I'm a bit neutral on the RNS at the moment. Please don't anyone accuse me of deramping because I want to retire on the back of this sale, my position regarding my number of shares is set and I have no intention of buying or selling any until the deal is done. The above figures are my honest current appraisal.