Member Info for relephant

Thanks, Munpip,

It is probably a good time to be mining gold with possible inflation on the horizon, which could send the gold price higher. However, the company still has to find and dig out enough quality gold cheaply enough to be profitable. Ultimately the share price will reflect the business fundamentals and come down to the profitability of mining the sites they have licenses for. They couldn't do this for sapphire, but this is a different project entirely, and things could be very different this time around. Richland was a Gonna company - always "gonna become profitable but never did". Hopefully, things turn out differently for Lex shareholders. Good luck to you Munpip, and other shareholders taking a speculative punt on this. I hope you do well, but no harm in being informed about the past and risks involved.

A bulletin board should be the place for rational discussions (and that includes the airing of alternative views) rather than a cancel culture only tolerating positive spin in bullish posts. Keep posting Munpip

Munpip is not a deramper Oaber - just stating the truth and giving very fair comment. You are attacking the messenger! Tanzanite One and then Richland in the past made terrible capital allocation decisions and massively destroyed shareholder value over many years.

Iptuf - While two non-executive directors are new; the CEO was a previous CEO of Richland for many years when it was in Tanzania and then for much of Richland's failed attempt to mine Sapphires in Australia. The Non-Executive Chairman has also been with the company for many many years. I don't have my files at hand, but I think the latter may well have been on the board when the company paid out most of its reserve capital in the form of overly generous dividends. This left the company in a financially weak position, and it was less able to deal with problems that emerged in Tanzania and then Australia. The company was left with so little cash that continual and very dilutive capital raises were needed just to survive (to the detriment of ordinary shareholders). There was also the ill-fated Tsavorite acquisition - nothing came from that. The listed Group Company Secretary and CFO also had ties with Richland in the past. Thus Lexington does not have a completely new management team and board.

On the positive side Bernard Olivier has a PhD in geology and with new exploration and mining methods the company may be able to locate and dig enough quality gold out of the ground cheaply enough to make these old deposits profitable again. I hope that Lex shareholders will be more fortunate than those invested under previous guises of the company when Tanzanite, Tsavorite and then Sapphires were the mining targets.

Munpip is 100% correct when he said the company overpromised and underdelivered in the past. I hope those putting money into Lex are fully aware this is still speculative and the company has failed in a number of previous guises. Is there enough working capital to keep going if early attempts are not successful? Just would be wise to not get carried away with a sexy story and bet the house on this, as mining is unpredictable. While this could "hit gold" with shareholders doing very well, it could also fail.

Big Minnow - Not just a poor quality sapphire mine disaster, a Tsavorite disaster and after a promising start a Tanzanite disaster as well. I worry that many on here are just speculating on a sexy story, and this may turn out to be yet another "Gona" mine - "Gona make a profit but never does". Having rights to a mine is no guarantee it is going to be profitable to operate. On the other hand the CEO does have PhD in mining geology and using modern exploration methods, shareholders will have to hope he can this time he can successfully pull a rabbit out of the hat.

I agree with you that there is potential for coloured gemstones and it has been a fragmented industry. If you could get a player like Gemfields who could consolidate and sell a range of ethically produced coloured gemstones then this could increase potential demand and prices. RLD tried to market the ethical known-source route with little success. Problem is there are many sources of sapphires and much of Australian material is low quality and colour (although to be fair some of the best Oz stones can be great with some historically having been illegally passed of as being from Sri Lanka or Kashmir to unsuspecting buyers.

As an ex- shareholder for much of the RLD Oz venture and having with another shareholder communicated with other Austalian sapphire miners in the past, I probably know a hell of a lot more about the Capricorn deposit and what it has yielded and coloured gemstones than you do. The fact remains, Capricorn is on the whole a poor quality resource that RLD (and Australis before them) were unable to mine economically. In Richland's case that was despite having a PhD gemstone mining geologist as a CEO. It doesn't matter how many cts are in the ground if the majority are of a size and colour and quality that you can't sell for more than it costs you to dig them out of the ground. From Nov 2105 to 22 June 2018 90% of the cts sold (5,417,932 cts) were of low quality sapphires and carborundum for a total of $1,670,322. That's only $0.31 per ct. Other sales of medium. medium-high and high quality cts only brought in an additional $1,507,555 with even the supposedly high quality cts only selling for an average of $3.14/ct with an overall average price of $0.52/ct sold. The website only ever had a handful of nice stones at any time.

In contrast, before the thefts, smuggling, and mine invasions Tanzanite could be profitably mined and it was much easier to sell than the Oz sapphires given its rarity and beauty. Many Australian sapphires are very dark and can be cloudy requiring heat treatment. Also don't forget some of the deemed resource is low value corundum which sells for pennies. The mine did produce some nice stones including some funky parti-coloured ones but these were too few and far between and they never generated enough revenue to cover costs. The mine yielded the odd larger stone (much more valuable) but surprise surprise we never got to hear of any major sales of such stones.

A great company needs more than a nice story - RLD , aside from its profitable initial Tanzanite years has been a gona company ... Gona make a profit but never does. The carats in the ground at Capricorn are worthless if you can't sell them for more than it costs you to find, mine, market and sell them (adding in corporate costs as well). You can't make a silk purse out of a sow's ear.

Angel - FYI I am not a Market-maker - just an ex long term TNZ/RLD shareholder hence a passing interest in watching how things pan out.

Look at the numbers for FURA rather than be swayed by a sexy coloured gemstone story and wishful thinking. FURA has lost money in each of the last 10 years as well as the current TTM. Return of Capital is -260% ! If they hadn't raised yet more capital the Quick and Current Ratios suggest the company would have had trouble paying its short term debts. Why FURA (or anyone else) would want to buy the Capricorn mine with its limited and generally poor quality material that two companies (Australis and Richland) have failed to profitably mine there is surprising. The previous RLD CEO had a PhD in gemstone mining geology and even he couldn't cover the costs of digging the stuff out of the ground. But then FURA has a track record of being a terrible allocator of investors capital.

Be wary of sexy story stocks - if you watch the Ed Croft video I posted a link to you will see that most companies exhibiting at the UK investment show he was speaking at (often with nice optimistic stories) were poor quality businesses and hence poor investments (expensive junk stocks rather than cheap quality stocks). I worry how some on here don't seem to grasp that a very low price per share doesn't necessarily mean it is cheap.

Granted - with RLD we are no longer thinking about value of the business; but rather simply the value of a cash shell that has an AIM listing and substantial losses on the books that could be offset against future profits.

Presumably for an RTO to make sense the buying company needs to have profits it can offset losses against to reduce its tax liability (which FURA doesn't have).

Agree with Quindell and Graham-Wales. Don't shoot the messengers. It is a pity that this board has sunk to predominantly twitter length highly speculative micro-posts and wishful hunches (without in most cases any supporting evidence presented to justify the confident assertions presented). I fear for the bank balances of those who think speculating is investing and that "0.1p is so cheap" and "it must go up from here" or "this is going to fly by next Wednesday".

Maybe someone might want to buy RLD's debt with an RTO to offset losses against a profitable business. However, who on here is knowledgeable or experienced enough with RTO's to comment and give good advice? I certainly am not.

FURA is also a rubbish company, that has like Richland been loss-making for years and like Richland has burned through millions of dollars of shareholders money while seriously diluting their holdings. Why did FURA want to buy a twice failed sapphire mine that couldn't produce enough quality material to even cover the costs of digging it out of the ground?

I suspect the only people who might get something from this RLD mess, in the end, will be the insiders and directors and the odd pump and dumper, with the average retail shareholder losing out. RLD has had a track record of some questionable deals (e.g. Tsavorite), leaving shareholders in the dark (e.g. failing to give shareholders proper breakdowns of sizes, quality and colours of sapphres and carborundums mined and prices achieved for each class) and misleading shareholders ("sapphire operations about to become profitable" and " can't find a buyer for the Tanzanite Experience " yet it was still operational after selling their Tanzanite operations!"). Caveat emptor.

While not for me, I will keep an occasional eye on this to see how things pan out. Hopefully, for the people still speculating with money in RLD there will be an RTO within the deadline period that gives them a return in the end.

Worth watching Stockopedia's Ed Croft's 2106 "Manage the Monkey" presentation he gave at a UK investment show (https://www.youtube.com/watch?v=K174mUaSV4U). He presented some interesting results from a study of the performance and quality and value of the 100 most discussed shares on UK bulletin boards. Only 4% of the 100 most discussed shares were what could be termed good cheap quality stocks (that tend to outperform). Instead a large proportion of those being discussed on bulletin boards were deemed "sucker stocks" that were expensive loss-making speculative junk shares (based on fundamental analysis). The average performance he quoted for the 100 most discussed bulletin board shares in the UK was -22%/year - well below what the FTES100 did over the same period. Studies in multiple countries have shown that on average individual retail investors underperform their local markets.

For those gamblers out there - good luck - but don't put in more into RLD than you can afford to lose. Bew

No need for the snide comments Gorilla - Ad hominems don't add anything to your post and detract from your point that I probably misunderstood Kryzs' post (i.e. that Fura might be interested in obtaining Capricorn). I accept that I probably misunderstood Kryzs' post. Afraid I am not from the twitter generation - but I still wouldn't classify a 14 line post as an essay.

Since when was providing some pretty negative data on a company and asking what the investment case was for it condescending ? (albeit on a probable misunderstanding of Kryzs' post). I would have thought the numbers I gave were useful in informing any discussion as to the suitability of Fura as an investment and justify asking questions as to what the investment case for Fura is ?

On the basis that Kryzs was rather suggesting that perhaps Fura as another Gem company may want to acquire the Capricorn sapphire mine.... Fura's 2018 accounts are not yet up on their website, but from their 2017 report I see that (as of end 2017) the company had a negative working capital of $1.984m and a cummulative loss since inception of $11.804m. It lost $9.558m in 2017 alone and more than doubled its share capital during the year to raise some funds. Not sure if this includes losses when it traded as Fura Emeralds before changing its name. According to the 2017 annual report, the company has a need for equity capital and financing for working capital and exploration and development of its properties.Its ability to continue as a going concern is dependent on more capital raising. I see Fura also reportedly committed to spending $25m on Montepuez over the next 3 years. This will require further significant capital raising. Cash at 2017 year end given as only $298,566. Given the weakness of Fura's balance sheet and its poor performance to date, why would it seek to further dissipate its efforts and raise even more capital to buy a sapphire mine that has (unfortunately for us) not yet been able to generate profits (under both Australis and RLD management)?

Hi Quinny - Regards to you too. Am keeping well - Some positives and some negatives with the rhinos. Fingers crossed that something materialises, and you and others still invested here get something back from RLD.

Fura Gems - despite it being a penny stock - based on financials to date this looks to be expensive junk. Stockopedia classifies this as a "sucker stock" and hence likely to underperform. This company has lost money in each of the last 10 years and its current TTM EPS is -$0.25 which is the worst performance since 2012/13FY and almost at the shareprice level of $0.34! Return on Equity is -242.5% Return on Capital is -241.8% and liquidity is not good either with Current and Quick Ratios of 0.3 and 0.2 respectively. For me these are all huge red flags. If you like speculating and want to gamble, or have confidence and a business cases for why and how the company is likely to finally be in a position to start posting profits soon (despite not posting a profit in the last ten years) then maybe this is for you. What is the investment case for a longer term focused fundamental investor who wants to be pretty confident EPS will be positive and markedly higher in 3-5 years time? Why is the future here going to be different to the disastrous past? As a more fundamental investor this one is not for me. If you have suffered with RLD why on earth put yourself through possibly more trauma with yet another speculative mining stock?

Hi Quinny, Regards to you too. Sounds positive - but surprised that when we had a professional geologist as CEO such a high grade zone had not been targeted earlier. However, perhaps it has only recently been discovered following research that may have set in motion by Bernard a while back to try to improve on choice of areas to mine. Sapphire mining can be a bit hit and miss and the company may have been unlucky with choices of areas they have mined in to date. Good to learn about no dilution. For your sake and other continuing holders, I hope everything pans out and this is not just another claim of profitability round the corner which doesn't materialise. Still, there is huge room for improvement in communications from the company who have been keeping shareholders in the dark. GLA

As you rightly say "nobody knows" about the quality profile. The company is to blame here. The BOD are there to look after the shareholders. We are all having to, or had to, make decisions with inadequate information which is not good.

It wasn't because I sold out, but for me on the balance of probabilities. If you look at say Gemfields ruby and emerald mine profiles in the past, the high quality stuff made up only a very small part of production (but a big part of turnover). The Capricorn mine supposedly has a much bigger resource, and so if marketing and sales channels and better pricing could be developed in time then and better profits could come in the future. My thinking was Why run out of working capital and have such low sales and turnover that the share price tanks, and you then can only raise a little cash with very dilutive placings to the detriment of existing holders IF you could had sold some quality stones to boost turnover and reduce the need to raise working capital (albeit not at best prices)? Your are right that it certainly would make sense to keep some quality back if you are only getting offered really lowball prices. I suspect there was a bit of this. You may well be right that the company has kept some quality back for this reason. I just can't work out why they never put more quality stones on the website, or have reported selling ANY quality stones for a reasonable price. Shareholders have certainly been kept in the dark about what has been going on which is not good. Good luck to all who have stayed in. I may be wrong and if suddenly, large amounts of stockpiled quality are reported sold at good prices following the new CEO succeeding with setting up marketing/sales then profitability could be possible and the share price should rocket. A few on here will be smiling and I for one will drink a toast to your success if that is the case!

Typo - should read 1.11m cts unsold (ignore $ sign)

Jace - Based on company reports and updates since mining started in 2015, the company has reported production of 6,598,297 cts. After ramping up they mined 3,023,760 cts in the first three quarters of 2017. Thus they were therefore on target for 4m cts that year had they continued to mine. However you are completely wrong about prices achieved. While operating costs were reduced from $2.00/ct in Q1 2016 to 0.75c/ct for Q3 2017 the bulk (4,887,326 cts or 89%) of the total 5,487,651 cts sold up till end of 2017 were of low quality sapphire and carborundum. Turnover from this material only raised $1,6423,017 = averaging only $0.34 per ct (way below costs of production). The bulk of the 2,225,730cts of low quality sapphire and carborundum sold in Q4 2017 went for an average of only $0.04/ct (presumably largely carborundum) with the best Half year avg price for this material being $1.30/ct in 1H 2016. A total of 117,6777 medium cts sold for $185,147 or $1.57/ct with 444,572 cts of medium/high selling for $2.71 and 38,076 cts high quality selling for $118,546 or $3.11/ct. This gives an overall average of price/ct sold to date of only $0.57/ct. This is well below the cost of production, and nowhere near your figure of $1.70. Remember, to turn a profit, the company has to cover the rest of its corporate costs in addition to costs of production. It has not yet managed to do even the latter. The result has been a burn through of cash reserves. The company has raised a little extra capital (but due to the low sp this was via highly dilutive placings that were very damaging to existing shareholders). It doesn't matter how big the sapphire resource is - if much of its is very low quality and you can't dig it out and sell it for more than it costs you to do so. That leaves $1,110,646 cts of reported production unsold by end 2017. I suspect much of this will be pretty worthless carborundum. If on the other hand much of it is higher quality; it begs the question as to why there was no attempt to sell more of this to generate much needed working capital (while trying to build markets and sales channels) in order to avoid/limit the very dilutive placings at low cost. Apart from a tiny number of stones sold on the website, why have there been no reported sales of quality material for decent prices? Why have shareholders been kept in the dark regarding the quality profile being mined? Why were so few quality stones for sale on the website? What happened to the beautiful big stones we saw photos of? Profitability most probably will hinge on developing and marketing and finally selling quality material for decent prices. As is the case with Gemfields' Rubies and Emeralds, high quality material is only likely to make up a small % (but all important part) of production. In the past Australis tried and failed at the same mine before going under. Did RLD buy a lemon of a mine with a poor quality profile?

Hope the new plan (whatever that is) is a success and can turn things round. The new CEO must know the Capricorn mine well as I see from his LinkedIn profile he acted as "negotiator/translator and selling agent for a joint venture agreement between Memory Gems, the principal Thai investor and Australis Mining Corporation Ltd, a publicly listed Australian company to own and operate the largest sapphire mine in Australia". (For any new posters that don't know Australis was the last company to operate the Capricorn mine, but failed). His profile says that monthly shipments then averaged US$300,000 in value, comprising between 10 to 50 kilos of rough that were received. He is listed as V-P of the Thai Gem and Jewelry Traders Association and its Chairman for overseas business development. Hopefully efforts this time round will be more successful. From comments from an ex-Australis employee at the time (and given Bernard's geological expertise), Richland's mining operation will be more professional than Australis's was. Clearly the new CEO's experience is in treatment, sales and marketing and hopefully with his experience and connections he can finally sort out the sales and marketing going forward. The question as to how much quality he has to sell still remains.

Hi Quinny, Yes thanks and trust you are doing well too. Sounds positive - will await news with interest.

Apologies for double post- I got and error message and resubmitted only to find original went through,

Agree DtE that Directors effectively buying is a major positive. Fingers crossed for those invested, that he has done this because he has confidence that company fortunes are about to turn. Maybe he will bring the marketing success that has so far eluded the company in Oz?. On the other side the question remains as to why there has been no significant sales of quality material to date.

Agree DtE that Directors effectively buying is a major positive. Fingers crossed for those invested, that he has done this because he has confidence that company fortunes are about to turn. Maybe he will bring the marketing success that has so far eluded the company in Oz?. On the other side the question remains as to why there has been no significant sales of quality material to date.