Member Info for Rickylfc5

Jan has resigned his role of CEO at PALA with immediate effect - see the PALA website news section

And Iluka were offering £435m for Kennare which had a turnover last year of $135m a profit of $5m and over $300m of debt - It would be great if there is a scramble for assets in the industry

Interesting volumes today - is something happening??

Here is the link (it was dated 15th May) http://www.iluka.com/docs/default-source/company-presentations/presentation-to-bank-of-america-merrill-lynch-conference-miami-by-david-robb-(15-may-2014).pdf?sfvrsn=4 page 9 talks about an 'inventory Bullwhip'

Www.iluka.com take a look at the presentation dated 28th may on the home page

Take a look at Iluka (largest Co in the sector) they produce some good market analysis in presentations posted in their website - they talk about av'Bullwhip' in demand and prices

Well the Directors are fully loaded with shares (some purchased and some through options) so the only way they will realise any value is to sell the Company - hopefully they will get this back on track

Adams - I think we need more detail from AAZ - their cost of sales should simply be the total extraction costs (before overhead and interest etc) but they calculate cash costs at only $600 oz - so why the massive (non cash ) extra costs. Depreciation of equipment is part of it but also the massive discrepancy on 'inventory expensed' may account for some of the difference

I am still not clear on the stock 'charge' against profits. - why is it so much higher than the previous year (on similar volumes) my guess is they discovered inventory was over valued and therefore had to write some down ( hence the warning about accounting issues) also there is a big discrepancy between cash costs of $600 per oz and the cost of sales which work out at over $1000 per oz (some of which will be depreciation)

Looking at the accounts one of the noteable figures is the write down of £36m of inventory (note 7) which is more than 3 times the Company's market cap!! - this is a non cash item and explain alot of difference between the cash costs per oz and the low gross margin. (it is probably also the accounting problem found pre announcement) - this level of write down shouldn't be repeated in 2014. This share is a buy at current levels - subject to the gold price holding

Maybe calling off the takeover talks was a tactic to tease a higher price from the aquirer???

FFS how much longer before we hear whether the TO us going through???

The report doesn't really talk much about the market and the future, more about what they've achieved. Also Mr Sisay has committed to owning 4 million share (he doesn't hold any) but he does have 4 million + options. Interestingly, most of his option were due to expire on 3rd March but due to the TO talks he wan't allowed to exercise them, however, the date for exercising them has been extended to end of July. I may be overly optimistic but believe the deal is still on.

Pala only need two fellow large investors to agree the takeover details to achieve the 75% threshold and they would have sounded them out before this process begun ( to avoid wasted afford and costs) - I remain hopeful even though, on some days , I wonder if this will ever happen!!!

Don't think its Pala - they have already announced that they have engaged RBC capital markets to deal with the sale - Pala aim is to turn around and sell. As previously discussed could be a Chinese buyer or a private equity - will find out soon. Don't forget the Directors loaded up on shares in the second half of 2013 and (IMO) they did this to cash in on the sale - Jan Castro personaly spent around £950k on shares in the 50p + range

I will take a guess here and predict that the announcement will be next month. I say this as there has not been any news that the talks are off - so they must be finalising. Also, SRX have extended the share option date from 2nd March - in my view this has been done to allow employees and Directors to take up the options as the announcement is made.

I can't see that PALA will bid - the Company has stated that RBC Capital markets have ben engaged to handle the potential sale - that doens't strike me as the kind of thing that would happen if PALA were to bid. Don't forget that only 5% of the shares are in free float - the rest are held by PALA (over 50%) and a few other City investors. All PALA need to do is agree a sale with one or two of the other investors (to achieve 75%) and agree a deal with a buyer - RBC have been angaged to handle this process. It may all collapse if a price cannot be agreed (or DD problems) - personally I would see it around the £1.50 mark valuing SRX at about £750m - a potential investor could see value at this level. One other possibility is a buyout by another City Institution - to hold and re sell in a few years.