Member Info for RightOn

One other point. Money spent to date is being charged through an intercompany loan to the production venture (Konnex). This is viewed as an asset, and they have stated it will be paid back as dividend from production, so potentially we’re looking on a real early return of our investment to date, particularly as I have heard that the annual revenue will be the order of $55 million for an investment of $25 million.

Yes, they do need finance to see the company move forward, just like any company. The key holding them back to the present time has been whether they can access debt finance, or through equity which will lead to more dilution. I sat in a shareholders lunch not long ago, and they were confident that they could move into project finance mode, based on debt equity (loan notes). The funds raised recently should take them through to the major project finance steps, hence minimising dilution. This is great news, as it demonstrates that we are moving out of exploration and in to production. And yes, I understood that the silver project capital cost is estimated at $25 million, not $51 million. Everything appeared to be well mapped out in that lunch, and with the annual report I see this on track.

Has anyone else read through the annual report issued last week (link at the foot)? I have just completed my read, and have been blown away. I just don’t understand why this company is not flying. Let me pick out a couple of points.
The company has moved forward in leaps and bounds. The money from equity raising has gone into developing their assets, with a book value today of $11.6 million (compared to $5.3 million in 2018), and compared to the market capital today of about £3 million. These are audited numbers, with no impairment. Today’s share price is silly in comparison.
Phoenix are presently conducting the next drill programme on the high grade Red Star silver deposit, and they’ve even anticipated that Covid will not impact their programme. All the analyses to date point to high grade, high value and easy to mine mineralisations across their territory, and to being a low cost producer.
The fundamentals remain very solid. This is a company operating in a stable environment, with assets largely exceeding current share price, who plan to have production under way for end 2021, with a pay-back of under a year. This could be the opportunity of the century.
https://static1.squarespace.com/static/5914577386e6c0cd77e15c74/t/5e95d21fddd79043a5cb4031/1586876962161/PXC+2019+Annual+Report.pdf

My apologies for this is off board, but I wanted to thank Tuscan who posted here on 30th March about CASL. Following that I popped over, looked and investigated, and invested a few £k at 2.75p. It went up, I sold half at 6.5p, so am now getting a free ride with the remainder. Thanks Tuscon. The beers are on me when this silly period is over if you are ever in the London area (do I remember you are in Spain?). I add that this is generally a very friendly board, and I do appreciate the constructive comments. Well done all!

I hope your oil knowledge is better than Covid-19. My daughter lives in Germany and has been in a similar lock-down to us for about 3 weeks now, whilst Sweden is now considering moving to lock-down as they see deaths rising, according to the news I saw this morning, whilst Italy has no plans to lift the lock-down yet. As for the oil deal, whilst he would like to see oil move up I am sure, Putin must be rubbing his hands with the stress and calamity caused to the US oil shale industry. I would love to believe you, but I fear you are over optimistic.

I am an oil man, and worked in Kazakhstan in oil for 10 years, and won and lost with previous investments. I won large with Petrokazakhstan (can anyone remember as far back as that), and lost with Max. Can anyone convince me that we have a PK here, rather than a Max, as the fundamentals look closer to Max than PK (smaller company, gamble on deep wells, etc). I made good with PK, and want convincing that this is a winner, particularly when I see the oil price where it is, and tankers filling. The issue may not be that the price is low, but just that they cannot sell.
So, I am interested.... and would welcome your words.
Cheers!

How often do you see a shareholder buying with a 50% premium over market price? How confident he must feel! But the board is doing exactly what they promised in the earlier shareholders meetings. The money is coming in, and dilution is minimised. Next step into construction, and then operation before end 2021! Here we go....

These are my notes from the recent shareholder meeting. And my apologies for the delayed preparation, but the festivities intervened! I went into the meeting quite sceptical, and wanting to know why the share price is so stagnant.
The meeting brought together a number of board members, together with some non-institutional shareholders. We sat in round table, with shareholders able to quiz and exchange. These notes are a summary of that meeting, from one shareholder.
Up till earlier this year, the primary project was of course copper, and although still profitable, the early target has changed, due to significant discoveries in Red Star of very high grade lead and silver from a polymetallic galena resource. The objective has switched to get this into production asap, since it will have a much lower Capex than the copper resource, but with a similar return. They are taking samples across the mountain, and expect to have the analysis results back for mid-January. They are so confident with the results already in that roads are at present being built across the ore structure.
For production, they plan to process relatively locally, with several plants available, and expect the Capex to be approximately $25 million. Phoenix are currently financing via loan notes so minimising dilution, and whilst they cannot rule out some equity for the construction finance I think the current activity clearly indicates the commitment to minimise future dilution. This is extremely positive, as LN’s cannot normally be issued unless the financier sees production in sight, or to put another way, LN’s cannot generally be issued against exploration. There was talk about a possible end 2021 date for production to start. Everything appeared to be well mapped out.
Other comments: Copper is taking a step back at the present time, but can be reactivated at any moment; Phoenix is in the process of appointing a new broker / market maker. This is significant because neither SPA nor BHC act as market makers. Having someone on side in the market should help considerably.
Whilst earlier the biggest risk was raising finance without further dilution, the goal posts have moved substantially, and in our favour. To summarise, geologically we have switch to a higher valued resource, the resource is now known, politically the investment is safe, management know their business, and LN’s are being issued in advance of production. The share price in my opinion does not reflect the change in potential for this company.
In summary, I remain very positive, and will add to my holding. But please remember that the above represents my personal view, and you should do your own research.

I want to offer a little feedback from a Mining meeting I attended yesterday.
The British Ambassador to Kazakhstan offered that the switch to the new regime had been smooth, and although Nazarbaev was still holding some of the reins, the new President (Tokaev) was starting to carve out politics in his own style. The important thing was that we have continuity and stability, and Kazakhstan remains open and welcoming to foreign companies and investors.
The presenter from Kaz Minerals was very positive. He stated that Kaz Minerals have the second lowest operating costs in the world (the lowest is a small mine in Australia), through a combination of modern equipment, low employment numbers and low energy costs, and are on the trade routes to China, so this makes them very well placed. He said that the BoD are very confident about their plans, and had not missed a copper target in 10 years. The Baimskaya project is indeed for the long term, but is very similar to the existing facilities, and could be built as a copy, thereby further reducing costs, plus reducing unknowns. Putting the existing deposits together, adding in Baimskaya, could make Kaz Minerals the 4th largest company, by copper resources, in the world.
All the above came with appropriate health warnings, and I have tried to respect in the above the disclaimers supplied with the information, so it is a little diluted, but I wanted to give a general positive feel communicated for the long term health of this company.

In one day we have 2 sales, 2 buys, a positive balance of about £13,000, and yet the prices goes down. Can anyone offer an explanation?

Rastuss, you said you weren't sure about renaming Astana to Nur-Sultan. I think this is worth expanding, for it says a lot about the country. The name change went through in 1 day. Final. All signs changed overnight. No pansy consultation or impact assessment or review, no soliciting the views of the inhabitants. No thought of the consequences (which airport are we flying to?). There were demonstrations, which were easily resolved by arresting the participants. The underlings have done their sycophantic best, and the boss is flattered. Everyone is happy (apart from the population - a small detail). Why couldn't we manage that with Brexit? The Kazakhs laugh at our democracy. Three years later and more and we're still debating. Can you imagine the pain it will be when we rename London to "Boris" and the protests we would have!

Sorry for the delay, I did try to post earlier but with the changes on LSE, plus the move across to PXC, it got lost.
We had a conversation between the BoD and the audience about the name change, which was due to confusion with another company who listed shortly after us with a similar name. The BoD also felt that the new name reflected the core business better. We were told that copper represented more than 80% of the potential business, which made sense for the new name.
There were several questions from fellow investors, including one asking about difficulties US investors had to buy through their electronic platforms. A representative from OTC Markets was present and answered this question himself, specifically regarding the New York trading platform, and it is very clear that they are working closely with the company to resolve the outstanding issues in order to allow the company to trade electronically and without restrictions on the OTCQX Market. When this does happen there should be considerable demand from the US, and hopefully the sp will start to move up, as US buyers do show a real appetite.
In conversations after the formal session, I received a run down from a board director. The findings so far appear outstanding, with in-situ value of measured and indicated open pit metal valued at $850 million, with current metal prices. With the present BFS, and $60 million capital to be raised, production is scheduled to commence in 2021. The pay-back could be under a year! But moving into the future, the opportunity is almost unbelievable, with a significant exploration upside, since only 1% to 2% of the potential ore system has been explored to date. In the words of the director, the findings keep on coming. They have increased their staked territory to protect these new findings, which could be a world scale deposit. The key is financing, and they have many people knocking at the door. Their plan is to raise the maximum possible through debt and project financing, and keep share issue to the minimum, if any.
Hope this helps.

Yup, Rastuss. My apologies. Vladislav Kim. I stand corrected. Just exceedingly rich.
I don’t know if you are aware, but in the 1940s and early 1950s Stalin deported a whole range of people from frontiers who may pose a risk, and were sent to either Siberia or Kazakhstan The Koreans came and never went back. Very good business people and due to family bonds they survived those times and are now generally seen in high regard, and have moved up the ladder.

Vladimir or Vladislav. Well, Rastuss, on the Kaz Minerals website he’s called Vladimir. And on Forbes the same with a personal value of $4.3 billion. I’ll just call him stinking rich.

I attended the AGM yesterday, and had my confidence in this venture strongly reinforced. This is an early holding message, and I will try to document more fully early next week. But in short, this venture (mines) has the identified resources, so it is just a question of time and raising the finance. The key to success for us early investors is whether they can deliver the project without harming our value. It was my opinion from the AGM yesterday, and the very positive information being communicated, that whilst we may (note the word may) need to raise a little more cash to support the finance (some banks cannot offer 100% loan, and require some shareholder equity), this would deliver finance specifically for the project to construct and operate, essentially ending the risk for us. But the need for additional funds is not sure, whilst the BoD were talking positively of the finance houses calling for our business. I met and chatted to all of the BoD and were very impressed by them, and the time they allowed a small investor. I'll write more next week. If you have any specific questions, pose them here and I'll try to answer them, noting I am just a personal investor, and am not offering any form of advice.

Interesting link copied from Kaz Minerals on the future of copper. https://smallcaps.com.au/copper-demand-to-double-forcing-miners-more-for-less/
When we get into production the signs are very encouraging indeed!

I tried to log in via the link given by PGM, but it would not work for me. I hope they post this on their site.

Daramunda. I think you understate the picture, which even more positive than your message describes. With the reserves now getting clarified and set into bankable feasible studies, my reading is that the company is moving into raising funds through loans, not from share dilution. Look at the highlights of the RNS, and I think it is pretty clear, I quote "The Company will fast track into production a low capital cost open pit mine with a planned annual production rate of 8,000 tonnes of copper and zinc at an average head grade of 0.61% copper". My conclusion is that share dilution as a risk is getting lower by the day. When the market gets to understand the implications of this, I suspect this share will fly!
good luck to this rising bird!!

Aether, Kim is a very common name in Korea, and with people of Korean ethnicity in Kazakhstan. The way to identify is to look them up in Russian language version where they will generally be referred to with their patronymic names, which will clarify if they have the same father at least.

Are there any other views out there? Am I barking mad to feel that this company has a future?