Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Johns,
I feel your frustration.
I am not a shareholder here. I wanted to be and wasted a huge amount of time and effort trying to convince CA and HUR "leadership" team hat there were some very interesting things that could have been done with that cash pile (and, albeit not perfect, I was in favour of the Albion/Tony Buckingham deal).
So, I have not lost money here as a shareholder (I would not ever have bought shares unless Wolfe and Maris were removed) but I have lost a lot of wasted time.
Which is fine. That was my risk and I knew that when I decided to expend time and effort on seeing whether this company, with some decent leadership (ie not Wolfe and Maris) could have done some extremely interesting transitional energy things with that massive cash pile.
Basically done a Morph Strategy, like Nokia (forestry into cellphones).
That could not happen because the "leadership" team (Wolfe and Maris) were a total disaster and CA were not able to remove them.
I do not hold shares here, so have suffered no direct loss (though, given a proper leadership team with a proper strategy, I think this stock could have had real legs - which is why I felt the Albion/Tony Buckingham deal, imperfect though it may have been, was potentially a very interesting way out of a mess.
I think that shareholders here should think about suing Wolfe and Maris in their personal capacities for monumental value destruction.
And maybe even see if CA would join as a co-suitor.
Johns,
I think you are very right.
This Prax "deal" is one of the worst I have ever seen.
It is a total mystery to me why CA withdrew the EGM requisition to do the Albion/Tony Buckingham deal.
That deal was not perfect - but it was a million times better than this deal.
It would have gotten rid of Wolfe and Maris (two greater clowns one could not hope to find in your worst nightmare) and given a powerful team an opportunity to use that cash firepower to really make some action happened.
Because of CA's withdrawal of that option, everyone is now stuck in a weird sort of no-man's land - while Wolfe and Maris are richly rewarded for doing what might appear to be absolutely sod-all.
This can drag out for as long as it wants - they keep getting paid every month, despite being demonstrably inept.
Nothing much can really be done here without CA showing some combination of strategic nous and a degree of intestinal fortitude - which they have shown before (the rejection of the crazy debt equity swap pushed by the ludicrous Maris was only defeated because CA fought back).
No government of any sanity is going to give a long term contract on something as critical as currency printing or passport printing to a company whose solvency appears questionable.
So, that hugely damages the sales pipeline - especially when there are several other much more financially stable competitors out there who can do exactly the same thing, in some cases much better.
There could be something to rescue in DLAR but it needs a complete change in strategy and operational and financial structure.
I think CA's attempt to bring in a new chairman who has very few apparent merits is likely doomed to failure - like CA's last attempt to evict Loosemore, which was thoroughly thumped.
It is very frustrating that this "leadership" team seem committed to a path that even the captain of the Titanic would have seen as a bad idea.
The chances of removing them - Loosemore and Vacher - are very low indeed.
They need to be persuaded to a different strategy and CA should have spent their time on that.
Because the chances of kicking them out are not good at all.
I am not normally an O&G investor (much more US tech and biotech) and I have no geological expertise.
I am just an arbitrageur (seeking out discrepancy between share price and what I think may be the real VALUE). But I tend to take a patient view on how that discrepancy narrows - it does not always happens as quickly as one might want and hope). So, I am not a trader.
In the case of PANR, it has not been a great experience of late - I hardly need remind other shareholders of that.
But it does appear to me that it may have been oversold, possibly significantly so.
The asset remains probably enormously valuable. A potentially great asset. Obviously, especially with minnow O&G companies, there can be many a slip twixt cup and lip, but it seems to me than the SP currently is a long way south of reflecting true VALUE.
Take any BB observations from whence they come - I have a decent size holding in PANR at an average buy-in price at 122, so, at about 80% down currently, I won't need to be taking any more baths for a while.
I still think it is a very good asset and will hold through.
404, it may speak to ability to get this deal for HUR, terrible though some may think it is, over the line.
It will require mustering some element of shareholder support - or at least not creating a significant pool of shareholder opposition - and CA's record on that is, at best, described as mixed.
To be fair, they did extraordinarily good work in stopping Maris and Evercore's crazy debt-equity scheme and all shareholders in HUR should be hugely grateful to CA and specifically RB for that.
But they (CA) were complicit here in allowing a very weak board, a disastrous chairman (Wolfe) and a complete clown (Maris) to run riot and destroy value on a monumental scale.
The failure to sack - and then sue - Wolfe and Maris has been at the total heart of CA's inability to drive value-creation in HUR and just allowed it to be used as a sinecure for some useless executives and a useless chairman.
Just look at the "quality" of the proposed new chairman put forward by Crystal Amber to replace Loosemore (never did a chairman have a more apt surname).
Did Crystal Amber do no proper search to find a credible alternative to Loosemore and instead came up with this?
I will be astonished if this EGM motion passes. It is pretty much p*ssing into the wind. Or an electric fan.
Either way, there does not appear any way out of this Valley of Death for DLAR while Loosemore and Vacher remain in place.
Trifle,
I agree with your sentiments.
Efficient Markets Theory is complete drivel, dreamed up by academics and economists, most of whom couldn't lose their virginity in a brothel.
Especially in small caps, it is a 99% psychological exercise.
Obviously you have to have picked the right stock with strong fundamentals. Call that Insight/Research.
Then you need Patience.
Then you also need a helping of Courage because sometimes things don't always play out as one would have wished (that is usually just a timing issue if one is right on the fundamentals).
All that is required here in PRD for shareholders to make decent money (I am not talking about riff-raff spivvy traders) is some patience and courage. And many here on this BB have shown that at commendable levels.
The PRD ship will berth at that dock called VALUE.
An unsolicited offer here is always a potential challenge, especially given that the current SP would seem to be way south of true VALUE.
I am not sure a classic hostile takeover is too likely - PG, Lonny and ONHYM are too critical to this business for that to happen (hostiles usually only succeed when shareholders have had enough of crap management who have no skin in the game - we have the exact opposite of that here).
I think that what we could have here - and one of the reasons I have been long invested - could be an auction-type environment, where a number of big boys want to get the asset and will be prepared to pay to get it rather than let their competitors get it.
PG, Lonny and ONHYM hold all the cards here - which is a great thing for smaller shareholders because it means an under-priced unsolicited offer is extremely unlikely to go through.
Obviously, I hope KeithOz's analysis is right but whatever I think this stock has a huge ways to run, especially if the distribution mechanism is special dividend - because that leaves the stock, post special dividend, as pure optionality on all the remaining assets (the rest of the Morocco licence area, Ireland and Trinidad).
I think it all looks rather good.
And I think PG and Lonny are doing an excellent job.
Razorman, I think some of your points are well made and have considerable merit.
The fact remains that PG and Lonny have assembled an incredible trifecta of assets on a shoestring.
I am not suggesting that things could have been done differently, especially on the comms side.
But we are all just human and there are only 24 hours in the day.
I think PG and Lonny and now the lady driller have achieved extraordinary things and are well on the way to crystallising huge VALUE here.
For which I applaud them to the rafters.
I feel very sorry indeed for those loyal shareholders here who lost so much money here - on what seemed to be a great asset.
I think CA and RB showed huge loyalty to this situation and did incredibly sterling work in blocking the utterly insane debt-equity swap deal put forward by Maris, advised by Evercore.
I think RB has made some sub-optimal decisions since then as regards this stock but for that action alone, RB deserves the investing equivalent of a Victoria Cross.
Wolfe and Maris should be sued in their personal capacities for the value destruction they have architected here.
Little Nige,
It is not always easy to make sense of your posts.
You reference "capital conservation" and seem deeply concerned that I may not have done as well on that front as would be ideal.
That happens to not to be true - and is none of your business anyway. Don't worry about me, I am perfectly capable of looking after myself.
Anyway, my investment strategy over 30 years has never been about "capital conservation", it has been about "capital multiplication".
And I think, in a long investing career, PRD may well be the best single situation for capital multiplication I have ever seen.
Hence, I have been in here for 3 years and will be staying.
And think PG and Lonny have done a great job in assembling this asset portfolio.
I have been consistent on that since I first invested here.
And I think things have only gotten better......
Little Nige,
How might you even begin to have the first clue about my "capital conservation" position? I have been in here for 3 years now and bought advantageously at some points and at some points I bought at less propitious moments. But my average is still very attractive - and, anyway, I always just look at it relative to the VALUE I believe to be herein PRD.
I do not opine on Guercif because I am not a technical O&G guy, so my opinion on that would be worth about as much as that of the dog in the park.
I simply observe the quality of input from some here (there are several) and who really do know their stuff technically and I weight that heavily in my analysis of likely VALUE.
I don't tend to attribute much value to your contributions. A view I think is pretty widely held on this BB.
Some here added incredible value in terms of their factual contributions over a long period (GRH, KeithOz, Wacky, Methodology, Seabright, MickTrick, BRV, Vegas and other), contributions which were often very helpful to the discourse when the Muppet Brigade were in full flown.
So much of what they said was factual and related to the quality (VALUE) of the assets, rather than just opinion.
When this ship berths, many of us will owe those stalwarts for the time, effort and huge value they added to this BB.
It would be less clear what value, if any, Lttle Nige, his bag-carrier, Redbox, and PastaBelly brought to the table.
The RNS's may not have been perfect.
And some posters on here have grievances about that. Which is entirely legitimate and understandable. And some of those posts are actually fairly lucid and reasonable (Jonmo, Aimster, etc).
Then there is the stuff posted by Little Nige, his bag-carrier Redbox and PastaBelly.
I would only commend any interested investor here to read some of the postings by some people who have serious knowledge and insight (GRH, KeithOz, Methodology, Wacky, Seabright, BRV, etc) to get a clear analaysis of what could be at play here.
Jonmo,
I be not a geologist (in fact, I am normally not an O&G investor at all - tech and biotech is my normal focus).
But there is some serious knowledge and experience on this BB (KeithOz, etc - and, even though GRH is not actually a geologist, his level of knowledge there is pretty astounding).
But O&G is necessarily exposed to Mother Earth. Which is a complex being.
Hard timelines are difficult to hit. Especially when the team is run lean, as PRD's is.
And I think it brilliant that they (PG and Lonny) run the cost base lean.
The upside is in the VALUE - how much is there when they hit it. I believe they will hit it and am prepared to wait for them to hit it.
I am sure they are doing it in the best way possible. But they are dealing with rock and mud.
Lots of people, including Churchill, yelled at Montgomery about his taking time to attack the Afrika Korps in the Western Desert in 1942. Time needed to be taken and when he came through at El Alamein, he smashed Rommel.
I believe that, in PG, we have our own Monty.
Comms is just weather on the trip. The destination - VALUE - is all that counts.
I have not myself been a fan of PRD's comms strategy. And that goes back some time.
However, I would observe that PRD is run very lean by PG and Lonny and they have done an excellent job of assembling a great portfolio of assets.
I remain well invested here and think it has been an excellent investment.
The comms stuff may affect the SP in the short term. All that matters is the ultimate VALUE - and I think that PG and Lonny are doing very well in that regard.
Poor comms will often upset nappy-wetters. The end goal is VALUE - and that should be the only metric to be invested here.
ASI,
It is lovely and sweet that you are putting up these docs. And, presumably, trying to make me look stupid (which may not be the hardest task in the world).
The fact remains that the market - the share price - reflects the fact that this "deal" sucks.
The SP is not always right, especially to upside but, when it is compared to a so-called "deal" and is way south of the value of the "deal", that is usually a good indicator that the "deal" is less than optimal - and may, indeed, be sewage on an industrial scale.
ASI,
No advice has been proferred .
Opinions have been given .
I have not seen the terms of the irrevocable undertakings supposedly given by CA and Kerogen in favour of the Prax "deal".
It is not impossible that another offer could come out of the woodwork (though that would seem unlikely - who with a brain would bid cash for cash at a premium)?
Whether the irrevocables (supposedly) would then be enforceable would be dependent on how tightly structured those agreements were.
Putting this thing into unlisted DCU's seems to me to be an utter joke - at least the Buckingham offer left the company listed and with therefore liquid upside for shareholders.
DCU's are unlisted and totally illiquid - and totally subject to the controller's accounting policy. Profits can easily be made to disappear, at least temporarily.
The Tony Buckingham deal was not perfect - but it was a hell of a lot more interesting and exciting than this Prax "deal".
From the instant CA pulled that EGM requisition for the board replacement and the Buckingham deal, this stock was dead man walking.
CA had basically tattooed "VICTIM" right in the centre of its forehead - and Wolfe and Maris were going to keep getting richly paid for destroying the company.