The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Rastuss, at the time the rubbish part of Kazakhmys was divested and gifted, as you say, to Kim, it had a valuation of negative 2bn, and even now remains a poor business which, if it still was part of Kaz, would have made sure SP would not rise much above £3. With that part Kaz shed all liabilities, including maintaining football clubs, airlines, hospitals, seaside resorts, and not to mention building $150m libraries for the great capital of Astatna. On the day the spin-off was announced SP shot up (yes, it continued lower after, due to falling copper price and rising debt), and as this was a sale to a related party, the sale was subject to sharehder vote with Kim and friends prevented from voting. It was supported ovewhelmingly and remains the best thing Kaz have done to date, giving birth to what is now a fast growing lean and mean mining business with no government participation and no social burden which the remaining Kazakhmys carries to this date. All these conspiracu theories, political reasons behind the deal and all, it’s all utter rubish. The deal is a result of a long term vision and focus on the hottest commodity, and making sure it is obtained at the lowest cost well into the future. It doesn’t mean that they won’t mess it up again, or fail to build this new mine, but as someone said on this board, so far since restructuring the company hasn’t taken wrong steps.
Seer, respectfully, you don’t know what you’re talking about. The deal is normally announced as ‘done’ when the binding agreement is signed, so Abramoich and his buddies are in at $10.71 whether they like it or not. There is no renegotiation opportunity here, otherwise it would have been an MOU and not an agreement to purchase. They are in a paper loss now, but they wouldn’t care as they are obviously in this for a long ride - they only get their second part of shares when the mine reaches commercial production - that’s 8-10 years from now! Many here are criticizing the BOD for doing this deal, but few have noticed how incredibly well the consideration has been structured to tie in those Russkies for a long ride and to align their interest to success of the project. Look, the oligarchs are not stupid, if they have taken half of their deal value in shares locked in for minimum 3 years but practically for the duration of mine development and ramp up, they must believe that those shares will generate them an annual return worthy of the long-term holding risk. They clearly believe the asset’s potential, and so should other LTIs. The deal shook out short term traders, but investors in growth of this well run company with a vision will not be bothered.
Russtus, I disagree on dividends. I expect results to be very good, $700m ebitda is my guess. There was a question on divis in the webcast yesterday and they didn’t rule them out. My guess is they will start paying small dividend. As for the Chukotka, I said before I think it’s a great asset that would generate production for decades if not century. I encourage people to do some research. Check out USGS report. The company has been silent on its potential. And as to BHP and Rio, Russia is out of bounds for them now, but BHP did want to buy it for $1bn in 2012, before even pfs was done! Just google it. And Nornickel reportedly offered $750m cash! I think the market overreacted by a mile. I added £50k to my position yesterday and will add more if it goes lower. DYOR and keep faith all
Because the buy-out offer is at 825 plus shareholders get to keep the dividend, which is roughly 31.3p, so towards ex-div date (20 July) it should go up to 856 and then drop back to 825 before 30 July... Unless activist shareholders (if there are any) voice their objetions to a rather low ball offer and the expectation will be that the offer will actually be higher (unlikely in my view).
He is an unnecessary distraction to what was otherwise a decent strategy of bringing oxide into production. The company is not fit for doing large scale M&A, and I don't undrestand how Martin could fall for that. Kyrgyzstan is a very difficult jurisdiction, you cannot just assume that investors will start throwing money at you to do a bunch of M&A transaction just because Artem says so... What is Chaarat? A private equity company? Does Artem & Co have a requisite experience to create shareholder value through M&A? Is this a right strategy for the company? I don't think so...
Anyway, I wonder how many "consolidation transactions" he did with his ACG outfit since 2014 when it was apparently set up. Hmmm, lets see... well, given none are reported to be transferred to Chaarat along with the team, I can only conclude that none! Well then, if he wasn't successful on his own, why should I be convinced that he would be successful now leading Chaarat the same path? And why hasn't he been successful, did anyone ask? Did Martin bother to look into his departure from Kerimov's team (after only 3 months at the top job)? Or his stint at Sapinda with an (unsuccessful) attempt to muscle in on Petropavlovsk?
With his arrival Chaarat has suddenly changed its strategy from developing a promising deposit to wasting time on pursuing a dubious M&A strategy with no money or credibility to do so.
If he suceeds, great, I'll be the first one to admit I was wrong, but my money is on the opposite outcome. Current holders should get ready for some significant dilution in the meantime...
Spot on tucson. I'm getting 880 at $3. I can see the market dragging this below 800, probably towards 770, but I very much doubt this will go below 700. I'll be adding slowly, starting now.
Hmmm, if the RNS included copies of letter with no commentary and invited people to make their own conclusions, that would be perfectly fine. The RNS provided commentary that suggested that the information disclosed to them was incomplete and/or untrue. Look, I am not saying that those guys are not hiding their master - I was first to say that I think it's Rakishev who is behind them. I am saying that the Board should not be using RNS (which you so blindly believe) to peddle their own agenda. They have a website for that. Or they can take a whole page add in FT if they want. RNS is for releasing factual news, not opinions on whether someone is saying truth or not.
I'm not suggesting anything at all, Hmmm. Just couldn't help but notice how everyone immediately assumes that what the board are saying is the truth. Following this whole affair is a great entertainment! And educational, too.
Contrarian, I told you already, I was a shareholder once, lost quite a bit of money, following it ever since. Have never met the CEO, couldn't care less about him. Actually heard good things about him from someone who used to work with him. But that video was just awful - he needs some PR training... Look, you should welcome people like me on the board. My opinion is not biased by having a holding.
Contrarian, that's a terrible video. It was so painful to watch him I couldn't concentrate on what he was saying. This guy is out of his depth. I'm definitely not going to be investing with him in charge.
I know it's probably a stretch, but what if this bunch of Russians indeed is the true owner of cabs/slevin? Who knows, maybe they made some money last year in the crypto craze and decided to invest in a Russian gold company (they are Russians after all). They looked at POG and thouhgt to themselves "well, that's a hell of a low EV/EBITDA multiple, it's a ten baggar, no doubt", and without doing a proper analysis they ploughed £20m of the hard-earned bitcoin into the stock. Once invested, they realised their mistake of not doing the homework and decided to investigate. They met PH and PM who scared them into action...... LOL, I know, but maybe, just maybe... I'm just throwing this out there for people to pause and think why is it that we all blindly believe what the board tells us in their latest RNS? After all, no amount of disclosure would satisfly them...
There was a bunch of RNSs on 27 Dec. One of them shows Fincraft voting reducing from 29.25 to 20.17. Another same day shows VTB going from zero to 9.08. My guess is Rakishev used a loan from VTB to finance acquisition and used shares as collateral.
Millfield, the reason I said Mr Rakishev will win control is this: Don't you find it interesting that in a very short space of time, he first acquires 29.25% of votes, then he transfers 9.08% to VTB, then very soon after a misterous cabs/slevin (crypto investors - just like Rakishev - and with the russian background) suddenly acquire 9.11% from Vailaski (notably with 0.46 residual ending up with PH)? The Mukazahov starts buying and around the same time cabs/slevin send in a requisition... I'm no conspiracy theorist, but seems to me this is all one and the same person shifting votes around trying to avoid getting caught by the 29.99% mandatory offer trigger... PM/PH have no reason to hide behind cabs/slevin. No one has, but Rukishev.
Fincraft - 20.17% VTB - 9.08% Cabs/Slevin - 9.11% Mukazhanov - 0.04% TOTAL = 38.4% Bloomberg showing: Philotus (Hambro) - 0.46% Maslovskiy - 0.14% Chekashkin - 0.11% Ermolenko - 0.01% TOTAL = 0.72% So, my guess is that in total, about 40% of votes will go against the current board. Even with an increased interest, I would guess that only about 75-78% of all shareholders would actually cast a vote on the day. Hence my prediction would be that Mr Rakishev will take control of the company with roughly 52-53% of the votes on the day. All IMHO, pure guessing, so don't crucify me, I could be totally wrong. DYOR
Well said CofE, people should respect the opinions of others. It's quite cowardly to hide behind the anonimity of the electronic communication such as this board. I bet this unnamed person would watch his tone if he was talking to miners at a pub in Donetsk, or Blagoveschensk )) Anyway, to respond to a challenge to my opinion, firstly, my point was not about supporting the old board, it was about hypocricy of Sothic and the current board. They are given a taste of their own medicine and shoudn't cry about it now and pretend they are doing something new that the previous board didn't. The previous board was trying to do exactly the same. So, yes, it's all about money, about control of whatever is remaining of this company and the cashflows it generates. Secondly, trust me Contrarian, I know what I'm talking about. My name has nothing to do with Donetsk and the eponimous football club, but rather with mining, as I happen to work in the field. I personally know and/or have worked with half of the people on both the current and the previous boards, and at various times (and unrelated to POG) have met with Vekselberg, Rakishev and even Windhorst who also tried his luck with POG. I could give you a lecture on what Peter and Pavel did wrong. I personally had many discussions with several of the key executives at POG so I know what I am talking about. Yes, Peter and Pavel made a meal of this company, but the were eating it! It's a great shame that instead of supporting them Sothic chose to support a coup by Vekselberg and installed their board, who are no better. sothic have started this mess of a fight for POg's control, which has taken the time of the previous management, and is now taking the time of the current management. The precious time that needs to be dedicated to building POX and running operations of a mining company. So I have no sympathy to Sothic and their crying. But I'm not supporting the return of Pavel either. I'm just saying P&P would have been better than all these distractions. I have my view's on who's behind the CABS and Slevin, but will keep them to myself. At the end, it doesn't matter who wins the fight. The shareholders are more likely to lose than to have a hope for a rapit return of their lost fortunes. And for these reasons I am staying away from investing. But genuinely wishing good luck to all those holding!
Great few posts there, kenj! I'm in complete agreement with you. I'm not a shareholder now - got out at a sizeable loss a few years back but have been following the POG saga since. I observed Renova-orchestrated coup last year and now, following the current battle and reading the Sothic letter today, I had similar thoughts to yours. Sothic talk about board's new strategy. What a bunch of nonsesne! Peter and Pavel were pursuing the same strategy, it's quite simple really - build POX, remove guarantee and keep producing gold. Are there any other options? The new board is not doing anything new. And Peter and Pavel would have done it better, I'm sure - they've realised their mistakes, and they were on a path of rectifying them, and Pavel new what needs doing. Instead Sothic supported Vekselberg who had his own agenda of dumping into POG his Kamchatka assets which he didn't know what to do with for years! Now Sothic complain that Rakishev is confused with his M&A ideas. A bunch of shameless hypocrites they are! If I had shares now, I'd certainly be voting the current board off. All IMHO
At last some good news on Koksay. NFC just bought into the project, investing $70m for 19.4%. NFC were the ones that built both Bozshakol and Aktogay, so a good vote of confidence in the prospects of developing Koksay soon. And puts a value on Koksay of $360m which I don’t think is recognised in the SP. I hope we will see these news adding 50p or so to SP.
I think it's a very smart move by KAZ which will provide sustainable production growth for years to come. I've done some research on Baimskaya. Apparently it's a very prospective area. The deposit is called Peschanka, it sits within the Baimskaya licence area, but there are other deposits too. Here is what USGS says about it: "The tract includes one world- class porphyry copper deposit (Peschanka, with 1,517 Mt of ore and 7.9 Mt of contained copper), as well as five significant porphyry copper prospects and at least 19 other prospects. An estimated 14 undiscovered deposits could contain a mean of 56 Mt and a median of 30 Mt copper. The eastern part of the tract that includes Peschanka deposit, as well as number of significant prospects along a trend that includes Peschanka, is considered to be highly favorable for porphyry copper deposit formation and preservation. " "Peschanka is a world-class porphyry deposit comparable to Oyu Tolgoi in Mongolia and Pebble or Bingham in the United States. The reserve at Peschanka is 1,517 Mt at a copper grade of 0.52 percent and a gold grade of 0.3 g/t, calculated at a cutoff grade of 0.4 percent copper equivalent. This yields a contained copper resource of nearly 8 Mt." Source: https://pubs.usgs.gov/sir/2010/5090/w/pdf/sir2010-5090-W.pdf
Kazakh copper company Kaz Minerals [LON: KAZ] is close to acquiring a controlling stake in the Baimskaya copper-gold porphyry deposit project in the Chukotka region of Russia, from the Russian businessman Roman Abramovich and his partners, for about USD 1bn in cash and shares, reported Kommersant. Citing knowledgeable sources, the paper reported that the agreements between the parties may be formalized already in June or July, the Russian daily reported. Kaz Minerals is now preparing documents for the Russian Government �s commission on foreign investment, as Baimskaya a deposit of federal significance, according to the sources. The license for the development of Baimskaya belongs to GDK Baimskaya, a company owned by Abramovich (about 25%), Alexander Abramov and their partners. The item reported that Baimskaya is also eyed by Russian nickel producer Norilsk Nickel [MCX: GMKN]. More than 34% in Norilsk belongs to Norilsk President Vladimir Potanin�s Interros holding. Potanin has offered to buy Baimskaya in installments for USD 750m, with involvement of Interros, the item reported. However, Kaz Minerals offered better terms, the sources told Kommersant. According to the sources, the Kazakh company is considered the main contender for Baimskaya, and is already discussing a forthcoming deal with the Russian authorities. Yury Trutnev, the Deputy Prime Minister overseeing the Far Eastern Federal District, has recently announced to the St. Petersburg International Economic Forum (SPEF) that he would meet with the leadership of KAZ Minerals in regard to Baimskaya. Kommersant has learned from undisclosed sources that the project also attracted interest of other Russian investors, without providing further details. Sergey Batukhin, the President of Abramov�s company Invest AG, has told Kommersant that the talks are taking place , but legally binding documents are not signed. At the same time, three leading Russian banks are ready for project financing of up to USD 3bn, the paper noted. Interros, Abramovich�s company Millhouse, Norilsk, and the Trutnev�s office declined to comment.
I think some of the explanation to the "strange week" of KAZ share price breaking through 1000 despite copper price holding in a 3.05-3.15 range lies in the movement of the pound-dollar fx rate. After all, KAZ revenues are all in dollars but the share price is in pounds. At least 6-7% of the recent price increase is due to FX move. And despite dollar appreciated in the last few weeks copper price has held very well, offering further support to KAZ share price. I think the weekness in the pound is likely to continue, at least in the short term, with all the Brixit and economic uncertainty. This should provide support to KAZ share price (personally I think at around 950 level), and the copper price is overdue a breakout to a higher level, so I think we are well positioned to test 1100-1150 in the coming months.