My view is that firstly they made an assumption that a company the size of Panthera wouldn't be able to access the required legal funding to take this through the international courts. The deal with LCM changed everything.
Let's face it, most companies would have thrown in the towel after 16 years of being stonewalled, IMO PAT were an annoying flea to the GoR, now they are something a lot more irritating.
The other point to consider is that nothing had been expropriated until the 2021 law change. This is an excellent (but very long) article on expropriation;
https://globalarbitrationreview.com/guide/the-guide-investment-treaty-protection-and-enforcement/first-edition/article/substantive-protections-expropriation
I believe India did this because the rise in the price of gold made the effective expropriation of assets like Bhukia a necessary evil - if it contains 20Moz then compensation of $1-2b makes sense, especially if they believe the price is gold is heading to $5k/oz over the next couple of decades!
The final point would be that they may think it likely that PAT will accept a settlement offer of say 40% of a $1-2b award. If that turns out to be the case then their decision will have made sense.
Safe to say I'd be happy with compensation of $400-800m, although no doubt some on here want more!
It's probably worth listening to the LCM final results presentation from Tuesday that's on investor meet company. The CEO emphasises once again how selective they are with new cases, it's all about quality over quantity. They've also had the learnings from Indiana Resources & GreenX to hand when making a decision on whether to fund PAT, the fact they proceeded & actually increased the size of the funding package by 30% from the conditional stage surely speaks volumes...
Topsharepicks, for the final time, there are no options on a share like PAT. You are talking utter nonsense. There are 11m warrants and 154m ordinary shares, that is it.
The market makers want to avoid this spiking in the way it did in 2021, so have been using a supply of shares to offset buying pressure. On Monday it was NT at 10.5p for ages & buys were going through above the ask at 11p. Then the MM's 'found' 500k shares and put then through at 10.25p. Yesterday was the same - 150k but at the open offset by 4x 50k sells a few minutes later...
This is a classic holding period which will be ended by news. The CEO has already said it would land in a few weeks starting end of August, so I'd imagine it's not far off now. When it lands there will be very few shares available to buy
Given the lack of posts it looks like it's time to flag the prize again!
"Ok, here goes my claim quantum effort - no investment advice / DYOR...
IMO there are three key factors that will be used to determine the market value of the investment at the time of the alleged expropriation in 2021; the in ground value of the gold, when the expropriation became public knowledge & the estimated size of the resource at that point in time.
I found this 2015 research report really useful to try and put some meat on the bones of some analysis;
http://www.cipherresearch.com/reports/150601_The-Real-Value-of-Gold-in-the-Ground.pdf
It studied 253 transactions involving gold companies between 1990-2013 and determined that the average price paid per in ground oz was $63. The average price of gold over the 24 year study period was $605/oz. So the average transaction paid 10.4% of the 'in ground' value. That may be skewed by the fact that for 16 of those 24 years gold averaged ~$350, but to me that seems like a sensible figure to use and leaves some upside.
The 1999 BIT states; "The compensation referred to in paragraph 1 of this Article shall be computed on the basis of the market value of the investment immediately before the expropriation or impending expropriation became public knowledge"
Based on this link it looks like 15th March 2021 was when the bill was first introduced; https://prsindia.org/billtrack/the-mines-and-minerals-development-and-regulation-amendment-bill-2021
'Immediately before this on the 14th March 2021 gold traded at $1720, so using the 10.4% figure above, that gives us an in ground market value of ~$178.88/oz
Then we just have to apply that to the resource size. IMO there is no chance PAT are just going to claim for the 2008 JORC of 1.74Moz given how much that figure would have risen in the 13 years between then and the official expropriation. However, even if the arbitration panel decided to use that figure it would still come to a claim size of $311m, or some 20x the current market cap. That's the ultimate downside here IMO.
However, it's far more likely that PAT will utilise the 2 resource studies from the GSI, the 6.7Moz from 2014 or the 7.9Moz from 2021 that I posted earlier on.
6.7Moz * $178.88 = ~$1.2b
7.9Moz * $178.88 = ~$1.4b
That's the size of the prize... and before anyone says they could claim for 10Moz+, they would need some reasonable basis to do so, that is what makes the GSI work potentially so valuable."
Anyone spotted this?
"Total committed debt facilities at 30 June 2023 amounted to £115.5m (excluding loan arrangement fees which are included in borrowings), giving a liquidity pool of £21.4m. Net debt equated to 2.66 times trailing twelve months' EBITDA as at 30 June 2023, which complies with our debt covenant threshold of 2.75 times."
Given how close they were to a technical breach at 30/06, it's absolutely nuts to still pay a dividend that will utilise £2m of cash. The market is quite rightfully taking them to the cleaners.
This still looks expensive when you compare against the likes of SPEC. The sheer level of financial mismanagement via capital misallocation is off the scale. No small cap should be paying dividends from debt, it's quite simple. They've always had debt, even in 2019 they had £40m, it's just grown and grown as they wasted operating cashflow on new acquisitions, CAPEX and dividend payments. They apparently thought that the gravy train of cheap debt was going to last forever - well they've had a rude awakening and now need a 5 year turnaround plan to get back on track. They should have started that today by cancelling the dividend in full.
on interest rates and timings, my understanding is that interest will be applied from the date that any expropriation is deemed to have taken place. this is likely to be march 2021 when the new rules were signed off by parliament. the rate applied will almost certainly be the us prime rate (which was used in the ****stan thethyan copper bit dispute),
the current prime rate is 8.5% https://www.fedprimerate.com/
@Edhallas, I'm not sure there is any relevance to comparing the timeline of Panthera's dispute to Cairn of Vodafone, as those cases were both related to retrospective tax - an undeniably more complex area than asset expropriation.
There is far more relevance vs GreenX given they are also funded by LCM, are focused on the resources sector & involve an asset which appears to have been expropriated. Indeed, that's what the PAT CEO is going to benchmark against...
Yes time to resolution is likely to be 2-3 years if they don't get a deal - however, the re-rating of PAT shares from current levels will happen a long time in advance of this. How far it re-rates depends on the size of the claim.
"Anyone else notice that delayed 500k share trade from yesterday at 10.25p? That's quite a chunky transaction..."
Ah, so that's what the market makers had to find to prevent this breaking out through 11p yesterday. When that supply of shares runs out then we will move significantly higher, news or no news.
75,757 just bought at £1.32... market makers definitely running out of stock & that interview is like throwing petrol on the flames!
Some very interesting trades gone through in the last 20 mins above the advertised ask...
A fun fact with GGP is that on 12th March 2019 when they did the farm in deal with Newcrest, the share price spiked to 2.5p. It took until January 2020 to exceed this price, and you could have bought as low as 1.4p in June 2019. Once 2.5p was broken though, shares never looked back until the end of 2020 when they hit 36p. Imagine how many PI's sold out in 2019, almost certainly for a loss, and missed out on those gains?
Something similar can certainly happen here given how tightly held shares are. The trigger for GGP was the reporting of continuously good drill results that eventually become too exciting for family offices to ignore. For us, it just needs to be Mark reminding the market on a periodic basis of the historic context around Bhukia, how exciting the resource is & how much compensation they want from India for deciding to stick to their expropriation efforts.
Very much looking forward to the pending RNS that discloses the timeline & more about the claim.
Have been following AVCT closely as the key value driver in my opinion was the end of the search for an MTD and the move to the phase 1b efficacy trial. This mornings news was transformational in that regard. Going straight to a 'potentially' pivotal trial reduces cash burn required to reach commercialisation & also substantially reduces the time to get there, the data to justify such a dramatic change in plan must be significant.
Unlike Nasdaq, the Australian ASX or even the Scandinavian exchanges, AIM simply hasn't produced a genuine biotech success story for years and years.
This line alone should be enough to generate big pharma interest; "One patient with soft tissue sarcoma has shown a significant reduction in tumour volume in response to the drug"
If they can replicate that in the P2 then yes, this will absolutely be worth billions, as the market will extrapolate the platform technology across dozens of other cancers.
Fascinating to see where things go from here, I've always known the technology was potentially transformational, but this is the first time ever that AVCT have changed timelines for the better... that's certainly worth taking notice of and starting a position here.
A lot less than 80%? Not sure how you come to that conclusion? I'd be very surprised if Fasken's received more than 5% of any claim value.
Either way, it's a bit like worrying about how you'd pay for a round the world trip if you win the lottery?
If the claim is anywhere near what we suspect then retaining anything like 75% would be incredible vs the current £15m market cap. Shares are currently pricing in a chance of success of ~1.5%...
The market makers are fishing for stock here with both bid and ask so close together - Winterfloods just raised the bid to 10.5 so it will now appear that all trades are sells - a classic AIM trick of manipulating weak hands into selling. We're on the cusp of breaking significant resistance at 11.5p, from there it could run significantly higher on low volume...
"i can't imagine mb, based on present value of future cash flows, which the arbitration look at as mentioned in the ****stan case here, lodging a claim of anything less than $1.5 billion."
I'd have to agree with that prof, just wanted to check whether you'd seen this pres before?
https://slideplayer.com/amp/4620845/
Always tricky to know what's been discussed before when joining an existing board
The confirmation that they had plans for 300k ozpa production way back in 2007 was a critical new piece of info for me. We know that any compensation will be based on the deemed market value of project at the point it was expropriated - i.e. early 2021 when the new mining regulations were signed into law. A 300koz pa open pit resource with mine life of >20 years in a stable jurisdiction with low AISC surely has to be worth >$1.5b.
It's a bigger resource than GGP's Havieron and at a much shallower depth, that was formally valued at $1.2b in mid 2022 and looks to have a current production throughput target of 3mtpa @3g/t - so ~100kpa.
With such a large and accessible resource I see no reason why Bhukia production couldn't have grown beyond 300koz PA either?
Have added to my pot this morning.
Here are some absolute corkers to get stuck into over the weekend;
Presentation deck from an Indo Gold A$10m pre IPO round in 2007, intended to precede a full AIM listing;
https://slideplayer.com/amp/4620845/
So many exciting details in the 44 page deck it's hard to know where to start!
There are also loads of articles from early 2007 on the Indo Gold discovery in Jagpura, I.e.
https://www.diamondworld.net/news/815
"Indo Gold will invest up to Rs.20 billion ($450 million) to develop a modern mine in Rajasthan. We will also invest in primary and secondary processing plants on site,� said Mike Higgins, the managing director of Indo Gold. �The deposits are world-class and we hope to start commercial production in four years,� he added. The annual Jagpura mine gold output is expected to be around 8 tonnes, according to the company."
8 tonnes = 292koz per annum, or ~$570m revenue in todays gold prices...
This could be absolutely massive - the LCM funding starts to make a lot more sense now.
Nice to see things a bit calmer and the share price floating upwards. News will land soon enough, just need to tuck these away and wait patiently.
Temuchin. This share is traded on SETS so the market makers are not driving the price, it's driven by demand on the order book. Swedbank RNS'd a 1% reduction in their holding last month & I also think there has been some inevitable shorting going on. I said 1x sales would be interesting, well now it's almost here and it's still very hard to justify buying after yesterday's RNS.
From 2013 IPO until November 2016 this traded in the £1-2 range, it appears to be heading back there.
Yep, a classic walkdown to try and shake some shares loose - the bad news for the market makers is that the 176k that were sold this morning were all bought back this afternoon plus a few extra.
They move the share price up and down in waves because it's the only way to get PI's to sell. Some get excited by the prospect of a few hundred quid extra when the price ticks from 10p to 11p and others panic when it drops back through 10p. Most of the free float will have no interest in messing around at these levels.
We know a full update is coming in the next few weeks as that's what the CEO said on Friday 25th Aug. He also wants to get the share price to re-rate in line with arbitration peers (GreenX), to do that he'll need to provide regular updates to maintain momentum. It promises to be quite the ride.