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The pre tax NPV will be far higher than $1.2b with gold prices at $2150 and rising, and I suspect that is a good part of the reasoning for the apparent gov strategy.

A brief review of the history of this deposit provides further clues as to why we are where we are;

From the PAT website;

"In 1993, Hindustan Zinc Limited (HZL) applied for, and was granted a PL, completing 4,000.3m of shallow diamond drilling which resulted in an unclassified resource of 8.7 Mt at 2.0g/t Au. Initially the focus of HZL was to see if there was the potential for mining the oxidised mineralisation processing via heap leach. The trial was not successful and the findings by HZL led the company to let the licence lapse in 2001"

When Hindustan Zinc got the PL in 1993 the price of gold was around $400oz, gold traded lower throughout the 1990's,and bottomed out at ~$250oz in mid 2001, they almost certainly let the license lapse because the economics wouldn't have made sense at $250oz, especially not via heap leach...

Indo gold picked up the Bhukia license in ~2003, when gold had recovered back to it's early 90's prices but was still in a 20 year downtrend... between then and 2008 that changed in a major way and I suspect Hindustan Zinc's feasibility studies looked dramatically different with gold at $900/oz!

15 years have then gone by to reach where we stand today, and now gold sits nearly 10x higher than when Hindustan held the license, the assets won't have changed one bit, but the economics will have utterly transformed.

A fascinating special situation the likes of which I've never come across before.

Some further media coverage of the impending auctions;

https://myind.net/Home/viewArticle/first-ever-e-auction-for-gold-mines-initiated-by-rajasthan-government#:~:text=Geologists%20from%20the%20Geological%20Survey,an%20area%20of%20940.26%20hectares.

"Anandi remarked that with the auction of gold mines, Rajasthan will now be recognised on the world map as a gold mining state."

Given the rhetoric in that article, is it any wonder that the local court dismissed our case?! Can you imagine the pressure that the judge would have been under...

Wow, so they paid 12.55% of 2016 spot, if they used the same calc here with gold at $2100 they would have to pay $263/oz... base case on the JORC resource of 1.74m/oz would value it at $457m, however based on the 6.7m/oz defined by the GSI it would be $1.4b.

Looking good to me

"With 25 million buys needing to be executed under 45p, I don't expect this stock to move much higher anytime soon. GLA"

What on earth does this mean? The price will only stay sub 45p if there are sellers out there to match the £25m buyback money flow + PI buying volume. The aim of the buyback is to increase the share price to fair value, which is clearly well north of the current price.

No surprise to see a little profit taking this afternoon, I suspect there will be a few US shareholders who will sell up with the US business being on the verge of disposal. But get the next few days out of the way & let the buyback do it's thing, I'll be amazed if an uptrend doesn't form.

I'm here for Flexipay growth, £256m of transactions from 6.5k businesses last year, and now they've introduced a Flexipay card to further aid business spending. The best part is that these products are interest free, so they should be extremely sticky and therefore valuable. £50m income by FY25 was the previous guidance, they are guiding for £24m for FY24 so that still looks attainable.

Very interesting to see where this goes over the next 12-24 months. Target price £1.50 based on them achieving 8p EPS in FY26.

Notable that it's being sold as a mining license, tells you everything you need to know about their plans going forward.

£18k registration fee to access the docs - presumably they will have to disclose the size of the resource...

A £25m buyback on a share with a current market cap of £160m is highly unusual, add in the growth element via Flexipay and it becomes an even better opportunity.

I've just had a quick look at trading volume over the last 12 months, if we strip out the 19m shares traded on one day in mid Feb + 2 other high volume days where multi million block trades went through then total volume in the last 12 months was 50.9m shares. We can estimate total value traded by multiplying this by the daily close price, which gets you £21.9m.

If shares were to remain at the current 44p then the £25m buyback could sweep up 56.8m shares, reducing total share count to 305m. This volume of shares across a 260 day trading year equals 218k bought each and every day, vs the 204k average over the last 12 months (excluding the 3 days of block trades).

The main question is where do they think fair value sits? With the IPO price of £4 and no dilution since, it's surely a long way north of here...

Great spot Deckchair, very much on the ball :)

Https://timesofindia.indiatimes.com/city/jaipur/mines-department-starts-e-auction-process-for-rajasthans-first-gold-mines/amp_articleshow/108280669.cms

The below really caught my attention, looks very interesting indeed considering the overall market cap + share buyback

"Our newer FlexiPay business, which helps small businesses manage their cashflows, delivered strong growth in 2023, building on a successful full launch of the product in 2022. Transactions near quadrupled to £234m, compared to £59m in 2022, as we saw FlexiPay quickly become an essential and ongoing part of customers cashflow management toolkit. We more than trebled the number of active accounts to c.6,500 at the end of 2023 and we have been encouraged by the increasingly predictable repeat behaviour among users. We also continued to innovate and expand our product set in 2023. In the second half we launched our integrated FlexiPay card. Whilst this remains at an early stage, with its launch, customers can now borrow, pay and spend with Funding Circle."

Really pleased to see that they've settled into a steady cadence on the buyback, with 10 consecutive trading days of 10k shares bought. If they continued this for the year they would repurchase ~2.6m shares at a cost of £44m (at current share prices). As I mentioned a few weeks back, this is a material proportion of the free float & once sellers are extinguished, this should rapidly move back higher. With interest income of ~£80m PA they can comfortably afford to continue this beyond the current £20m buyback IMO.

Changing to the SETS order book with a 250 listing will improve liquidity no end, with international buying able to purchase shares via the likes of interactive broker.

Liberum said the below on the main market move in an updated note last week;

"While the company has not given a specific date for the move to the main market from AIM (first announced in March 2023), we believe this is likely to happen before the end of 1H24. This would be on the back of the FY23 prelims in March and the publication of the FY23 annual report in April"

Not impacted in the slightest, however given the circumstances leading up to the placing it's hard to believe they have changed the REX offer to only allot shares to existing shareholders... So any unfortunate individual who got spooked by the 2 week long fall, or had their stop loss taken out by forward sellers / insider trading can't participate? Simply awful.

Ps. Posting this link again in case it was missed last night

https://www.businessnews.com.au/article/The-Use-of-Disputes-Finance-in-International-Mining-Disputes

One option that wasn't discussed yesterday which is unlikely but possible; India auction off Bhukia for $1b and use a portion of this to offer PAT settlement?

I'd give it a 1% chance of happening, however it would explain why they are planning to sell it during the period when the NOA has been filed.

This strategy would be win win for everyone and avoid a drawn out process & Indian legal costs, however it shouldn't be completely dismissed IMO.

Like others, I'm 99% sure this is heading for arbitration, and am delighted to be able to buy PAT with the market currently given a 1-2% chance of winning the case :)

This is a MUST READ article posted a couple of days ago;

https://www.businessnews.com.au/article/The-Use-of-Disputes-Finance-in-International-Mining-Disputes

Input from the LCM CEO & specifically references Panthera.

Can't copy and paste annoyingly, however this para is key;

'For established funders, one key criterion is whether the damages estimate for a case is realistic - this is, the value of the investment which has been expropriated by or targeted by a governments breaching conduct. The decision to provide funding and to what extent, depends in large part of the estimate of that value. Thus the underwriting and due diligence process for a litigation funder may often include obtaining a damages expert's opinion"

This matches up to what I was saying the other day re. comparing the A$18m / $12m funding given to Prairie / GreenX and the $13.6m funding for PAT, and the value of the claim. On this basis the $1b for PAT makes sense vs the GRX claim of £737m.

This sentence is also important; 'with a litigation funder involved, the chances of success of a claim can only improve by reason of this rigorous assessment by the lender"

Crazy that shares closed today at 7.25p mid vs the 8.5p on the day the LCM funding was confirmed last August & the 11.5p high reached last September.

IMO the wider market is asleep on PAT, at some stage this will change rapidly...

@gallmat, glad to see you've reached a similar conclusion to me. It's no wonder India are either cancelling or renegotiating their legacy BIT's as the ones agreed in the 90's provide a level playing for foreign entities, something that they haven't wanted in the Modi era;

https://www.forbes.com/sites/ikebrannon/2021/04/12/indias-hostility-to-foreign-investment-threatens-long-term-growth/

The necessity to compensate Panthera at some point in the future vs selling the asset today, developing it & benefiting from the taxes & free carry royalties that will come there way looks like a no brainer.

That's why PAT shares appear a really attractive proposition at just a £12.6m market cap

If the claim quantum is $750m then the market is pricing in a 2% chance of success, LIT haven't got to where they are today by backing claims that have a 2% chance of success...

My guess is that this time next year PAT is trading at between 5-10% chance of success, as time passes this should trend up towards the ~20% that GreenX sits at today. The higher the claim quantum is, the higher the near term upside. Once the quantum is known, investing becomes that bit less speculative, and I expect more PI's to accumulate for the re-rate journey.

Yes very good news this morning, the board own nearly 10% of shares in total here which is certainly a big positive. Shares are extremely scarce and it's not hard to see why when you compare market cap vs potential incoming claim size.

Technically we have broken out and set a higher high, this makes sense given the progress made & impending milestones ahead. It would be ideal to retest the 1 year high / resistance at 10-11p before claim quantum lands. Then a claim break above should see 20p+ come into view.

Also on how long LIT took to agree the funding, I think this is easy to explain. PAT announced the funding when it was conditional, whereas the likes of Prairie/GreenX didn't release anything until funding was unconditional.

It was also 6 months from the first announcement, not 1 year, and they ended up committing more capital than initially proposed.

I just don't think LIT would get involved in a claim like this unless the evidence was watertight

Gallmat, it will make no difference what the government sells the asset for, the value will be determined by the India - Aus BIT. The BIT is essential DD;

https://edit.wti.org/document/show/84d54d73-935f-4f41-87d8-49c7b6e894ec

The 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"

As for their attitude towards the litigation, if they've already expropriated an asset why would they care about litigation? Bear in mind Indo Gold got the exploration license back on 2005, the project was then blocked for nearly 15 years before they officially changed the law in 2021, if they were bothered about legal cases then they wouldn't have changed the law...

Great news on the Bhukia auctions.

@Gallmat, I posted the below on 29th Jan, obtained from the GreenX hot copper forum on ASX.

Expropriation is the lesser of two evils & much cheaper, even if it costs the government $1b they will make it back via the sale & then multiples via the tax income as the mine will almost certainly be developed via a local entity.

"Related to GreenX, but the government attitude is extremely relevant to PAT's case;

"An interesting article was written by what seems to be a pro-Polish government journalist. Link below:

https://naszeblogi.pl/65852-bezpieczenstwo-surowcowe-nie-ma-ceny

The final paragraph of this article has some interesting points. English translation below:

"key deposits of coking coal to create competition for Jastrzębska Spółka Węglowa.

What was at stake was shown by the latest results of JSW, which earned a record PLN 7 billion in 2022.

Thanks to the efficient policy of Deputy Prime Minister Jacek Sasin and Minister of Climate and Environment Anna Moskva, the situation is now under control. An example is the Dębieńsko deposit. Its value was discussed by the previous management boards of JSW, which wanted to buy it from the Australians. These are the last large deposits of the most valuable type 35 coal in Poland. Estimates by Prairie Mining indicated that approximately 93 million tons of coking coal suitable for mining were deposited in Dębieńsko. Prices reach over PLN 1,000 per ton, which means that resources worth PLN 93 billion were at stake.

Of course, this bold policy comes at a price. Foreign investors have filed claims, which they pursue before the arbitration court in The Hague. The case is on the final straight and the verdict will be delivered soon. The value of these claims is over PLN 4 billion, but even if Poland loses the case and has to pay a one-off compensation, which according to legal experts is likely, the profits far outweigh the potential losses.

It can therefore be concluded that for the amount of several billion zlotys, it was possible to recover strategic deposits, the value of which is many times greater. More importantly, we managed to secure the security of raw materials and energy for many years, as well as ensure stability and a good future for important state-owned companies."

@Gallmat, IMO you can get a clue about the claim size here by comparing it to the Prairie Mining / Green X metals funding package.

"LCM will provide up to US$12.3m (A$18m) in limited recourse financing which is repayable to LCM in the event of a successful Claim or settlement of the Dispute that results in the recovery of any monies. If there is no settlement or award, then LCM is not entitled to any repayment of the financing facility. In return for providing the financing facility, LCM shall be entitled to receive repayment of any funds drawn plus an amount equal to between two and five times the total of any funds drawn from the funding facility during the first five years, depending on the time frame over which funds have remained drawn, and then a 30% interest rate after the fifth year until receipt of damages payments."

The claim size was announced the following year at £806m and subsequently revised to £737m.

LCM have provided USD13m of non recourse funding to Panthera, note that this amount was increased from the USD10m originally agreed in the conditional package last Feb.

Given how experienced LCM are, I can't imagine for a minute that they won't have standardised practices for how much capital is invested in a case vs the potential return, and this calculation will include assumptions around the potential for a negotiated settlement & of course factor in the time value of money.

I'd therefore be very surprised if the claim quantum is lower than GreenX, and the publicly available facts reinforce this belief.

Prairie was valued at £45m post the claim file, which would be ~25p here, based on the issued share capital.

Greenx is now on the cusp of finding out whether it's won it's case & has a market cap of £147m, so from the current market cap of £10m, PAT has a potentially very exciting path over the next few years