Member Info for Simon_Said

Hello CERP, I'm an investor in RBD but was as the talk last night.

Just to say, Leo Koot presented a very compelling case and did a great job. I don't hold any CERP shares right now as I'm more than happy with Reabold, but he put CERP on my radar for sure and I may well take a dip at some point. His presentation was very compelling and he comes across as likeable and practical-minded.

You definitely don't deserve the dip this morning!

- On Reabold’s ultimate strategy: He stunned the room here by saying Reabold is a cyclical play and if the market conditions correct themselves (no more starved capital assets and valuation anomalies) then, I quote, “We’ll have made everyone lots of money and we’ll happily sell off our assets and close up shop”. He was clear that they won’t recycle capital for the sake of it, and will return cash to shareholders when there are no better options and roll-up the company when this part of the cycle ends.

- Miscellany: The cameraman was OK, I saw him later sitting outside chatting with the City Police who were looking after him. As for Reabold, Stephen did a great job in difficult circumstances. My perception of the company is a bit different now, as he stressed repeatedly that they are a cyclical play and all about precise timing of acquisition and disposal of assets. They aren't trying to build an empire and aren't going to ride this to retirement, they're being shrewd and riding a part of the cycle with the express goal of creating shareholder value. He described how they 'think like investors' because they were professional investors at M&G and elsewhere, and that is at the heart of how they operate.

- California: Extremely confident, almost discussed their ongoing production as a done deal, and had particular praise for their rapid and professional ground teams. Gave an example that one of the prospects was up a rocky hill that they had trouble accessing on a visit, and they told him they’d build a proper road to ease access. It was done within 1 day.

He said the service companies over there are very available and skilled and everything is done much faster than we’re used to here. Notable that he discussed this as an ongoing production asset and not to be sold off immediately. This fits with hints about a producing asset that were being dropped long before the Gaelic deal was announced.

They're much more excited about other parts of California than the workovers. The lack of discussion on those is that it's not priority and not why they invested.

- Dilution: Very unashamed to say they will always do what's right at the time when a great asset pops up, these opportunities are all about timing. Nothing dilutive expected in near term though.

- Current share price: Lots of detailed observations made it clear Stephen watches the share price as closely as we do. I asked if he thought it was Gaelic flipping their 25% holding it back and he said he was certain that it wasn’t them. He said this a few times. They think it’s private investors selling but are sure it's not Gaelic.

In the opening he said there is a clear disconnect in junior O&G between underlying operational progress/asset value and share price that they see across the board, with assets only being given value at the absolute last moment when they are in production. That is why they don’t do exploration, and buy assets ‘on the cusp’, and this is what they mean about ‘catching the steepest part of the value curve’.

When I asked about this with regards to Reabold’s current stagnant share price, he said ‘That’s why we’ve got 6 drills all about to happen’!

- Lack of 7am RNS’s: Actually due to a problem with their NOMAD that he wouldn’t detail. They submit them on time for 7am, it’s the NOMAD slowing things down.

- On why they paid for Gaelic in shares rather than all cash: Project costs would have meant printing shares later anyway, they felt it better to get it done at the outset with pre-spud favourable economics.

- On the prospectus from the last raise, I asked what happened to all those projects (Rhine Graben etc). He said not just some, but he corrected himself and said ALL of those are still under consideration, and sudden significant eye contact at that moment. I suspect our next asset can be found on that list (given the cash position, one of the smaller ones I’d venture).

- Asset disposal: No specific gains in mind for choosing the moment to sell, they will judge the right moment based on individual circumstances, both of the asset in question and the other available assets to recycle the cash into at the time.

Hi all, I was at the event last night and have lots to pass on. Caveat: This is just my recollections, nothing here is a direct quote and I am happy to be corrected by others who were there.

Firstly, while Malcy was talking, before Reabold’s slot, the cameraman fainted and caused the whole room to be evacuated waiting for an ambulance. Thus, Stephen Williams had to give his presentation in the lobby, with no microphone and no slides. He said his slides were his cues/notes-equivalent, so he was talking off the cuff. Despite this he spoke confidently and clearly, with no hesitation.

In introduction we got a slightly different riff on the Reabold origin story, with Stephen explaining that when him and Sachin were at M&G during tough times for junior resource companies, they were the only investors in the city who were taking meetings with these companies. He credits that time with the contacts and relationships they built up which are now creating the sweetheart deals they’ve been getting for new assets. S&S are basically all-about the junior resources sector and that’s why they created the Reabold strategy.

Also notable that Malcy and Stephen were talking together the whole time and clearly admire each other a lot. Malcy actually used Reabold as an example of the sort of exciting play in the sector right now during a talk about how it’s a great time for oil investors. He said Reabold is the fastest a company has ever entered his ‘Bucket List’ of best oil plays.

The following notes are a mix of my observations and some from another attendee who is also on this board. Some of this comes from Stephen's main talk, other parts come from talking to him afterwards.

- 6 wells in the next 6 months, the first of which in a month.

- He talked a lot about Parta, saying something like “I know you’re not supposed to have ‘favourite children’, but that one really does excite me the most”. Apparently environmental permissions have recently come in and it’s all going ahead just fine and he was visibly excited every time it was mentioned. Stressed to the point of laughter that these are *already proven assets* that were just never taken into production and are of absolutely no concern, especially after the CPR adding even more evidence.

- Colter: very confident over permissions, they have just been told 'no red flags whatsoever’ and Corallian have already made minor adjustments requested to the drilling plan by the EA. I asked him several times about this drill and he seemed very confident it would go ahead.

- Colter/Wick drilling: He expects these back-to-back using the same rig, but didn’t know what order they’d be in. Said it *can* be different rigs but plan is to use the same one.

More in a moment...

This is not a normal placing. Single bookrunner (unusual unless you already know which institutions are interested!), no prospectus (only possible if the funding parties are already briefed). Remember the market cap is crucial right now for Secker to keep control of the company - he will be hyper aware of the risk of flakey placees who could prematurely flip. This is a preplanned exercise among select institutions, not a begging bowl.

Welcome Leas, the answers you seek are in the most recent RNS and none of us would be able to impartially explain. Go to the source and ignore our noise.

I just re-read the placing RNS and this part of the appendix stood out:

'The Placing Shares are being offered to a limited number of specifically invited persons only and will not be offered in such a way as to require any prospectus or other offering document to be published.'

They are not offering this to scalpers and the placing price will not be punitive. Let's see what happens eh.

Yes I saw that too. Definitely some strange happenings today.

Harvgreaves Lansdown are generally the best thought-of by private investors and BGO is available.

It is indeed highly volatile, so timing of entry is key (the 'low days' are easy to spot).

Excellent little summary there. Always good to see the various stories woven together to a manageable digest.

A nice analysis, thank you.

Once this funding kerfuffle is sorted, the market will be able to get a better view of the economics, and given the fact that the plant is permitted and offtake agreed, the price should show some premium to projected book value, as with all junior miners at this kind of stage.

I've seen lots of different methods used to set a placing price. Given that the plant is permitted and offtake deals are in place, there is no reason for the company to bend too far to fill the book.

I hope they will use a longer VWAP to set the placing price to account for this distorted present market price. As I posted yesterday, even paying market price or slightly above it would be good value for the II's, as it simply wouldn't be possible for them to acquire such a large stake in the company on the open market without causing the price to rocket long before they had finished gathering shares, thereby costing them money.

Fair enough, I read it as your own moves as a trader, rather than objectively observing the behaviour of others, apologies.

Very frustrating watching price action so divorced from reality. I struggle to see what Mr Market would have preferred Bacanora to do when such a large capital outlay is required for a project at this scale.

Well put Noel. That's the entire point, isn't it - once the project is that far progressed, the terms of any funding will be far more in Bacanora's favour. So it makes sense to stagger the funding and not give away more of the company than necessary this early on.

If you are such an experienced hand in this market, could you explain how coming on here to a stock you don't hold to **** in everyone else's cornflakes is making you money? Or are you just bored?

Nah nothing to do with Netflix - look at the volume of sells, it's bugger-all really. It's just an illiquid stock so moves fast on any buys or sells. Volatility should always be checked against volume to understand it.

Oh god here comes the 'Technical Analysis' tea-leaf readers to show how their magical wiggly lines predicted everything except for all the times it didn't but that was because it was actually a DIFFERENT squiggly line at that time.

No stock available to buy. Hmmm...

Anyone who has been on AIM for a few years will recognise this scenario well. Many here are gamblers simply looking for big fast % gain on 3-letter names. They reflexively sell at the word 'placing' without understanding what it really means or why understanding it and reacting carefully is a key part of actually making money in the junior markets.

Think about it - you can cheaply buy large chunks of these companies who have exposure to significant economic assets. The only reason this is even possible is that they raise money later. The idea is the companies organically build value at a faster rate than they need to print fresh shares/take on debt. So as your slice of the pie gets proportionally smaller, the overall size of the pie increases faster, leaving you as the PI ultimately with more pie.

Less sophisticated PI's simply can't get their heads around this and thing 'placing' means 'failing'. Anyone with any understanding of this company (or indeed sector) understood that a vast amount of capital was required for buildout and would have to be found somehow. Such a small amount of dilution on such good terms (including restrictions on selling placing shares) indicates the institutions are fully aware of what a diamond in the rough this company is.

For those not researched, this is not like most juniors. They are already permitted for the plant with several years of product already sold ahead of time, and the funding is now arranged. And the shares suddenly at new lows. You simply don't get better than this on AIM.