Member Info for SirGBoycott

If anyone doesn’t like what I have to say they can also report my posts and I’ll abide by LSEs decision.

I also reported the posts. Lse decide if they breach their posting rules and act accordingly.

Quiet happy to have a genuine debate.

https://www.karelianshareholders.com/blog/circular-on-behalf-of-the-egm-requisitionists

A lot of very pertinent and valid points alongside Mr Gimmers comments.

Its a shame that the current BoD of KDR couldn't or can't share a similar plan / update instead of the overtly negative and scaremongering response to the EGM request.

Going to miss it this years gents. Unfortunately I'm landing back in the UK on the 24th into Leeds.

Clearly sandersons would prefer us to use the drawdown which is equally unattractive but agree either the principle. That’s why the Sepco SDA when proposed looked so attractive. We could do with one for Moz but are we reliant on PPA being agreed first?

This sums it up for me

"You are asked not to risk it all by placing confidence in, and voting for, individuals who either have no knowledge of the industry or have already overseen the failure of another diamond company."

Negative campaigning because they have nothing positive to offer.

I have been nothing but positive about KDR until the last 6-12 months and even then defended the company or kept quiet. I have taken the time to got to events / AGMs and try and get answers to questions. I know more about diamond exploration now than I ever thought I would. I have criticised others that have attacked the company.

So after all that and reading this it wont be any surprise to say that I will be supporting the impetuous requisitioners that clearly have no industry experience and no plans to take this forward because even if that was true it would be a damm site more that what we currently have.

"The Board urges you not to allow a campaign of misinformation and misrepresentation regarding your Directors or the progress that your Company has made cause this effort and hard-won success to be jeopardised through the actions of a small group of shareholders who, with a former consultant/employee are endeavouring to gain control of the Board of your Company."

Campaign of misinformaton. Pot kettle black. Read the Irish times articles which are full of inconsitencies at best. The company today is run by two people who seem to totally understand private shareholder frustrations and are unable to articulate a timescaled way forward for the company .

"We wish to make it very clear to you that no definitive plans of any sort have been put forward by the requisitionists in respect of either the short or medium term financing of the Company"

That applies equally to this BoD. Their own broker initiation note also questions how this will be done and I dont recall the company addressing this issue

Financial
With a market capitalisation of only £1.35M financing is going to be a problem, even getting sufficient money together
for the pilot plant. However, once this is achieved, and should the bulk samples processed through it prove
economic, and Karelian meets the terms in its agreement with Rio Tinto, then Rio has the option to earn a 51%
interest in the project by paying for its development.

"The existing Directors have, in other words, made a major personal financial commitment to the Company."

The existing shareholders have also made personal financial commitments to the company usually at a higher level, based on trust and without the comfort blanket of a salary.

" The timing of the requisition is, the Board believes, not accidental."

So what is it then .... a concerted and malicious attack on the company to steal all the glory. Come on ......

"The existing Board believes that this success in acquiring and moving forward the Lahtojoki diamond deposit is now being imperilled by proposed impetuous technical and financial actions, just as years of work potentially comes to fruition. "

imperilled? impetuous? OK so when does the company envisage the establishment of a mine at Lahtojoki. What steps are required to get there and what are the timescales, How will it be funded. HOW CAN I DECIDE THAT THIS IS NOT IN MY INTERESTS when you dont tell me anything

And now to the conclusion

"Far from doing very little, as the requisitionists have tried to assert, the Company under its existing Board, has achieved a great deal by way of a well thought-out and carefully planned, very focused and success-orientated exploration and acquisition programme."

Of which no-one outside the company seems to have any visibility of

"AIM Rules considerations and trading on AIM"

And now for technicalities. Whilst they might be obliged to share this information and make shareholders aware of the risks one cant help but think there is an element of scaremongering.

"In order to comply with the AIM Rules for Nominated Advisers, the Company’s AIM nominated adviser must undertake customary due diligence including commissioning third-party due diligence reports on the proposed directors and satisfy itself as to Board composition and suitability, as a whole and the suitability and appropriateness of each of the proposed director"

If the current BoD passed this assessment then I have every confidence the four proposed directors will.

"In the event that the Company’s AIM nominated adviser cannot reach a satisfactory conclusion as to the suitability of any new Board for the purposes of the AIM Rules, then passing of the Requisitionist’s Resolutions could potentially result in the resignation of the AIM nominated adviser and trading in the Company’s Ordinary Shares on AIM being suspended."

Theres that word 'potentially' AGAIN

"The existing Directors are of the view that, in the circumstances, there can be no guarantee that a replacement AIM nominated adviser can be appointed within the appropriate timescale."

again another vague what if / maybe / no guarantee

"Shareholders should also be aware that the Company will no longer be bound by the AIM Rules if the admission of the Company’s Ordinary Shares to trading on AIM were to be cancelled. As a consequence, investors would not be able to benefit from certain of the protections provided by the AIM Rules"

Thats a great one. The same rules that have protected shareholders so well over the last few years!

Just had a session on engagement at work (seems appropriate). Anyway back to the EGM response

"Furthermore, the Company has a Confidentiality Agreement (with back-in rights) in place with Rio Tinto Mining and Exploration Limited, one of the largest mining companies in the world. This Confidentiality Agreement has been in place since July 2010 and runs through to 30 June 2020"

Time running out on that one then. Does anyone hand on heart really understand what this agreement contains and the benefit to KDR. Bearing in mind that in the 9 years its been running KDR have failed to identify a project that RIO would be prepared to fund.

Anyone remember the mystery mineral

"Karelian Diamond’s exploration programme has been a success. It has taken time, but successful exploration does take time. It has included the discovery of a diamond – the best possible indicator of a diamond source. It has also resulted in the discovery of two new Kimberlite bodies and has identified a series of 21 Kimberlite indicator anomalies in the Kuhmo region of Finland and has shown the Seitapera Kimberlite body (at 6.9 hectares) to be the largest discovered to date in Finland."

Define success! Its not reflected in the shareprice. Seitapera - 2012 !!!!!

"The Company acquired the Lahtojoki diamond deposit on a very attractive basis and through negotiations which took several years to complete, and it is now moving towards development in an orderly and technically measured manner. The Company has also gained the benefit, at a minimal cost, of the multi-million euro expenditures by previous operators at Lahtojoki. The current Board plans to move forward to developing a diamond mine by continuing its sensible technical and financial approach."

OK that maybe true but where is the plan or even any high level milestones to achieve this? "Plans to move forward to developing ...... " There should already be a plan that's is accessible or communicable to shareholders.

"Many diamond companies, some of them very large and other small explorers such as your Company, have come and gone in Finland over the years. Only one company, your Company, Karelian Diamond, has remained and built a portfolio of assets."

A portfolio of claim reservations. How many have been progressed / developed? Why if they are so good are we bothering with a claim reservation in Ireland. The only one we have 'developed' we bought.

Who can tell me what work has been done at this site since 2012 and the plan is for its ongoing development?

KDR webiste - "Seitaperä has been shown by Karelian to be the largest known kimberlite pipe in Finland, with a surface area of 6.9Ha and drilling and analysis of drill core by Karelian from the pipe has recovered seventy-four diamonds, including six macrodiamonds, predominantly from xenolith-rich zones within the Seitaperä kimberlite pipe. Seitaperä is highly significant but still only one target area of a series of potential and perhaps richer targets in the Kuhmo region."

"Exploration and development of a mine is dependent on a number of factors, including technical ability and funding. The Board is aware of the accusation of slow progress in the development of the Company’s assets but the amount of work that can be carried out is dependent on the funds available. On limited funding the Company’s existing team has developed a very impressive portfolio of assets, carried out the necessary work to retain the licences and built an excellent relationship with both the Finnish authorities and the local population."

True but why is funding limited? What prospects have the company of raising funds with such a low share price. How successful was the last share consolidation in attracting new investors as per the stated objective?

"The ordinary shares have recently traded in a range at a fraction of a cent. Shareholders will be asked at the Annual General Meeting to approve the consolidation of the Company’s shares which will reduce the number of shares in issue and, the Board of Directors expect, result in a share price more appropriate for your Company and more attractive to a greater number of investors. "

"The valuation assigned to exploration projects has, however, not only affected shares in Karelian Diamonds but the mining industry in general, and the diamond industry in particular. The Board believes, nonetheless, that the Company is now at a stage when the asset value of its properties, including the Lahtojoki diamond deposit, may progressively be recognised by the market"

Agree market has not been good. And there we go the use of MAY ....... favourite word alongside probably / possibly. This is great if true for both existing and new BoD but wheres the evidence ... it will only be favourably viewed if there is credibility in any plans / company structure to deliver

Now where were we .... 'share price'

"Members of the Board are themselves significant shareholders and have personally invested heavily (approximately €2.2 million) in the Company. It is true that the Board members have been paid by the Company for their work. However, the members of the Board have between them invested in excess of €1,000,000 more than was paid as remuneration to all of them (net of tax) over the whole of the 13 years to May 2018."

So if I read that right Board Member renumeration in the last 13 years was 2.2m - 1m which makes 1.2m or approx 100,000 per annum for all Board Members. That doesn't seem right.

Putting that to one side at what level have they invested? Without going through all the transactions I'd be surprised if any of them were above the current share-price at the time of the transaction. (apart form that big £5k director buy which was after may 2018 anyway). Brings a whole new meaning to buying at the bottom.