Member Info for Small_Holding

Shakey, you have probably gathered I am not a chartist. Not knocking it but it has never been something I've followed.
"A descending terminal wedge" does not sound good though, it sounds like the last rites are about to be administered.
If you can get the chart to turn positive however, I may yet be a convert.
Have a good weekend

A JV is a possibility but I think the odds are in favour of an outright sale.
It suits both parties because ARC get the funds immediately and from Anglo’s point of view any future discoveries are theirs. Under a JV they would have to share profits from future discoveries with ARC.

In addition, if Anglo propose a JV and that does not suit ARC then AA could risk losing the deal. With other majors looking ARC may reject a JV and see if any other majors want to buy the lot.

It shows how far we have fallen when on a good day we can get a quote around 15p for all our shares and on a bad day we would have to risk "At best" if we want to sell.

Ginoir, I can't help you I'm afraid, as a premium member you will have access to far more data than I am on my basic trading account. Hopefully one of the other regulars can assist you.

Whatever our different views on how we get there, we all want the same thing a big fat juicy profit.
Hopefully it is just a few more months away.

I didn't mean them selling in the open market, I am talking about another oil or gas company mounting a takeover bid and offering say 30p a share.
It might not happen but it will look even more likely by the year end if cash is growing and the share price is still around 20p.

One day our fortunes here may change, I hope I live to see it!

I appreciate I am in the minority but it is good to have debate.

There are evidently many on this board that believe drilling results will not be released by ARC because of the exclusivity agreement with Anglo.

If that is the case that would be a condition in the exclusivity agreement, no drilling results are released, that is in an agreement where no money changed hands, as far as we’ve been told.
If that is your view you believe AA provisionally offered £Xm for ARC, Nick was so impressed with the price he agreed to not releasing any drill results this year.

Nick would then do a very positive investor presentation and say drill results will be released as soon as is practicable and when asked if the AA agreement reduced competitiveness, he said no if anything it increases competitiveness.
Remy then said they wouldn't go for a JORC resource as it sets a low target.

All this from Directors who have already provisionally agreed a deal and signed up to withhold drill results for the 2020 campaign.

If you buy into this argument and we get drill results from Fwiji then you believe that despite blocking the release of drill results, AA have had a change of heart and told Nick that despite the contractual block on release of drill results, we will let you release these anyway.

Interesting to see what happens.

Eloro I respect your opinion and a deal may have already been agreed in principle.
However, I disagree about the drilling results not being released because at the time of the Investor Presentation the exclusivity agreement had already been agreed and Nick said the drill results would be released as soon as was practicable, he added that they would apply what pressure they could to get them out. I trust Nick and I am sure if the release of drill results was a condition of the exclusivity agreement, Nick would not deceive shareholders. Why would he, he is just giving himself more grief down the line.
The drill results will be released or NvS has been telling us porkies and I don't believe that.

Southmead, I respect your opinion and you could well be right.
I share the view of nberzins that the major shareholders are key but we have seen nothing to say that they are still enthusiastic about their investment.
With WAHA and Ingalls their average price paid is about 29p, since then neither has bought more shares when it would make good business sense to do so.
Yes Mr Menhali is on the board but that is their right.
Just as we are feeling the pain they have both tied up funds for years in a non performing investment. Not only that but it has got worse not better.
If we got an offer at 30p it is clear you think the major investors would all refuse the offer and they well might.
However, there are some very good investment opportunity out there now and if our major shareholders were given the opportunity to break even and look elsewhere at some other more exciting opportunities, I think they would think long and hard before saying no.

I agree because even a failed takeover attempt would raise awareness and give the share price an instant boost.
Never thought I would see the day where I wanted someone to attempt to takeover the company.

Market cap around £32m, they have at least US$9m in cash or £6.7m and no debt
Cheap as chips, surely someone is looking at SDX as an acquisition target. As the cash builds if we don't see any movement in the share price, the likelihood of someone making a bid will just increase.

SDX have the authority to market purchase their own shares, this resolution was again passed at the AGM with a 99% vote.
Surely at these low prices they should buy their own shares. It makes good business sense, they have the cash and it sends out a clear message to the market that the current market valuation is crazy.

I am hopeful of good drill results at Fwiji

Nick said on the Investor Presentation “I’m pleased to say on Fwiji having drilled only three holes we already have got early confirmation of mineralization copper”

Then later on he said “Vassily do you just want to highlight, I know we are limited to what we can say but you’ve been very excited at what we’ve seen at Fwiji” to which Vassily replies “Yeah I mean again, first up looks like we’ve had some early wins”

Vassily doesn’t sound like he gets “very excited” easily so fingers crossed. It would certainly give the share price a boost after all these quiet months if the first results go someway to confirming the potential of another target.

"Although BHP had stated its preference for exploration over acquisitions, Macquarie analysts noted the company had recently purchased the Honeymoon Well tenements in Western Australia to shore up its nickel division. "We believe it would not shy away from acquisitions in copper should they present," the Macquarie analysts said."

https://www.brisbanetimes.com.au/business/companies/bhp-maps-out-priorities-in-quest-for-future-facing-commodities-20200830-p55qnw.html

"Asked whether BHP would seek acquisitions to secure more options in commodities like nickel, copper and potash, Mr Henry said "maybe", but only if the right opportunities presented.

"It has to be really attractive assets in the places that we like and for an attractive price, and those factors don't line up that frequently," he said."

An acquisition needs to be in production or very close to it, I don't want to see SDX just buying additional reserves.
Something like the failed BP assets acquisition but on a much smaller scale.
I have looked for potential targets in Morocco but I couldn't see anything. They used to talk of Tunisia at one time, perhaps that might be an option. I just hope we see some action soon because we desperately need to make the company attractive to investors. The current scenario of a very low share price, almost non existant turnover and no interest from anyone, needs to change.
Currently we seem to wait three months hoping that the next set of results will change the outlook, the results come and go with no effect whatsoever and then we wait another three months for the next results.
I tried doing dummy sells on Friday of 30,000, 20,000, 15,000 and 7,500 shares on ii, I couldn't get a fixed price on any of those amounts. Only when I got fed up and put 1,000 shares down did I get a guaranteed price, not good.

Unwise suggests listening to the investor call again and I have.
The level of excitement expressed by Nick could just be the agreement with AA but it seemed more than that to me.
He did say that since signing the agreement ARC had been approached by another major but obviously they couldn't talk to them.
I wonder if that major was one of the big boys or they think the drill results at Fwiji are going to be good.
Just my view but the level of excitement shown by Nick seemed to suggest he knew something over and above the Anglo agreement.

Just playing with numbers and rounding down to keep it simple.
200m shares in issue, WAHA and Ingalls have 20% or 40m shares each.
They can own 30% under AIM rules

If SDX issue 50m shares at 20p that would only raise £10m less expenses. With 250m shares in issue they could own 30% or 75m each. If they took half each 25m shares + 40m they already own making 65m shares, less than 30%

If SDX issue 100m shares at 20p that would raise £20m less expenses. With 300m shares in issue WAHA and Ingalls could take half each 50m shares + 40m they already own making 90m shares or 30% of the 300m shares in issue.

The point I am making is at this low share price it is very hard to raise serious money. By increasing the shares in issue by as much as 50% they only raise £20m.

It may put them off making an acquisition until we see a recovery in the share price that MR keeps talking about.

I hope you are right that they don't want to invest further, I worked their averages out at around 29p.
If they have an appetite for more shares though, they do have a lot of influence and averaging down might suit them.
I prefer your scenario to mine though!

I think most here have accepted that an acquisition is most likely coming in the next few months.
The big question is how much will it cost and how will SDX finance it. With the share price shot I would prefer a loan but I'm not sure they could get it unless it is a fairly low figure. I think it is much more likely that they do it through issung equity and that is a concern at these low share price levels.
They would need the backing of WAHA and Ingalls, presumably they would have already got that before making a bid.

Whether there are many PI's who would want to invest more here and take part in an offer, I'm not sure. Personally I wouldn't want to put more in given the track record. Assuming WAHA and Ingalls agree they could end up getting a large chunk of shares at a very low price, much lower than they could ever hope to buy at in the open market.

To my mind it all depends on the quality of the target, if it is seen by the market as very accretive the share price might do well. Increasing the number of shares in issue and then the two cornerstone investors taking most of them would be good for them as they instantly average down at a very low share price but it wouldn't help liquidity if they just sit on them.
AIMO