Member Info for spike501

"How on earth CEO didnot know about that trouble long time befoce that and did he do anything to announce so more solutions will be found than it is too late."

I'm not sure where you got this timeline from - the interim results were released on 17th August and then the announcement of a cost overrun was 2nd October so almost 7 weeks. The interim statements also included language highlighting risk factors that there were still substantial unknowns.

Its likely on 17th August they had some idea that some revisions may be needed but no idea on the magnitude - announcing uncertainties at that point was likely premature and no doubt holders would have been furious if that was announced in that way. They were likely working through the details at the time and discussing with financing stakeholders, but it was only the release of the definitive review end September, early October when they had to go back to the market.

Fair enough - I won't continue flogging the horse, best of luck Wasa

"Spike not sure what your point is, I didn't make the investment months ago"

Sure, but you could have exited at about 70p when the first announcement was made about cost overruns when it was already pretty clear that the writing was on the wall for shareholders, either through massive dilution or complete wipeout. Instead you continued dreaming up ever optimistic scenarios and even down at 3p were talking about potential bail out placings with hundreds of percent premiums to the prevailing share price.

So now instead of examining your mistakes you are instead thinking its a stitch up.

Tell me something - why would the cornerstone investors not wait until administration to pick this up cheaply and most likely succeed in getting a substantial hair cut on the debt? Why all along did you think they would throw in more cash at a premium and be stuck with the existing levels of debt?

Nice updated, if somewhat random, but all adds to the momentum here.

Now they need to release the financial results, on time and ideally not at 5pm on the 30th April and hopefully the financial results don't contain any unexpected surprises.

At 50k oz production with current gold price, without the geopolitical and concentrated ownership risk, you could easily make an argument that £10 per share for a market cap of £270million is not undemanding. Do the geopolitical and ownership risk warrant an 85% discount? Not in my book, this could move very quickly if they can keep progressing operational, maintain decent communication and not have any nasty surprises in the financial statements.

"It could be a stitch up (I'm undecided - but it will all come out in the wash):"

It was so obvious that this was the next stage that was coming. Instead of owning making terrible investment decisions and taking a massive gamble when the writing was on the wall months ago, instead blame some shadowy stitch up scenarios for being the reason the gamble when down the tubes. No doubt there will be talk of a shareholder action group next.

Wasarunner - you simply called this wrong again and again, dreaming up totally unrealistic scenarios and reasons why small shareholders would be bailed out by the big boys. Its a small company with no reliable access to debt and capital and was distressed in unfavourable debt and commodity markets with Nickel unloved and a project that had clearly been badly designed. As many advised the cornerstone investors weren't interested in desperately trying to save their original investment by putting in more capital on current unfavourable terms, if they would have added more capital now, it would have been on terms highly punitive to all existing investors.

"So WHY should the new investor who is part of the deal not pay accordingly in line with the de-risked company future value, maybe with a little discount?"

Because they don't need to as its a distressed asset.

"One can reasonably expect a number of offers from the various Gulf States"

Its difficult to begin to describe how utterly delusion this is. Anyone externally interested in this, will not in anyway be looking to bailout existing equity holders and the notion that somehow the Gulf States are desperate to start a bidding war on a half finished mine with hundreds of millions of debt tied to and hundreds of millions more is just laughable.

You really need to wake up and smell the coffee.

"Wasa, Solg raised cash on premiums couple of time from Newcrest and BHP."

Solg was not distressed at the time of those issuances.

Neither option 1 or 3 necessarily provide upside - option 1 could still result in massive dilution for existing shareholders even if there is some debt and option 3 could result in massive dilution for shareholders that ensures even at production the SP never recovers above the value you buy for today. If you believe option 3 is a likely option you'd wait until the funding is sorted before risking throwing your money into a black hole now.

"If assets sale gives shareholders £50m, that will be almost 20p. £10m gives 4p, £20m gives 8p."

If an assets sale gives shareholders £500million that will be almost £2 per share, but so what? An asset sale first has to pay off debtholders so the starting bid has to be in excess of however many hundreds of millions of debt is currently out there.

The situation the company is in makes it an utterly terrible entry point - its a high risk gamble that no one should touch with a bargepole, private investors are last in the queue in and almost certainly will get hugely diluted and more likely completely wiped out. Existing holders should also apply the same logic and protect whatever capital they have left and move on if for nothing more than your own sanity - but you won't as you are emotionally invested and hence dreaming up all kinds of unlikely scenarios.

"How much - what number? I think at a push it could be 1bn-1.25bn shares (4:1 or 5:1 dilution) at 20p."

A company in a highly stressed scenario raising at a 900% premium - sure of course. Any precedents for this you can name?

"Why have they not released RNS as its on company board ? You think they want anyone to know or potential infestors to invest here , It don,t make sense sometimes ."

Which RNS do you want them to release, I don't quite understand that?

In general though this is one of the reasons the valuation is so low. They hold around 70% of the equity so can pretty much do what they want with the company. They are also the ones to stand most from the gain in equity. So the fact that they seem to care very little about the value of the equity does raise a flag here, that the listing and equity price is not particularly important to the owners and so someday simply decide to delist it, or make a poor offer for the part they don't own, which they can then effectively force through.

Which makes this a gamble

Gold up $150 over the past week and a half. At run rate production for around 40,000oz per year, the increase in gold drives pre-tax income up $6million, call it £5million. You could justify the entire market capitalisation here just by the increase in gold price in the last 2 weeks.

There was an RNS - Altyn release news update via Businesswire and somehow LSE hasn’t synced it properly

"With the company moving to Canadian reporting rules, should we expect reporting metrics, such as this discussion surrounding NOI to change to something that is more easily comparable with other Canadian companies?"

Stas to answer your question - NOI is a forward looking metric and I'm no aware that the Canadian reporting rules will have any impact on forward looking statements. What the requirements will more likely impact is the standard and timing of the quarterly updates that are more tightly regulated.

"I agree that NOI is not one of the the best metrics because as an investor you are more interested in cash generation or more specifically free cash flow."

NOI is theoretically free cashflow from operations excluding SG&A costs - which makes a lot of sense from an operational metric, although what you say about I3E admin costs being high is very relevant and a cynic would say the NOI metric is something of a smudge over that.

However if the NOI forecasts don't take any account of the hedges even when up to an even over 50% of the revenues are protected and the sensitivites make no account of those hedges, then frankly the NOI guidance is a bit of a joke.

"Also I3e's quarterly update / guidance only provides a figure for NOI which EXCLUDES the impact of hedging and all other major costs except opex and royalties so you only get to see the impact on i3e's profits and free cash flow"

This is quite an interesting point Tony and raises a few questions as to how useful any of these NOI forecasts are.

Its says NOI is a non-GAAP metric, so it could be the case that they consider the hedge price as the revenue - but I think that is unlikely as I assume they just use their projected oil/gas price for all revenue assumptions.

The revised Net Operating Income figure for 2023 after the Q1 update was USD75-80million and it was specified $45.6million was protected by risk management contracts. So when well of 50% of the project NOI was protected, it seems very bad form to simply not consider that in any forecasts, especially on the sensitivities when the impact of changes in oil and gas prices are shown on NOI - do these sensitives consider a large portion of NOI is protected or not?

None of which the hedge accounting gains/losses help with as they are not seen until well after the event.

I think if I3E are genuinely putting NOI forecasts and sensitivities out into the market that completely ignore the impacted of protected revenue, that is pretty amateurish.

Posted before I read you next reply - no worries, these discussions can get heated but no harm intended. I'm not arguing with you for the sake of it, you're a highly competent and respected poster but on this topic I don't fully agree with your conclusions and points.

Tony - really not sure why you are getting so agitated, my target audience is also fellow posters and I don't agree with some of the points you have made and so am trying to discuss them without throwing toys out of the pram. Fine if you don't want to respond, then don't respond, other posters can decide to read or not and take their own information.

You post this..

"Looking at the positive effect of hedging - February is nearly done and by my calculation - i3e have made a hedging gain of about $700,000 on its gas partially offsetting the weak AECO pricing."

So what does this $700k mean in terms of I3E's financial projections of cashflows, NOI etc etc - it means virtually nothing as the projections are made using the hedged price for the portion that is hedged. Again it could be a $1billion gain or a $1billion loss and it would have no direct impact on projections as the hedged price is what the projections are made on. It is far more significant on the unhedged production, but there are no accounting figures for that. The size of hedge gains and hedge losses on their own tell you very little, without understand the wider strategy, the proportion hedged, the upside opportunity, the downside risks etc etc. A company without hedges doesn't book any hedge gains or losses, it simply suffers more from volatility

Yes absolutely hedges need to be considered in financial predictions based upon on oil and gas price scenarios, but hedge accounting bookings don't tell you much for that - all you need to know is what is hedged and at what price and what isn't hedged.

One last point on why I call it notional.

If I3E announced they had agreed a forward sales contact to directly supply ABC refineries who will buy a fixed amount of oil in Q2 at a fixed price, you wouldn't see any accounting bookings to reflect the differences between the price sold to ABC refineries and spot price, the revenue received would simply be one booking.