Member Info for TigerByTheTail

https://www.bloomberg.com/news/articles/2020-07-08/crispin-odey-hedge-fund-s-losses-deepen-to-17-9-in-first-half
Here's the Bloomberg article about Odey. He is a highly unpleasant individual, so I can't say I'm sorry for his troubles.
But my guess is that his funds will be hit with a wave of redemptions after these results, and that could easily mean forced selling here and elsewhere.
Still, given the numbers HUM should be generating, there should be buyers for any shares hitting the market!

I've been thinking that it makes sense for Newcrest to make a low-ball bid for Solgold as soon as they can. (It may take a few weeks for them to get such a bid organised, and they may wish to try and buy out Cornerstone first).
Firstly, the bid may succeed. In which case, it's good for them.
Secondly, it releases BHP from their shackles, allowing them to make a counter bid. That would mean BHP were free to make an offer (at an appealing price) for Newcrest's stake. Again, good for Newcrest.
Thirdly, such a lowball bid may force any other potential bidders (Barrick?) out into the open, again potentially increasing the sale value of Newcrest's stake. Again, good.

I'm going for a spike on open (15p?), then a huge wave of selling as people who have been locked in try and get out. Close at 4p.
There's no takeover here, and the value of the assets has been wildly (and I mean WILDLY) overstated on this board. Mcap of about $75m sounds about "right" to me.

Hi GoldGnome!
Why won't gold go to $3,000? I actually think it may well do so, but here are some possible reasons why I could be wrong!
1. Gold is bought in times of fear in the West, and in times of prosperity in Asia. We have recently seen outflows from Thailand as people in economic difficulty sell their savings held in gold. Also, there has been very little recent purchasing from China and India. What if this trend increases, and there is a big outflow of gold from Asia as their economies struggle?
2. What if major central banks decide to sell their gold as an attempt to hold down its price and to hold up the value of their own fiat currencies? Or simply because they desperately need the cash, as per Venezuela recently? Remember, the US and Switzerland may be able to print currency without harmful effects (at least for now), but this is decidedly not true of emerging market economies.
3. Stocks are wildly overvalued, and bonds are in a giant bubble. What happens if the stock market crashes? Will there be another desperate "dash for cash" as margin loans are called in? If that happens (again), I'd expect people to sell what they can for what they can get for it, and gold will always be one of the most liquid assets around. That would cause at least a short term dip in the gold price.
Just a few things to think about. I still think Centamin is about as safe an investment as there is these days. But nothing is absolutely safe in times like these.

Hi Bobliz!
I think you meant "property owning bourgeoisie" or some such, not "property-owning proletariat".
Just saying.
Yours,
Citizen Winston Smith
(Eat the Rich Citizen's Front)

Hi Jdevereaux!
But we know there are several years of "mine life" based on using the existing tailing dumps alone - I believe it's 7 or 8, but that's from memory.
Also, SLP still have fresh arisings from newly mined materials at some dump operation locations. And it looks like the bottom is in for chrome prices (they're about $155/t now compared to the low of $125/t). If that trend continues then Samancor may reopen some of their shuttered operations as well.
Finally, we should remember the possibility of deals to obtain access to other piles of chrome tailings for processing. They do exist!

Hi Caution!
There should be plenty of feedstock from the existing tailing piles for operations at all sites, even though the stream of fresh arisings from new chrome processing will have stopped in two locations due to Samancor suspending their own operations. Going forward, this arrangement could result in slightly lower guidance for next year - I think maybe 68,000 ounces instead of this year's original guidance of 74,000 ounces.
Social distancing measures may also add to production costs slightly, but it should be remembered that the dump operations (outside, on the surface) naturally lend themselves to good practise. I'm very happy we're not a deep miner!
At today's PGM prices next year should be a very good one for SLP.
However, Q4 results coming up won't be so great. One month totally closed down and then a ramp back up to speed must have ruined the figures. I'm hoping production will be around 8,000 ounces for the quarter (as SLP soft guided) and that the quarter will come out at about break-even.
Profits for the financial year 2019-2020 should still be excellent, but they will almost all come from the first three quarters.
I haven't a clue how the market will react to all this, but IMO the company is in excellent shape, and it could pay a humungous dividend if it so chooses (as per Liberum broker note prediction). I agree about the laughable undervaluation here.

Yep, gold spot joins join futures in the $1800s.
$1920 - the old all-time high - is the next target.
I'm sure gold will need to consolidate a bit first before making a move on that.

Hi Bangrak!
The argument you make is enough to justify buying and holding SLP shares. I would only add that the company is debt free and has about $45m in the bank, that it owns two valuable non-core assets that may be sold (Grasvally and Volspruit), and that I think your estimate of 60K ounces production for next year is decidedly on the low side.
That said, as regards PGM prices, I'm more optimistic than Trading Economics for two reasons.
Firstly, once platinum drops below $800 per ounce, it begins to affect supply. There are miners that just can't make money at $700. (Not Sylvania, which is one of the lowest cost producers of Pt). Who knows, perhaps platinum will even catch a bid from the ever rising gold price? (Remember the decades when the platinum price averaged 1.25 times the gold price?) Certainly, platinum coin and bar demand has shot up this year.
Secondly, as regards rhodium, the only two real sources of supply are South Africa and recycling. And South African deep mine supply is going to be limited by Covid19 restrictions for some time yet. As the rhodium market has been in deficit for years, and there are almost no surface reserves left anywhere, I can see another price peak coming next year for this rare and irreplaceable metal.
All IMO and DYOR, of course.

Hi Fifo!
I'm overjoyed that HUM are not spending any new money on Dugbe, which I regard as a money pit. (I'll be happy if ARX manage to make something out of the asset over time, but I certainly won't be buying any of their shares).
I couldn't care less about a non-cash charge to the company's book value relating to Dugbe.
IMO, HUM is all about the cash that Yanfolila is currently generating, and the hope that Kouroussa can continue and increase that cash generation in the future.
I think you'll find most shareholders here feel much the same.

Hi BillyBoy!
First, I did bite the bullet and buy back half the shares I had sold on Monday's RNS today. I even "made" a whole 1% on the operation, counting in stamp duty!
Roughly speaking Hochschild (HOC) shares usually trade at a price 50% higher than those of fellow precious metals miner Centamin (CEY). Over the long run you can use this crude approximation to see which one of the two is currently "cheap". When HOC shares are slightly cheaper than CEY shares (like now, at 180p to 184p), then a lot of woe is already built into HOC's share price. I guess that's why HOC's share price didn't drop more on Monday.
BTW, I still think CEY shares offer value, even at current high levels. IMO, in this troubled world of ours, a dividend paying debt free cash rich unhedged gold miner whose operations are unaffected by Covid has a great deal going for it!

Surely the major BHP have the financial resources and the technical expertise and the existing relationships to get Alpala into production sooner and more certainly than an explorer / developer like Solgold?

Hi Bangrak!
I'm a big optimist about rhodium prices, in particular. Rh was in severe deficit before Covid-19 hit. For now, I think demand has dropped by about as much as supply, but I believe demand (i.e. catalytic converters) will recover faster than supply over the next few months. There is no way that the operations of South African deep PGM miners will not be severely impacted by social distancing for some time to come. And Sylvania don't have that problem.
A Volspruit sale would be a wonderful bonus. Even the the completion of the sale of Grasvally would be very welcome (chrome prices have recovered slightly now). But my investment case here isn't based on either of these things happening. It's based simply on the profits of the dump operations. That's plenty enough reason for me.

Hi Miagi!
First, I should say that I make it that SOLG is a decent investment either way - taken over or not. (Though a takeover would likely mean a quicker profit).
As regards a possible takeover vote:
1) Remember that many PIs won't vote. That's the way it always is. And also, that the PI vote will probably be split. It's the bloc votes of the institutional shareholders that are crucial.
2) The board only own 5% or so of the shares. That's not a great starting position for them.
3) You can be sure that Newcrest and BHP will do a deal BEFORE a bid is made. That means the bidder (either BHP alone or a BHP - Newcrest JV) will start from about 27% of the shares. Given not all shareholders will vote, the bidder then needs to get to around 40% of the total "electorate" to ensure success.
4) So, yes, 7% is a key stake. Any bidder will strike a deal with Cornerstone to buy the company to get their votes.
5) IMO, the risk for Cornerstone is in no bid emerging.
Still, in Cornerstone's shoes, I'd definitely turn down the current Solgold bid and wait for a better offer.

Hi Quady!
Yes, if you like, Cornerstone is the all-important swing voter in this election.
7% or 8% voted one way or the other as a bloc would make a huge difference to the eventual outcome.

Hi Miagi!
It's point 4 of my post that's the key consideration for me. And, yes, 7% would be a "kingmaker" stake in a potential hostile takeover situation like this one.
As regards ToS's reply to point 3, can I point out that ENSA is the holding company for Alpala, and denying information on it to Cornerstone and restricting site access would be a fundamental breach of their rights as 15% minority shareholders in ENSA. I don't know Ecuadorian law, but I think that is unlikely to stand up in court.
Don't rule out Newcrest and Cornerstone" calling an EGM with a "sack the board" agenda, either.
I still take Cornerstone's initial pushback to Solgold's offer ("there's no cure for stupid") at face value.

HI Miagi!
A few caveats to your post:
1) You're assuming that Solgold's offer document is a fair-minded interpretation of the actual underlying contractual paperwork. I'd regard more as an adversarial "case for the prosecution". We haven't yet heard Cornerstone's "case for the defence".
2) If BHP took over Solgold, then Cornerstone's 15% stake in ENSA would become far more valuable, not less. Apart from anything, it would mean with 100% certainty that the mine was going to be built. All in all, it would make Cornerstone's raising of their share of the capital required substantially easier.
3) I'm not sure that it would be legal to block data room and site access for crude business advantage like this. I have serious doubts on this point.
4) You are forgetting that BHP (if they bid) would want to stay on good terms with Cornerstone in order to gain the votes of their shares in Solgold in favour of their offer. That would require BHP entering into a biding agreement with them at that stage, I'm sure.
All told, based on what we know, if I were Cornerstone I'd turn down the Solgold offer and hold out for the bigger payday to come.

Hi Waynexx!
Technically, you're right. But (and trust me, I know) there are ways around such "anti-collusion" clauses.
A nod, a wink, a third party intermediary, a leak to the press, even a significant silence.
Sometimes successful business requires being able to give and take a hint.

Hi Allthatguff!
But, Cornerstone hold Solgold shares.
So, no, BHP can't bid for Cornerstone as long they have those shares, at least until October 15th.

Hi Sotolo!
I agree with most of your post. I also have sold everything except precious metal shares and ETFs. I just can't see that the risk-reward in investing in the wider market is worth it at the moment. I am sorely tempted to short some of the more "bubbly" stocks, such as Tesla, but so far I've resisted the impulse.
I'm probably more willing to play at "timing the market" than you are. But it seems I overestimated the effect of yesterday's RNS on the HOC share price. I suppose when HOC is trading 1:1 with CEY (instead of the usual 1.5:1), a lot of grief is already built into the share price. I'll buy back in here in due course, but I'll leave it a few days in the hope of a dip - Q2 results are out on the 15th, and I think we'll see some traders selling before they hit.