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I always assumed 30%. At least that's what it says in the December 2023 ppt, page 7.
The current RNS states that the Saudi assets comprise 3.3moz AuEq. Kefi percentage is 0.9moz Au Eq. That's a percentage of 27%. Have we now been diluted again by 3 percentage points on Saudi assets? Or is it a matter of math.
urai5
As the saying goes: New day - new luck. But the odds are (much) better for Vast Resources than for roulette. It makes no sense to bet on Red - and then the Green Zero comes.
I will try to summarise the current state of affairs below (point 1 in more detail):
1. What do we have?
Vast Resources is the legal successor to Africa Consolidates Resources ACR. ACR held mining licences in Zimbabwe for the extraction of diamonds in the Marange area. The Mugabe regime had revoked ACR's mining licences and confiscated the 129k carats already mined. ACR had filed a suit against this in the Harare High Court in 2010. There was then a legal skirmish without any real progress - until NOW!
As of 1.2.2023 our case is on the agenda of the High Court Harare under "DEFAULT JUDGMENTS" (number 15). This means that the court does NOT have to MATTER on the merits. A "DEFAULT JUDGMENTS" only applies if either the defendant does not come forward (default) or if the defendant (Ministry of Mines Zimbabwe) de facto acknowledges the claim and does not want to do anything about it. This allows the ministry to "save face".
I assume that in our "DEFAULT JUDGMENTS" case, this can only be done if there has been an out-of-court settlement between Vast Resources and the Ministry of Mines - a settlement.
What we don't know: What material elements are included in that settlement (deal). But we do know that the tract was taken to court without objection (by the Ministry of Mines) Semester Comment 31.1.2023: "unopposed motion court roll".
2. Which scenarios are conceivable?
a) The court grants the "DEFAULT JUDGMENTS". Case legally settled. At least Vast Resources can again dispose of the 129k carats.
b) The Ministry of Mines files an appeal. Until the decision it can do so without giving reasons. After the decision, it can only do so if it can prove that the ministry was not able to do so before - this is purely theoretical. This may be impossible in the case of a ministry.
Personally, I assume case "a)".
3. What could this mean for the course?
Now it depends:
a) At least the 129k carats come back. Presumably net plus/minus 8 to 10m USD. This could be used to ramp up the Manaila-Carlibaba UG mine in Romania. Price potential considering Baita Plai profitability and 1 to 2m USD FCF from Tajikistan. Then I can definitely see GBX 2, market cap just under 50m£.
b) There is a deal with the Ministry of Mines, which includes the return of the mining licences for the production of diamonds at Marange. Then it depends on the terms and the business case. x-Bagger not ruled out.
urai5
I do not know the Anglo-Saxon legal system in civil law very well. Especially the possibility of DEFAULT JUDGMENTS. So I looked for the relevant passage in the Zimbabwe legal system.
Voilà:
https://www.justice.gov.za/legislation/notices/2010/20100823_GG33487_NoticeR740_civil-jurisdiction-rules.pdf
Article 12 is authoritative. pdf pages 11/12. Very interesting is the following passage:
(8) If one or more of the defendants in an action consents to the judgment or omits to give a statement of defence or a judgment may be entered against the defendant or defendants who have consented to the judgment or are in default, and the plaintiff may, on the basis of that judgment, without prejudice to his right to continue the action against another defendant or other defendants.
Extract: If one or more of the defendants in an action consents to the judgment (...) a judgment may be entered against the defendant or defendants.
Conclusion:
If there is effectively a settlement between Vast Resource and the Ministry of Mines, then there is a good chance of getting a valid decision from the High Court in a timely manner. This decision will then relate to the return of the 129k carats. In an RNS, we should then know in due course whether the settlement also includes conditions to resume business at Chiadzwa Diamond Fields located in Marange.
Really exciting times
urai5
Very good @BlueWiley and sorry it's not very easy as I'm not a native English speaker.
Now it comes down to it: If the ministry deliberately stopped reacting in court, then that would be a very good thing. That would mean that Vast Resource and the Ministry of Mines have a deal. And this deal no longer needs to be reviewed by the court.
However, should the ministry stall vast resources and play games, then never ending. Let us surprise ...
urai58
Good question @Billthebank
If the judge or the court has to decide, then it will take many years and the outcome would be absolutely open. Presumably, this would not have made an RNS AIM Rule 11 update necessary.
Based on the RNS dated January 23, 2023, it is possible that settlement discussions previously took place where the government (Ministry of Mines) and Vast Resources agreed on a deal. If that is the case, then the parties must confirm at the court that the parties still support the settlement (the deal). If the court has previously checked the deal for compliance with the law, then a quick decision would be possible. Certainly not years.
urai5
Vast Shareholders, you need to read this. It's not just about the 129k carats of diamonds.
https://en.wikipedia.org/wiki/Marange_diamond_fields
If I understand correctly, this is the Chiadzwa Diamond Fields project, Marange in Zimbabwe.
https://www.vastplc.com/operations/marange-diamond-fields/
Excerpt from RNS 23 January 2023: "Upon this matter being finalised the Company can refocus its attention back to other opportunities in Zimbabwe as previously announced."
urai58
PS For the history, court document on the 2010 case:
https://zimlii.org/zw/judgment/harare-high-court/2010/57
Please note: African Consolidated Resources Plc is now Vast Resources
@asimpleinvestor I can understand your point of view very well. This case is the only one dealing with settlement discussions where the two parties were apparently able to agree on a settlement. This settlement must now be approved by the competent court. But this does not require a hearing. This is usually done on dossier. Or is it different in Zimbabwe?
It is incomprehensible how User tries over and over again to unsettle existing or potential investors. Perhaps they have a Hidden Agenda - I don't unterstand Behaviour. So, let's stick to the facts:
- POLY is considered a UK company for the purposes of UK stock exchange regulation. It is important to note that in order to be considered a British company, more than 50% of the shares must be freely tradable in London. POLY obviously fulfils this requirement.
- POLY cannot be traded with accounts at DACH banks. Reason: the brokers commissioned have POLY on their restricted list and have not executed an order (for almost a year).
- In the case of EVRAZ, the situation is completely different: Roman Abramovich is a major shareholder in EVRAZ and he has been personally sanctioned. Trading of EVRAZ has therefore been stopped in London. The so-called POLY oligarch is Alexander Nesis (his brother Vitaly is CEO of POLY) and he holds a stake of around 11.3% in POLY via ICT. ICT's stake is 23.9% in POLY; Nesis holds 47.29% in ICT. There is absolutely no evidence that Facts could sanction Alexander Nesis personally - analogue RA.
- The main reason for the planned re-domiciliation to Astana/Kazakhstan is that currently POLY cannot pay dividends to shareholders in Russia.
- Whether it makes sense to split POLY into K-POLY and R-POLY has yet to be evaluated in detail. Personally, I expect a split. It remains to be seen whether it will be at the level of a holding company or two completely independent companies that no longer have any legal connection.
- If a company has assets in Russia, this situation is not yet toxic. Of course, the sanctions rage of the value West and counter-sanctions by Russia remain open. Therefore, it makes sense to examine a split-up with the consequences. Here are examples of international Companies that are still doing business in Russia: ING, Red Bull, Unilever, HSBC, Pfizer, Veolia, Hayatt, Accor, Glencore and many more.
- The assets in Kazakhstan alone should be worth around £5 - if they can be traded freely again. Should K-POLY be an absolutely independent company, nothing would stand in the way of a re-listing on the LSE in London.
urai5
P.S. I repeat myself: for us shareholders in Germany/Austria/Switzerland, the share price plays absolutely no role at the moment: we cannot trade. Central for us is that the registered office is moved to a neutral jurisdiction: No Western sanctions, no Russia counter-sanctions. If a split is needed for regulatory reasons - that's fine. As ownership rights are preserved and Polymetal is a British and, if necessary, later a Kazakh company, dividends can be credited - regardless of whether the share can be traded. As I see the current business situation, Polymetal Internation should be able to pay dividends again for the 2023 financial year.
Thank you. Yes @SandyShore459 I saw and checked your calculation. With the available key figures (Q4 production report) your figures are correct.
However, there are three big unknowns:
1. By-Product Zinc and especially Gold: What are the revenues.
2. OPEX taking into account economies of scale.
3. For me, the grades/recovery rate are not yet clear. 0.66% copper seems rather low to me - an increase should also be possible here: (498x100/17'343)x23%.
In addition, mechanization and modernization should enable cost reduction. The management is now challenged and must deliver!
urai5
Thank you for your feedback @asimpleinvestor
The Tajikistan royalty case is absolutely central for me. It is really brilliant - should it generate (free)cash flow. Therefore, I will now write to the IR Vast Resources and ask when we can expect the first financial figures from the case.
If the assumption is just about right and Baita Plai is no longer burning cash from summer 2023 at the latest, then there should be a revaluation. That's what I'm betting on.
urai5
P.S. If I receive an answer, I will of course post it here.
I don't understand your replica @Carltt
Unfortunately, my translation programme did not take over the whole text. Therefore the following addition:
We in DACH (German-speaking countries Germany, Austria, Switzerland) cannot currently trade Polymetall International. No broker accepts orders ex a DACH bank. Reason: Compliance and sanctions.
Trading in London therefore takes place to the exclusion of potential investors. You can believe me: POLY at these prices is an absolute bargain.
I/we don't care what price is currently being paid for POLY. Only the valuation after a re-domiciliation, presumably to Kazakhstan to AIX, is decisive. For all I care, Polymetal International could also go to the Gobi Desert. For me, two conditions are central:
1. POLY must be able to produce and sell profitably.
2. POLY must be able to pay dividends to ALL shareholders again.
In the event of a change of jurisdiction and a delisting in London, the ownership rights are still protected. This includes the right to receive dividends. Currently, it is not possible to transfer dividends to shareholders who bought on the MOEX in Moscow. Trading should be possible again after some time on "neutral" exchanges. DACH shareholders have no possibility to buy/sell in Astana. But even these restrictions should only last for a short time.
urai5
Translated with www.DeepL.com/Translator (free version)
I have been following Vast Resources since my Euro-Sun mining days in Romania. At that time (2017/2018), Vast Resources was also in the pipeline for ratification of the Mining License by the Romanian government.
2023 is known to be planned by management to become CF positive at Baiata Plai Mine. Production underway. Distribution channel established for concentrate sales. Target 14kt per month mined. Could be revenue at Cu of just under $10m plus by-product gold and zinc. Calculation CF open as I am missing OPEX as well as Company costs among other things.
But not enough for an investment decision yet. There are still two very interesting goodies:
1. Tajikistan
Very interesting business case: mining know-how against royalty. When the deal was announced in early May 2022, it chased the share price from GBX 0.28 to GBX 1.98 within a few days - 7-bagger. Now all fizzled out. Why? Simple: there are no financials yet. There is no quarterly financial report like in Canada. Fiscal year ends as of the end of April.
The gist is this:
Under the agreement, the mine is to produce approximately 7,000 tonnes per month of ore containing no less than 1.5-2% lead, 1.2-1.4% zinc and 27% fluoride of which two months production has been stockpiled on site ready for processing to commence in mid-2022. It is for note that it is reported that historically the mine contained 30g/t silver and 1-2g/t gold in situ.
What does this mean now - hence "small calculation" with the average values in each case:
- Monthly production 7kt ore, assumption recovery 90%.
- Royalty 12.25%
- Lead 1.75%, 2'180$/t: 29k$
- Zinc 1.3%, 3'400$/t: 34k$
- Fluorides 27%, 300$/t: 62k$
- Gold 1.5g/t, 1900$/oz: 70k$
- Silver 30g/t, 24$/oz: 18k$
Total: 213k per month, respectively 2.5m$ p.a.. After deducting costs plus/minus 2m$ FCF p.a. possible.
2. rough diamonds ex Zimbabwe
Very specific. It is possible that there is a deal or settlement with the authorities. This would now have to be approved by the court. Time of course open. To prevent insider information, AIM Rule 11 update. But: Hakuna Matata. But should those 129.4k rough diamonds (seized property of Vast Resources) be released, that could be worth plus/minus $10m. Plus possibly new business prospects in the diamond business in Zimbabwe.
urai5
Translated with www.DeepL.com/Translator (free version)
In a German-speaking forum, a user asked a question about dividends without war. Here my answer:
However, the answer must take into account different dimensions with some variables.
What we have for 2022 is the Production Results report, but not a financial statement. I would say business as usual without war in Ukraine. The costs would be massively lower - but possibly the gold price would also be lower. Therefore hypothetical: plus/minus ex 2021 - about 1 USD.
However, it is interesting to ask whether Polymetal International would actually be able to generate dividends under the given circumstances (Ukraine war, sanctions by the West and counter-sanctions (these also exist and hinder POLY) by Russia, interrupted supply chains, disrupted distribution channels. There the answer is: No. The ratio of net debt to EBITDA is presumably too high. However, the net earning would always be sufficient that at a payout ratio of 50% the hypothetical dividend could be around $0.50 (473m shares).
But I think that was steered that way by management. Because the debt is not "only" about the long term debt (bonds) but also about working capital which is financed with a credit line. This was the main driver for the expansion of the debt in 2022, so by the end of 2022 the debt could be reduced by $400m. In addition, POLY still has 200m of unsold gold/and silver inventory in stock. But so the BoD does not have to make a discretionary decision: Because debt ratio not met.
Now to the 2022 figures and the hypothetical calculation:
- Net Debt at the end of 2022: $2.4 billion.
- AISC 1'300 to 1'400 USD/oz
- In 2021 AISC was 1'030 USD/oz and EBITDA 1'464m$
- As of 2022, therefore, about $350/oz more. At 1.7moz: 600m$ higher costs, which burden the Net Profit (at least). So let's assume a (hypothetical) EBITDA of 800m$.
- In 2021 the ratio of EBITDA was: 60%
- Whether as of 2022 the ratio remains the same or is lower can only be said when the financial report is available, probably early March 2023.
- Potential net earning therefore around 480m$. Payout ratio 50%. At 473 shares about 0.5$.
Conclusion:
Polymetal's operational performance is very good under the given extremely difficult circumstances. This has to do on the one hand with the fact that the gold price remains historically high and of course with an extremely capable management. Polymetal International's possible decision to change jurisdiction and relocate its headquarters to a financial special zone in Astana/Kazakhstan and list POLY on AIX Kazakhstan is very welcome. After the relocation at then Polymetal International again all options open: Dividends to pay, Corporate Action and M&D.
urai5
PS As far as I'm concerned, those responsible could lay POLY in the Gobi desert. Only 2 things are important: The operational business must be able to be run profitably and in the future POLY should be able to pay a dividend again - to ALL shareholders
PPS We DACH shareholders cannot tr
Thank you @Robjm66
Everything is really on track there. Relocation is extremely important. 1 billion Birr are to be spent on this. Approx. 18.8m$. With 360 households, that's more than $50k per household. In my opinion, this is very plausible and should enable the local population to start a new life. Not included are the wages for the jobs. The most important challenge for the government is to guarantee security on site and on the supply axes.
Of course, the current price of gold is not very conducive to miners. Courses are falling massively across the industry. However, Tulu Kapi is still an "old school" project: high grade, open pit at 2.1g/t gold, simple metallurgy and 93.3% recovery.
Ethiopia is certainly not at the top of the preferred jurisdictions. The risk here is very high. But courses up to 0.8 GBX are still buying courses - if only because of the assets in Saudi Arabia. If everything goes well in ETH and KSA and the gold price moves back to around $1,800/oz, Kefi Gold and Copper would be a 4-bagger within around 18 months - we were almost at this price level in the first half of 2021.
urai5
Many thanks from the German-speaking area for your perfect online reporting @Robjm66. I have another question about the Umm Ad Damar auction at KSA; I didn't quite get it. ARTAR has applied. Is Kefi included or not? Thank you for a short feedback.
urai5
Anyone who is invested in Kefi Gold and Copper - or is considering an investment at this depressed level, should definitely watch the following (video) presentation from AGM 6/30/2022:
HAA goes into great detail about the prevailing (difficult or challenging) circumstances in Ethiopia. Things may have become (extremely) simplified in Saudi Arabia as a result of the government's new strategy away from oil and towards other value-added industries, including mining: regulation has been modernized and capital is available.
The USP (Unique Selling Proposition) for Kefi Gold and Copper is the opportunity to invest in the Arabia-Nubian Shield. Apparently the very last under-explored world region for mining - and therefore offers sky-is-the-limit potential - particularly in the Kingdom of Saudi Arabia with km-long mineralization (wording HAA), where no one had previously explored.
The bet on Kefi is very simple: After all these years of disappointments, will the company succeed in developing at least 2 projects into production within plus/minus 3 years. Personally, I assume that with Kefi Gold and Copper, HAA has a very good chance of achieving the ambitious goals that have been set. I stay invested.
The RNS does not change my assessment: It is absolutely open and is the very last chance for HAA and Kefi for Tulu Kapi in Ethiopia.
Specifically, it is about: How are the payment modalities regulated in the Umbrella Agreement (framework contract). And if a payment of 80m$ by July 7, 2022 to the Ethiopian central bank is scheduled to be received by investors, this payment will actually be made.
The problem is and has been conditionnel over and over again. Even the RNS says: "any attaching remaining conditions". It was just never clear - always "conditionnel" which we don't know. And this "conditional" is obviously no longer accepted by the Ethiopian Ministry of Mines.
But: I remain invested. After all, the last capital increase went through with 0.8 GBX. This means Kefi would have a few million extra dollars to support development in Saudi Arabia. With the best will in the world, I simply cannot see why the assets in the KSA could also be lost because of the (possible, final) Ethiopia drama. Because the operator there - and thus the owner of the drill analyzes and the exploration know-how - is at Kefi Gold and Copper.
urai5
While I'm at it, we can clarify one more point:
RE: Secure mining license TK: 80m$ until July 7th, 2022 at Ethiopian central bank, Sat 22:30
RE: Secure mining license TK: 80m$ until July 7th, 2022 at Ethiopian central bank,Today 09:13
(...)"but there's much you are missing out simply because the real information is not publicly available and a few continue to suppress anything leaking out even on this platform. Unfortunate."
You see, 2 times the same post along the lines of: "I know something you don't know."
So if you know something - and I'm assuming you're not an insider - write it down. But only give hints - this creates uncertainty. And that's why I reacted like this in the post "RE: Be Careful What You Wish For, Today 15:01".
Thank you for your feedback. I'm agree with you on the next process steps 1 to 7. Also regarding assessment, absolutely open.
But please note your following post:
RE: LICENSE REVOCATION DEADLINE DAY: JULY 7TH 2022; 24 Jun 2022 10:34:
7th of July is only 13 days to go
not long enough to wire $80m
It may be that I didn't really grasp the deeper meaning due to my limited knowledge of the English language. But to me that sounds suggestive that Kefi Gold and Copper CANNOT - according to your opinion - the Ministry of Mines requirements and therefore may lose the license.