Member Info for workingstiff

"The 1,305,363,764 votes cast against Pavel was 39.4% of the total issued shares."

So if UGC do convert all their bonds, and assuming they still have the support of Everest and whoever else voted with them last time, it looks as though Pavel is a goner.

Kenj is your man for the chapter and verse on this sort of thing.

Not sure about 1m oz's or £2000 per oz, but $2000 looks to be on the cards. Over $1900 now.

There may be perfectly reasonable explanations for this and the other points I raised. But the problem is they never do - explain, that is. Anyway after its afternoon slump gold is on the move again. Back up to 1885 as I write. If it keeps rising all will be well perhaps.

I didn't want to be the first to rain on the parade, but since RB and L3Trader have chipped in, there were a couple of things in this morning's statement which left me less than overjoyed.

The rate of year on year improvement in production slowed markedly in the second quarter - up only 17k oz from the same period last year as opposed to an increase of 78k oz in the Q1 comparisons.

The paltry improvement in the cash position of around $23m (net debt reduction).

The business of "interest bearing gold prepays" reducing from $187m to $121m. This seems to be a form of undeclared debt, most if not all of which seems to have been incurred last year. Bearing in mind that the gold price took off last year, one has to ask - where did all that money go? And where does the gold price have to be before this company can make a true, cash generating, unencumbered profit. As always with POG, the lack of transparency doesn't help. Setting aside tribal loyalties, perhaps this is part of the UGC beef.

Presumably these are "off the books" debts, since they are described as "interest bearing". I don't know who they are with.

It is the half year trading update - 320.6k oz mined this year versus 225K oz last year. Ave price realised - $1640.

So UGC have told us they have converted $28m worth of bonds but POG say only $200k have been converted. Strange.

It would make sense to convert the lot, from UGC's perspective - if they think they are in with a chance of winning the coming battle - thereby arming themselves with as many votes as possible. It will also provide them with a liquid asset to cash in if they lose I suppose.

Meantime we are missing out on this lovely surge in the gold price. I've been away and out of the loop. Does anyone know if the GM has been scheduled yet?

In the seven years I've been involved POG has always been fairly sound operationally, if you exclude the IRC shambles. It has been some of the commercial decisions and proposals that have caused the issues.

RB - Yeah, that's pretty much how I see it. Although I suppose I had a vain hope that there was some funky clause in those famously long-winded CB T&C's that reduced the coupon proportionate to the increase in the share price above 13p.

The last sentence, I mean.

From the Standard article:

"That's not the craziest of ideas; the bonds were issued at a conversion price of 13p a share last year. With the stock now 28p, bond investors can double their money. Besides, the share price surge has halved the yield from 8.25% to a more pedestrian 4%."

Anybody know what this means?

Good run up today. Everest didn't get the judgement they wanted so they're going the EGM route instead. Let's hope this can happen quickly and this dispute can be resolved and put behind us.

We haven't heard the judgement from the court hearing today, but presumably Prosperity's action will ensure that Pav and his team are on the ballot at the next GM, regardless of who else is. A lot of shares have traded over the last 5 days, perhaps moving from weak PI hands to strong major shareholder hands, but still I can't see how UGC will move the vote away from the PAV regime.

UGC came to the party with huge refractory gold reserves and the prospect of a merger which I liked the sound of. For some reason they have taken against the Pav board. What are they going to do now which will either see them prevail and insert their independent board, against the odds, or change the conversation such that the merger is back on the table?

There has been a lot of talk recently about the dysfunctional nature of Russian capitalism. This is a test case. The onus is on Pav, or UGC, or both in concert to make this work.

Yep, got it thanks, Kenj.

Updownflat

Your quote from page 71 describes something very much like a scrip dividend, where the share entitlement of the bondholder is increased by each dividend. This would seem to be directly contradicted by Kenj's quote from page 38 "... Bonds will not have any voting rights, any right to receive dividends or other distributions or any other rights with respect to the Ordinary Shares until such time, if any, as Conversion Rights are exercised ...".

My guess is page 38 is a piece of boilerplate left over from the previous CB issue which they forgot to take out when they were cooking up their special 2019 treat. Grounds for a challenge, nonetheless, if the company ever pay a dividend and anyone could be bothered.

Kenj

"... that is exactly what I am saying."

Do you have a view as to what resolution 19 was for?

Kenj
Legal - maybe / maybe not.
Fear - or prudence. 2024 is a long way out. Who knows where the share price / gold price will be then. Nothing wrong with taking a profit. A lot of successful investors leave something on the table.
Conversion - I am not clear what you are saying about this. Are you saying you don't think it will happen early?

Kenj - that is a very good question.

If the contact from Prosperity is right I can only think that Pav has got them to agree to convert early. Perhaps they fear some legal challenge, as the bonds were issued without any reference to shareholders. It would also provide Pav with an extra 800m (or however many it is) friendly votes. Useful to him, given the current strength of his enemies.

"As long as you believe them" This is a key point. We should have a better idea next week.