Diamondcorp Share Discussion Threads

[jaf1948] 17/6/2016 11:20

Ged,

I am not going to waste your time and everyone else's time on this board by posting a reply. It is clear that my comments are not generally welcomed on this board so I will leave you all to your own devices and will retire from here.

[ged5] 17/6/2016 08:23

Thanks Hutch_Pod! For some reason I must have missed this:-

"The tonnage ramp-up will have a corresponding impact on the volumes of carats recovered, cashflow and project cashflow. Based on a 1.00mm bottom screen size, the Directors currently estimate that for the year of 2018, the Lace Mine will mine and process approximately 1 million tonnes of K4 and K6 kimberlite, recover approximately 466,000 carats of diamonds and result in operational cashflow after tax and interest of approximately ZAR362 million. External debt repayments in the same year are estimated to be ZAR81.5 million. A table of these metrics to 2041 (which are based on 1.00 mm bottom screen sizes, certain grade and carat value assumptions and incorporates the recent IDC Loan reschedule, but does not assume the potential positive impact of a waste sorter or DiamondCorp plc overheads) is provided in Data Tables, Part 3. The Directors are however considering changing the bottom screen size to 1.25 mm which would result in lower diamond recoveries and reduced processing costs, but an increase in the price received per carat. This decision will be taken following the completion of bulk testing activities currently underway. The potential net impact on cashflow from increasing the bottom screen size is estimated by the Directors to be relatively neutral."

[hpcg] 17/6/2016 08:11

That's because discussion boards are the least reliable source of information there is. Posts are usually positive, usually over optimistic and usually turn out to be wrong. I'm only being negative now because it looks like we'll come good. I'm posting for my own benefit to anchor because watching a share price drift from 12p to a 6p placing is terrible investing. I don't want to fall in love with a share again.

[hutch_pod] 16/6/2016 22:10

Hi GedThanks - yes I saw it was from the other board. Just wondered if I'd missed something obvious around stated cash flow targets. No worries.Didn't they mention 400K carats in 2018 in the schedule attached to the Dec placing?CheersHP

[ged5] 16/6/2016 18:20

Hi Hutch_Pod.

As I mentioned, the notes about the AGM were from posters on another board. Unfortunately I had other commitments yesterday.

I had wanted to go to ask:- when do the company anticipate producing 400k carats per annum as stated in presentations?

We really will be at the races when that happens!

Not an unreasonable question but one that nobody seemed to ask. PL still hasn't replied to my email!

[jaf1948] 16/6/2016 17:56

Of course the past year has been a success. Despite all the problems that any mine has in its build-up phases, DCP is going into full production exactly when it said it would after the uneven floors and additional safety requirements were confirmed at the end of last year. Overwhelming success ? No, but who ever claimed it had been.

Some of us have bought DCP to keep for many years when they start paying the dividends they have previously mentioned. A few months delay is immaterial as long as the mine, when in production, is profitable and safe.

Management has got us to this point with relatively little dilution compared to most AIM miners and with a 100% safety record. You keep posting your negative comments if you want to whilst those of us who are serious about the company will continue to go to Lace, ask questions at the AGM, write to Investors Chronicle and perform other proactive measures, none of which you moaners on here bother with.

[hpcg] 16/6/2016 17:42

No, not really. That board is overwhelmingly populated by those with a complete lack of critical analysis. You seem to think this past year has been some overwhelming success. Negative posting is much much more valuable than positive posting and I kick my self for ignoring both the chart and the warnings from Tiger who had astutely recognised all was not well.

I have to say, the macro picture scares me, and we have to watch diamond prices very carefully.

[hutch_pod] 16/6/2016 11:18

Very comforting to read the comments on cash.

Ged5, do you recall what the 'stated Aug/Sept 16 cashflow targets' were? I simplistically just read that as not needing further funding.

Not surprised you didn't pay the L2 renewal. It is mind-bendingly expensive, compared to eg IG.

[ged5] 16/6/2016 10:33

If either j_b1000 or BobZim read this thread I would like to thank you for your very useful feedback.

Good to see you still here Keifer. I think you've timed your latest buys well.

Thanks for your words hpcg. This past year hasn't been good but I think we're about to take off. It's hard not to fall in love with a share when there's so much potential.

[loobrush] 16/6/2016 10:19

Ged5

I see that their was a very tight vote on resolution 4 of the AGM, what was that about ?
Can you advise ?

[hpcg] 16/6/2016 10:15

Ged5 - thanks for re-posting the AGM notes. There are some sharp questions with highly relevant answers, along with the usual bizarre irrelevant bete noires which PIs have. Social media and RNS wording are of no significance at all in comparison with being a year late on the production start up. I couldn't disagree more with J_b1000 about the grading which is both margin of safety and upside if conservatively forecast.

So I wouldn't worry about the pictures in the header. There are only two types of investor in junior listed companies in the UK, those that actually do some research from primary sources, and those that post arbitrary price targets with a DYOR epithet. I hope the muppets turn up and move the price exponentially but they move in mysterious ways.

I'm annoyed at myself how badly I have played this in the last year, especially in comparison with Tiger. It finally looks like we are more or less there with that one truck in production, other equipment forecast to come online in a fortnight, and regular parcels going to Antwerp.

[ged5] 16/6/2016 10:07

Further update from the AGM by BobZim

Again whilst still relatively fresh in my mind....and in no particular order;

1] Todays RNS - Res 4: Personally I found the manner in which EIB chose to air their grievance[s] rather unedifying. It was in my view deeply unfair to EW, and certainly unhelpful to other shareholders present to have this veil of secrecy tightly wrapped around their "concerns". So unnecessary and a tad shabby. The consensus post meeting was that Rasmala [EIB in old money] were probably not well suited to investment in mining stocks and the inherent risks and uncertainties?

2] Attendance was thin compared to last year - although the Panmure meeting rooms were a serious upgrade from the meeting space of 2015! A total of 5/6 shareholders, 2 Nomad reps, and 2 Com secretary reps. Therefore [Valency] I was conspicuous!

3] Post meeting I talked at length with both PL and EW - my key conclusions were;

3.1] There is zero expectation at Board level that a "cash call" will be necessary. I pressed PL quite hard on this and he reiterated that whilst cash flow is tight [creditors monitored daily by the CFO etc] they have quote -"options to avoid a dilution scenario". Suffice to say I felt genuinely comforted by both the words and the manner in which PL articulated his replies i.e. with conviction and [in my view] a deep seated belief.

3.2] EW's opening remarks were [as one would expect] positive vis a vis progress to date and future prospects. Best summed up perhaps by his phrase "it has been a long haul, but we are now a mining company".

3.3] I expressed to PL my belief that the Panmure target share price of 15p was [all things considered] conservative. He said "he could not disagree with that sentiment".

3.4] I found both PL and EW extremely open [as open as one can reasonably expect] in their dialogue and I sensed a genuine confidence from both [in separate conversations] re the future. As PL said, mining is never straightforward and its been long hard road, but .......finally we have the infrastructure in place to be an efficient producer of diamonds.

Finally, I explained to PL my 'emissary role', and he passed over his full contact details making it clear that I/we could contact him at anytime if we felt a pressing need to do so.

I hope the above provides some useful context.
Cheers

[keifer derrin] 16/6/2016 10:03

GEd - thx for that...

I've been fairly negative with the way the company has handled it's news, but have been slowly buying, as felt this company is going in the right direction. Mining is a hard sector to buy shares in, as many things can go horribly wrong, I have made and lost money on other mining companies.

Bought another batch this morning (which for a change hasn't sounded a deathknell in the shares price this morning).....

so I would like the share price to be £1 by the end of the year please so I can retire :-) lol.....

[ged5] 16/6/2016 09:59

OT

I'm sorry about the loss of images and links to Diamondcorp's website. I refused to pay the exorbitant fees of over £465 for the renewal of Level 2 and cannot access the monitor or charts during trading hours.

When I edit any of my threads they remove links and pictures. I was thinking of paying the basic subscription but their futile behaviour is putting me off.

[ged5] 16/6/2016 07:02

Thanks badday! The video is also on the home page of the website.

A good promotional video. PL seemed very pleased with the size of the diamonds.

Some feedback from the AGM posted elsewhere:-

"J_b1000
There are regular small parcels that go to Antwerp for security reasons. They are then aggregated for monthly tenders. PL confirmed at AGM that there will be two tenders before the one in September - one in July and one in August. Clearly the July tender will not yet reflect the first full monthly tonnage of 30k tonnes slated for July. PL confirmed however the plan for monthly tenders based on a mining rate of 30k tonnes per month. He said money is tight until full production in July but "it has been tighter before" and for what it's worth I came away as a shareholder thinking this is an issue under control and more a case of saying it "how it is" and will start to fade away altogether as we start to enter full production in a couple of weeks. Once we enter full production and as PL completes a marketing exercise he says is underway PL said that SA institutions should start to come on board in chunky blocks which is where the Panmure arrangement to share liquidity between JSE and London comes into play satisfying both them and tightening the London share base. He also mentioned that he needs three of the four newly acquired trucks to be available for service end June to reach 30k tonnes in July. One is already in service and two more are to be ready for service end June. That delivery of trucks plus the ore silo end June are the two deliverables needed for July 30k tonnage and both look on track as of today.

Speaking for myself came away positive and I came in positive. I am maybe slightly more positive now. I am actually pretty excited about the July and August tenders. PL reiterated what he said in video today about the better than expected size frequency distribution. Also when you look at the resource statement see if you think there is a proper and sufficient account taken of the higher $ per carat you get with the larger stones - I personally don't think it is factored in enough, a mistake really, never mind the frequency of those stones being better than modelled ie a 10 carat stone is much more valuable than 10 stones of 1 carat each - ready to be corrected!

Bobzim

Whilst still fresh in my mind - I will outline PL's answers to the specific questions we collectively raised - then follow up tomorrow with some more general observations and opinions re the AGM.

PL was kind enough to sit with me [1:1] before the AGM and provided hand written notes/answers to our questions. I subsequently sought clarification on a few points both during and after [again with PL and also EW] the meeting.

1] Production targets ..... have been met for both April and May.
2] Social media and lack of website updates/news etc ..... will be addressed in Q3/Q4 when DCP are cash flow positive.

3] Capex ..... the next major stand-alone item is the X-ray sorter scheduled for Q3-17/Q1-18 at a cost of ~USD$ 1.5M. As a rule DCP budget annually with a 15% contingency and 12.5% replacement capital.

4] DCP will be profitable in H2 2016.
4.1] There is no requirement to revisit their stated Aug/Sep16 cash flow targets.

5] Re Tech Report table 16.7 - Trough drilling/Doming drilling - have there been any indications of water or mud from old workings? ..... "not that we couldn't adequately handle" [PL quote].

6] There are no specific problems or difficulties envisaged as Lace moves toward full production other than already advised - i.e. trucks. I sense that the 'truck issues' are now largely resolved - and PL seemed relaxed [as one can be!] re this matter.

7] COO's [Steve Ward] retirement - currently the Mine Manager [Andre] is acting COO; highly likely that he will be offered the COO role on a permanent basis and DCP recruit a new Mine Manager. Time-scale = 90 days.

8] DCP are not engaging with the Ministry of Mines with regard to BEE Charter proposals. PL stated that DCP are "too small" .....they do their level best to remain under the political radar.

9] There share trading arrangement announced on Sep7th remains open.
9.1] Very few shares have been transferred to date.
9.2] The current equity in issue is split 95% / 5% respectively across AIM and JSE.
9.3] I asked PL specifically how aggressively DCP were marketing to SA institutions - he confirmed they/he were involved in heavy - ongoing - marketing activities in SA. He expects their to be a significant appetite from SA once DCP are recognised as a fully fledged [de-risked] producer, and not developer.

10] Small parcels of diamonds are sent to Antwerp on a frequent basis. Tenders/sales are currently scheduled for July, August and September. These sales will be run-of-the-mine [kimberlite] diamonds.

11] RNS tone/wording .....unbeknown to me the NOMAD [and author] of the latest RNS was sat immediately to my left. He was identified as such only AFTER I had criticised [constructively I thought!?] his efforts! He remained silent throughout. Thankfully both PL and EW were clearly very sympathetic to the points I raised and agreed to review matters with their NOMAD.

I hope the above helps....
....I will post some more general observations

[jaf1948] 15/6/2016 14:02

Thank you.

[badday] 15/6/2016 13:03

Pleasantly surprised

[badday] 15/6/2016 13:00

Interview on the miningweb

[ged5] 15/6/2016 09:08

Good find wisecat2

"Panmure Gordon has a "buy" recommendation on DiamondCorp, with a target price of 15.7p. Analyst Kieron Hodgson said in a February note that the share price could appreciate on regular sales and growth in production tonnages.

"Despite our caution for diamond pricing in early 2016, we believe DiamondCorp remains a special situation as the company ramps up output to commercial status."

Hubbard says DiamondCorp’s market capitalisation of about R650m is less than the R750m it cost to build Lace. Once debt is settled the indicated dividend is 3p-4p, suggesting an "astonishing" 46%-61% yield on the current price.

He says other factors in DiamondCorp’s favour are that management has delivered on its promises (which is not always the case with junior miners), that it has sound black empowerment partners in Shanduka Resources and Sphere Investments and that there is potential for corporate activity. The mine has been de-risked, is about to become cash-generative and is delivering high quality diamonds, but this is not reflected in the share price.

hxxp://www.financialmail.co.za/moneyinvesting/2016/06/15/diamondcorp-ripe-for-takeover

[darcon] 15/6/2016 08:31

That would make sense as the company is incredibly undervalued and is being held back by cash flow issues that wouldn't apply to a well capitalised acquirer.