Shaft Sink Share Discussion Threads

[rcturner2] 05/11/2015 14:14

Mark Twain's definition of a gold mine was "a hole in the ground with a liar at the top".

[technofiend] 05/11/2015 14:05

Thanks Muckshifter.

What initially attracted me to Oxus Gold as an arbitration play was that a number of litigation funds had invested money in Oxus's case.

If Oxus wins then they are paid off. If Oxus lose then they get nothing.

I don't believe SHFT attracted any such legal investment.

[muckshifter] 05/11/2015 12:45

No, sorry TechnoFiend, never been a goldbug.

First time I found gold mining interesting was while living in Indonesia, when, you may remember, a Canadian Miner found one of the richest gold deposits in history. There was then an unholy fight between the Suharto children over which of them was going to "invest" (a euphemism for steal) in the project, all courageously reported in one of the very few papers I have ever held in high regard The Jakarta Post. In the end, the geologist's report was found to be nonsense and the Philipino geologist "fell out of a helicopter" over the Indonesian rainforest, never to be seen again. - An everyday tale of life in Indonesia.

Second time was a month or two after my one and only investment in a gold share - Stratex, when I spent a couple of weeks looking at muckshift problems with a mining specialist in the desert. The evenings were spent drinking and talking, and I learned quite a bit about opencast gold mining from him. I learned enough anyway to ensure that I sold my gold shares within a week of returning home at a small loss, and never looked seriously at a gold share again.

So all the best with Oxus Gold, if you are looking at an arbitration "play". Don't want to "teach grandma to suck eggs", but one lesson worth remembering from SHFT is be very wary of a relatively weak party to an arbitration which is constantly proclaiming the strength of its case and using gullible journalists to convince investors.

Regards.
PS. The article you posted above missed out the fact that the arbitration tribunal dismissed the SHFT arbitration claim against Eurochem - but I suppose that was obvious.

[technofiend] 05/11/2015 09:35

Oh a few grand. Big loss relatively speaking but not ruinous.

This sorry saga has taught me a hell of a lot though. Which is a compensation, you only learn from your losses.

On a side note, have you been paying attention to the other arbitration play - Oxus Gold?

Muckshifter, thanks for your input. All the best.

[technofiend] 04/11/2015 19:16

Can anyone confirm this?


13/10/2015 | Press release Swiss Arbitrators Award EuroChem $140 Million in Dispute with Shaft Sinkers -

Zug, Switzerland, 13 October 2015 - EuroChem Group AG ('EuroChem'), a leading global agrochemical company, today announced that its subsidiary EuroChem-VolgaKaliy LLC ('VolgaKaliy'), has won its fraud claim in the Swiss Arbitration Court of the Swiss Chambers' Arbitration Institution against Shaft Sinkers (Pty) Ltd ('Shaft Sinkers'), a company then controlled by International Mineral Resources B.V. ('IMR').

A three-member Swiss arbitration panel appointed with the consent of both VolgaKaliy and Shaft Sinkers unanimously confirmed a pattern of fraud and bribery by Shaft Sinkers. The panel awarded VolgaKaliy around $140 million, including $112 million in damages and $8 million in legal costs.

The Swiss arbitration panel determined that for more than two years Shaft Sinkers deliberately withheld critical information from tests and studies, which established that Shaft Sinkers' proposed method to construct a shaft at VolgaKaliy's potash project in Kotelnikovo, Russia, would not work in the wet soil conditions and that Shaft Sinkers' written guarantee that such method would work was fraudulent.

Additionally, the Swiss arbitration panel determined that Shaft Sinkers bribed VolgaKaliy's senior project manager who took action to protect and favor Shaft Sinkers while concealing its mistakes and fraud.

EuroChem believes that the Swiss arbitrators' decision clearly showed that Shaft Sinkers lied, cheated and bribed to win and retain a contract to build a mine shaft with a method that it knew was likely to fail, while purposefully and deliberately withholding information that confirmed the likely failure.
Shaft Sinkers is currently trying to avoid liability by pursuing what VolgaKaliy believes is a fraudulent bankruptcy scheme in South Africa.

VolgaKaliy will pursue all available legal means against all involved parties to recover this $140 million award from Shaft Sinkers and IMR, and is currently pursuing additional damages claims in other legal proceedings before the International Chamber of Commerce and elsewhere.

With this Swiss final arbitration award and the additional evidence disclosed of IMR's involvement in the fraud, VolgaKaliy is of the opinion that its claims against IMR in the Netherlands will be upheld in the on-going action in Amsterdam, where the court's 2013 ruling granting VolgaKaliy a $1 billion attachment order against IMR remains in place.

- See more at: hxxp://www.noodls.com/view/5ED03FB94D1EA06113237EAE26C1711E14A1048E?5558xxx1444753895#sthash.PwJaujBF.dpuf

[muckshifter] 14/9/2015 15:18

RCTurner2,
Don't know if you remember all that nonsense he posted about the arbitrations and the IMR/Eurochem case, but many of the points I made, and Hedgehog evaded, look to have been vindicated by this:


Page 28 of the numbered document pages, under section 26 heading: legal proceedings:-

“In October 2012, the Group filed a claim against SHAFT SINKERS (PTY) LTD and ROSSAL 126 (PTY) LIMITED (formerly known as SHAFT SINKERS (PTY) LTD.), (“Shaft Sinkers”), the contractor involved in the construction of the mining shafts at the Gremyachinskoe potash deposit, seeking US$ 800 million compensation for the direct costs and substantial lost profits arising from the delay in commencing potash production, due to the inability of that construction company to fulfil its contractual obligations. Based upon the damages report provided by an independent expert, the amount of the claim was increased up to the US$ 1.06 billion which includes net wasted costs to the amount of US$ 248 million and lost profits in the amount of US$ 812 million.

In December 2012, Shaft Sinkers filed a counterclaim against the Group, seeking US$ 44 million without Russian VAT of 18% or US$ 52 million with VAT under the construction contract. In its counterclaim, Shaft Sinkers admits that it will give credit, in respect of any sums awarded to it, for a deduction of US$ 30.6 million in respect of advance payments made by the Group with the result that the maximum net claim from Shaft Sinkers is US$ 14 million. Management believes that this counterclaim is without merit.
The above disputes are subject to arbitration as specified in the contract.

In March 2013, the Group filed a claim against International Mineral Resources B.V. (“IMR”) which, the Group believes, held a controlling interest in Shaft Sinkers, claiming IMR is responsible for its subsidiary’s actions. In July 2013, the Dutch Court granted EuroChem definitive leave for levying the requested prejudgment attachments against IMR’s Dutch assets, while fixing the amount for which the leave is granted, including interest and cost at EUR 886 million. The court held an in-depth hearing on 21 January 2014 where it considered the arguments and witnesses of both sides. Following that hearing, the court rejected IMR’s request to suspend the case and stated that IMR would not be permitted to submit any additional evidence. On 25 June 2014, the Dutch court denied the Group’s claim against IMR and on 18 September 2014, the Group filed a writ supported by newly discovered additional evidence with the Dutch appeal court. In accordance with the procedure the Group submitted the grievances to the Dutch court on 17 March 2015. IMR has submitted their grievances at 23 June 2015. The date of hearing will be announced after 18 August 2015.”

The first paragraph above from page 28 section 26 verifies, imho, my contention of two years ago that the fundamental basis of the main arbitration claim against shft is probably “breach of contract” – failure to fulfil their contractual obligations.

It was always my contention that Eurochem knew that they couldn’t get any significant compensation from shft – simply put, under any of the approximately 20 civil engineering Conditions of Contract I’ve been involved with, the $248m direct cost incurred because of the failure to fulfil the contract would become payable by shft, and would bankrupt them. My view was that the arbitration referal was skewed to provide evidence against IMR, who effectively owned and ran shft at the time the contract with Eurochem was formed (they owned 54% and provided two of the three executive directors from their own organisation). I believe that Eurochem, by the time the shft failure to fulfil the contract became clear, and the information about the supressed report and the shft payments to a Eurochem employee were uncovered, were running out of time for taking court action against IMR. As a result, the court action against IMR occurred before Eurochem were able to have “discovery” through the arbitration procedures, and they lost the initial court battle. My contention, when that result was announced, was that this would not be the end of the case against IMR, and that Eurochem would be back in court after “discovery of documents” in the arbitration hearings – which is exactly what appears to be the case when the last three sentences of the above third paragraph extracted from the Eurochem report are considered.

In terms of the arbitration, although the outcome has not yet been publicly released, I would think that there was very little confidence that they could win in the shft camp, because if they were sure of a win, the banks, financiers and creditors would surely have been prepared to support them while waiting for the huge inflow of cash Hedgehog kept predicting that they would receive, “when they won the case”.

And the final adversarial opinion that is now clearly settled was Hedgehog’s prediction, made in about fifty posts, that shft could even lose the arbitration, bankrupt the relevant subsidiary, and carry on as normal, as opposed to my position that in my experience that never happens in the Civil Engineering industry – when a subsidiary goes bang, so does the parent company – which was what happened here.

Regards.

[rcturner2] 14/9/2015 13:03

Not one of your best tips, eh hedgehog?

[napoleon 14th] 04/6/2015 11:01

Well, there you go...

Further to the announcement on 30 March 2015, Shaft Sinkers regrets to announce that it has no option but to continue with the winding up of the Company and has called meetings of members and creditors for 4(th) June 2015. It is proposed that Stephen Cork and Joanne Milner of Cork Gully LLP will be appointed as Joint Liquidators of the Company.

[hedgehog 100] 21/5/2015 18:49

From "THE TIMES" Wednesday May 20 2015, "Market report":

"Shaft Sinkers is finally sunk

The aptly named Shaft Sinkers conceded yesterday that it could no longer dig itself out of a tight spot.

The mining services company, backed by a trio of oligarchs, said that it had no choice but to continue with plans to wind itself up. It has called a meeting of members and creditors in June.

Stephen Cork and Joanne Milner, of Cork Gully, the London restructuring firm, are to be appointed as joint liquidators.

Alexander Machkevitch, Patokh Chodiev and Alijan Ibragimov, the founders of ENRC, the private miner, are understood to own almost half the company through International Mineral Resources.

The company came to the main market in December 2010 at 124p a share and its market value rose to £91 million.

The downturn in commodity prices put pressure on Shaft Sinkers, which had also been caught up in a legal battle over a Russian mining project. Its shares were suspended in February, by which time they had sunk to 0.625p, and the company was unable to repay a £5 million loan and interest to Hillside International Holdings at the end of March, prompting the company to begin winding up proceedings."

[technofiend] 25/3/2015 13:33

In for the LOLs....



Shaft Sinkers shakes off sinking feeling

BY ALLAN SECCOMBE, 19 MARCH 2015, 05:43

..........

A $917m claim by Russia’s EuroChem was directed at the South African division and by ring-fencing it, the rest of the business would be unaffected by the claim if an arbitration process in Zurich went against it, Mr Heyns said. The results of the arbitration hearing are expected "imminently".

Shaft Sinkers secured $4m in loans from Hillside, a company that has already injected £5m into it, and Standard Bank to underpin its projects in India and the Congo.

Hillside can, at any time, call in its £5m loan plus interest, which more than doubles the market capitalisation of Shaft Sinkers, or it can convert the loan into shares, giving it about 70% of Shaft Sinkers.

The Shaft Sinkers board must decide by the end of April whether to continue its suspended listing in London, where its share price had spiralled down to 0.5p each, valuing the company at £2.3m. Mr Heyns said his recommendation was to delist the company and rebuild it.

.......

hxxp://www.bdlive.co.za/business/mining/2015/03/19/shaft-sinkers-shakes-off-sinking-feeling

[the stigologist] 19/3/2015 17:21

shouldn't you just keep quiet after SHFT and TGL ?

MUPPET

[hedgehog 100] 19/3/2015 17:09

Nice to see CAPD declare a maiden dividend, after the unfortunate demise of Shaft Sinkers recently:

17/03/2015 07:00 UKREG Capital Drilling Limited Full Year Results

" ... Financial Overview(1)
-- Revenue down 15% to $98.8 million (2013: $116.3 million)
-- EBITDA up 20% to $20.4 million (2013: $17.0 million)
-- EBIT improved to $3.9 million (2013: -$0.2 million)
-- Net Loss After Tax improved to $0.6 million (2013: $1.9 million)
-- Net Debt to equity ratio of 0.4% (2013: 9.9%)
-- Net Operating cash flows of $22.7 million ... "

" ... Commenting on the results, Jamie Boyton, Chairman of Capital Drilling, said:

"2014 again proved highly challenging with the commodities industry facing prolonged headwinds, impacted by continued weakness in key commodity prices and an uncertain and changing global economic environment. Our customers continued their focus on strict cost management and constrained capital expenditure, driving a material impact in the demand for drilling services. Capital markets activities remain depressed, at levels last seen a decade ago, which has driven a sharp decline in exploration expenditure, down almost 50% since the 2012 peak (Source: SNL MEG Date: November 2014).

Despite these substantial and sustained headwinds facing our business we have delivered improved margins, increased free cash flow and significantly deleveraged our balance sheet, demonstrating the effectiveness of our strategy and the quality of our people, assets and processes. With our significantly improved financial position and an improving operational performance we are confident for the future of the Group, reflected in our decision to announce the Company's maiden dividend today at US1.9cents per share.

The market volatility seen since the start of the year suggests that 2015 will continue to be challenging yet is slowly showing indications of improving sentiment. We are currently experiencing a transition in global growth drivers, with a moderation of growth in China and an improving growth profile in the United States. This shift is having a marked impact in global commodity markets, with increased volatility in the prices of oil, iron ore, copper and most recently gold. Accordingly, the continued drive of global mining companies to reduce costs remains firmly in focus. Industry utilisation rates for the global drilling fleet remain at historical lows, with an estimated global fleet utilisation of 35 to 40% based on recent company announcements. Whilst we have been operating in this environment for the past 2 years, aggressive price competition remains prevalent, particularly in exploration and delineation drilling.

Despite these challenges we are in the strongest position in the company's history, as reflected in the announcement of our maiden dividend of US1.9cents per share for 2014. The decisive early actions taken by your management team to reduce costs, our improving operational performance across a solid base of long term contracts and our strong balance sheet, all position us well to cope with the challenges ahead. The foundations that are now in place will provide increased earnings and cash flow leverage for when markets recover". ..."




Price Price Change [%] Bid Offer Open High Low Volume
26.00 0.0 [0.00] 25.00 27.00 26.00 26.00 26.00 51,165
Market Cap. [m] Shares In Issue [m] Beta EPS DPS PE Ratio Yield 52-Wks-Range
35.00 134.60 0.79 -0.27 - - - 34.00 - 20.50


At 26p CAPD is down less than 10% from when this thread was started two years and two months ago, a massive outperformance compared to most small mining and mining services companies.

[lennonsalive] 17/2/2015 18:29

One morning you will wake up and this share will be bust...too late

[technofiend] 17/2/2015 09:07

LOL.

I'm still intrigued to hear how this Eurochem business finishes though.

Worst investment ever.

[pugugly] 17/2/2015 07:50

Game set and match to Muckshifter..



Hedgehog - Knocked out - 06 06 06.

[vision88] 15/2/2015 10:54

What sort of mining company is this

[the stigologist] 15/2/2015 07:42

hedgehog certainly did

[chemistdude] 15/2/2015 00:25

Looks like this share got SHFTed

[buywell2] 14/2/2015 10:11

buywell2 22 Aug'14 - 14:09 - 2661 of 2784 0 0 edit

They timed the news just right to coincide with the spike

Funny that

But what conditions will the new money insist on ?

And how much will they raise ?

I would imagine the new contract depends upon sufficient funds being in place










buywell2 27 Aug'14 - 15:14 - 2670 of 2784 0 0 edit

That's two nice little wiggles on the chart now ...


























but the angle of elevation needs to be bigger to achieve escape velocity methinks

[rcturner2] 13/2/2015 15:36

hedgehog is a legend in his own mind

[envirovision] 13/2/2015 14:00

Common courtesy, most probably being left open for peoples shorts to close.

[pictureframe] 13/2/2015 13:47

How is this not suspended?