Trans-siberian Gold Share Discussion Threads

[nobull] 27/9/2007 10:28

Xiaonike, I don't know, but O.B. did strike me as sincere, and one member of the Board did point out the difficulty of trying to get out to Asacha at midnight on 31/12/08 to check if 1,000 kgs of gold have been produced. (The place is so remote and inaccessible at that time of year?). I shall draw comfort from 1. the fact that there are so many Russian people on the Board. 2. There are other less drastic options than removing the licence e.g. can demand compensation for late tax and royalty payments. The worry is that if the gold price keeps rising, then expropriation/licence revocation becomes more attractive. Continuing to hold, albeit nervously in view of Mr Mitvol's past statements.

[xiaonike] 27/9/2007 09:35

From the website:

'Gold production at Asacha is expected to be approximately 1,000 oz in 2008, 39,000 oz in 2009 and 60,000 oz per annum over the subsequent eight years, before tailing off towards the end of the current planned life of the operation.'

Why did O.B. think that 12 months latitude was okay?

TSG are already on Rosprirodnadzor's watch list and all this farting around is hardly going to strengthen their position.

[nobull] 27/9/2007 08:41

At the AGM? on the web site? they said 1,000 ozs of gold by 31/12/08. The licence condition is 1,000 kgs by 31/12/08. By the sound of it, even to hit 1,000 kgs by 31/12/09 will be mighty tough. O.B. suggested at the AGM that 12 months latitude in the licence conditions was okay.

[nobull] 27/9/2007 07:12

Highlights

• Sale of Krasnoyarsk properties for $40 million completed

• Asacha interest increased from 90.05% to 95.03%

• Asacha mine development commenced in July 2007

• Drilling commenced at Rodnikova


What a shocker: No production until, wait for it, H2 2009. What a load of asterisks.

"It is anticipated that approximately 40,000 tonnes of ore will have been mined
and stockpiled by the end of December 2008, with first gold production in the
second half of 2009. The directors consider that this delay should not endanger
the Asacha licence, given the progress that will have been achieved by the end
of December 2008. The delay will also not result in any increase to the capital
cost of the project."

[nobull] 22/9/2007 16:46

Yes, I hope so too, but the theoretical margins TSG should make may not have improved as much as the rise in the gold price would appear to indicate: e.g. if the electricity, explosives, tyres and labour cost are related to the oil price? It is annoying they are just talking "designs" and "drawings" all the time. I shall have to write a letter: they don't answer emails sent via the feedback facility on their web site. Maybe it needs somebody to short these down to 15p then they might wake up! Thanks for the info on Equitable Life. Other nearer term, fully funded producers I know of are EUM and HMB. CER look good for a takeover at £2.80. Have not really studied Aurum Mining (due for production soon?) and LRL have similar timescale to production as us.

[ali g2] 22/9/2007 10:40

With current price of gold I hope they get cracking with this now.

[ali g2] 19/9/2007 20:02

I understand low price is reflected by selling from equitable life - market cap being below their threshold. Shame noone wanted to pick up the job lot.
time will tell if bottomed out!

[nobull] 18/9/2007 08:22

Ali G2. Good on you. I think we might have bottomed now. I have grumbled to the company about the share price, but no reply (other than the share price shot up a few hours after they would have received my email!). I just don't understand why they can't release regular mine construction progress updates, as in the absence of them the market is right just to mark this down daily to reflect a) the rising licence revocation risk as the minimum production deadline rapidly approaches and b) to reflect the delay to +ve cash flow. The rise in the gold price only exacerbates the licence revocation risk if there are any construction delays? Leyshon Resources with a similar timescale to production has at least published a sort of bar chart time schedule showing all the activities that need to be done (and which ones need to be done simultaneously) to achieve the production target date. And from this company: nothing. The last RNS said something about being "on track", but omitted any dates. I also do not understand why when the weather is good and they have money in the bank and own a drill rig why they can't frigging well expand the Jorc resource at Asacha. I voted for the Chairman, but maybe I was wrong to.

[ali g2] 17/9/2007 21:23

topped up a few more.

[nobull] 07/9/2007 14:50

A blue day. Well I never. And we are not even a producer yet. Come on gold.

[nobull] 29/8/2007 20:17

Only Bendigo is worse than us (-84% from 12 month high compared with our -72%).

[nobull] 29/8/2007 15:20

Well Firebird Funds don't seem too worried about it. They've added another 200k (crossed the 7% threshold?), and, LOL, the shares went to another new low of 22.5p middle on that announcement! Maybe AGA will demand repayment of their loan at an inopportune moment forcing a free transfer of Asacha to them (through us having to issue zillions of shares at this low price to repay it?). Why, when TSG own their own frigging drill rig and they have money in the bank they don't go out and prove up more resources at Asacha I just don't know. And even the weather must be good now, and of course it might make the finance costs cheaper if they found anything good. They keep hinting at LOM extensions in the future, and Mr Burnell and Mr Olsen are happy to say how cheap the shares are, but do they buy any themselves. Not a bit of it. Have they been having AGM's in Toft in the past with no outside shareholders attending? Have they forgotten we exist? This company needs one frigging big boot up the backside.

[wiganer] 21/8/2007 18:56

The Russkis are stitching up the PIs.

[ali g2] 21/8/2007 17:57

What is going on?

[nobull] 08/8/2007 11:00

Erik, well I did attend the AGM. I don't believe the Chairman, (in his sixties? educated at Oxford University, and who has worked for a major mining company (Minorco?) for a considerable time), is the type of person who needs to tell a lot of porkies. (He must be capable of doing a good job without having to tell tall tales to cover up gross errors of judgement?). He may have seriously underestimated some things, and it doesn't help that he is under attack from one load of shareholders with, apparently, an agenda of some sort. He claims the share price is low because of a lack of marketability/liquidity in the shares (if I am not misquoting his explanation - it's in the annual report) and that the shares are "cheap". Anyway to cut a long story short, the big mystery is why the directors are not buying the shares. (They extended the option scheme for another year: a reward for failure??) I bought another 10k yesterday at 15:17 at 30.2 something. It shows as a sell. (I cursed my broker because I thought he must have mistaken my buy order for a sell order, but maybe someone is desperate to get rid of these.)

My understandng of the licence issues is that as Asacha is cut off in winter (rivers cross the access road?) it is impractical for the regulators to visit the mine at midnight on 31/12/08 to check if 1,000kgs of gold have been produced. Besides the temperatures at that time of year must be unbearable. I am assuming the authorities will be forgiving as far as not meeting the mining licence condition to produce 1,000kgs of gold by that deadline is concerned. I was told no mining company, once in production, has lost its mining licence. So the key thing is to be in production by that date. The major risk is that late equipment deliveries and extreme weather conditions, etc. will all conspire against them to produce a disaster that results in the cancellation of the mining licence. A lose-most-of-your-money situation or 5 bag it? (Maybe there are better investments than that with a two-year time horizon?) The presence of so many Russians on the board hopefully means we won't be treated as representative of Imperial UK plc that needs a lesson or two in how to respect an energy superpower with a man like Putin in charge! As always best to do your own research. I now have 55k of these.

[eriktherock] 07/8/2007 20:25

TEST. sniff, sniff
EDIT: The more I sniff, the more I smell a rat.

[nobull] 06/8/2007 12:00

Bought 25k this morning. The mining licence revocation risk is a major worry. They haven't even ordered the equipment with long lead times. At the AGM they had only committed a minute amount of their cash mountain in the bank to buying anything. The Diesel Generators (if they can't cut an acceptable power supply deal with the Vladivostok Electricity company) haven't been ordered, and a recent article in the Daily Telegraph said a lot of mining equipment (including tyres) can take up to 3 years to procure. The directors say they will be in production by late 2008. Hard to believe. I must be betting on a bleeding miracle. (They also need to find 400k ozs more, I believe, at Asacha before the project is "robust", and of course there is funding risk (the $40m shortfall). Still, if you can stomach all that, you are getting a third "part constructed" mine in one of the most inhospitable and remote parts of the world under one of the more uncertain legal jurisdictions for nothing (to say nothing of the politics between Russia and the UK). Interesting times ahead, perhaps?

[nobull] 11/7/2007 13:21

Phoned the company this morning. Bowring and Burnell are thought to own the same no. of shares as they did according to note 8 in the 1995 accounts i.e. 449K and 171,100. The table of directors' interests got left out of the 1996 accounts in Note 8. Just as well that was the reason otherwise the the directors voting intentions, as expressed in the letter to shareholders received on Monday, wuoldn't make a lot of sense if they didn't own any shares!

As to the other question of how they are going to produce 1,000Kgs of gold before 31/12/08 when Mr Burnell says in the annual report that Asacha won't start production until late 2008 is a mystery I will have to wait until Friday to hear the answer to. Anyone who is following the story of Oleg Mitvol's recommendation to remove the mining licence from Highland Gold's Maskoye mine for failing to produce the exact same quantity of gold by a deadline that has now passed ought to be interested in what Mr. Burnell has to say about this.

[wiganer] 10/7/2007 21:12

Well, I no longer hold, so have no reason to defend TSG. Guess time will tell.

[wiganer] 10/7/2007 14:48

Indeed, but that said, there must be something worth fighting over...

[nobull] 10/7/2007 14:01

The directors call Asacha a robust project. It is only robust if they find another 400k ounces of gold and if the gold price stays at $650 and if they complete the funding. Note 8 in the accounts this year omits any mention of Bowring and the Chairman owning any shares (Yes, they've got bleeding options excersisable at 45p before 30/09/07). Note 8 last year shows Bowring with 450k?+ and the chairman with over 100k. I cannot find any RNS showing disposals by these two directors (yes, there is one for Jocelyn Waller). The auditors statement has the "share price killer" phrase about there being material uncertainty as to whether the company is a going-concern. And if that isn't bad enough the Board is divided (disfunctional?). This company is bit of a nightmare to say the least.

[nobull] 09/7/2007 12:03

Received the letter to shareholders this morning. The AGM is going to be a right old fistycuffs. $38m in cash in the bank as of Friday 6th July confirmed in the letter (market cap today is < $30m). Holy cow what is going on? $40m spent on the Asacha mine so far and another $40m needed to achieve positive cash flow in addition to the $38m cash mountain in the bank. I've already pointed out that if Shell or BP had as many directors per £2m of market cap as this company does that they would need to hire Wembley stadium every time they wanted a Board meeting. Now they want even more directors, as outlined in the letter.
A bit concerned about the deal that allows AGA to convert its $10m loan at a time of its choosing into equity (and therefore to some extent to choose the conversion price). Also concerned about that UFG trying to force us to buy projects owned by Sigma at prices that are disadvantageous to us. Not surprised the AGM is being held in the firm's solicitors' office. Anyone going to the AGM?

[nobull] 27/6/2007 03:31

After yesterday's announcement Asacha appears to be a freebie? The $30m cash in the bank covers the mkt. cap of £15.4m? But the risks for the equity holders just increase from hereonin: the cash in the bank will only last until January (title risk increases?), and the equity holders will have to wait a good few years for any debt finance raised to be paid off? An 18-month wait until some of the risks start reducing?