Vatukoula Gold Share Discussion Threads

[janyboy9] 20/3/2012 07:56

BEEN BUSY SMELGY




WORCESTER PARK BYELECTION

Wednesday, 15th February 2012


David Pickles stood as UKIP candidate. David was a Councillor in Sutton for 8 years, 3 of those with UKIP. So he has a lot of local knowledge.

David would like to thank all those UKIP members who have helped in his campaign. The result of the election is listed below:



Roger Roberts - Liberal Democrats:....1367
Simon Densley - Conservative Party:....977
Hilary Hosking - Labour Party:.........315
David Pickles - UKIP:..................190
George Dow - Green Party:...............46

[p3dr036] 19/3/2012 22:47

Two extracts from the latest VGM update. From these, it seems clear to me that VGM and the Fiji Sugar Corporation will be partners in this venture. So I assume that VGM will be funding their share of the cost of the project, which I assume is a year or two away yet.
======
1. Encouraging progress has been made with the Fiji Sugar Corporation in the planned construction of the Rarawai Biomasse power project. The Fiji Sugar Corporation has confirmed that VGM will partner in the project and expects that power costs delivered to Vatukoula from the Rarawai Biomasse power plant will be less than half of our current power costs.

2.Power
On 6 March, 2012 the Fiji Sugar Corporation ("FSC") announced that FSC will be partnering with VGM on the Rarawai Biomasse Power Project. VGM and the FSC are currently negotiating a joint venture agreement and we will inform the market when this is complete.
The FSC has stated that the Rarawai Biomasse power project will provide power to VGM at a cost of F$ 0.23 per kWh (US$ 0.12 per kWh). Our current total cost of power at Vatukoula is approximately F$0.54 per kWh (US$ 0.30 per kWh).
======

[stodgy88] 19/3/2012 22:38

hi smelgy.

[speedwaymad] 19/3/2012 22:23

More broken promises from Paxton. No wonder these are falling out of bed, and will continue to do so.

[benjib5151] 19/3/2012 21:26

The biomass plant is an externally funded third party project. Im pretty sure VGM will not be putting equity in the venture. VGM's substantial offtake agreement and introduction to city fund raising is what they are bringing to the party.

[smarm] 19/3/2012 21:23

I thought the biomass plant cost was in order of $80m, not £6m. Perhaps my memory serves me poorly!

S

[yanzui] 19/3/2012 18:33

Here we go again. Mr expert investor, attempting to tell us 'the world according to ELBAN'.

I can't speak for others but FFS, give it a rest will you?

We know your view, we've read your opinion. Time and time again.

Whether or not Mr average Pi likes it or not or whether the gold price is preventing this going bust, the company have delivered in line with latest forecasts.

We've all been let down here but ask yourself why our major investors still remain in the picture? Are they all idiots?

I'm not going to get into any argument with you because IMHO you're not worth it. I've no idea why you come on here and try and discredit views of well respected BB users and knowledgeable people like CHIP and WENDY DURHAM. As an investor, who makes good and bad decisions, I certainly welcome their input.

I'd urge any of your 'supporters' to 'follow you' over at NGL or SKR, to see where your strong beliefs and opinions could potentially take them. LMFAO.

FWIW, there has been a lot of misleading information eminating from this company but I genuinely believe you're pointing the finger at the wrong person. Trying to lay all the blame at Paxtons door is unfair and if you bothered to take a closer look, you will see that a management existed, that brought Paxton in. A management that were in place and shouting production of 100k ozs, well before DP entered the scene.

No surprise to me some of these key elements of management both in London and in Fiji, are no longer involved in the 'project'.

We are not where we want to be but I see an infrastructure, albeit put in place painfully slowly, being put in place.

It might not work out but many long termers here can be thankful DP got involved when he did, because their would be nothing at all to even cling to now.

Maybe time you started directing your venom towards, the Leathleys, Lenigas's and Orr-Ewings of this world.

[chipperfrd] 19/3/2012 18:26

Elban

I don't spend my investing life looking backwards!

If I believed there was no recovery in prospect here then I would have moved on long ago without a backward look.

There are no guarantees and to many people the jury is still out on VGM until their performance meets their obvious potential.

I think they will turn their operation around - you obviously don't - fair enough, we will agree to differ.

Let us see what their next quarter has to offer.
Chip

[elban] 19/3/2012 16:52

Chip,

if it is so typical - why did nobody predict it.

If it is typical - why did it take Gunner Paxton 3 years of saying '100,000+ is imminent" before he realised it?

If it is typical, why did anybody give them money early on? If the POG hadn't risen - they would have taken about $70 million less in gold sales and so it couldn't have been a credible investment.

If it is typical then all the professional commentators - Wendy Durham, the Proactive team, Minesite and all the rest should hang heir head in shame for all the bullish statements that clearly indicated that no such development phase was necessary - before Gunner announced it as a bolt out of the blue.

The simple fact is that on many, many occasions Gunner Paxton made it appear that VGM were progressing towards the goal of 100,000 oz. It is clear now that they were actually falling substantially behind in their development.

[chipperfrd] 19/3/2012 15:55

Elban

Well, we can all have our own views and invest accordingly!

Taking the averages over the last 11 quarters:

Development has increased from 1,664m to 6,177 per qtr (avge is 4,225)

Sulphide ore delivered has increased from 43.4kt to 79.15kt yet grade has declined from c. 8.6g/t to a minimum of 4.06g/t and has now improved to 5.7g/t

As expected oxide ore and grade has remained approx steady.

Blended Mill head grade has averaged 4.4g/t but has now risen to 5.01g/t

All this is typical for an underground mine going through an extensive development phase.

It looks to me as though they have passed through the worst and are showing the early signs of recovery. Lot's more to do of course and people will have to make up their own minds as to whether VGM looks a good prospect as a recovery play. Another couple of quarters should help with that analysis.
Chip

[elban] 19/3/2012 15:05

chipperfrd,

I disagree completely.
Not that what you say isn't sensible - just that it doesn't apply to VGM.

The problems that VGM are encountering now are NOT due to the previous owners - two years after restarting mining VGM could mine 20,000 oz in a quarter at a decent grade (despite having done minimal development themselves). The fact that this then declined was because VGM hadn't done the necessay development to replace the gold that THEY had removed.

Gunner Paxton is good at putting the blame on others - but can you believe him?
The flood occurred under VGM's ownership -- did this not do any damage to the stopes? Was this not responsible for damage to the Phillips shaft?
NO - apparently not - it was all due to the last owners.

My view is simple - Dave Paxton can not be believed.


And if there was a problem that was inherited why did he not do something about it at the time???
If things were so bad - then surely he must have known that his constant promises of 110,000 next year were totally unobtainable.

You say that costs of operations are largely fixed for miners -- NOT HERE THEY AREN'T --- Yes Gunner keeps saying this in his presentations and interviews -- but look at the numbers going back to 2008. They depict a very unusual definition of fixed.

The fact that after 3.5 years of mining and record gold prices, VGM are still making a loss and trying to catch up and making promises for the future -- is a failure of this management.

Since Gunner Paxton made his first forecast of hitting 110,000 in a year (2009) VGM have produced a total of about 150,000 ounces less than would have been achieved if this target had been hit. How much extra development would that imply?

This 'development phase' has been going on for 15 months!
And they are still below 15,000 oz per quarter.

And this is actually the 3rd or 4th Development phase that Gunner has reported.[Each one bigger than the last and each one going to be the one needed to get VGM up to 110,000 oz then 100,000 oz now its 75,000 oz.]

Look back at his old presentations and statements -- do they bear any relationship with what actually happenned?
He was either totally deluded, or was lying through his teeth.

Why believe him now?
Is a liar always a liar? Or is a stopped clock right twice a day?

[chipperfrd] 19/3/2012 13:44

Elban

Like all miners, costs of operations are largely fixed and as mining is all about throughput, it is the costs per tonne processed which are the main issue.

During a development phase ore dilution will invariably rise, grades will fall and recoveries will suffer - ie the costs per oz will rise!

As development effort decreases compared to stope mining output the percentage of ore dilution will decrease and both grades and recoveries improve for the same ore throughput. This is a characteristic of underground mining and companies who wish to remain mining an underground ore body have no choice but to keep development in line with stope advancement.

In the case of VGM they are having to undertake a much more significant development programme to make up for lack of development by the previous operators who ran the mine down without making the necessary investment in such development.

The fixed costs of operations are high - there is no denying that! Power costs will remain a significant proportion of the total fixed costs with a degree of mitigation by the future prospective 'green' power plant. But the main driver of improved margins will hinge on the increase in stopes currently being developed.

It all takes time but there is no choice but to keep on with this essential work until sufficient undiluted stope ore is available to support full operations at improved grades.
Chip

[1waving] 19/3/2012 12:46

WARNING
Do not go to any links for precogz.com as above.

Posters elsewhere have warned to keep away.

EDIT. Looks like ADVFN have removed it

[elban] 19/3/2012 12:38

It is often hard to see what is really going on - because Gunner Paxton keeps changing his comparables - and always blames any negatives on reduced grade or increased development. [Even though a bit of digging shows worsening when compared to previous quarters of similar grade and development.]

To get around all Gunner's spin - I look at total cash costs (which only varies slightly with grade and development and ounces produced).

For the equivalent quarters: total cash cost (= stated cash cost * ounces produced)

2010 = $8.8 million
2011 = $16.9 million
2012 = $20.3 million

The 2010 figure is probably understated by (less than) $2 million because it didn't include development meters.

Here is the problem - minimal (or zero) improvement in gold production - but massively rising costs. This is down to exceedingly bad management.
All the investment in new equipment should have lowered these costs.
If it wasn't for the $700 increase in POG over the last 3 years - these would have sunk with massive losses.

Gunner Paxton -- tell us what is really going on!

[shanksaj] 19/3/2012 11:03

You lot are a bit of a misery.....is it a Monday hangover?

Results are pretty good.