Vatukoula Gold Share Discussion Threads

[andy] 08/5/2014 08:14

"
I tipped this stock a long time ago and it has been a rotten tip for which I apologise. Most gold stocks have cratered but this
one more than most. Rather than hang on, hoping for a bounce I would sell now as the possibility of a full or near full wipeout
looks very real to me."

---

It's a bit late to advise a "sell" now!

Where has he been for the last few years?

Anyone with a sense for mining stocks knew this was a busted flush a long time ago, the the "market guru" has only just cottonned on!

And people pay this guy for tips like this?

And of course you have to ask, was VGM a paying client of Rivington Street when it was originally "t1pped"?

Some gain, others lose.

"where are the customer's yachts" was a very apt question!

[atlantic57] 08/5/2014 07:50

The next report will be very interesting.

1) what is the cash position
2) what are the grades being achieved.

Given the pog what is the timescale for vgm to ramp up production.

paxtons guidance was worthless, ho reliable will the new the management team be.

Time will tell

[chinese investor] 07/5/2014 18:45

Thanks ac123.
I'm confident now Paxo has gone.

[atlantic57] 07/5/2014 18:42

You make very good points ac.
However what concerns me is that on 40 000 ounces production we are loss making and cash flow negative.Therefore the need for further funding looks likely.we need to see hard evidence that the grades and production ounces are improving.

[ac123] 07/5/2014 18:39

One final thing - in the email I received from VGM it was pointed out that the ultimate controlling party of VGM plc is Zhongrun which is also a listed entity – therefore announcing the Q2 results would have resulted in compliance issues between the Shenzeng and AIM stock exchange with respect to reporting requirements.

The board are considering changing VGM's year end to Dec – this will mean the quarterly will represent the Mar, June, Sept and Dec, although this has not been finalised as yet.

[ac123] 07/5/2014 18:38

Re: ShareProphets article: as far as I am aware, a 75% vote is needed to delist.

Current share structure from website is :
Zhongrun 65.6%
SCD Energy 8.7% (SCD have 2 non-exec directors)

After that it's
Sprott Asset Mgmt 4.3%
Canadian Zinc 3.6%
etc.

So Zhongrun could not do it on its own - SCD or some other would need to be in on it - but it still looks precarious. S/p movement today reflects that.

[chinese investor] 07/5/2014 10:25

I met up yesterday with a chap who was until recently very familiar with the goings on at AIM listed (*for now) Fijian gold miner Vatukoula (VGM) but naturally I shall not expose my source. Anyhow, he has sold all his shares in Vatukoula and even at 4.55p I suggest that you do the same. 
The reason is two fold.
Firstly the company is now 100% controlled by 66% shareholder Zhongun. The two non-Chinese members of the board, ex CEO Dave Paxton and a NED, have both walked in April although they were outvoted 5-2 on any issue that mattered before then. As a minority shareholder you now have no protection.
I would say that, if Vatukoula survives, it may well be delisted. Would you fancy owning shares in such an entity?
But the question is whether this company will survive. Zhongun has renaged on its commitments in terms of funding. $20 million of debt that was meant to be provided some months ago is – we were told on March 31 – now to be provided in 3 tranches with the first tranche due by the end of April and the last by the end of June.
We were told that Vatukoula had agreed to change the payment terms even though it is patently not in its interests to do so but then again I refer you to the composition of the board.
I am reliably informed that as at mid-April Vatukoula had serious arrears with its two main creditors (fuel and construction). If either walked the mine would have to close. So the first tranche of debt (if it has arrived – perhaps the company might like to clarify that matter) will almost certainly just go to pay bills to keep the lights on.
Output this year we were told in late March will now be just 40,000 oz. And those will be 40,000 high cost ounces and since the gold price is not recovering I cannot see how this company can generate cash. Assuming this debt is provided in full what happens when that $20 million runs out?
 
I tipped this stock a long time ago and it has been a rotten tip for which I apologise. Most gold stocks have cratered but this one more than most.  Rather than hang on, hoping for a bounce I would sell now as the possibility of a full or near full wipeout looks very real to me.

[atlantic57] 07/5/2014 10:06

Share prophets and Paxton ( If we assume that he is the person who cannot be named) no longer a fan.

[atlantic57] 06/5/2014 17:05

ac123 thanks for your help !

The new management team will do things in their own way.
Given the size of their investment they must have a plan and belief that they can turn it round.

However private investors need to see the head grade and ounces without that information we have no idea what progress is being made.

i guess we better write off the periof up to 31/08/14

[chinese investor] 06/5/2014 16:06

Wasn't Feb 2014 A Six Monther ?

[chinese investor] 06/5/2014 15:56

"THE second tranche of the $US40million ($F73.72m) funding from Zhongrun International Mining Co Limited to Vatukoula Gold Mines has been approved following a delay in processes earlier this year.

Zhongrun, which is Vatukoula's largest shareholder, holds a 65.7 per cent stake in the company and announced last month that the second tranche of $US20m ($F36.85m) of secured loan notes was awaiting the approval of the Chinese State Administration of Foreign Exchange.

Vatukoula Gold Mines Limited newly-appointed general manager Kevin Zhu confirmed approval had been granted, adding they had agreed with Zhongrun that the $US20m would be made in three tranches between April and June, with each tranche being no less than $US4m ($F7.37m) each. The investment agreement, which was announced in August last year, meant Zhongrun's backing would allow Vatukoula Gold Mine to implement its capital investment plan.

"So far, we have received a portion of the first tranche, which has primarily been used for working capital purposes and the deposit on the new underground equipment," he said yesterday.

Mr Zhu, who took over from David Whittle in February, said significant capital, the right management structure, motivation and an efficient mining system would ensure Vatukoula Gold Mine's prosperity in the future.

"In general, management is focusing on two of the most critical areas - to increase production capacity and to reduce operating costs. Any changes to be made will reflect this focus."

According to 4-Traders.com, an online media specialising in stock exchange, financial and economic trend analysis, Vatukoula Gold Mine had advised it would need to revise its production guidance for the financial year ending August 2014 to about 40,000 following an assessment on the effect of the historical delays in financing and the change in the delivery dates of the loan notes."

[chinese investor] 06/5/2014 15:55

Thanks ac123.

[ac123] 06/5/2014 15:53

Chinese, Atlantic
I did finally get an email from VGM covering the points above (#1008)

Regarding the loan, the gist of the reply was that if no changes had been made to the terms of the loan then no new RNS was required.

I.e. we can infer that the statement of 31 Mar - that the 1st tranche of the loan would be in place by end April - was in fact the case.

I was referred to the following article -
hxxp://www.fijitimes.com/story.aspx?id=267208 -
which states, among other things, that a proportion of these funds have already been used.

On the quarterly figures, the reply stated that there is no statutory requirement beyond interims and annuals. Figures for the 1st half-year will therefore be given in interims due end May. I get the impression that new management are finding their own ways of doing things.

So - if you're a half-glass-full kind of person - I guess it's no news is good news.

[chinese investor] 06/5/2014 09:11

I was thinking on the same lines atlantic.

[atlantic57] 06/5/2014 09:08

Perhaps they will combine the may quarter with the February quarter i expect they will be poor figures also.

[atlantic57] 02/5/2014 18:42

I have had the same experience.A reasonable conclusion to draw is that private investors do not matter.i don't think zhongon would have pumped so much money into the company without believing there is some hope of success.However whether private investors will benefit is another matter.

[ac123] 02/5/2014 17:32

Message for CharleyDuck and Benjib5151

Are you two guys still around? I recall both of you visited Vatukoula a year or two back, and were impressed, despite recent troubles, by the mine's potential.
Do you still feel the same way?

We're currently missing crucial information from the company regarding a)Q2 figures up to end Feb, b)the completion of the first tranche of the loan, which was due to be in place by end April.

I've been trying to contact the company at its London office to get details, but they refuse to return calls or emails. This has gone beyond evasiveness and is becoming more serious.

From your experience, is the management that remains reliable? (The Finance Director is still there.)

Anyone any thoughts?

[atlantic57] 30/4/2014 12:45

That is not so attractive..

[chinese investor] 30/4/2014 12:43

There's nothing stopping Zhongrun offering 0.1p per share IMO !

[atlantic57] 30/4/2014 12:34

I can confirm that private shareholders don't exist as far as Vgm are Concerned.
I have telephoned the Company 4 times in an attempt to Find out when we will get an update.

No calls were put through to anyone that could help and surprise surprise no calls were returned. i also called w h ireland same story.

Forget £10 per share Chinese if we get an offer of 15p from Zhongun i would bite their hand off.

[augustusgloop] 25/4/2014 11:04

Still no update.

No prizes for guessing what level of priority the new management are going to give to keeping shareholders happy.

[augustusgloop] 23/4/2014 00:17

The quarterly update is now a month late -- it must be truly shocking.

[atlantic57] 22/4/2014 17:02

Heading to 3 p a share i think maybe no gold was produced in the last quarter.!