Vatukoula Gold Share Price - VGM
|Share Name||Share Symbol||Market||Type||Share ISIN||Share Description|
|Vatukoula Gold||LSE:VGM||London||Ordinary Share||GB00B52ZLG09||ORD 5P|
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|Industry Sector||Turnover (m)||Profit (m)||EPS - Basic||PE Ratio||Market Cap (m)||RN||NRN|
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|01/10/2015||18:31||Vatukoula Mines - VGM - Going For Gold||1,241|
|07/8/2014||10:08||VGM Civilized Thread||13,520|
|20/5/2013||14:09||Vatukoula Gold Mines||1,072|
|23/3/2012||12:06||VGM Civilised and moderated.||1,354|
|22/6/2011||09:32||...has this donkey any sparkle and shine left since 1934...||14|
Vatukoula Gold Top Chat Posts
|atlantic57: VGM Share price static and still no quarterly update , disappointing but not surprising given the quality of the Management.|
|johncraven: Quite a big push up for gold but will it help the shattered VGM share price....|
|craignet8: Chinese Investor 18 Apr'13 - 10:51 - 334 of 336
Serious Buying !
|yanzui: Don't think i've seen this write up on here.
Posted by Charleyduck on the Motley Fool site: Good read.
From the 29th February 2012.
Vatukoula Gold Mines (VGM)
A producer of gold for 70 years.
They lost private investor support last year.
They should recover it this year and next.
Gold? I see the gold price is dropping 5% as I type - $1,785 to $1,690 in six hours - typical! a different big discussion point but in my view it will hold in the $1,600 to $2,000 range for a year or two yet. Something to watch though!
Size of VGM business? - £48 million revenue last year from producing 52,000 ounces of gold at their operation on Fiji.
Reason to pick it for this year's competition? Recovery of investor's trust the start to be demonstrated this year.
Reason to pick it as an investment for a longer, two or three year, term? Recovery to the historic levels of production achieved by the previous owners which was between 100,000 and 140,000 ounces of gold every year for the 18 years 1988 to 2004.
Therefore a double recovery story rather than a breaking new ground story...... "Should be easy then?" ....... Not so far, it seems.
Will it win the competition? I do not think so, but a top twenty finish would be nice. 150% increase on the 70.25p to 175p at the end of the year ought to be possible IF they do what they say this time.
The mine has been producing gold and for more than 70 years (7million ounces)
It has been 100% owned by VGM since 2008
It has 790,000 ounces of gold Reserves in a Resource totalling 4.2 million ounces of gold (1.4million measured; 1.3million indicated; 1.5million inferred)
Income last year was £48million
Current Market cap £72.5million
Shares in issue 88.56 million
Current Share price at close 29th Feb 2012 was 81.9p (70.25p at start of competition)
Cash at year end £6.2million
Net loss last year of £2.3million after a profit of £4.5million the year before
Listing? - On AIM, and planning to also be on TSX later this year
So the opportunity here is for a double recovery but at what risk and what went wrong last year?
Like others, I have been invested here for two and a half years. Last year was not good. A "learning experience", they say maybe - but not good for the pocket over the last year! The signs are that this year the payback from a series of initiatives will, at last, take effect.
Firstly, for those new to VGM, here is an overview of the business extracted from the Annual Report:-
"The Vatukoula Gold Mine is located in the northern part of the main island in Fiji, approximately ten kilometres inland from the coast and within the Tavua Basin. The mine is located at the foot of the hills that make up the Tavua volcanic crater. [My Note: It is extinct...!.... More than 3 million years ago and the islands were then pushed away from the "ring of fire"]
The mine operates within three Special Mining Leases which covers a total area of 1,255 hectares. In addition VGM can explore on areas outside the current mining leases via Special Prospecting Licenses which covers over 19,000 hectares of the surrounding Tavua volcano.
The Vatukoula Gold Mine is currently both an open pit and underground operation, however in the medium-term it will become predominantly an underground mine. Underground production is sourced from four mining areas; Smith Shaft, Philip Shaft, R1 Cayzer Shaft and Emperor Decline. The Smith and Philip Shafts, and the Emperor Decline serve as the main accesses to the underground workings for personnel and materials, and are used for ore and waste haulage.
Once the ore is hauled to the surface it is crushed, enriched and refined at our on-site treatment plant, to produce Gold Dore. Gold Dore produced at the mine is typically 80% gold, 19% silver and 1% base metals such as copper and iron. The Gold Dore is sold to the Perth Mint in Australia.
VGM has onsite workshops, assay labs and produces its own power via diesel generators.
Vatukoula Gold Mines Plc. is a UK public company with its headquarters in London. The Group reports in Pounds Sterling (£) in accordance with IFRS as adopted by the EU."
What went wrong in 2011?
First an apology In early 2010 I was very supportive of VGM, they were my pick for the NFSC that year and did ok (up 200% from 67p to 201p). Although I did a cautionary "it is unlikely to gain much from here" post on 7th November 2010, I was still optimistic for the year ahead and the longer term. Even during the setbacks in early 2011, as the price dropped progressively I remained optimistic that the management would deliver on their forecasts. I am sorry if the posts over that period encouraged you to buy in at those higher levels. I personally also added at that time in the 177p 167p range in January, February and March. In April, Shanklin100 posted his doubts about management forecasts, but I favoured the management being given one last chance to meet their 75,000 ounce forecast. He was right to be sceptical and I was wrong. Sorry.
On 31st May 2011, they opened at 142p but then announced their forecast for the year of 75,000 ounces of gold would be reduced down to 55,000 ounces. A severe reduction considering the confident assurances two months earlier. They also announced that they had raised £6 million from Zesiger by a placing at 125p. That seemed low but within a month VGM was down to 92p investors had lost trust in the Company.
There followed several months of trying to find out exactly what was going on. Together with another shareholder, I met the CEO, Dave Paxton, in VGM's London office to get some answers to some serious questions. It was clear a major shift in management and strategy was underway and whilst we were re-assured that the Company was not in irredeemable decline it was difficult to be certain how long it would be before the changes took effect and how effective the investment they were making in the future would prove to be.
"Prove to be" rather sums up the position. We, and the vast majority of shareholders, had lost confidence and could not take forecasts or projections on trust in the same way as we did in 2010.
Their year end was 31st August and in September 2011 it was announced that they had still marginally undershot their 55,000 ounce forecast with production of 52,157 ounces. Despite income of £48 million they would go into bottom line loss having been in profit the previous year.
The planned recovery to historic production levels had clearly stalled.
What was the underlying problem?
There had been insufficient investment in underground development by the previous owners in the last few years of running the mine down to closure. Last year, no amount of pushing of the labour force by the then mine manager could get the production up. Perhaps the Executive Director who had been the mine manager 10 to 15 years ago also had too optimistic an expectation. He managed 100,000 ounces to 120,000 ounces a year ok back then after all.
The first quarter exposed the weaknesses. As an emergency measure the accelerated development was conceived.
This was insufficient and the second quarter was worse than expected. I guess they kept a brave face on it while planning more radical corrective measures. The then mine manager was coming up to retirement. Time to plan for, and perhaps head-hunt, a replacement. The new man would need to buy-in to new initiatives and procedures and hopefully bring some of his own.
Guessing with the benefit of hindsight, this process probably started in February/March and the new mine manager may have been selected by April/May. Normal notice periods meant he was unable to start until July. The old mine manager retired, perhaps a smidge early, in May/June. Dave Paxton, the ceo, was acting mine manager for a month before the new man, Dave Whittle, started in late July.
Once Dave Whittle was in place at the mine, the new procedures and initiatives that had probably been discussed in May, June and early July could be confirmed and brought in to action.
How they addressed this, is all set out in detail in the Annual Report which was published in December 2011.
|benjib5151: The VGM share price has gone up a fair bit since the original price was agreed as has the gold price. So the investment case for the chinese has only got more compelling in the last few weeks. I suspect one of the reasons the price was so decent is that more than one party were interested. If i was you i would put on a trading position at the very least, or even a long term position...|
|a harris: the old shares vgm.l 'we do now expect the offer [ to acquire ] to come in at some point in September at the previously advertised rate of 3.72p per VGM share. We would recommend visiting the Company’s website (www.vgmplc.com) intermittently as further details will be posted in due course.' does anyone know if the delisted shares could have any alternate intrinsic value either now or in the future... ??|
|140661: The share price of VGM closed at 34.5p last Friday, its lowest value for over 3 years valuing the company at just £33m. At these levels VGM's share look incredibly cheap but why has the price fallen so far and why does VGM have so few supporters:? 1. exec management have let shareholders down big time in over promising and private investors have understandably deserted the stock. The large institutional shareholders already have significant holdings and while happy to hold are not buying any more. 2. management present poorly and have done a terrible job in attracting new investors. 3. most small gold miners have had their share prices crucified over the past 6 months although VGM's share price has significantly underperformed the sector. 4. incompetent broker who has failed to get behind the shares and does not care. By way of example the latest half year results did not result in any change to WH Ireland's profit estimate for this year despite it being blatantly obvious the company would fail to meet the old forecast of £12m profit this year. As a result of the above factors VGM has been an easy share to short and the price has been destroyed as a result. The result is a share price that has fallen 85% from its high reached 18 months ago and a price down 70% over the last year. In my humble opinion despite the obvious deficiencies of management this share is now trading well below its real worth. More importantly, we have the beginnings of a potentially significant positive move in the gold price. Fridays' rise was the largest single day move upwards for 2 years and there is a growing feeling that further QE is inevitable leading to a further strengthening in the gold price. Finally, we are starting a quarter where VGM's management expect production to reach 20koz maybe 22koz, thereby generating significant profits this quarter. I have called this wrong for some time and now stand on a hefty loss, however, I am not selling and am buying more at these levels. The recent fall has allowed me to average down to a price of 45p and I remain convinced my shareholding in VGM will soon be showing a healthy profit. Disappointingly this will have nothing to do with VGM's management who have done a poor job but rather to a market which has over reacted and now resulted in a share price which significantly under values a company making profits, with significant cash reserves, significant exploration upside, 40 years of existing production, falling costs, supportive large shareholders and a rising gold price. Strangely the incompetence of this management has created a wonderful buying opportunity for those with the cash to take advantage. GLAH|
|flyingswan: How low can VGM go? I sold my VGM share at 200p at Christmas time last year. With the funds, I bought into ADH and glad I did, from recent VGM share price. ADH is down a little from recent highs but not as much as VGM. When would be a good time to get back into VGM? Should I wait for St Ledgers Day - 15th September, when the Sell in May People come back in?|
|nielsc: stodgy, What is depressing? The chat on this bb, gold price, VGM share price? As I said earlier I think the share price will drift around these levels until we get closer to the Q3 results or an indication that VGM is indeed producing more gold to meet it's 75k oz target for year end Aug 2011. Cheers, Niels|
|chinese investor: Zhongrun obviously didn't want to cause controversy by leaving existing shareholders with nothing so they've made the December 3.72p offer. If they hadn't made the offer the share price would be under 1p by now. They deliberately created uncertainty with the offer to flush out weak holders. Now they don't have to pay 3.72p to mop up shares.|
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