African Consolidated Share Discussion Threads

[ryan83] 18/12/2014 15:29

0.565 to buy ;-)

[moreforus] 18/12/2014 15:19

the offer has blown out but you can still buy im sure closer to the bid....

typical mm tactic to kill trading interest and momentum...

[yorgi] 18/12/2014 15:18

Moving strongly now that's for sure :-)

[yorgi] 18/12/2014 15:17

Buyers taking advantage while they can at this low price.

[yorgi] 18/12/2014 09:28

Up now as well Moreforus :-)

Those that took advantage of yesterday's drop will have a little smile on their faces now and a much bigger one next year if they are not impatient :-)

[21trader] 18/12/2014 09:19

I hope so. Plenty of full offer buys at 0.6p once it was blue and up more than
5% you knew people would return to the stock there was some real panic yesterday selling at 0.5p never bail on a large dip at the lows you might as well wait for
a blue day if you really do not want to hold a stock.

[shammytime] 18/12/2014 09:17

Looks set to make a big move here...hold on to your hats!

[21trader] 18/12/2014 09:09

Morning m :-))

Full offer 0.6p to buy now will it spike ?

[moreforus] 18/12/2014 08:52

0.50 support held....

[21trader] 18/12/2014 08:51

100k max offer at 0.58p looks good providing there is no more selling but right
now it's going one way

[21trader] 18/12/2014 08:29

Bounce is on the cards. 150k or more online is full 0.55p offer it looks to
bounce from these levels on the chart.

edit 0.515-0.5388p now

[21trader] 17/12/2014 16:07

Can buy no problem now at 0.523p

[21trader] 17/12/2014 15:45

100k max buy online.

They have been fishing for panic sellers and now a few buyers show up they
quickly run for cover and refuse to offer any size online

[21trader] 17/12/2014 15:11

It will bounce it always does. When it's blue tomorrow they will all pile in again it's driven by sheep either all selling or all buying.

[bam bam rubble] 17/12/2014 14:28

A retrace on the cards here (and then some) I should think.

The recent acquisition had something of the night about it.

[21trader] 17/12/2014 14:24

Selling at 0.5p now jeez it was 0.65p bid for millions just a few trading days ago.

[paleje] 17/12/2014 13:58

And down again in 48:)

Thanks for your detailed reasoning Xscream, I'd rather it then one of Zak Mir's crystal ball predictions. Of course a lot of things have to go right over the coming weeks and months to make it happen, including no further turn down in the global outlook; let's hope they do and that management provide newsflow at every opportunity.

[21trader] 17/12/2014 12:38

mm's having a bonanza as the sheep now panic and sell near the all time low !

[xscream179] 17/12/2014 12:27

I made my first post on this board a few days ago. I don’t post a lot but sometimes I have something to contribute. I tend to hold for long periods. By way of introduction I first invested in AFCR about 9 years ago. I have long been interested in the potential of Zimbabwe and have spoken to a number of people who travel there. I invest in a small number of stocks and know a lot about those that I invest in. I have met Roy Tucker, Mike Kellow, Andrew Cranswick and recently Roy Pitchford. I believe this is a good time to be in AFCR with much of the available information looking positive.

Expected cash generation from Zimbabwe:
“The Company remains of the opinion as previously announced that the finance introduced into the Joint Venture will be sufficient to commence production at Pickstone-Peerless within eight months at a provisionally targeted run-rate of ore production of 10,000 tonnes per month.” 10k tpm at 5g per tonne /32 g per oz = 1562oz
per month x margin of $450 = $703k/month = $8.4m pa. 50% share to AFCR is $4.22m pa = £2.7m pa. Cost of production at PP has previously been quoted as $600-$700. It will take 2-3 months to build up to 10,000tpm. The necessary machinery has already been ordered. Note that Grayfox the new Zimbabwean investors own 50% of Pickstone, Peerless and Giant the rest of the Zimbabwean assets are 100% owned by AFCR.

The known orebody at Pickstone Peerless has higher grades at greater depths. There are several avenues open to the company to increase production once capital is generated from early operations. It would be fair to include at this point that there are significant political risks in Zim however I think this is clearly reflected in the in the modest market cap.

Shares being traded in the market:
Brimfell sold their 29% holding. The buyers of this stock over just 4 days paid 1p to 1.3p. I think it would be unlikely for them to become significant sellers with the addition of the Romanian project.
There were very high volumes traded around the time of Zak Mir’s potential 25 bagger article however current holders will include people buying in on his recommendation with the hope of the share price multiplying to an assortment of levels above the current price.
The shares from the placing are non tradable yet. I don’t think those who bought in on the placing will be planning to sell for a modest profit at around current levels. Why be tied in for a period for .01 or 0.2 of a penny?

Romania:
As per the last RNS there are some legalities to be confirmed. Once the legalities are sorted out, estimated Jan, it will take three months to restart the mine and possibly a further three months to increase throughput to 10tpm. By this time annualised free cashflow (after tax) is described as $14m-$15m. Noting cashflow is not profit I think the profit to AFCR would be £4m- £4.5m pa from mid 2015 from Baita Bihor. This is my rough estimate not a company figure. “Resources and production facilities (post refurbishment) are sufficient to double production for further $4m investment”. This additional investment is expected to come out of cash flows generated from the first phase production output. Known resources indicate an 11 year mine life. The various metals being mined are equivalent to 6% copper or 10g/t gold. The plant to extract the main minerals is in place and comes with the deal.

I know someone who asked an analyst to scrutinise the Romanian figures. The outcome was that it was difficult to come up with an IRR of less than 50. My rule of thumb is that anything higher than the mid twenties is exceptional.

The way Biata Bihor will be run will include some improvements in working practices that will bring further benefits. For example simply putting the viable ore through the plant rather than all of it will increase the already high grade (6% Cu equivalent) even further. This isn’t just creaming off the good ore. Under state control all the ore was out through because no one in charge asked the people working in the mine for their advice. I understand Andrew Prelea (Romanian CEO) is both a Romanian citizen and an Australian citizen. His in country contacts give AFCR a unique position which has resulted in the current arrangements and the prospects of additional developments through Remin the state mining body.

Conclusion:
The sovereign risk in Romania is substantially less than in Zimbabwe which derisks AFCR’s operations. This will be to the benefit of shareholders. With the price around 0.6p absolutely nothing is priced in. By the time both mines are working later in 2015 my figures above indicate an annualised profit of c£7m to AFCR for the following 12 months. This excludes further improvements enabled by using cashflow to improve operations. The new number of shares in issue will be approx 1182m. If the share price is 0.6p this is a P/E of one (1182x x 0.6p = £7m). If you chose a P/E that is more realistic that is the multiplier from the current share price. I would be surprised not to see a share price of above 2p in 2015. This could be viewed as a cautious estimate. Note that the Romanian element has a lower risk and will contribute more profit to AFCR than Zimbabwean assets. The very fact that there are two independent projects reduces the risk to the company. If it was Zak Mir making these points the share price would be over a penny in 24 hours.

XS

[yorgi] 17/12/2014 12:04

Clearly not flavour of the month at the moment and that is despite what is clearly transformational news, the Romanain polymetallic mine which should be producing for us next year with significant resources and potential for further discoveries.

[21trader] 17/12/2014 11:40

Hi Jenny.

I know exactly who you mean.

Just shook it down to 0.55p offer what a price.

[jenny tulwought] 17/12/2014 11:38

Nice to see a new thread - makes a nice change being able to contribute to a thread not administered by deluded bullies.

[21trader] 17/12/2014 11:35

SS

They bait you and then they ban you by going off to Advfn. This little gang has
been doing this for a while. One day they will not get away with it.

Great offer today 0.56p buy the dip it's a good price

[yorgi] 17/12/2014 08:49

You were right Moreforus it was a bad day for AIM yesterday and not good for us in AFCR either. I also agree that it is no reflection on the company but for the moment people are not looking at what our prospects are in the coming year and we are abut to move from explorer to producer in the coming year.