Braemore Res Share Discussion Threads

[jackiewilson] 11/7/2009 09:56

Thanks Mirandaj.
I feel less of a fool now for having faith; the reply gives reassurance and is very thorough.

In the link to podcast that I and you posted Leon did mention that company's duty would be to explain to shareholders how it was an appropriate deal. I can't help wondering why, as David Russell and the others are good communicators, why Jubimore didn't call a briefing alongside the announcements. Seems almost cruel to the shareholders, but I guess its a big job juggling all that, they are not a big company and 'of flesh and blood they're made'.

[zaitoon] 11/7/2009 09:33

From my perspective as a very long term holder of BRR this recent saga has been disapointing.
I was drawn in before Conroast PGMs etc had been heard of here. It was simply the Australian Nickel Tailings.
Seemingly little progress has been made in this area over many years. I understand the collapse of metal prices has hindered that recently but would still have expected BHP to take a long term view on this.
This slowness has caused me to have doubts over the management of BRR.

Conroast is something I am not sure about. The technology appears to work but I do hear views that it is not the holy grail and other processes work equally well. In a sense this take over removes that uncertainty or at least the importance of it.

I am now becoming positive on this tie up with Jubilee. OK we are taking a massive hit on the share price of BRR right now but the opportunity to build a successful business from the Conroast technology must now be greater and the timeframe shorter.

That is my take on it anyway and right now I think BRR shares are at an attractive price.

[david77] 11/7/2009 09:19

Thanks Mirandaj and to Mr Russell for his substantial reply to your enquiries.

[call me a cab] 11/7/2009 09:18

Thank you for that Mirandaj, I too have become fed up with some posters on this thread who have nothing of interest or useful to say but the filter facility works for them.

I guess we'll have to wait and see how it all pans out but it does sound like game on still (unlike at Sophia Gardens where the covers are on and I expect to have a fair bit of time on my hands).

Regards,

cmac

[mirandaj] 11/7/2009 08:31

As a shareholder of Braemore for some time now, I was pretty shocked by the Braemore/Jubilee announcements. I am also extremely fed up with some of the comments being made in various places; so to clear up some things for my own understanding, I wrote to Mr Russell.

He has kindly replied and in so doing has put my mind at rest about many things. Hopefully this will help others have a better understanding.

I have just listened to the following and some of my concerns were actually allayed by this discussion (already highlighted here I note) - starting about 5 minutes in. Even so it was good to hear from the company.



This is what I wrote to Mr Russell and below that is his reply and the questions I asked and his replies. Mr Russell has given me permission to disseminate his reply as you will see.

"Dear Mr Russell,

I have been a shareholder in Braemore Resources for quite a while now but am getting mixed messages about exactly what is actually happening to my investment and why. One can read all the reports there are from various sources but still remain in the gloom. I am pretty angry and upset to see all the company announcements being misread by what I see as manipulators and misinformation being bandied about.

Would it be possible for you to answer a few basic questions that might clear up misunderstandings? If so, may I disseminate any reply that you give?

Yours sincerely,
Miranda xxxxx"

Dear Ms xxxxx

Here are the replies to the Questions that you put to Braemore. I can
give you permission for these to be disseminated in their entirety. I
hope these answers set the record straight given the high degree of
uninformed speculation we have been subject to recently.

Regards

David Russell


1. Why did Braemore go for a takeover in the first place? Was the
company really that broke?


The merger was motivated from a position where both companies
recognised the enhanced value of a combined entity. Braemore had
completed its development phase and was seeking a partner for the
commercialisation phase, ideally a partner that held assets which
would directly compliment the ConRoast technology and nickel potential
in Australia. Jubilee fitted the bill and shared the passion to
utilise the ConRoast technology to access their surface stocks in
the short term while recognising the value it brings to their longer
term Tjate project in South Africa. Braemore issued a cautionary RNS
in May 2009 informing the market that working capital was under
pressure, as margins contracted sharply on a weaker PGM basket price
and a strongly appreciating Rand, amid the global economic crisis.


2. And why choose a takeover deal instead of raising cash in the
market? Especially one with another junior that has little money and
no better access to funds than Braemore do themselves?


Combining a company that offers the solution to PGM processing for the
future with a company that has a platinum resources portfolio of both
underground and surface assets establishes a totally new force in the
sector. This new entity has the potential to generate significant
cashflow in the near term and transforms both companies and will be in
a much stronger position to access funds going forward. Braemore
carefully assessed all potential sources of capital and investigated
debt (backed by PGM alloy as collateral), straight financing, equity
placements and committed equity financing. Placement terms offered
were at punitive discounts and would have resulted in significant
dilution to existing shareholders.


3. Why, when all the rumours were about a bid by Ruukki, did the
company choose to go with Jubilee at a huge discount to the prevailing
share price?


Braemore cannot account for all the rumours nor why they surfaced.
Braemore reached a critical juncture in its history with the
conclusion of its development phase, in a tough market and while
receiving recognition from the platinum industry. It reached a point
where the technology was no longer a dream, but a reality.
Unfortunately, this point was reached within a world recession with
sharp contractions in metal prices and Rand strengthening. To
commericalise the technology, platinum resources on which the
technology could be implemented needed to be secured. Choosing to
merge with a large, funded entity already in production would cause an
unfavourable evaluation in current markets, whereas joining two
companies in similar positions creates potential for far greater
upside once a solid, cash-generative position is reached. The ?huge
discount? is not correct when you include the fact that the
performance shares have been cancelled at no cost, removing a 50%
overhang, and that Jubilee will provide working capital totalling R50m.



4. Was the Jubilee bid a last minute rescue after Ruukki walked away?


Certainly not. Jubilee and Braemore are well known to each other and
have tracked one another?s progress over the past year and a half.
Both companies have reached critical milestones that supported the
transaction ? Jubilee released their resources statement in June and
Braemore concluding their technology development. The fit between the
two companies offered great synergy to provide PGM resources to
Braemore and smelting and refining technology to Jubilee. It is what
we refer to as ?total capability? in the PGM business. In the time
between now and commissioning Tjate, the new company will be producing
PGMs in final concentrate from the previously announced reprocessing
of PGM-rich tailings deposits and at the same time is examining open
cast UG2 mine operations. Do not forget the synergies between the
nickel projects held by Braemore in Western Australia and Jubilee in
Madagascar. There could be aspects of the Braemore atmospheric
leaching technology applicable to Jubilee?s nickel deposits under
exploration in Madagascar.


We are seen as a fully fledged platinum company with very strong
process capability. Yes, Tjate is a few years off, but it is a superb
project due to its grade, reasonably shallow depths and location.
This bodes well for the future. Bramore is significantly strengthened
with the Jubilee resources and can finally give light to the
commercialisation strategy in a market that heavily discounts a
company that is emerging from technology development and entering
commercialisation.


5. Is Conroast really as exclusive as you have always claimed?


Definitely. Look at the repeated problems experienced at other PGM
smelters when excess chrome is added to the smelter feed. The revised
ConRoast agreement further strengthens the technology partnership
formed between Mintek and Braemore which provides for the commercial
exploitation of the ConRoast technology through the smelting and
refining of PGMs. Two key points within the amended agreement are as
follows:

Braemore Platinum has consolidated its sole, exclusive right
to use and commercially exploit the ConRoast technology within the PGM
industry on a global basis.

An extension of the exclusivity period is available to
Braemore for the life of the ConRoast patents which expire in 2020


6 If so, why do Ruukki say they will smelt and refine PGMs at Mogale?


I want to stress that in terms of the ConRoast Agreement between
Braemore and Mintek, Braemore has an exclusive global licence to the
patented ConRoast technology. Ruukki acknowledges these rights.
Braemore has stated previously that it will continue to engage with
companies within the platinum industry to form partnerships on
commercial terms.


What is being referred to by Ruukki relates to DC arc smelting of
chromite concentrates which does not cover recovery of PGMs. It is a
subtle but important point.


There is nothing in future to stop Ruukki and Braemore coming to an
agreement to apply ConRoast technology to assist in recovering PGMs
but that would be subject to negotiation.


7. Have BHP backed out of the Australian operation?


Certainly not. We had a meeting just this week in the BHPB offices
where technical discussions continued.


8. The CEO was talking of deals and discussions re: Conroast only days
ago - have these fallen through?


Not at all. The focus has always been to ?un-clutter? the Braemore
strategy and demystify the technology offering. This was tackled
through very difficult global times and ensured that Braemore reached
one of its most critical goals: to conclude development and move into
commercialisation. Braemore therefore had the potential to deliver
the growth for its shareholders, when the industry had been hit by a
collapsing world market where growth ground to a halt and companies
ran for cover. This realisation drove Braemore to find a suitable
partner that offered complimentary assets that could ensure the
ConRoast dream can continue and in fact grow through these most
difficult times. Clearly there are other companies who from the
outside might look to offer greater synergies and are already
producing concentrate; but these companies value their positions even
higher and therefore ours even lower.


9. Are we still smelting for Northam and AmPlats?


The demonstration smelter is temporarily shutdown awaiting the
completion of the hydrometallurgical refining facility that will boost
margins to levels where it is feasible to recommence smelting. This
is in response to the continued strengthening of the rand and low
metal prices .


10. What do Atomaer get out of this deal?


Atomaer gets Jubilee shares in exactly the same ratio as all other
shareholders. They actually get less given the decision to cancel the
305m Performance shares at no cost which effectively removes a 50%
overhang on the share price.

[aaspell] 10/7/2009 22:48

JackieWilson - great link to the interviews thanks

[johndee] 10/7/2009 22:14

Strange people here.........I bought at around 16 pence...sold as they fell...and bought back lower..........but even if someone did buy at a high price and bought again at below 2 pence its highly likely many more will have been obtained at under 2 pence than the number bought at 24 pence and is very likely to be at break even much quicker than if never bought any more again.

[david77] 10/7/2009 17:27

"Masurenguy - 10 Jul'09 - 09:03 - 19293 of 19314

judijudi - exactly - the tenor of recent newsflow gave absolutely no indication that there were current problems/issues that could have resulted in a potential liquidation/administration of the company !"

Not true - there was an RNS saying that they had completed work on the refinery but had to switch off 'cos they hadn't got any cash. That is from memory - I went away for a week and you lot let the share price fall out of bed while I was on holiday - but that RNS was before my break so before 27 June. I admit that I didn't sell then and I should have done :-(

[jackiewilson] 10/7/2009 17:08

Was this 'podcast' link posted here? Very interesting contrast between our two main players.



There's an interview with the previously confident and well-presented 'technology developer' Leon, followed by the reassuring Northern tones of Colin Bird.

Amongst the discussion its apparent that Leon has not given up on BHP. He talks about Jubimore being in close discussions with BHP to 'accelerate the work on the [Ni] tailings treatment facilities', particularly since Kambalda offers significant upside, with higher grades and lower capex than Leinster. The new Jubimore entity has a stronger ability to raise capital and generate revenue in the short-term. The relevant bit starts at 5:45 in.

Colin says that the market has viewed BRR as a technology co and so anyone embarking on implementing its process might have been seen as a guinea pig, CB doesn't see it that way at all.

I've now decided to believe in Colin, having gotten over the shock of throwing away a small fortune by not selling out ... ;) here we go again.

[lionheart79] 10/7/2009 14:47

Johndee - 10 Jul'09 - 08:35 - 19286 of 19312


What wrong with 12 pence..........no one invested all their money at 24 pence surely they have been astute enough to buy at various prices and averaged around the 3 or 4 pence mark.

So tell me JD - is it better to have bought one batch at 24p and still hold just that, or to have bought one batch at 24p, another at 12p and another at 4p?

I think I would much rather have bought just the one batch at 24p rather than use your "astute" strategy.

Fortunately I bought one batch at much lower levels but am still down nearly 50%

[p@] 10/7/2009 14:06

300k @2.66p just gone through.

[johndee] 10/7/2009 14:00

yes ..a little.........like getting jlp for 41 pence instead of 43.5

[p@] 10/7/2009 13:58

Cheaper to buy this than JLP now.

[johndee] 10/7/2009 13:48

The 15.88 divider will stand if over 75% acceptance....there will be no changing of the goal posts...if it goes to 7 pence it will mean JLP has risen by the same percentage as they are moving equally now.

[johndee] 10/7/2009 13:46

Assegai

Its good you said that as people here were stating to act like little children and I had to put them right.

[alimo] 10/7/2009 13:01

In all this stir about JLP and BRR, and the pros and cons of what value BRR hasn't got right now, where does the value of the nickel workings in Oz come in? I must admit to falling into BRR because of the STRONG tip from RHPS which didn't have much to say about the SA connection at the time, but majored on the Oz prospects. He was still recommending this in May, and then told us in July that he sold out in June!!
Is this nickel side of BRR now worth nothing, or does the JLP/BRR future together mean that both now become more viable, and therefore become more attractive to a future buyout.

IMO neither are going places fast on their own, but with each other I see a good future. The price? Well, we'll see if the 15.88 divider is correct when the "independent" valuation is completed. In the meantime if BRR climb back to 7p all that will happen is the divider will be reduced, so no doubt the ones who want to stir will keep stirring - what a waste of good time.

[assegai] 10/7/2009 12:05

Johndee, you may or may not be telling the truth, we may or may not care, but it doesn't really do much for the thread, does it?

[johndee] 10/7/2009 10:50

I am gutted as for a time in the year 2000 I was worth a lot more but we all know about that bubble busting and its been hard work getting over losing a million plus real pounds...of course you would have no idea how that feels.

[billysilly] 10/7/2009 10:47

Oh well done. If you put a hotel on Mayfair, and land on 'free parking' who knows how much you could have.

Right, Im done with the teasing now. I dont usually go in for those sort of posts, but youve made it so easy.....

[johndee] 10/7/2009 10:43

My net worth is over £500,000...so I will ignore that remark. I can see many here are working and using office time to post here.I have no need to work unless I want to so can post from the comfort of my home.

[billysilly] 10/7/2009 10:39

Have you thought of a paper-round so you can invest a bit more?