Chaarat Gold Share Discussion Threads

[casual47] 27/6/2018 23:34

I'd prefer them to make a placing for a first M&A than just pay off debt at this stage, which doesn't really get us anywhere (apart from the debt reduction itself). If Kumtor were to go ahead then debt no longer becomes an issue as they will have the cash flow to service this debt (and then some).

It just seems a lot of dilution for zero growth and zero potential.

Basically, if the next step is "placing to pay off loan" then, for me, it is a defeat of sorts and the BOD have demonstrated they cannot use leverage to their advantage and don't have the clout to negotiate a refinancing deal.

So why not a first M&A instead? Which will actually grow the business and can help with servicing debt at the same time. E.g. a smaller gold mine, net cash generating of the order of 10-20 million USD pa, or something they could buy for 100-200 odd million USD (depending on LOM, future capex needs etc), raise cash by 50% equity and 50% debt. Use cash flow to get additional financing to pay back the loan notes.

Maybe this won't make as much sense to me come morning....but I think something along these lines would be better than just diluting to pay off debt, at this stage. At least it would show 1. They are serious about M&A, 2. They indeed have backers who stand ready for both equity raise and financing. 3. They will have cash flow 4. They are building a portfolio and no longer just one asset

Until now much has been talk. Let's see action, let's see Artem do at least one deal to demonstrate what he is made of. It may even set tongues wagging in the Kyrgyz parliament.

[jc2706] 27/6/2018 13:49

I think that 25p is the likely target price so agree with that way forward to redeem the debt. You don't get something for nothing in this world so I would suggest that 25p isn't bad when considering the price a couple of years ago.

[casual47] 27/6/2018 10:38

A placing of 238m shares at 0.25£ would give them 78m USD. So more than 50m$ left for G&A, drilling and getting started on Tulkubash.

It would make our £1-a-share dream a little longer to achieve...

[casual47] 27/6/2018 10:30

What is interesting from the AGM letter: if they are thinking of already redeeming the second loan, which isn't due for another 12 months, then perhaps the reason is that they have already lined up investors looking to take up shares and that this would be more advantageous to the company than keep the debt.

So, maybe they can get a good deal on placing price, or perhaps another corner stone investor is in the wings who would beef up things in the eyes of the City?

[casual47] 27/6/2018 10:23

I believe CGH pushed back funding to q1 2019 in its latest presentations, which could tally up with giving a Kumtor offer deadline of end of 2018.

What is puzzling is: if no Kumtor deal, then what?

They seem to be going full steam ahead and had more cash left than I had expected (with a further 10m available to draw down) but there is the issue of the senior secured loans that need paying back in a couple of months. I would really hope they pay it off by getting a new loan rather than via placing of up to 238,585,310 shares (130m to be agreed via special resolution and 108m through authority they already have, see AGM letter).

[juju44] 27/6/2018 10:14

It certainly is not looking as positive as it was some weeks ago . I don't like the idea of a further prolonged suspension

[casual47] 27/6/2018 10:09

We should know soon either way. Centerra can't keep on postponing the longstop date and the Kyrgyz prime minister said he would "soon" update the parliament with his suggested approach to the Centerra strategic agreement.

Either Centerra and the Kyrgyz kiss and make up or the stand off continues/toughens.

The next month should see further clarification on this point.

[casual47] 27/6/2018 09:14

The comments on the article:

Noor
17 hours ago
At Kumtor, serious large-scale production, more than 2,500,000 workers, and Chaarat is an inexperienced company, small. The whole staff is 68 people.

Murmochka
20 hours ago
Centerra did not agree with the idea of ​​selling it. Nonstykovochka.

Clara
21 hours ago
Chaarat can meditate on Kumtor as much as necessary. But the project Chaaratu, this small offshore muddy company is too tough. And for Kyrgyzstan there is too much risk in the proposal of Chaarat. We do not even know who is behind it and how honestly the company will work.

Assel
asel> clara
21 hours ago
I'm not against new companies in the country, but maybe first let's see how Chaarat will produce gold in the South? What will be the successes and problems. First you need to observe the investor and make sure of his serious intentions, experience.

Kegety
Kegety> clara
20 hours ago
They even received money for the development of the Chaarat proper.

kaimak
kaimak> Assel
20 hours ago
"According to the information," Chaarat Gold "in the coming years plans to receive the largest mines in Central Asia for gold mining."

Maybe first Jerue from Bazhaev will redeem. Kumtor works very well and benefits the country, and Jeroi is actually conserved.

[casual47] 27/6/2018 09:09

All the previous articles I have seen were careful to make it seem as if Centerra are the ones blocking progress and refusing to come to the table, while praising the longstanding partnership Chaarat has had with the Kyrgyz and its government.

The article I pasted above has this line (Admittedly Google translated):

"In "Centerra" there are shareholders who support us. Currently we are waiting only for the government's response."

[sparkyboy1] 26/6/2018 13:35

Casual47 its good to hear your views over the last 2 months while we have been suspended it makes it go a bit quicker. I have a realy strong feeling that this share can be a £+ there is so much going on you don't know what is going to happen and the main mam is top class and look at the board he as got in.

[casual47] 26/6/2018 13:11

Certainly, if the background mood music is geo-political influence and control over critical assets then it's not difficult to see a major Russian bank getting nudged a little by the Kremlin to step in and lend money more easily than e.g. a Western bank would.

(Maybe I should just put my tinfoil hat on...)

[casual47] 26/6/2018 12:54

.....it's perhaps no coincidence that Dekel's strategy of getting in bed with the Chinese never went anywhere.....

[casual47] 26/6/2018 12:51

....which is probably one of the main reasons why I think there may be an inevitability about Chaarat's success in Kyrgyzstan now.

[casual47] 26/6/2018 12:45

Artem joining has definitely put Chaarat on the radar with analysts and journalists, though possibly more because of his link with US sanctioned billionaire Oleg Deripaska.

This is probably why papers like the Telegraph will be keeping a much closer eye on what is happening with Chaarat.

For sure, Artem's experience with EN+ is a huge plume in CGH's hat but anyone close to the likes of Oleg (and thus Putin) will be watched like a hawk.

I wouldn't be completely surprised if further down the line it turns out our executive chairman is not actually the ultimate linchpin of this story after all and e.g. a Russian company suddenly swoops in having acquired all his shares.

It is just a fact that for countries like Kyrgyzstan both China and Russia are playing a game of influence and control. Russia will be loathed to see China get too much ahead of it in this game.

[casual47] 26/6/2018 12:17

Telegraph had the news before the RNS. So must have been given the scoop.

[sparkyboy1] 26/6/2018 12:14

Yesterday's Telegraph too :


I know we have seen the report but i did not know it was in the Telegraph yesterday got this from Pablo2 in the LSE site

[casual47] 26/6/2018 10:13

Kinda glad this share is suspended....been an awful couple of weeks/months for $POG and gold miners. Not sure the positive news flow would have sustained us through the headwinds.

[juju44] 26/6/2018 08:56

Andersson is a good guy and strong. he knows what he wants and I feel sure he will do the right things to make us all money sooner or later - probably sooner.

[casual47] 25/6/2018 12:36

I note that Linda is no longer listed among the contacts at the end of the RNS. Might explain why she didn't (yet?) respond to my email from a couple of weeks back. Though, I doubt she had the liberty to provide a reply as basically my central question was "Given that Kumtor is so important to Kyrgyzstan, why hasn't there to date been a formal response or acknowledgement from either government or Kyrgyzaltyn to the Chaarat offer."

[casual47] 25/6/2018 12:21

Chaarat and Kumtor together have already the potential for 1m oz pa. Though Kumtor will wane come 2022-3.

Their stated target is 15-20m oz reserves, which might still be feasible with just those two if the drilling at Chaarat continues to turn up trumps. I think Kumtor has about 4m oz left? (I believe there is potential to expand this with an adjacent plot?)

[jc2706] 25/6/2018 11:13

Well, the share is suspended which would suggest that he will find it difficult to buy on the market! I doubt whether it will come back from suspension until the Kumtor is decided (one way or the other). I am intrigued to see what these 13 other projects are. Given the target of 1m oz a year, they are going to have to bring in 2 or 3 100k oz a year projects.

This certainly feels like a very different beast now. The strategy is ambitious but bold and visionary. The people seem like the right ones to pull it off.

[casual47] 25/6/2018 10:06

Might be a closed period for him anyway seeing as he is the man negotiating the M&A. Who knows, perhaps M&A target #2 is hot on Kumtor's heels.

[pjackson2] 25/6/2018 09:09

He will probably buy a tranche in fund
Raise to buy Kumtor