Chaarat Gold Share Discussion Threads

[casual47] 02/10/2018 16:57

Assuming Kumtor doesn't happen for us then I suppose the shareprice upon coming out of suspension could depend on:

1. How the deal for the first M&A is judged: does it give credence to the company's strategy and give credibility to the CEO, was it bought at a good price, did they overpay, do analysts expect the asset will require some work to optimise and get AISC in shape (I.e. it may not actually help with cash flow towards the rest of the company for the foreseeable)

2. Does the forthcoming updated Tulkubash resource statement confirm a solid economical case or will some doubt remain until further drilling is completed

3. How near to their "up to $100m" fundraise do they get? E.g. if they only achieve $50m I suppose it could be seen as a failure and jeopardise the construction phase of the Tulkubash project?

[jc2706] 02/10/2018 15:18

Agree. The acquisition was always unlikely and gets more so by the day. The Kyrgyzstan government will consider it too much of a risk to shift ownership I believe.

[casual47] 02/10/2018 15:13

Well, it's October now and although Kumtor was discussed in the Kyrgyz parliament (part of budget/GDP etc) it doesn't appear to have been discussed at all with regards to the Centerra impasse on the Strategic Agreement.

Meanwhile, southern Kyrgyz region politicians are openly criticizing the president for his lack of action on a range of topics. (Kyrgyzstan is still quite tribal with the southern tribes seen as the more powerful)

Looks like Kyrgyz politics are in a bit of a rut and the promise brought by the new administration has so far mainly resulted in the prosecution of previous regime figureheads and little else.

I really cannot see the current administration doing anything as bold as joining Chaarat in the buyout of Kumtor.

My prognosis: more kicking the can down the road. Chaarat will have to announce they are no longer actively pursuing Kumtor.

[casual47] 30/9/2018 21:08

Pabs, Chaarat can not unilaterally submit the AIM document as it would need to have sufficiently detailed info on the deal so that shareholders can make informed decisions e.g. placing price, total agreed deal value etc and so that orderly trading can resume i.e. not chaotic and speculative due to substantial uncertainty.

So, either their is a deal or there is not. If no deal then no AIM document.

In order to resume trading there needs to be a firm deal, firm enough to have detailed info on what has been agreed, or if there is no deal it needs to be unequivocally stated that there isn't.

They can't leave the door to a deal ajar. It is either shut or wide open. Anything else would be against the rules.

[2pablo] 30/9/2018 18:40

Oli - if the Krygyz government wanted to get rid of Centerra they surely could get this deal through with their massive shareholding and influence over matters on their own soil. If they don't want to, it's a non-starter but I don't think they've made their mind up yet. If they can't reach agreement with Centerra on the environmental problems, it's still game on.

We need to get an Aim admission doc out there before 24th October to avoid Aim expulsion however temporary (but costly I fear), so I reckon we will pull this new acquisition off and publish a re-admission document just on that. Whether we can keep the other offer 'open' I'm not sure, but we'll revisit it later if it looks a possibility.

[oli12] 30/9/2018 14:37

Casual one could go as far to suggest that the suspension of shares has helped the company over the last 6 months, the Kumptor offer is a win win no matter what happens. If you were sceptical one could view the kumptor ‘offer’ genius based on the fact it would never be accepted.

[casual47] 29/9/2018 10:50

I don't think there is much of a risk of opportunities slipping away soon. The only mining companies investing in FSU countries nowadays are Russian or Chinese. For both I am not aware of much happening consolidation wise, in the FSU at least. Looking at what's happening with the stalling of Jerooy there doesn't even appear to be too many assets being brought into production.

Lots of the large Russian mines have too much debt for any/much further M&A which creates scope for smaller outfits like Chaarat to cherry pick non-core or 2nd tier assets away from the big ones.

With what I have found out about Mr. A and our CEO (whether fact or alleged) I now think Kumtor is more likely to have been an empty offer that's more useful for marketing Chaarat, raising funds and convincing lenders to take on the new loan notes than anything.

The offer does sound like a no-brainer for everyone involved but perhaps I'm not the only one thinking it is an empty offer.

[juju44] 29/9/2018 10:06

Very quiet > been suspended now for almost 6 months . The news when we get it would need to be good. The silence on the Kumptor offer is not encouraging and opportunities for bargains in the sector will start to slip away if we get a rise in gold . So lets get on with it

[sparkyboy1] 28/9/2018 12:23

any news im away in the US last post i can see was Sep 12

[casual47] 26/9/2018 16:34

It's one side of the story so grain of salt etc. But it's not the kind of dispute you'd like to have your captain embroiled in...Even if it is all fake news.

(Brunswick Rail settled out of court a couple of weeks ago, the settlement was confidential so who knows. Either way, Mr.A is no longer shareholder there so doesn't really matter)

[oli12] 26/9/2018 11:12

An interesting read that article, it raises many questions. thanks for posting it.

[casual47] 25/9/2018 22:37

An article with our Chairman Mr. A as the main bad guy in a story of grim Russian business tactics.

[jc2706] 25/9/2018 22:35

Interesting one PlatoNL. I have a very small stake in ALTN and have watched rather bemusedly at the glacial progress there. They just cannot get hold of any kind of funding to improve performance.

Their major shareholder obviously holds the cards but the shares are trading a lot lower than they have invested so it is difficult to see that they would be willing to sell at this level.

I don't believe that they fit any of the profiles listed as targets in CGH's latest presentation, although target 6 is the closest. However, you cannot argue with their resources and the prospective nature of their assets which would easily support 100k+ oz a year. On that basis alone they would be a decent addition.

[platonl] 25/9/2018 16:27

Good day fellow investors, first post here but have been holding CGH for a few years. Very much appreciate all your expert insights on this active board. Also a holder of ALTN with assets in Kazakhstan but not much happening there, awaiting financing since many months now... I was just thinking, wouldn't ALTN be a suitable acquisition target? Any ideas on this would be appreciated.

[casual47] 25/9/2018 14:18

I think the combined address book of our BOD must have the direct personal mobile number of every oligarch out there....

[casual47] 25/9/2018 14:16

Interesting quote from that article:

In Central Asia, there are few deposits that would increase production to 1 million ounces, says Maxim Khudalov, an analyst with ACRA. Chaarat Gold is aimed specifically at the purchase of the Kumtor mine. "The project economy is good. The ore is simple at the deposit, and the gold content per ton of ore, 3.5 g per ton, is quite high, "he says. "The situation on the global market is deteriorating because of the trade war between China and the United States, and in such circumstances investors are always invested in gold," the expert notes.

[casual47] 25/9/2018 14:12

Probably shouldn't have surprised me but seems that our CEO has also worked for Mr. Polyus

"In July 2013 Volynets left En + and moved to the structure of Senator Suleiman Kerimov"

Got this from an interesting website worth bookmarking for those invested in Russian sphere companies: rucompromat.com

[casual47] 25/9/2018 13:04

Here's the article I referred to regarding Jerooy, fyi

[jc2706] 25/9/2018 12:30

Well, the government come across as incompetent. But in the interests of trying to be fair, with Kumtor being 10% of their national income, it is obvious that their income streams are few and 'lumpy' which actually makes budgeting very difficult indeed. They have no chance of getting income from Jerooy in the specified time frame. It would certainly be no surprise if Tulkubash came on stream before then (or even Kyzyltash!)

[casual47] 25/9/2018 12:19

What's even funnier about Jerooy is that the government have already included projected state income from it in their 2019-2020 budget. Already people are asking what will replace the loss of these funds.

[casual47] 25/9/2018 12:15

And by doing it now via Chaarat they can unlock investment in the country and get a gold mine up and running....

I saw news the other day that Jeroo has been further postponed. The Chinese are getting fined for being late but it's peanuts compared to sinking hundreds of millions into it.

[jc2706] 25/9/2018 12:10

I'm not sure how difficult it is for them to understand that they are not going to get cash out of Centerra for years without a very large increase in the price of gold (possible in my opinion, although there is the real possibility of a drop before then). If they took direct ownership of half of Kumtor they would at least benefit now rather than potentially benefiting more at some point in an unspecified future.

[casual47] 25/9/2018 12:03

Rather than dividends they may have meant one of the various "bungs" that Centerra gives them left and right. 600m soms is only 8m dollars.

But yes, the public discourse around Kumtor seems rather poor. With people on one side pointing to all the great things they get from Centerra while lone voices one the other side are struggling to get the message through that all these "bungs" are just baubles that the state would get in any case via taxes etc while Centerra siphons the vast majority away by not having paid dividends for several years now.