Chaarat Gold Share Discussion Threads

[2pablo] 27/9/2019 19:46

Quiet day for Mr A but at least no sell-off from recent massive gains.

Think I'll de-risk some more next week (maybe 10% - 15%) if I get the chance as my pf is so out of balance weighted to CGH.

It's all out in black and white for KRS distribution of CAI shares at year-end and they look a great bet for little risk - Buy before Nov 19th on any lows if you agree

[jc2706] 27/9/2019 12:51

Getting to 51% would give them control of the company (although, to be honest, this is already pretty much the case) but is insufficient for a takeover.

[casual47] 27/9/2019 12:41

Chaarat as a company has been transformed and in my opinion this transformation was done to be as perfect a fit as possible for the financial backers that they need for Tulkubash.

E.g. I am pretty sure the EBRD would very much approve of all the changes and also the rather obvious messaging coming from the BOD.

I wouldn't be surprised if e.g. the EBRD told them something like "yes we can invest in Tulkubash but to make your application for the loan more likely we will need to see a majority independent board and a much bigger focus on ESG. It would also help if we could see your ESG focus in action rather than just words"

[casual47] 27/9/2019 12:33

They would not jump through all the hoops of having an independent majority board and all this song and dance about the environment, social impact and governance if they thought they would do better as a private company taking money from e.g. a Russian bank.

The only reason to do all this is because they want/need to attract the type of investor which finds these things important and they are more than likely to find it reassuring and necessary that a company they invest in is listed in a well-regulated exchange like the LSE.

[2pablo] 27/9/2019 12:32

True Oli, why has he waited but the company is more and more solid as time goes by. Surely, JC, it would not take him much muscle-flexing to get a 51% majority for a takeover?

Does a takeover only need 51%? Anyway, it’s a silly argument, can’t think why I started it - very unlikely

[oli12] 27/9/2019 12:25

I tend to agree - having a listed company has huge benefits despite the costs of maintaining the listing. I doubt Martin will take this over - why would he.....he has pretty much total control.

He would have gone hostile years ago when he could have nicked it for much less than the current share price I remember the days of well sub 10p.

[casual47] 27/9/2019 12:24

Percentage-wise he is still below where he was e.g. last year. So yes he is buying more shares but he owns less of the company than he did before...

[jc2706] 27/9/2019 12:19

He would need to bid for it, he couldn't buy it a drop at a time. And I think that he would need to pay something of a premium on top. 36p would be a minimum he could be and would, I suspect, be rejected currently. I would expect at least 50p plus.

However, I do not think that this is likely. Having a quote is useful for them I believe and they are probably reasonably happy with the status quo.

[2pablo] 27/9/2019 10:42

Thanks for those stats Casual.

So : 1,411,581 left to buy under the waiver.

Highest price paid so far is 36.67985p

I wonder if there is any possibility of Martin A and a consortium going for the whole shebang - then that price of 36.67985p is relevant as we know. Think it's extremely unlikely but would explain all this Buying he's doing. Take it private, then flog it off for a huge payoff in a year or two. He'd only need another $100m or so to Buy ALL the shares and can't see anybody could stop him.

Anyway, just supposing, looks like Buying has totally dried up today, so far.

Mr A's average - we know he bought many millions through Wilsher Fasanara for 11p or so, quite a bit in 2015/2016 a lot lower, but he has been averaging up now for 2 - 3 years. 15p average might be a good guesstimate but gradually rising.

[casual47] 27/9/2019 09:08

According to the share price Angel report the Kapan concentrate output is hedged but it hedges "at least 50% of projected revenues protecting the <$1,000/oz price downturn over the next 2-3 years"

And:

"The Company retains exposure to commodity price upside."

Would be good to get some clarity on this. If they retain exposure on the commodity price upside and are only hedged on the revenue downside, somehow, then with gold at 1500$/oz they might more than make up for their legacy hiccups?

[casual47] 27/9/2019 07:45

Only need a 25% rise from here to get to 45p. Positive news of project finance could easily do that in one day?

[casual47] 27/9/2019 07:38

Look at TSG. The chairman controlled about 75% and he only sold down about 10% after they started paying dividends.

[casual47] 27/9/2019 07:35

If he can't make it work then probably. But if he can make it work, and so far the progress has been amazing, then why wouldn't he make it work?

The prize here is a share price of £1 upwards if he can succeed in his strategy.

[oli12] 27/9/2019 07:32

Thanks casual. I wonder if there is a chance Mr A is simply going to sell this and he’s doing a much better job than Dekel did of window dressing.

[casual47] 27/9/2019 07:15

1,411,581 left to buy under the waiver.

Highest price paid so far is 36.67985p

[casual47] 26/9/2019 19:43

I think Mr. A's average is below 15p. I did an exercise last year or whenever it was where I added up all their trades (including the ones done by Fasanara) and I arrived at something like 11p.

China non ferrous bought their 19.9% at the time for 25p.

[2pablo] 26/9/2019 19:40

How do you know their average, have you got an account of all their old dealings?

What's Mr A's average? I'd guess about 25p too

[casual47] 26/9/2019 19:35

They do but they have showed no engagement for years now, they just let their holding get diluted. They used to have a 19.9% share.

Their average is 25p.

[oli12] 26/9/2019 19:24

China Nonferrous own 5% of Chaarat no?

[casual47] 26/9/2019 19:14

"China Nonferrous Gold said it is considering making other acquisitions in central Asia's Tian Shan gold belt"

Chaarat's strategy seems to be replicated by others:

China Gold Tajik project turns profit, hints at expansion


The company produced 15,557oz of gold ingots in the first half of 2019, earning an operating profit of US$278,000 on the back of sales revenue of $27.87 million with an average sales price of $1,333.1oz/t.

This represents a start towards recovering the loss of $3.36 million incurred in the same period the previous year, before the mine opened. As of June, the company's net liability position was $1.363 million, which it said was due to the expenses in setting up the project, but it also said it expected sales would soon alleviate this, given the mine is now producing.

The Chinese company is the first foreign company to own a 100% stake in a mine in Tajikistan, a Persian-speaking central Asian republic located within the Tian Shan gold belt, which extends into China to the east and Uzbekistan to the west. The defined resource at Pakrut is 4.8moz.

The company's chief executive Yu Lixia also hinted the company might expand its operations in the region in the future.

"The group has long been dedicated to becoming a significant gold producer in central Asia and participating in [China's] belt and road initiative," said Lixia.

"The group has also established a strong relationship with the government of Tajikistan and other central Asian countries and the directors believe the company is well positioned to make acquisitions of more gold resources and gold mines in the future, so as to create greater benefits for our shareholders in the future."

China Nonferrous Gold extracted 300,300t of ore from Pakrut and processed 11,480t of concentrate at its processing plant in the first half of 2019. The recovery rate from smelting was 88.8%. Lixia said the mine is now on target to achieve its production target of 660,000t of ore.

The company is also discussing a broader refinancing package to help repay its loans, including the $20 million it drew down in January from its loan with China Construction Bank Corporation Macau branch. The company's major shareholder is CNMC.

Central Asia has also received attention from other mining companies in recent times, including Russian miner Chaarat, which has an operating gold mine in Armenia and two gold exploration projects in Kyrgyzstan.

China Nonferrous Gold (AIM: CNG) shares were trading at 16.6p on Wednesday, up from 2.6p in May and 4p a year ago. If company can sustain its upward trajectory, it could be poised to regain much of the share price value it lost since 2017, when it was worth 27p.

[oli12] 26/9/2019 12:36

He’s going to have to pay more if he wants to get his full allocation.

[casual47] 26/9/2019 11:43

Meanwhile 36.8p paid

[gorsuch] 26/9/2019 11:38

Yes Pablo I pulled out at 31.5, so I'm sat on 30k which will go back in mid to late October, I only started with 20k a year ago so I'm happy, if the price hasn't come down much it won't matter, I took out 30k and I will put 30k back so my profit is intact, I may have a few less shares but it's the money that counts in the end.

I suppose the key is why is Martin buying and what happens when he stops, current "O" trades appear to be 4 to 1 in favour of sells, but trading figures these days are so manipulated it's hard to tell what is fake info.

[casual47] 26/9/2019 10:06

36.35p paid over on NEX

[casual47] 26/9/2019 09:35

It doesn't have to be all or nothing. You can top slice along the way but personally I would want to be invested whenever the news of project finance drops.

We have never been this close to Tulkubash actually going into production.