Cluff Gold Share Discussion Threads

[onehanded] 27/7/2012 14:48

Was going to top up (hold £2 k at 62p) worth but too risky for me. Gold price set to rise, going to buy AUCO tracking gold index or blackrock gold and general fund for my isa / sipp. Gold minning stocks THAT do produce gold, going to be sort after soooooon.
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Anyone read 'Why you should buy gold now' in moneyweek. Very interesting

[amargosa] 27/7/2012 13:16

A couple of months ago the Chairman promised 6 months of strong newsflow; he and his team need to deliver on this very convincingly.

[simonbroughton] 26/7/2012 22:25

amargosa,

Thank you very much for your insight today. It really does look as though Spivey has brought about a change in priorities. The market may not like it but someone with a mining track record is better than someone with a speculative deal making track record when it comes to development and production. The costs involved in developing the resources at Yaoure and Kalaska to profitable production must, surely, be a lot less than Boamahun. Perhaps you are right that selling Boamahun is the way forward.

[amargosa] 26/7/2012 15:57

sporazene2, I have a lot of sympathy with what you have just written, but I'm not sure it's all true. I think when Spivey took over he inherited a disaster at Angovia, and a mine at Kalsaka that was too short of resources to put back into operation without further exploration success; when Algy and Douglas did it anyway they then spent all their time on the Boamahun project and ignored the ops/exploration at Kalsaka (they also didn't want to dilute shareholders by doing unnecessary exploration). I think Spivey also inherited an imperfect BFS from Algy and has had to expend a lot of time and effort to improve it; either that or it was good enough but crying out to be improved by someone who knew what they were doing. Ask Algy any question you like about the technicalities of mining and he flounders. My feeling now is that they have an excellent team in place and are getting on with the jobs in hand - will this be enough to satisfy very disgruntled shareholders at this point - I don't know, I'm just as disgruntled as anyone. The presentation tries to pacify a little by explaining how it all takes time in mining and that's certainly true, but Algy just didn't have a clue how to build or run mines, and that inability has taken quite some time and effort to put right.

Edit: My vote would be to sell Baomahun and get a CIL plant built at Yaoure and do the same at Kalsaka/Sega a year or so after that (once the oxides are exhausted) - the remainder as a special dividend and no further dilution necessary.

Addition: Draghi has just said those words all gold bugs love: 'whatever it takes'

[pineapple1] 26/7/2012 15:49

I doubt this would get an offer much more than 80p .Too many other targets around.
They ,ve built a few schools and a police station but i thought that there was meant to be a mine some where in the story.
Oh well i suppose looking on things a bit more positiveley we haven,t performed as bad as some larger companies in the sector.Lets hope it doesn,t decline further...imho

[sporazene2] 26/7/2012 15:05

Gold Producers such as CLF that have seen their share price decimated can't just blame the wider market, as there are specific reasons for the share price taking a major hit, as well as CLF consider. HGM, MML, AVM, CEY, MIRL, SHG the list goes on.

In CLF's case our management are one of the worst performing I have seen. They raised $12m at 112p from Macquarie around 2 years ago and have only just released the first batch of results from the exploration that the funds were targeted at. Ironically, the first results are coming from Ivory Coast as opposed to Burkina Faso, where a civil war had all but stopped operations.

Nothing has come from BK from that round of drilling, to the point that we go and acquire Sega, which smacks of desperation, given what we were told about LOM extension at Kalsaka. Not to mention the two lots of dilution that has come since

Additionally they are 12 months late on the delivery of the DFS at Baomahun, from the original timeline, even the latest resource update that was supposed to be delivered in June has not arrived.

So all in all my view of the current management is not good. Add in a good dose of political uncertainty in BK and IC and there you have it, more than enough to mark down together with the poor performance, across almost all facets of the business, regardless of what has happened in the wider market.
If they are struggling to raise finance for Baomahun, the shareholders that shelled out at much higher amounts in previous placings are going to want a hefty discount or to force a sale at 100-120p, IMHO.

Contrast this with PAF who have delivered pretty much everything they have promised and their share price is pretty solid. From my perspective there are too many AIM junior minors that promise too much, overcommit their financial resources and fall way short of what they are trying to achieve through their own inability to manage expectations and risk effectively.

[fitton] 26/7/2012 14:19

$1100 is lower that I thought.Thats a sensible level base calculations on.I would guess that the orginal production cost will have risen maybe 10-20% or more from the original pre-feasibility study.

[amargosa] 26/7/2012 13:23

Thanks for the heads up JDK14; a different sort of presentation from previous, obviously penned by the new chairman. He has said he has joined the company for the potential in IC - this presentation majors on that theme - in fact:

'Yaoure, a key exploration project in Côte d'Ivoire with immense sulphide potential'

It's a while since I've seen the word 'immense' in a presentation. They reckon 2-3 million oz.

My impression after reading it is that something is going on here wrt company strategy - they are spending a lot on Yaoure exploration this year - are they doing it to sell it or are they going to use it as their flagship project and get rid of Baomahun? To me Yaoure looks a better bet than Baomahun now - they already have a mine and its infrastructure there, there is already an HEP plant right next door, the political risk is probably lower now, there seems to be more Green Belt exploration potential.

Fitton, the original pre-feasibility study for SL was based on $1100 POG, which valued the project at around $170m.

[fitton] 26/7/2012 13:18

The DFS needs to prove that the project can be financed very comfortably on a much reduced margin, just in case there is a serious down turn in gold prices.If it has been based on a long term gold price of say $1300, that may now not be good enough to attract finance.The one good point is that the hydro scheme should keep the cost of producing at a fairly reasonable level compaired to some other companies in the region.

[jdk14] 26/7/2012 11:47

New investment presentation on the web site - are they going to be raising money for a CIL/CIP plant?

[amargosa] 26/7/2012 11:25

IB, good to see you back. Whatever the reason for the falls across the sector, they are very serious for a lot of companies and their business models. If the slide continues or even just stabilises at these levels, then each company is going to face a new reality in terms of future project finance. I would imagine for a business like Cluff Gold, with powerful shareholders, whether they too will now have to re-evaluate how they are going to return some value to shareholders - from 40p, 116p, 92p? Unless there is a turning point soon in the sector, companies like Cluff are going to be forced by their shareholders to look seriously at mergers, splitting up the assets and selling them off or some combination of such strategies. Perhaps having too many irons in the fire is not the way forward when times are tough - can they really ignore the potential benefits of bringing in the DFS for Baomahun and selling it off to finance their other projects or visa versa?

[inside building] 25/7/2012 22:31

They are in a "Close Period".
One consideration on the seller is maybe some similarities to Azumah Gold:

Market comment and strategy

Several of Azumah's major overseas-based institutional shareholders are experiencing either redemptions by their own shareholders or other challenges. Azumah's management believes this is having a doubly negative impact on its share price in an already difficult market environment. However, there has been consistent buying interest in Azumah stock, which management sees as recognition of its excellent assets and support for its strategy.

Importantly, Azumah holds cash and listed investments totalling $22.5 million making it well positioned to ride out this present market malaise.

If one of the sellers is the TIPS fund they would not need to notify the market as their holding was less than 3% but would be big enough to bring the share price falling down.

IB

[amargosa] 24/7/2012 08:05

The Chairman could buy now and ditch his options package, which would make a lot of sense for him and us, but I think it might be already too close to H1 results for management buys.

[jdk14] 23/7/2012 21:49

I wonder if the directors are going to be buying at these prices - or are we in a close period?

[amargosa] 23/7/2012 19:24

I suppose it does all depend on the POG; if it holds or trends upwards, miners like Cluff will do well sooner or later; if it doesn't, only those with the most robust balance sheets will survive in the short term - beyond that is very unclear.

These market collapses are all too frequent nowadays; such periods do nothing for the long-term sustainability of the stock market model we operate now - it's not meant to be a casino, rather a method to raise cash for investment purposes. Eventually, we'll have to find other ways to finance companies and the current stock market and all its spives will die out.

[fitton] 23/7/2012 17:00

Trading at 3 1/2 year low.Could be some serious money made here should gold start to go higher out of its trading range.Lets not forget the company is debt free and can still trade at a profit with substancial increase in costs.I am hoping for a fall from here into the 40-45 range as I consider at that price the shares are a gift.Maybe not in the short term,but on takeover hopes.

[fitton] 23/7/2012 15:22

Unless there is a very good financing option on the table already,the constant downward presure on the share price and increasing costs is going to force the company into accepting a takeover.All that is needed at this stage is a very big increase in resources.

[pineapple1] 23/7/2012 14:53

Guess we are in for a 2008 ride.De ja vu.
If we get into a real bear market this could quite easily take a trip to 30p

The 43% increase in ABG,s costs per oz must be ominous signal for this turkey.
imho

[amargosa] 23/7/2012 14:52

Yes, it's having a right kicking; I would suggest, however, the lower it goes the LESS likely would be a placing (for Baomahun) in the short run. Just don't buy the placing theory (until I'm proved wrong!). I would guess the additional weakness (apart from the markets are in meltdown mode) is that the stock is easily moved up or down, so is a shorter's wet dream. In addition, the uncertainty over the financing arrangements for the Baomahun financing are still there after all this time!

[fitton] 23/7/2012 14:30

amargosa. I agree with the Spain concerns but not all the producing miners have had the living day lights kicked out of them like Cluff.Over 100 trades is unusual.

[amargosa] 23/7/2012 14:11

Look out of the window, Spain's about to go bust. CLF gets whacked when the wind changes direction.

[jdk14] 23/7/2012 14:09

It's surely got to be a placing coming.

[fitton] 23/7/2012 14:07

101 Trades by 2pm and still no news of production problems,down another 4p.Some very nervous shareholders or very clever with some inside information.