Diamondcorp Share Discussion Threads

[ged5] 11/5/2016 11:26

Delayed sells now being reported.

Someone's been selling for some time now, first noted by wisecat2 post 1804. Let's hope they've nearly finished.

[jaf1948] 11/5/2016 11:13

Strictly speaking, not a tick up but a tick back.

Some strange trades going on today both here and on the JSE when it is currently down 36%. A series of trades of 5000 shares went through at 150 then the last one of 10,042 shares went for 101.

[ged5] 11/5/2016 10:18

Well done!

Tick up had to happen with all this buying.

[tiger60] 06/5/2016 20:31

Actually bought back a smallish position today.

The concern about the cash position is valid but even more so one should concentrate on the output. Is it meeting expectations?

[ged5] 06/5/2016 09:50

Was the half quote better than the full quote? Certainly better than a misquote!

Anyway well done on your selling. You saw it; you called it; you acted on it!

6.025p to buy this morning, so probably more sells to show later.

[ged5] 05/5/2016 17:45

free stock charts from uk.advfn.com


Looking very oversold!

[iicb] 05/5/2016 17:28

good energy :-)

[rollthedice] 05/5/2016 14:29

If cashflow was so tight they wouldn't have splashed a $1m on trucks or would have combined a placing to fund same which would have been accepted by market without breaking step (IMHO).

The lower share price goes in the short term the better as I'm looking to top-up!

[jaf1948] 05/5/2016 14:16

Unfortunately some of our investors consider DCP guilty of needing more cash even though they have specifically said that they don't (unless something untoward happens).

Then one sell begats another and now we have a 25% fall in a month based on NO bad news at all and in fact good news that we are on schedule for production in two months.

The share price doesn't concern me but it certainly depresses me. I have to add that negative comments from some posters on BBs can't actually help the situation (though I doubt whether they have any significant effect) !

P.S. It may well be coincidence but there appears to be someone selling in 250,000 chunks - 3 so far today and 2 yesterday - but overall the volumes have been tiny which suggests to me that there is not a serious problem with the company.

[iicb] 05/5/2016 13:59

concerning me a lot this share price expect more like 10p now, not back to 6p again.

[ged5] 05/5/2016 13:06

Thanks for that! I didn't get as far as note 32.

Not much relevance but I just noticed Acrux are asking for 200K. It is disputed.

From what I heard earlier this year we are best without them.

6.325p to buy now!

[hpcg] 05/5/2016 12:34

The going concern statements are fine. If raising capital was inevitable then they would have had to say so, though judgement allows a lot of wiggle room. On the truck cost we don't know the payment terms. Given that DCP is spending money on maintenance and thus improving the asset it is not out of the question that cash payment to the seller is a few months down the line. That is not to say we should be naive about these things but nor is it panic stations.

Personally I am in show me mode before buying any more, and I would imagine that is a widely held view. This behaviour will tend to depress the marginal deal price. There are plenty of legitimate reasons why this is a better buy having gone up in price than it is right now.

-----

Going concern
Judgment is applied in assessing the likelihood and timing of future cash flows associated with the Group's activities.
During the year management have improved the Group's liquidity position for the next 12 months by raising funds from the share
placing and rescheduling the repayment of the loan to IDC. The Group expects to commence commercial production in the
third quarter 2016 and thus the current liquidity model is based on the judgements around the adequate production rates and sales prices. Whilst there are uncertainties in relation to certain judgements, management have concluded that no material uncertainty exist in relation to the ability of the Group to continue as a going concern.

-----


Going concern

In determining the appropriate basis of presentation of the financial statements, the Directors are required to consider whether the Group can continue existence of the foreseeable future, this being a period of not less than 12 months from the date of the approval of the financial statements. The Group's business activities and goals are set out in the Letters from the Chairman and Chief Executive.


For the year ended 31 December 2015 the Group incurred a loss of £2,410,027 (2014: £3,251,674 loss). After reviewing the existing cash resources, facilities and Life of Mine model and the ongoing ramp up of production the Directors have a reasonable expectation that the Group can meet all its liabilities as they fall due, therefore they continue to adopt the going concern basis of presentation of the financial statements. (Refer 1.3 Going concern)

[ged5] 05/5/2016 12:18

Thanks Hutch_Pod

That's just what I needed. I made a simple calculation from last years results but your reply made me realise there were several exceptional items eg the safety measures to secure the tunnels and the anti roll bars.

So the expenditure, according to share price Angel, for the first 6 months is more likely £2.2M.

Even with the phasing things aren't as tight as I feared. Makes a placing less likely.

[hutch_pod] 05/5/2016 11:57

Hi Ged5

Thanks for laying out your calcs.

I see spangel have 2016 full year op cost of £3m, G&A of £0.7m and capex of £0.8m. Which seems to imply a lower cashburn than yours, but of course the phasing could make it tighter.

Cheers
HP

[ged5] 05/5/2016 11:29

It's looking very oversold now and only 6.3374/5 to buy depending on your broker.

[jaf1948] 05/5/2016 11:02

A fair analysis. My own feeling is that if they were that worried, they would have announced a placing at the same time as they announced they were buying the lorries. But given the past 12 months, you can't blame the market for expecting the worst case, not the best case.

My spreadsheet looks awfully depressing but now is not the time to lose faith in DCP.

[ged5] 05/5/2016 10:53

Indeed we do. It would be reasonable to assume that much hinges on the June sales. Of course we could get news at any time about the find of a special diamond.

But the reports of finances being tight are correct.

I've assumed a cash burn of about £690K per month. So to get us through to July we need about £4.14M.

We had £1.78M and raised £2.06M. With the diamond sales less the $1M for the trucks a net profit of £116K. A total of £3.96M.

Although a deficit I seem to remember some cost savings so we might not be burning £690K per month but finances are definitely very tight.

Please check all figures.

Given the above and the huge difference in current liailities to current assets it's not surprising the drop in share price

It looks like a couple of depressing months especially if there are any unexpected problems but we should then reap rewards from July onwards.

Of course there could be a pleasant surprise as well.

[keifer derrin] 05/5/2016 09:14

we need to find one of these

:-)

[jaf1948] 04/5/2016 20:03

I totally agree. The stock market usually prices a share based on the company's likely projection over the next 6 months to a year and on that basis, DCP has all the building blocks in place for a large rise. However it seems to be priced on the previous 12 months when there were delays and the inevitable placings.

I read the whole of today's RNS with special interest in the two long letters by the Chairman and the CEO. They went into great detail explaining what happened in 2015 and seemed to hide nothing. This gave me a warm feeling that if there were anything amiss at the moment, they would be forthright with the bad news. But on the contrary, there has been no bad news recently just a fall in share price. If it were really explained as Panmure hinted that the market was afraid of another placing to cover cash-flow, it wouldn't justify a 20% drop.

As I have said before, I have held these for 5 years. I see nothing that is going to prevent DCP from being profitable. I had hoped that 2015 would be the year but it didn't happen - 2016 should be the breakthrough year and if, perchance, another delay occurs then I have no problem waiting for 2017. IMO, DCP is about as good as it gets on AIM.

[iicb] 04/5/2016 19:35

I can never figure out why some shares roar on good news and some drop.

[jaf1948] 04/5/2016 17:58

As I wrote on another board, to put things into perspective: On April 5th the share price was 8.25p, so in exactly one month with no bad news whatsoever and full production less than 2 months away, the share price has dropped by over 20%.

As our American friends might say, go figure !

[iicb] 04/5/2016 17:56

this share price is depressing to be stuck back at 6p levels yet again.

update was ok today however.

[hutch_pod] 04/5/2016 17:24

Interesting points on cash from Panmure.

h t tp://www.proactiveinvestors.co.uk/companies/news/125532/diamondcorp-sees-signs-of-recovery-in-the-diamond-market-125532.html

Panmure Gordon said the financial report was in line with expectations. “The main message is that management remains confident that progress towards commercialisation in July remains on track and the funding position, albeit tight, looks to be sufficient ahead of the planned June auction and the ramp-up to 30,000tpm [tonnes per month] from July,” Panmure's Kieron Hodgson.

“The cash position at year end was £1.78mln with an additional £2.06mln gross received in Jan 2016 from the second tranche of the December 15 placement. US$1.09mln was generated from the first tender at the end of March and circa US$1mln was spent on new equipment in mid-April,” Hodgson recounted.

“Taking the numbers into account we recently highlighted the limited liquidity under our modelling; however, management confirms that whilst the position will be tight, sufficient liquidity is expected to be available to see the company into commercialisation with the ramp-up in July. Between now and the next tender (expected in June) is the tightest time in our modelling and this ambiguity is being reflected in the share price in our view,” Hodgson said.

[thomasthetank1] 04/5/2016 13:28

Read Panmure Gordon & Co's note on DIAMONDCORP PLC (DCP), out this morning, by visiting hxxps://www.research-tree.com/company/GB00B183ZC46
"An inline financial report was delivered by Diamondcorp this morning. The main message is that management remains confident that progress towards commercialisation in July remains on track and the funding position, albeit tight, looks to be sufficient ahead of the planned June auction and the ramp up to 30,000tpm from July.."