Hambledon Mining Share Discussion Threads

[chipperfrd] 06/11/2012 00:15

Thanks Dof, I am coming around to a similar decision.

I am quite impressed with the offer document. I have certainly seen far worse! Bit unusual to get a cash, partial offer. Don't think I have encountered it before. Certainly better than the blunt, aggressive, take-over that closed me out of ENK recently! No choice, no alternative, just de-listed!

Like you, I think I will plan to keep a bit of skin in the game and see just what the Assaubayev's do with HMB.

Suggest we keep up the dialogue if further info becomes available that might influence things one way or the other.
Chip

[1nf3rn0] 05/11/2012 21:58

Who did you speak to dof? And did they seem the least bit regretful that this is where they have led the PIs - to a lofty 2p offer?

"The alternative will, I believe, be a slump in the share price if it fails, with no sight of anybody else coming in."

I agree 100% with that. Makes you wonder if the best option is to go short and collectively reject the offer. We might make more from it going downwards - there's more room down to zero than up to 2p ;)

[dofmeister] 05/11/2012 21:46

Pretty much sums it up:

[dofmeister] 05/11/2012 20:15

Chip,

I had a long conversation with the company today.

In short, I'm going to vote for AR and sell 60% at 2p (or scale thereof). I may be wrong but this seems the best way out.

I believe AR may genuinely want the prestige of a London listing (and maybe even a step up to a main listing in due course, which gets a mention in the offer).

They may well be using Hambledon to acquire other assets and take it forward with the necessary capex, which at the moment is completely out of Hambledons reach.

The alternative will, I believe, be a slump in the share price if it fails, with no sight of anybody else coming in.

The EBRD have probably gone with the deal but clearly no other institutions have given irrevocable undertakings to date.

I believe its the best of a bad deal (although I note the partial offer does provide for the offer to be revised) but 2p back and a stake left in (at risk)is one I will settle for.

PS made a mistake earlier, director of AR is not director of Hanson, but director of Hanson is dealing with enquiries for AR.

[phillis] 05/11/2012 17:57

tx Chip
travelling at the moment and the wifi performance is akin to the Hmb mIning performance1]!

[captain_crash_and_burn] 05/11/2012 16:55

So are most on this board not planning to sell their shares?

[chestnuts] 05/11/2012 16:32

Chip

It may agree to keep the aim listing, but it doesnot say that they will not Sell Seki, as Seki is a seperate company, and HMB is a holding company in its self,

[chipperfrd] 05/11/2012 15:51

Phillis,

Yes, the offer will not go unconditional if they do not reach 50.1%.

It sounds like AR is being set-up as a holding company to acquire assets like HMB.

According to the AR letter, they are expecting 2 investor groups (including Hanson) to invest in AR in the near future.

Presumably, AR will also be in a position to provide financial support for HMB in order to resolve the mill and UG infrastructure expenditures required. However, that is clearly not a given!

I am trying to ascertain whether, on the balance of probabilities, I am likely to do better by voting FOR but retaining my holding in total or part.

In general, I would expect the parties behind this sort of offer, to fully expect a decent return on their outlays.

HMB is certainly cheap at c. £20m (IMO) with it's operating assets and permits in place. So it does look like a useful vehicle for leveraging stranded Kazak assets.

The agreement does guarantee 18 months minimum retention of the AIM listing.

What I am trying to surmise is which way the valuation is likely to go post the offer deadline, assuming it goes unconditional.

[phillis] 05/11/2012 15:33

if they don't get 51% they will walk away
I bet it is in the small print - which I have yet to read

[sloppyg] 05/11/2012 14:55

If the vote is For but they only get say a 30% take up then I assume they will take that equity and then review their options as to building a further stake/ revised offer ?

It seems unlilkely they will walk away given who they are in bed with and recent share purchases etc.

Maybe it makes more sense to call No deal.

[chipperfrd] 05/11/2012 14:49

I was just using TD as an example of the point I was trying to make (obviously his holding is immaterial!).

The point is: holders can vote FOR the offer but elect to not sell their shares.

I would have thought that this emphasises the likely clear-out of retail PIs with largely institutional holders remaining.

[1nf3rn0] 05/11/2012 14:37

TD's share amount is immaterial. Probably decided it appears better to investors if he doesn't sell. At least we can see now why he never filled his boots on the way down.

[giant steps] 05/11/2012 14:32

Daffern has remuneration £175K vs £5K stock

Which investment will he protect ? (must seem obvious to most)

[tymedici] 05/11/2012 14:31

Well the Captains jumped ship..so there's a start.

[chipperfrd] 05/11/2012 14:24

dof,

Interesting that there are effectively two decisions required of shareholders.

(a) Vote FOR or AGAINST the terms of the offer
(b) Accept or not the 2p offer for ones shares.

I note that TD has voted FOR the offer but will NOT sell any of his 250k shares.

So it looks (to me) as though it is a no-brainer that the offer % FOR will go unconditional, but it is far from certain that the large institutions will actually accept the 2p for any of their shares.

But AR need another 41% (402.39m shares) to gain overall control of 50.1%.

So are there enough retail holders prepared to accept the 2p?

[dofmeister] 05/11/2012 13:09

Leoboy,

If you look at the Offer Document it says that Hanson Asset Management have agreed to a stake in African Resources, together with another investment partner.

You will find it towards the end of the document in the appendices, "about African Resources"

The current Director of African Resources is also a Director of Hanson. I suspect they have set the deal up.

[captain_crash_and_burn] 05/11/2012 12:13

Drewz

I feel I have broken my backbone from sticking this company out for the last 2 years.

I think one has to take an objective look at the current situation and at the end of the day right now things are looking desperate. Fines aren;t going to be reduced and this means our net cash position is probably sod all, we still need to take significant legal fees off this figure and the decision to stop underground mining further confirms this. The co. is running on fumes and has a track record for complete disaster.

I'm not going to disagree that on the face of it, we've got some great assets and the potential here was huge, sadly management haven;t delivered and we are now up a certain creek without a paddle as unkless gold price strengthens quickly, operating profits will struggle to keep overheads covered and there is every likelyhood that further funding would be required. Any further trip to the market with cap in hand would destroy us. If we go under EBRD have first dibs on whatever we casn sell at distressed prices and who knows what we'd have left.

Overall the investment in hambledon has not been good for shreholders, quite clearly but based on the current state of play, 2p does not seem like the end of the world to me.

I am at a loss as to just how much the directors have managed to destroy a great opportunity but thats one of the reasons I think its time to take the hit and run.

[leoboy] 05/11/2012 11:48

dofmeister - re your post 16305 :

Interesting to see that a well respected British investment fund, Hanson, (Hansonam.com)is taking a stake in African Resources.

Cannot see that on the Hansonam.com w/site ? maybe my mistake , certainly interesting ... can you point me to where it says that please ?

Leoboy

[drewz] 05/11/2012 10:15

"I think this deal is probably good for shareholders"



Good for shareholders?

2p/share?

With gold heading for $2000?? $2500???

Give me strength.

It's a naked opportunistic attempt to wrestle the company away from long-term shareholders on the cheap whilst sentiment across the sector is severely depressed.

Why cave in so readily? Show some backbone!

The company is worth far more - £50m or 5p/share as a minimum.

The bidder can afford this out of small change.

[captain_crash_and_burn] 05/11/2012 10:09

Though I would have loved to see us get a dizzying 2.5p or something, I've come round to this offer and will be accepting. It seems a reasonable way out and helps for me as I am not good at cutting my losses generally, but this co's been a dog of a share and I should be pleased to be rid of it!

Agree it is frustrating to hear then bang on about the 60% premium to the price on close as its not like its been that price for long and to most holders the offer represents a discount to what they paid, but thats markets I guess. It does raise the question whether the management has fed news in order to depress the share price so that the offer would bego through but obviously I don't have any evidence to say that is the case.

I think this deal is probably good for shareholders given the dire performance of the company a way out is a good thing but I expect the real benfactors of this will ultimately be the directors who will get to keep their nice salaries and take less of a hit to their reputation than we know they deserve!

[phillis] 05/11/2012 09:58

Nuts
I have to repeat that your brain processes continue to defeat me
The buyer can make any offer he wants - in this case to procure 60%

This is not against the rules

The Board ( excluding TD but including NB - who must be an interested party! )
have decided to recommend acceptance. So be it
They presumably pressed for a 100% offer which does not appear to have been forthcoming. Lets debate this later

With regard to the purchase of NBs shares. I would be pretty certain they followed the rules. Their obligation to issue the RNS starts when they receive formal notification from the buyer I think

An announcement of the family behind the purchase would have led to a mountain of speculation and a false market - and in the expectation of a documented bid following in short order the Board indisputably acted in a correct manner.

[giant steps] 05/11/2012 08:57

imo (given Assaubayev pull all the strings)

[drewz] 05/11/2012 08:55

"It will be the only offer that can make the venture work."

Says who?

[giant steps] 05/11/2012 08:50

"AR will not get enough acceptances at 2p."


It will be the only offer that can make the venture work.

( without it one can imagine Akmola never completing
and seki running into permissive issues )

[drewz] 05/11/2012 08:46

AR will not get enough acceptances at 2p.

They will have to increase the offer or continue as a minority shareholder.