Investika Di Share Discussion Threads

[nghomi] 06/8/2007 13:28

"Investika is an investment company in the mining finance industry with a focus
on pre-production emerging resource opportunities. The Company's principal focus is on opportunities located in Asia, North and South America and Africa."

I have a question for people with in-dept knowledge of mining sector. Is Berong still in pre-production phase? From the above mission statement in the company's first day of listing, one may conclude that IVK would sell Berong once it is in production. When would you consider Berong in production?

[strow] 06/8/2007 09:39

spread bet squeeze still on

[nghomi] 05/8/2007 21:35

ppowerscourt, I am convinced that there would not be any new placing for LP in the next two weeks. If you read the AGM, the directors have got permisstion to place up to 6m shares with professional investors until the 17th of August. However, Las Pasualas does not require any serious funding until the enviromental permission is obtained. The earliest time to get this would be in 9 months time. Any potential placing could be used to take advantage of the oppurtunities which have risen in the sector.

I expect that IVK profit from Berong project to be at least £1.5m this year. So we are having PER of 20 if we only include Berong project. The remaining assets and projects are for free!

[strow] 05/8/2007 17:31

ppowers-sorry then i obviously got you wrong there-i repeat i am no expert in this sector know a little and have opinions on a lot,and like all of us am still learning all the time-re uep-take a look at papillons post on the uep thread-it was in response to me questioning the economic viability of the uranium grades and this is also borne out by cmrs apparent interest by several parties for their bulgarian uranium projects which are lower in grade from what we know so far than ueps-the reason it is getting hammered is because it is not currently a producer-all pure exploration stocks(well most of them anyway)are getting hammered at the moment,irrespective of finds,unless they have large cash reserves or have bonanza finds
im not selling any ivk-you can see from friday how manipulated this has been in the current sentiment and how quickly they take it back up when this sentiment in the markets is percieved to be changing again-my guess is back down hard next week-it is exactly this manipulation on low volume that that leads to great buying oppotunities-i also wish i had more cash!

[ppowerscourt] 05/8/2007 12:52

Hi all!

Came across this: (courtesy of drewz on SLV thread)

Hold those resource stocks through the 'wall of worry':



In it, Nghomi's post 551 got answered. I agree heartily with the logical sequence which is unfolding nicely in the article---only wish I had more cash at hand. IVK's attractiveness lies in its diversified portfolio and the next stage really relies on the management doing the right moves to bring out the potential value to the fullest.

Is the funding issue sure to go ahead?

[ppowerscourt] 05/8/2007 11:12

Strow:

No no certainly not sarcastic at all. Don't and never think/do sarcastic! It's against my training!

I am having to grasp your response in post 550 as my worry for IVK's share price being brought down by UEP's sliding share price I used the word 'problem' initially to express my concern and reason for IVK's weak performance as of late. In fact I'm still trying to absorb your explanation which, I must admit, I don't as yet fully understand. I do hold your opinion as superior to mine as I, admit again, know little in the mining sector and wish to learn more. So the best thing to do is to accept an opinion and go/start from there afresh as a means to develop a different dimension to mine which I am more than humble to admit could be off, misconstrued, partial, underinformed, weird, .....

I will now read and digest the rest of your posts starting with 554... but must respond urgently to your doubt of me being sarcastic or insincere.

regards and thanks,

pp

[strow] 05/8/2007 09:50

nghomi-agreed,and i suspect that this is probably what the game plan is with the stated placing-LP is the near term funding requirement-they probably have enough cash to progress bzc for a while-as long as the financing is staged with all these projects,they should not run into difficulties-problems would arise if they tried to do it all at once,which is exactly why they are not doing that-if you look at the three main projects i.e berong,lp and bzc,then it is clear from the stages that they are all at,that appropriate staging is already in evidence,berong is producing,lp is pre production and bzc is still at the prooving up/confirming resources and exploration stage
Im sure the management will have very clear plans with the timescales and particularly the staging re finance of all these projects-one does not set up a multi-tier company like ivk without planning for this-as always in mining there will be delays,but there are likely to be delays in all the projects and so they should all remain spaced out in terms of their funding requirements-i am absolutely no expert in any of these matters,just stating and expressing opinion and fact from what i have learnt during the time i have spent investing in mining shares

[nghomi] 04/8/2007 21:17

Wazza208, I think IVK only needs serious money for LP. The remaining projects are either self sufficient or they have an independant route to raising capital from IVK. As to LP, (thanks to strow's posts) I can think of at least two ways of raising sufficient capital without selling off any projects.

LP needs £35m capex so if we do 70/30 debt/equity mix, we would only need £10.5m. IVK only needs to provide 62% of this. So we need £6.5m. The two ways are
1) Placing 3m shares at £2.25.
2) A third player could enter to LP project by putting down £10.5m. Given today's market value of TQN, IVK's direct and indirect interest would dilute from 62% to 36%.

Again, I am not a miner, but my personal perference would be the second option unless we think LP is more financially viable than the remaining IVK's projects. But I would guess that the city would support the first option for obvious reasons!

[wazza208] 04/8/2007 20:59

I'm not being negative strow i'm just stating that IVK has some great projects that altogether would bring in £100's million a year.

But in order to do that IVK needs to find more investment first.

The investment is subject to a timescale as well.

What i'm trying to put across is that the size of IVK currently requires more than its Mcap of investment and will need it within 2 years.

Berong will not be generating enough income within that time, in order to pay for it so IVK has to take another route.

What would you suggest as a method available in order to keep all projects alive?

[strow] 04/8/2007 20:25

Guys -they have three,maybe 4 potentially good projects here-its amazing how negative this is all becoming-as i said yesterday,each project has the potential to dwarf its capex,and there will also be big tax advantages/breaks-payback on the capex on las pasculas is thought to be somewhere between 2 and 3 years,depending on which scenario you look at-this is perfectly normal- i think people should just look at them all as individual projects with their individual requirements,rather than just as one big problem-the other way of looking at it,as people seem to be insisting on doing,if you want to lump all four projects together with no staged fund raising,is as one hell of a good project(4 parts in total) that will need a fair bit of fundraising,although bearing in mind,berongs cash flow is meant to be funding their bfs etc for vap-the whole discussion is becoming circular-what matters,and in my view what people should be focussing on,IF one can trust the management to get on with the necessary fundraising for it all in stages,is the quality of the projects-berong,celestial,ulugan and belitung are world class moderate to high grade projects,las pasculas more than underwrites the current market capital,and could add more interest and value with gold and moly and uep is a bit of an unknown,but given that cos like cmr have had interested parties looking at their bulgarian uranium projects which are lower grade than the info we have so far from ueps drill grades,it looks likely that ivks 20% holding in uep in time could become a very valuable holding also-its the management and the quality of the projects that are important,and that should be imo what people should be focussing on-as weve said before the fact that ck holds 33% of the company,is one of our biggest protections against mismanagement and shareholder dilution!

[wazza208] 04/8/2007 20:00

Where do you suggest we get around £35 million investment from then Nghomi if we keep all projects going.

Even a share issue at todays price say 6 million X 225p = £13.5 million

Leaves us £20 million short, theres no doubt in my mind a part of IVK's portfolio will be sold off.

L.P wouldn't raise any more than £5 million and thats if we are very lucky as things stand, so we'll be relying on loans.

I think a TMC sell off is the only option if IVK wants to stay involved with Berong and L.P

[strow] 04/8/2007 19:53

nghomi-cant call myself a miner either,but most of my shareholdings are in mining stocks-usually capex for projects would be raised by a debt/equity mix-often something like a 70/30 split,in order to minimise shareholder dilution as you rightly point out,although this can be incredibly variable-all depends on how easy it is to get a good debt deal i suppose and this will im sure depend on several variables in itself,like the percieved quality of the project being considered and the stability of the credit markets(this years hot topic)-have no idea where they will go with this-we will just have to wait and see

[strow] 04/8/2007 19:45

ppowers-not too sure how to take your post,but certainly seems sarcastic-may i suggest that if you pose questions as open as you did,then you are likely to get a general open response-if you expected everyone elso to understand your view of "a problem like 20% shareholding in uep",then you could at least clarify what you meant as the problem-clearly i dont see it as a problem-clearly you do-to me and i know at least one other who posts on here agrees,it is potentially a good,not a bad holding-at least it diversifies ivk into uranium.Please take some responsibility for the vagueness of your post and dont just criticise others who can actually be bothered to reply to you like me,who you obviously assume should automatically think the same way you do-it is a pure exploration play at the moment,and in that respect is "a sleeper"-it was likely to get hammered for this reason in the current market conditions,most of the pure exploration plays are and for this reason,in my view the recent drop in share price over the last 6 weeks in particular means nothing at all other than people moving away from this type of stock,it is not stock specific and has nothing to do with ueps future prospects-there thats my take on it-id be interested in hearing a little more about why you think it is a problem

[nghomi] 04/8/2007 17:46

The question is that what is the best method to raise funding for Las Pascualas. We know that we require £35m capex to develop this project.

1) Would you dilute IVK shares?
Unless I am missing something, I personaly believe this is not the right way forward. By diluting IVK shares, IVK' managment would not only dilute the value of Las Pascuala but also they would dilute the ownership of TMC, Berong, etc to the current shareholders. Unless they have a compeling argument that Las Pascualas project is actually superior projects to Berong and TMC ownership, I would not think that diluting IVK shares for LP is good option for the current shareholders. Of course it would be good for people who partake in the new placing!

2) Would you sell assets in Berong or TMC?
I now agree with your posts. Unless LP is a better project than Berong project, it would be stupid to put good money after not so much good money. As most people consenses is that Berong and TMC have got a better prospect than Belitung Zinc project, one would think selling TMC or Berong is not an option. Of course, if they choose to reduce holding in TMC or Berong to fund LP, imo this is a signal to the investors that in the opinion of IVK's management LP is a better project than TMC and Berong. I am not a miner and am not certainly qualified to make the right judgement on this issue. But I trust the management on this matter. After all, CK owns 32% of IVK and I am sure he would do the best for the interest of the shareholders.

3) Would you dilute LP interest?
I would put my money on this option. This is very similar to what IVK has done to Belitung Zinc project. I believe IVK used to own 100% interest in Belitung Zinc. IVK invited a few UK investors for £3m investment for 58% ownership of Belitung Zinc project. There is a new holding company called Belitung Zinc Coporation (or BNC) which will be floated on AIM at some point in future. In the case of LP, we already have TQN, so we would probably have a third partner invited for the develpment of LP imo. We own 62% of LP, perhaps by the time we have spent £35m, our interst could be diluted to less than 30%.

I would welcome to read any other opinions on this topic.

[ppowerscourt] 04/8/2007 12:24

Thanks strow, for the unexpected explanation on our 20% ownership of UEP. I automatically assumed there was a 'problem' with UEP due to its deteriorating share price and could never have entertained your view within my limited capacity.

[nghomi] 03/8/2007 20:04

I cannot bilieve that the market has been so muted towards latest IVK's operational update. In a normal circumenance the share price could go 50% up on a such news:

Tarquin Resources says Las Nipas shows signs of copper and gold mineralisation


LONDON (Thomson Financial) - Tarquin Resources PLC said initial work on the
Las Nipas area in Chile showed signs of copper, molybdenum and gold
mineralisation over an area of 80 hectares.
Drilling is set to start on Las Nipas, which is located 5 kilometres to the
east of Las Pascualas, once final infill drilling has been carried out at Las
Pascualas.

[strow] 03/8/2007 14:57

howdya mean?we own 20 % of the shares and accordingly its nav-if it gets taken over we get 20%,although our holding there will be diluted as time goes on,but that dilution will lead to increased value in the company-one offsets the other-is this "a problem"? another good investment if you ask me as it seems the grades so far are ok and if its developed,should be a large uranium resource

[ppowerscourt] 03/8/2007 12:33

I hope you are correct on the 330-210 seller. How do we solve a problem like 20% ownership of UEP?

[nomolos] 03/8/2007 12:22

It's a fair point - you can have all the resources in the world but if it costs too much to extract and the share price dilution through fundraising makes it uneconomic then we'll get nowhere fast.

My view for what its worth is that any large future investors would like to see an income to support operations - the Berong project gives us a good positive cash-flow to underpin the exploration projects and IMV will make funding easier.

It's easy to forget that these are the early footsteps for this company - I for one wouldn't like to see them rush into hasty decisions and sell off a potentially lucrative investment early, instead position themselves for the next twenty year base metal commodity boom I thinks coming.

[strow] 03/8/2007 12:02

Wazza-i for one would be very very upset if they sold out on berong-it is one of their key assets and probably their most lucrative future asset-why on earth would they sell it,unless they had something better to purchase-certainly i cant see them selling it in a month of sundays to finance belitung/L/P-that would be a very poor buisness decision imo and i dont think they are poor buisnessmen-you just dont sell your most lucrative asset to finance your other less lucrative assets-if they stage their funding which is what i think will happen,then we should see all of their assets separately,each needing their own separate funding-all of the assets are good in terms of future potential earnings-even the least potentially lucrative in las pasculas is worth the funding in its own right-i think they will and should progress with all of the projects and sell none,unless they get taken over

[nghomi] 03/8/2007 11:26

strow, your theory could be right. Somebody was offloading a large number of shares so that the price dropped from 330p to 210p. Then somebody else picked up all of them (i.e. 190k at 210p). Now we will go up on small volume. So any buys would push this back to where it belongs to imo. Any new placing of course would only happen with institutional support so the price would also go up if we have placing in the next two weeks. Perhaps we have now seen truely the bottom of the drop.

[wazza208] 03/8/2007 09:57

The lack of a free float makes this a nail biting share.

A few thousand shares sold we drop 30p and a few thousand bought it rises 30p

If IVK releases some great news in the future i.e (profits, gold find, takeover, institutional buying or even as simple as its fund-raising)

1.5 million shares available at the moment, of which you can only guess how many PI's hold.

This will inevitably result in backwardisation and fireworks will fly. IMO

The share price is already jumpy, its worth holding just for the thrill.
I also sense there could be W forming in the chart so fingers crossed the bottom is now passed.

Unless the U.S takes us down of course, but we are already down 30% so we cannot go much lower without some increased buying.

[wazza208] 03/8/2007 08:57

I still think selling TMC is the best option for investers,
but it could upset relations and cause problems in the future concerning there BNC interests, if we sell TMC i suspect we may sell our share in Berong altogether?

[strow] 03/8/2007 08:51

boom-4 vs 4 all blue

[strow] 03/8/2007 08:50

WAZZA-agreed in principle,but if they want part of it,they will want to go now at these low prices