Marakand Minerals Share Discussion Threads

[eriktherock] 20/12/2006 12:11

Thanks for your reply Frank on the other thread. I bought a few today and if I can get my head to believe my gut in regards to the 1 for 3 or 1 for 4 then I'll be adding shortly.

[eriktherock] 20/12/2006 11:13

nobull do you think that Oxus will take-up the remaining 14% of MKD on a strictly limited (time) 1 for 4 offer?

[eriktherock] 20/12/2006 11:00

Marakand could be a bit overlooked at the moment. Horrible spread. I'm thinking about what the Oxus Chairman had to say about fair treatment for MKD shareholders and also the Zeromax influence on Khandiza. EDIT: to be fair to the mm's the spread is only half a pee. Fair play to them.

[eriktherock] 14/12/2006 13:03

Interesting!............ Captain Beefheart eh? I've a few LP's of his and His Magic Band. lol.

[nobull] 14/12/2006 12:58

Off topic. Must have missed them. The Bee Gees were all the rage in Iran then, and I have an LP by somebody called Captain Beefheart from that era!

Have topped up on URL/UCL in the hope the termination of the agreements to develop Mehdiabad is a negotiating tactic. It may be the daftest investment I've ever made: the company is only worth about £8m and it is ONLY short of a mere $1.6bn, (needed to build the zinc mine). The USA and the West will never allow such a huge amount to be invested in Iran, and Iran isn't going to back down on the nuclear enrichment issue (even if Iran's economy is overdependent on oil, and its unemployment rate is sky-high). I'm-a-dinner-Jacket is more concerned with ensuring the population disconnect from the wicked Western world to merit a better quality of life in the next? 11m tonnes of recoverable zinc has a worth of zero if you can't extract it? The company is in cash-burn mode and would, if there are any willing takers of the company's paper left, have to issue shares to keep the lights on? Not a promising outlook, but then per $ invested it buys you the biggest amount of zinc? Not done the calculations, but 1$ invested was touted as buying 300$ of metal in the ground before the latest price plunge and the dilutive issue of loads of warrants? optons? with a low exercise price to RAB Capital). Until the latest termination-of-development-agreements RNS, URL/UCL was in the financing stage of development. Administration or stellar recovery beckons.

[eriktherock] 13/12/2006 20:36

'Think zinc' 'Think Pink' Fabulous Poodles from late '70's. Seen them?

[nobull] 08/12/2006 19:49

Something I did ask in private (at the Oxus meeting?) I forgot to mention was the effect of not recognising international arbitration unless permission is given by the Uzbek Govt. beforehand. Apparently all our agreements (Oxus' and Marakand's?) allow for arbitration. One comment was how bad the translation had been when this story broke in English. "Marakand and Oxus are unaffected by it and are fully protected" was what I was told.

Someone, can't remember who, Erik or another shareholder perhaps, made the point there is always a conceptual difficulty for the Uzbek Govt. in going from owning 100% of the metal in the ground to owning only half of it when it comes out. This is the source of a lot of our problems perhaps? I pin my hopes on "we won't get a worse offer than what has been made before" and the fact "Oxus is a fair company". All the best Hutchoman.

[hutchoman] 08/12/2006 16:51

nobull, thanks for your efforts. I appreciate you taking the time to post for those of us sitting in the background. I stopped out most of my shares at 20p on the slide, having an average of slightly over 18p. But that still leaves me with approx 50k at a nice loss as things stand. I don't take a huge amount of comfort from what you post, but will continue holding until the (very?) bitter end.

[cezary] 08/12/2006 16:12

In other words, dont bother us...we will make whatever decisions are necessary.

[nobull] 08/12/2006 14:13

You are welcome Langland. Sorry, I wished I had done a better job. It is more difficult than I thought.

[langland] 08/12/2006 13:30

Appreciate the report, Nobull, thnak you.

[nobull] 08/12/2006 12:04

I asked all the questions in one go, but had to repeat them one at a time to make the job of answering them easier.

On Q1. the answer was somewhat technical (I didn't understand). Something about "pooling the assets of both companies" and "Bill felt...?", A.S. finished his answer wtih "At least that was my understanding of it (the reasons Mr Trew resigned)". A.S's answer didn't mention "conflict of interest" or "cost control". Neither of those were the reason?

On Q2. the answer seemed to amount to "that is the way business is done". The more I pressed A.S. on why it was uneccessary, the more he smiled (until he realised it was a serious question?). FWIW, I think the lawyers are to blame (only they have such low moral standards, and revel in their own cleverness at giving their business customers like Oxus the greatest possible flexibility in cicumstances that are beyond what normal people can imagine?).

On Q3. I don't recall the answer. There is no case to answer? They were in the middle of buying in MKD when all the problems started? (MKD holders should take comfort from the acting Chairman of Oxus when I pressed the matter again at the Oxus meeting "we are a fair company" he said).

On Q4. The gist of A.S's answer if I understood him correctly was that there is nothing to bargain with: we don't have a mining licence at Khandiza and we don't have a J.V. agreement. (which makes Cooperation agreements worthless? I didn't have the quick thinking skills to press this point further).

On Q5. He must have said either nothing new we don't already know on these boards, or he must have talked about Turkey (I didn't catch what he said, and if it had been anything to do with +ve cash flow I think I'd have remembered every word)

I didn't press Q6 again. I think we know the answer and besides other people had questions.

Things I picked up at the meeting were

1. MKD minority holders will not get a worse offer than anything that has gone before. (I overheard this). This was followed by a qualifcation along the lines "dependent on price and market conditions at the time". FWIW I think the company does have a conscience, and as OTD has implied there is no point making enemies to save so little money by ripping off the minority, even if it is legally permissible.

2. Friendships between Uzbekistan and other countries change rapidly: India, China, Russia, America etc. have all been "flavour of the month" at one time or another. Our turn will come one day!?

3. Power within Uzbekistan has been drawn into the centre (4 key decision makers?). Things that were previously decided by the head of ? (something to do with Mineral Resources?) are now decided by the big 4?

4. It doesn't do sometimes to press too hard for the result you want? Wait until you are asked for help? Many mining projects in Uzbekistan are complex, and require techical help that the West is more capable of supplying? They will ask for help at some point? Just being there, having relationships with them makes it more likely we will be asked for help at some point when problems arise?

The Non Executive director did not attend the meeting (a cost-saving measure), but stood by the phone in France in case any shareholder had any questions to ask him for the duration of the meeting.

Any help from anybody else who attended the meeting on the things I have failed to remember (or misremembered) would be much appreciated. Thanks.

[otd] 08/12/2006 10:45

Nobull, looking forward to your report. Since you hold on to your shares I assume the answers were OK.

P.S. Thanks in advance and take your time....

[nobull] 08/12/2006 10:40

The questions I asked were

1. Why did the Chairman resign?
2. Why was it necessary to secure the Oxus loan on Marakand's assets?
3. Whether it was fair to give the "convertees" the MKD upside and downside OXS protection while not making the offer more public and while not encouraging MKD holders more vigourously to convert.
4. What assurances Khandiza won't be used as a bargaining chip to improve the welfare of Oxs at the expense of that of MKD holders.
5. What the prospects are (The annual report was the legal minimum, and didn't mention what they were)
6. How we can be assured you have our best interests at heart (The Board all converted their MKD shares).

[nobull] 08/12/2006 09:10

Sorry, I will post my report on the MKD meeting shortly. It has nothing whatever to do with what I have posted on the OXS thread, although I did not let the opportunity pass at the Oxs meeting to enquire about how the MKD minority would be treated. That is, I questioned the MKD Board in more detail on this subject. Full details coming shortly. I continue to hold my MKD (32k: not much but it is a lot to me!).

[otd] 07/12/2006 20:02

First thanks to nobull for the posing on the AGM at the OXS-thread. Good to hear that OXS is a ´fair´ company. Also a lot of other encouraging points (above all Mr. Daley).

0238jr, thanks for the offer. The question is:
MKD has a loan from OXS (as you probably know the main shareholder of MKD). This loan is secured by a pledge over Marakand's assets.
Would it be possible to transfer the assets to OXS just by saying ´We have no money to repay the loan.´ (and as long as there is no operating mine, there will be no money)? Or is management obliged to try all alternatives first to raise money (new loan, new shares, etc.) before transfering the properties to OXS? Thanks in advance!

[0238jr] 07/12/2006 14:16

otd- what is your question on the loan/ transfer of assets point, and i will have a bash at it?

[otd] 07/12/2006 13:03

Nobull,

Thanks for raising this at the AGM. You raise many interesting points and a big concern is making a deal on Khandisa to win AGF2 (if possible). This is not unlikely, if you remember that:
- Management are OXS-shareholders, not MKD-shareholders. Will they really defend MKD rights if that would be at the cost of OXS? It would make more sense to maximise the gains for OXS, even when this is at the costs of MKD.
- Oxus plays an active role in management already. From the RNS of 28.9:
´Management has completed a review of its cost structure in light of the
immediate exploration focus in Turkey, delays and uncertainty concerning the
development of Khandiza and the increased Oxus ownership of the Company. Oxus
plays more active role in the day to day dealings of Marakand.´.

But also a number of things can be said against the negative scenarios:
- Screwing the last few PI´s for a few pounds (just calculate how much OXS would save compared to a 3 for 1 offer for all investors) would not look good and hurt the image (which is already not that good).
- It also doesn´t make sense to get the Turkey properties for Marakand if they intend to bleed MKD to death.
- I am not an expert in UK-law, but I think it is not possible to transfer the properties to OXS just by not repaying the loan. I assume that management is obliged to look for alternatives first (maybe someone can help me with this) to raise money to repay the loan.
- Last, I still believe in the good intentions of management, but not all signs are good....

[langland] 07/12/2006 06:58

Thanks to NB and ETR ....your posts are always appreciated. And, NO, NB, the above post is not sour grapes on you part. There has not been a level playing field here in terms of the OXS/MKD conversion and I hope you do raise the issue at the AGM. I am left with well over 100k of MKD (worthwhile at one stage!) and at no time have I been approached about the conversion option. Of course, I had read the RNS's and was aware of what holdings had been converted but that is not the point.

[nobull] 07/12/2006 06:58

And a further point re 2584 is why was it necessary for Mr Trew to resign from the Board of MKD. Directors don't have to declare (in a prospectus) they've been associated with a company that has gone bust providing they resigned 12 months before the date the company went into receivership? The Marakand prospectus said none of the directors had been associated with companies that had gone bust within 12 months of their resignation.

[nobull] 07/12/2006 06:48

Re 2583: thanks Erik.

[nobull] 06/12/2006 23:36

Thanks Steve for your response. I may be wrong but it just doesn't seem a fair way to proceed. In the first place the only "advice" I got when I contacted the "Investor Relations" officer on whether I should convert was a slightly lippy remark of "well, please yourself" after I said I would probably not convert. Second I see with the benefit of hindsight, those who converted retained the upside of MKD and got rid of the downside. That wasn't something I learnt from talking to the Investor Relations Officer. Third if Khandiza development rights are not being defended vigourously e.g. to improve the chances of winning AGF2 that would be unfair and fourth it doesn't say much for the directors if they rescued themselves from a dud investment (they were close to the JV negotiations and perhaps had some inkling that things weren't going right) but failed to pass on their concerns to those who didn't convert, and fifth, as OTD says only active PI's knew what was going on. I shall certainly raise the matter at the meeting tomorrow. It is odd the share price of MKD should rise just before the meeting on zero news.

It is also possible I suffer from sour grapes. We'll see tomorrow. The annual report for MKD has nothing to say about MKD's prospects. The securing of the Oxus loan on MKD's assets is totally unnecessary unless you expect the directors of MKD to be replaced by Receivers, who of course can't be controlled in the same way as A.S. can be, by the Oxus board.

[eriktherock] 06/12/2006 20:03

For info. I've emailed the Uzbekistan office of Zeromax and asked for clarification as to the extent of assistance they are giving to Oxus, on behalf of MKD, with the JV at Khandiza. I'll post response.