Mining Minerals & Metals Share Discussion Threads

[1waving] 15/10/2008 15:13

A few posts on Randgold recently. Anyone thinking of a potential JV with them needs their fairly short term memory jogging --- not a company to get involved with.

From a Minesite article Aug 6th 2008
Randgold Resources Reports Encouraging Interims But Appears To Have Difficulty Keeping Its Friends

At one time Mark Bristow used to point out that the ground around Morila did not belong to the joint venture, but recently he has been pretty reticent on that subject. Presumably, he would like to come up with a new resource estimate and re-start mining once he has shed AngloGold completely.

There could be one or two problems with this plan. For a start AngloGold presumably has an equal share in the plant and would rather dismantle it and haul it to the North Pole than let Randgold take it over. Perhaps it would have been wise to stay on better terms. More recently, Randgold backed out of a joint venture with African Eagle and this is reported to have left a nasty taste, as all Randgold had done on this project was test its conceptual deposit model while doing very little on the ground. In fact Randgold did not bother to tell shareholders when it agreed the joint venture, or when it quit, so it is easy to see how much value it assigns to what it clearly thinks are sideshows. Juniors be warned.

_________________________________

Full article

[1waving] 15/10/2008 08:36

David Rosenberg is one of the few economists who tells it like it is -- I remember him in a Bloomberg interview in Aug '07 being hopping mad with the Fed for not lowering rates when it was clear the economy was in strong difficulty, he came out with a big list of negative indicators. Best Bloomberg TV interview I've seen, an economist showing real anger on screen.
Article from jsmineset.

Dear Jim;

Today David Rosenberg, chief North American economist for Merrill Lynch, made a few very important points for all investors. Rosenberg has distinguished himself by being by far the most realistic US economist of any major investment bank. He was calling for a difficult economic period in the US months ago.

He agrees with me that we are currently seeing depression like activity in the US economy. His point today is one that you and I have often made, but he has Merrill Lynch and Bank of America listening to him.

He points out that over the next few years, the supply of gold will grow at a much slower rate than the amount of any fiat currency. He points out that the monetary base is growing at the rate of 19% per year, and when you add to that the swap lines that the US will institute to loosen up the world banking transactions, the growth rate will be much higher. He goes on to say, "the supply of gold is going to be rising at a much slower rate than the growth of fiat currencies, and likely buy a huge margin." Thus, as an alternative to depreciating currencies, gold is a very a very attractive investment vehicle. He further states," If gold, in real terms, were to retest its old glory highs of the early 1980's, it would end up testing $2,000 an ounce".

Over time, the wiser of the big investment company economists are starting to endorse what you and your website have long stated. With money supply exploding as it currently is, the massive amounts of money that have been created by many countries in Europe and North America (especially the US) will force currencies down and gold up. It is a simple example of the law of supply and demand.

Respectfully yours,
Monty Guild

[bongo bwana] 15/10/2008 07:13

There was a well informed and wise Randgold shareholder (of long standing) at the GEX AGM.

[serpicouk] 14/10/2008 22:45

Randgold is an excellent example of a well run gold company operating out of Mali. If GEX could emulate a fraction of their success we'll all do very nicely.

They're definitely looking for the next Morila in south Mali. They've only done about 3Km of drilling to the south east and have added another 70km2 concession in that area. May be GEX will turn their head 200Km to the west in a couple of weeks time?

[haydock] 14/10/2008 19:51

A few ounces in Mali, could come in handy for another large operation, which is doing very well it seems.
Note the last line is the most significant for GEX.


Randgold Resources (RSS)
08/10/2008

Flight to safety
Quite simply, gold is used as a hedge against financial chaos. The US government's US$700 billion rescue plan and the global banking collapse have pushed the price of gold upwards. And with the inflationary impact of the bail-out set to further bolster the price of the yellow metal, its means good news for gold producers such as Randgold Resources.

As the US Federal Reserve orders more currency printing machines, we believe the ensuing flood of US dollars in the global economy will galvanise inflation. And for commodities or anything else priced in dollars for that matter, values will skyrocket.

At Randgold, recently released second quarter results are a vindication of management operational nouse emanating from a backdrop of a strengthening gold market.

For the second quarter of 2008, the miner weighed in with a net profit of over US$20 million. This represents an impressive 11 percent increase on the three months previous and a staggering 196 percent gain on the corresponding quarter in 2007.

Despite a number of operational challenges, the miner managed to boost output 12 percent from the previous quarter to 115,000 ounces.

Central to the Randgold's stellar bottom line performance is the high gold price environment. Despite being fractionally behind on the previous quarter, Randgold realised an average US$833 per ounce. Taking a broader view, this figure represents a 41 percent increase on price realised during the corresponding period last year.

Meanwhile, despite the climate of skyward cost pressure, much to our delight management have contained the average cash cost climb to a under 4 percent on the previous quarter. As such, the average cash cost per ounce came in at US$457 per ounce.

The star performer this time around was the group's Mali based Morilla mine. Total production jumped close to 13 percent to almost 46,000 attributable ounces. In addition, Randgold's Loulo mine (also in Mali) chimed in with another consistent quarter producing over 70,000 ounces for the quarter.

Although currently a two mine operation, Randgold's third will be its 81 percent owned Ivory Coast based Tongan Project which continues to make substantial progress.

In addition, underground development projects at Loulo are also racing ahead. And on the exploration front the miner has been very active, yielding positive results in Senegal and Burkina Faso as well as the odd disappointment namely in Tanzania.

All factors considered, the company is set to cash in on robust production, effective cost price control, and a burgeoning African investment portfolio.

As at the end of June 2008, the company's bank balance was a healthy US$275 million. In addition, operating cash flows are robust and should opportunities arise, Randgold has sufficient fire power to hit the acquisition trail.

[serpicouk] 12/10/2008 11:27

Slightly off topic but if anyone has 25 minutes free then this video is worth a watch. Geroge Soros sums up his thoughts on the current financial meltdown:

[bongo bwana] 11/10/2008 19:36

We are blessed to have the likes of 'Serpico' and 'Waving' halping us all along here.

[haydock] 11/10/2008 11:04

Minweb article.
GOLD SHOULD MOVE TO NEW RECORDS'
BMO's Coxe predicts gold and commodity stocks will reach new peaks during next global recovery

[deka1] 11/10/2008 09:39

serpico, good post and right on the button

[serpicouk] 10/10/2008 23:24

I guess GEX had about $2.4M to start this drill season. If they are expanding their program then they'll probably need north of $3M. So they'll definitely need at least another $1M before the end of this season.

Assuming an average cash burn of ~$500K/pm and keeping a $0.5M contingency that means GEX may need funding around the end of February?

Will Macquarie take up another share placement? They've purchased £2M GEX shares which are now worth just £830K...I'd be surprised if their warrants will plug the gap (priced up at a lofty 13.5p). May be they'll average down and splash another £1M @ 4p (~10% dilution?).

I'm less clear on how next season will sort itself out. The JORC report seems to take SRK 3 months to complete. They won't want to negotiate a JV prior to that and funding (4-5M) may still prove difficult in 9 months time...hmmm, some manoeuvring may be required.

Anyway - let hope we have something more exciting to talk about in a few weeks time.

Edit (11/10/08 12:30) - I should point out that GEX are probably in a better position than many other juniors. GEX are in the right resource (Gold), probably at the right time (>$1000 over the next 3 months?) and already in bed with a major (Goldfields). I just wanted to highlight that financing the current and more importantly the next drill season shouldn't be dismissed as trivial - I would rank it as GEXs greatest concern right now and I'm sure the excellent management are spending a considerable amount of time assessing the options.

[bongo bwana] 10/10/2008 14:28

I wonder what the POG will be in 18months time ?

[share_shark] 10/10/2008 14:01

4% jump in gold price today.

[haydock] 10/10/2008 12:30

Minesite:October 10, 2008

Wise Words For Investors In A Bear Market


By Lawrence Roulston of Roulston Opportunities

[bongo bwana] 10/10/2008 11:23

The more reserve ounces the better the terms of the Komana JV.

I have seen a few JV deals during the past year where small caps got a very considerable wedge of cash along with an excellent % holding in the JV vehicle.

Id expect GEX to secure same as this would enable their Solona discovery to be aggressively explored independently until it decided what was the best option to maximise shareholder value.

It looks like:

Sankarani,
Komana,
Asheba and
Uganda

will be looking after themselves nicely, leaving GEX to step properly into Solona, within 18months.

With this in mind I have today bought 1,000 Bank of Ireland shares at a very nice price which should buy me at least 100K GEX by that time.

[1waving] 10/10/2008 10:15

Still the potential for Macquarie to exercise their warrants which would probably take us to the end of the drill season. Also think one more equity placement would be fine and would have no problems with take up.

All in all Glencar is OK for cash at present and I don't think has any problems to raise any cash in future. As this season is going to show in a fair amount of detail what is at Komana and Solona we will be looking at feasibility studies by next June --- that is the point at which a JV partner should be brought in, when we know what is at Komana and Solona.

That will give Glencar a better deal the more ounces we prove up before a JV.

[haydock] 10/10/2008 10:11

Note the 85.000 buy yesterday, hidden in todays morass.

[deka1] 10/10/2008 10:03

haydock re the funding--- absolutely

[haydock] 10/10/2008 09:59

I have said before that I have felt a quickening of the pace of late with this exploration/announcement pattern.There is a clear calendar of events, no longer just the element of chance.
At this time it is definately what is needed.

They are working on, so burning the cash.
Agreements/jv's will have to follow this next 12 months?

[1waving] 09/10/2008 22:01

Think there will be too much competition for good resources. There are very astute wealthy investors waiting in the wings, China/Asian emerging market companies, institutions ready to buy equity and of course existing shareholders.

Could end up with quite a list but I don't think the majors can sit back and wait, not if they want quality assets.

[serpicouk] 09/10/2008 21:17

Not wanting to be too pessimistic but I wonder if the majors plan to just sit back and watch the juniors hit the wall as most will run out of money before the markets recover - they can then pick up the resources for next to nothing...not a nice scenario...

[deka1] 09/10/2008 18:31

cheers wave, still in here and intend to stay, but as i said earlier will not buy anymore till next year, took a big hit at mcr, and its only lack of funding thats put it under, GEX is in a good position compaired to a lot of others with gold fields looking over their shoulder it should be ok

[1waving] 09/10/2008 18:23

At least 2 rigs started at KE from the way this reads :--

'pleased to announce that reverse circulation and diamond drilling recommenced
on the Komana East deposit in Mali on 8th October.'

Maybe started early to get samples to labs early and get results quickly to demonstrate further deposits and increase share price -- like the plan, now go to it !!



deka1, feel for you buddy, I was so tempted with mcr as I know one or two others on here were.

[deka1] 09/10/2008 16:57

cheers haydock

[haydock] 09/10/2008 16:46

Commiserations Dekal, we have all been through it over the years & no doubt will again.

There is an interesting article doing the rounds today.


This is the article from the CEY thread, #49932