North River Share Discussion Threads

[carter1110] 02/11/2015 20:05

Thanks Steve239
Well put

[steve239] 02/11/2015 19:46

Jarvo, according to the shareholder page on the NRRP website, which was updated quite recently, none of the major shareholders have sold any shares other than Martin French who has gone from 90 million to 79 million during the last 9 months. Martin paid a total of nearly £1 million for his overall holding so there could be any number of reasons why he’s had to release some cash. The poor bloke must be going out of his mind over the devastation of the share price. I certainly am.

The actual volumes sold have been quite small. Usually the sale of around 2 million shares (equivalent to 0.1% of the total share base) results in an incremental drop, generally of the order of 8-10%. Clearly some are convinced that this is going to fail and for a while it seems to have been a race to sell out before the next man. Like a mug I’ve been holding all the way down from 0.9p but I can’t say I’m tempted to sell at this ridiculous low level, even though I’m absolutely seething about the way this has been completely mismanaged, with no apparent understanding of how the AIM market works. Not to mention the global mining downturn and the Namibian Mining Ministry.

As others have implied, it demonstrates an almost unbelievable disregard for the market that they have still not revealed an alternative strategy at this stage and have not given a date for the next announcement. It all seems so completely at odds with the fact that James Beams only a few weeks ago invested £100K of his own money, which he surely can’t have gambled purely on the assumption of getting the licence within 6 weeks. This suggests to me that they must have considered various options and must surely have some kind of a “fall back” plan, even if that only means getting back 0.2p per share as a minimum.

[1mack] 02/11/2015 19:22

This could very well go into administration if funds run out. However with the recent lump of cash we are in a much better possition than some juniour miners.

Do we sell our asset?

Do we get taken over?

Do we merge with another small company?

Do we close shop for a year and wait out the storm?

Do we risk it all and drill on until license?

All these factors could see many different sp's

[carter1110] 02/11/2015 19:04

Chablard
Iam with you, I ve supported this share throughout and know that you are heavily invested and cannot imagine how you feel. How can the new plan be anything but bad news as we have missed our goal and still do not have a licence and more importantly, have no idea if and when we will get one. I hope the bod can be honest enough to say why we do not have it and what we can do to get it.
How low can this really go??

Yt - your thoughts??

[1mack] 02/11/2015 14:03

Definately looking forward to the review or business plan update!

[yellowthroat] 02/11/2015 13:45

Final point for now in view of the quiet BB, wait till someone wants to say something.

Anyways the other tactic would be a merger or ALL Shares acquisition of similar and like minded companies, North River could well with the aid of Greenstone (or not) merge or acquire a company that already has licence and cash-flow and revenues.

I know I have suggested this already but I meant from the approach of merger and not buying into a JV or so on. We could simply use North as the consolidation vehicle for three or four entities that are all in a similar boat or are at different stages along the ladder.

The benefit is a consolidated balance sheet and potential equity base and an increase in the solidness and cash-flow / gearing potential for all of the subsequent contracts to be continued.

Clearly North River's assets are GS as the big fund, the seniority of the board, and also the potential of its flagship EPL 2092 plus EPL 5075.

Slowly but surely to start with, making sure North River shareholders keep all their skin in the game, but maybe leaves us ripe in the future to take advantage of the presumed recovery of the commodities market in the next few years.

I would point out that the reason why a lot of the biggies are stopping capital decisions till 2016 and 2017 is that they are heavily geared organisations with large debt streams that they have to manage whilst not getting bang for their buck from their operations. Not specifically a circumstance that North River is in, as we are still exploration until the pesky licence comes.

Obviously GS wont insist on interest payments presumably out of their own kitty until all the above and all we have suggested is looked into.

Lets see this very important review !!!!!!

Regards

YT

[yellowthroat] 02/11/2015 13:37

Firstly the company could point out that the failure to award the licence at any point this year so far has caused the Share price to go from a reasonable 0.50pence to a paltry 0.12pence for continual sells.

Financing the operation and producing from the mine means being able to offer equity at a reasonable price that doesn't make the project uneconomical in terms of the companies share base. Secondly the costly and important business of Pre-engineering and mine set-up cannot be put into action until the government simply signs off on the thing.

Thirdly it is a small brownfield where most of the other concerns have already been crossed off along the way with the environmental considerations and so forth. I also think that a government poking its nose into private companies financial details and ability to raise debt is an incredible cheek.

If the company sells the EPL on to someone else, then the ministry is in the same position but the employment issue is even more behind.

Doesn't excuse selling at 0.12pence... ridiculous to take £1200 for a million shares in North River.

YT

[1mack] 01/11/2015 11:51

Fortunately dont need to sell these any time soon. so can sit out for the long game...

Genuinly hope the guys on the board get the win or at least our money back one day.... that we all deserve.

Time to sit this one out ha

GLA

[yellowthroat] 30/10/2015 23:56

FWIW Mark says that the appointment of the current board means that there are plenty of independents. James also claims that he runs the company though Mark was quick to point out that James cannot do as he pleases. I took that to mean that the whole board has to approve.

James continually makes the statement that he is working in the interests of all shareholders. I am holding him to that as much as anyone and keeping an eye on things.

The plus with Greenstone is that we are still in business in awful commodities times and it is due primarily to them stumping up the majority of the monies, to this end they are taking big risk themselves as I have stated and presumably they want some sort of compensation for this, as perhaps you would if you were the largest shareholder ?

We have seen evidence that all are baffled by the non-awardence of a licence for a small brownfield that has had extensive work on it. Even the analysts are seemingly somewhat bemused.

As I said I hope that Beams ends the speculation pretty soon and tells us what is going on and I am sure they will.

If there are funds out there that will take part in a JV to get something else going then I think that will be great. James is the one to make that decision.

His approach is to be sure about the DFS before they ask for financing so that we do not 'run aground' during production and go bust owing Debt whilst there are mechanical breakdowns or slumps in recovered production.

I had the impression Beams thought the project would not bear anything like the proposed payback whilst it was in its current form.

It doesn't help that the commodities market is dire, maybe we should do absolutely nothing for six months but that still means a dormant company UNLESS we do find this acquisition independent of GS or we drill another 400KT resource that makes the NPV and future funding proposal more attractive.

The plus of GS is that they are willing to stump up cash and they allegedly carry consortiums and see North River as the vehicle. The negatives is the cost of their deals with us, I guess they don't want to negotiate their advantage but as you say maybe Beams will look to other funders as well.

We have already been told that others might well take part in Phase Two I thought ? Including Taurus ?

YT

[yellowthroat] 30/10/2015 23:44

Depends on whether or not you think that North River could have and will find other sources of financing, or will have to continue to 'suck up' the largesse of our main holder Greenstone. It is subjective of course but we assume that the company has looked to achieve financing from all quarters and Greenstone are the only ones currently that are willing to continue to invest.

We do not know if this is to secure the company at X price or to secure their already purchase of now £7.5mn. I am assuming that THEY did not think that the new team would come in and think that the DFS from November 14 was to be disregarded in quite a fashion. This decision was taken by Ken Keith and James.

This I believe is where the problem started with NR, though we were promised DFS in March 14 and we were promised all sorts of action in that Shares Magazine article along time before. Was Martin over-egging or not, this is subjective and I do not know myself?

We have then had shareholders selling up and share price decline, it has gathered momentum to the point whereby allegedly despite RFC Ambrian no-one wanted to take part in Phase One at 0.2pence only, when the project appears to have Net Positive NPVs and Paybacks that are deemed very attractive.

The beef as I have said a few times is with Ken Keith and James. James seemed to dismiss the DFS in his RNS on Optimisation and his manner at the AGM.

You have to take a position. I go by that 'naughty' email that MS sent to 1mack that was published on here and I don't know if it was still there or not but I have a copy, I re-read it and it says some of the main things that MS says at AGM.

Mark S thinks that the current financing markets are some of the worst he has seen in 20years in the sector, that is his statement and you can accept it or not. Mark claims he is at arms length to the actual decision making but he wants to 'point NR in the right direction at times'.

At the time it was still thought that we would have achieved the licence. I hear talk from FLU that there is a new licence process so maybe there is a lot of bureaucratic nonsense with the new guy wanting to Stamp his mark on the department and I understand hardly any licences have been approved yet ?

This must have repercussions with FDI as I said, they may not care but that is no way to run an important ministry or a government, you cannot turn you nose to foreign investment and trade. I am being careful not to accuse as we do not know for sure.

I am looking forward to waiting for James and Co to make some sort of proper statement as soon as they are ready. I see today more as an opportunity to not leave us all guessing on the day of the alleged nominal date.

Clearly they will have to come up with something substantial and they may be needing to discuss things internally before they open themselves up to the fury of the Shareholder base.

Regards

YT

[donk4] 30/10/2015 22:22

What are the GS assurances? They have NRR by the short and curlies unless? YT may I ask you to work out the pluses and minuses.

[yellowthroat] 30/10/2015 22:20

I don't have a problem with another venture if those ex-GS can find one.

I thought Beams was pretty set on Namib and he was the one putting the eggs in the basket.

I don't see an issue with other acquisition or drilling. I am open minded on opinions on this.

Where do all think we should go ?

Ultimately Beams claims he is his own man and his integrity is not there otherwise and I believe him that is all.

Nothing otherwise found to the contrary yet IMO.

Regards

[yellowthroat] 30/10/2015 22:16

Hi mate I'll get back to you on that. Sometimes get carried away with robust debate no one is going to be shot down and no one will be shown up if they discuss anything with me.Enjoyed today with lots of good comments on the BB.All opinions are of value and no one is right or wrong.My worry is that GS are the only ones with the money now. GS have made assurances they are at a distance but they are now very leveraged up on this being a success as well IMO.Just half way through 'A most wanted man' with Phillip Seymour Hoffman... A v good movie !!!!Folks tapping their feet on the play button being pressed !!! ;)YT

[donk4] 30/10/2015 21:20

YT - French had the wisdom to increase resource and sell Namib on the basis of an increasing asset. He increased resource and sold Namib.

Whether it is Greenstone or Beams or a mixture of both, the policy appears to have been to improve on the DFS (whilst spending pots of money) and then hope and I mean hope for the mining licence. At the same time have mining folk ready on site or at hand at large cost and contracted to start the mine development upon the grant of the hoped for licence. Spend and hope.

Zero thought imo has been given to what might happen if no licence appeared. Some have called it Plan B and rightly so.

A part of the policy has in effect been to put the company in hock to Greenstone with convertibles and a high coupon. That costs big bucks plus big fees which eats into equity. The tease one might say. Well the Namibians see through that and it was nor necessary in the first place.

All the Namibians want is to ensure that if a licence is granted their people will be employed and that they do not see the mine being put on ice pending receipt by the company of money. They do not want the employment of their people being put on hold. No money being raised means no employment. That equals delay in licence. Keyman has it right.

I hate to say it as a separate argument but James Beams has invested a 100K but at the same time does not appear to control the boardroom.

This whole project should be mothballed; there is no need to take Greenstone's money. Why potentially give Greenstone the company via convertibles (their constitution can always change? - nothing is set in stone)? How are they doing elsewhere? Are they increasing value with their investments elsewhere? Will their benefactors give them another go - another 100m for a second bash?

JB should imo, with some other board members, protect his money and that of the other independent placees and say, like any other junior minor ceo might say, "thank you but we are on ice for the present". Has he the strength or as Mark Thomson might say "the bottle?

Just my views and please YT shoot me down if you disagree.

[yellowthroat] 30/10/2015 20:37

Clarification :

Quick One, working on the assumption that break-even for ZINC I remember seeing quoted somewhere at about $1600 but as it was taken somewhat literally on one of my last posts, just to clarify I do not remember exactly and my point is that at $2400 ZINC the Post tax NPV is only X millions and at much less and somewhere near a potential break even that I remember, the project is nowhere near as attractive.

Anyone find the exact details I would be most grateful. I cant find any assumed ZINC sales figures on the last few RNS that I just went back over, I could have sworn we had mention on one or two of the DFS or RNS of the exact.

Anyways just a minor point, the point being the economics works out much more robustly at $2400 and we are some way away from there. Though the price is extremely volatile but lower than this is unlikely if viewed against its historical of recent times.

NB : Anywhere between $1400-1800 would see a more negligible return on our NPV was the general point I was making. We are all hoping that $2400 plus sustained over most of the life is much more agreeable for the anticipated returns.

General consensus for production 2017-20 plus is for in excess of this.

YT

[yellowthroat] 30/10/2015 19:17

Keyman, agree but that is temporary and ZINC is very volatile, it wasn't long ago it was around $2300.

It would have to be $1676 for 3-4 years which is exceedingly unlikely. At some point industry should see the pluses, I think there is intelligent Debt that will come in once there is a turning point.

By 2017-18 we could be seeing $2500-3000 to predict on future pricing alone is very silly for any debt lenders without some sort of smoothing and past experience scenario. ZINC hasn't been anywhere near this level for ages.

China is completely unpredictable and OIL is killing traders and funds and the current commodities market is seemingly not in balance in terms of the fundamentals. This clearly needs to be just ridden out for the time being.

I see where you are coming from about not spending too much monies, that depends entirely on acquisition potential and drilling potential. Doing absolutely nothing whilst paying interest and administration is also not too good an option IMO.

We will see what they tentatively announce once the review is over.

YT

[yellowthroat] 30/10/2015 19:10

c) bring successful junior mining expertise into the board, which so far has proven incompetent.

-------

Referring Steve's find on share price Angel earlier, no market participant can fathom in the slightest the failure to award the production licence on something that is brownfield and so on, and has had so much work on it.

It flies in the face of all sensible assumption, we cannot accuse a BOD of incompetence for not imagining for a minute that a previously safe investment country would seemingly about face and keep three-quarters of its foreign direct investment waiting and waiting.

With FLUs commenting on the economic predicament of the government in terms of public borrowing it is unbelievable that they are risking the private sector in this manner.

They have granted 100's of small Namibian's licences, where on earth are they exactly going to find the funds to develop any of their EPLS ?

Baffling decisions cant always be legislated for... but as I argue they could be a bonus and we could see an acquisition or a further drilling campaign soon !

YT

[keyman4] 30/10/2015 19:08

If the project is borderline break even at $1676, then there is no way they could finance it, mining licence or not.

[yellowthroat] 30/10/2015 19:03

One thing the company could do is to buy shares in a JV or another company to a level whereby some sort of accounting can see much of North River's and Greenstone's investing going into some sort of vehicle that means that GS can supply monies to a joint operation of North and AN other at a decent supply amount without having to lend North or seek to acquire more shares in it.

I don't know exactly how it would work but a heavy purchase of AN other with North as the investment vehicle would mean that the company can use some sort of cross-funding or cross-profit type scenario.

Failing that there is scope for a six month campaign of ZINC at North 150-350m in which to add possibly £3-5mn to the potential NPV and crucially mine life ?

I commend the BOD for announcing something today as they had mentioned Oct 31 on their previous circular and it would have been remiss not to have said anything and they have been clear that a review is now top priority.

Certainly ZINC is very poor I just had a look and it is something like 0.76 which equates at about $1676 which means the project is currently borderline break even if that was sustained for 3yrs.

Therefore we probably have got plenty of scope for a business strategy review and we have monies in the bank. I think they will update us fairly soon with something concrete as they have bothered to communicate today.

Will we ever see light at the end of the tunnel !!!! DOH

YT

[keyman4] 30/10/2015 18:55

If they have around $1.5m in cash that is enough for a mining minnow to survive, you can keep going for a year or two, with a CEO flying economy and staying in inexpensive hotels looking for deals. You just need him and a cheap accountant to keep the company running. But everyone else has to go, otherwise they will go bankrupt, or in this case being stolen by Greenstone, and we all lose all of our money. To be spending money on advanced planning and people at Namib (as Greenstone is predictably trying to force the company to do) is ridiculous. It would also be mad to call in this extra tranche of expensive debt from Greenstone. No public company should ever take on debt if they don't have a visible means of paying it back. Mr Beams and his experienced board would obviously know this, it is a the most basic of business principles.

The company has to come back to us with a proper plan to a)protect the company from the complete collapse of shareholder value (absolute first priority) and strip the company right back to bare costs (as most junior miners did a year ago) b) present a credible route to growth that restores confidence in the stock c) bring successful junior mining expertise into the board, which so far has proven incompetent.

[yellowthroat] 30/10/2015 18:54

Depending on cash-flow I think we find ourselves stumbling into a somewhat better position in terms of the strategic nature of the business. My one concern would be the number of shares and weight of investment money that has had to come from our main backer, and the lack of monies from elsewhere.

This means that much of what we do now in the short to medium term seems to have to come from Greenstone, you could argue that despite getting 0.2pence for their last lot of shares instead of 0.90pence, they are in fact on the hook big time for the future development of North River as an entity.

As long as GS see this as longer term still and are not too worried, as they have a big fund and lots of other investments, then over time we should be okay. If they get bored I am sure there would be enough willing shareholders to probably take 0.70pence say ? Particularly if people are adding.

I assume the lack of selling is that all of the shareholders are now in the same boat and are all in heavy losses. This seems to be some sort of final bottom around this mark as the company shares are nominal 0.20pence.

Commodity markets are usually boom and bust, as soon as they bust the slow steps to boom start to come along. India will take up the slack of China, India is good for services but poor for infrastructure, China are the opposite.

However what was that on Steve's investment house one that said that China still haven't gotten around to galvanising too many of their cars yet ! Thatll come.

YT

[donk4] 30/10/2015 13:25

keyman has hit the nail on the head. If the company cannot get finance since the market will not fund $20million plus to development the mine and plant what is the point on spending limited funds on developing the initial works for something that cannot be funded until there is a recovery in zinc and lead prices.

And to take up the balance of the Greenstone monies at a very high coupon plus fees would under those circumstances would not be sensible.

Mothball the project pro tem; do not take up the Greenstone monies and wait. That is what almost all junior miners would and are doing under current market conditions.

The alternative could be for the ceo to find a buyer say in the USA - a buyer with big pockets who can afford to sit on Namib - and with the proceeds find something else with a mining licence.

[steve239] 30/10/2015 12:52

I’m not generally inclined to publicly quote directors but as we are being met with a wall of silence, here are a couple of relevant comments, albeit neither of them up-to-date.


In December 2014 I asked Martin French: “Based on the fact that we applied for the Mining Licence in April, and that the elections have just taken place, do you envisage any problems in acquiring the licence? Also, in the event that our licence application is rejected, does the company have a specific “Plan B”?”

His response was: “The current Minister of Mines will remain in office until March. We are in regular touch with the technical team at the Ministry appraising our application. It is a good project at a time when several mines have closed or down-sized in Namibia recently, which suffers high unemployment. There is no logical reason why the licence would not be granted. Namibia is regarded as among the best African nations in regard to permitting. A plan "B", I guess, would be to use our cash and connections to buy other assets, although this hasn't been discussed formally internally.”


In late April 2015 I asked James Beams the following:

“1) Should the licence not show up any time soon, is there a cut-off point when it is no longer economically viable for the company to treat the Namib project as the sole starting point for company development?
2) Is there a feasible alternative arrangement (essentially a Plan B) if the licence for Namib is not awarded within a certain timeframe? I asked a similar question a few months ago and was somewhat surprised that such a scenario had not even been contemplated at the time.”

He replied by phone, though this was the only time I ever managed to get a response on anything. He first of all said that the other NRRP concessions are at a much earlier stage than Namib, with long lead times (and hence unsuitable as starting projects). He then stated that they were looking elsewhere at other mine re-openings, adding that there were many abandoned sites in Namibia of which 95% would be of no interest but there might be a few opportunities.
EDIT: he also said that he "strongly believed" we would get the licence for Namib but didn't know when.


It was only when I hung up that I thought to myself that if the Namibian Ministry refuses or puts off the award of the Namib licence, why would it give the company the go-ahead to NRRP on another project? Though it would presumably be much easier if the mine in question already had a licence that just required transfer of ownership.

I think it’s fairly self-evident now that any new project should be in a different country that does not have such absurd licensing delays.

[keyman4] 30/10/2015 12:24

it is not just getting the licence that matters. There is no way the company could raise $25m finance for this project on a 3 1/2 year mine life with zinc prices so low. With China still so shaky, you have to assume zinc prices will remain low and so the project is unlikely to get financed in 2016. In other words, they should immediately put Namib on ice, just like all the other juniors with base metal development projects.

It is now very important that they conserve all the cash that they have and do not end up paying Greenstone a stupid amount of interest and fees. It would be foolish to be spending any money on Namib now at all.

The company clearly now needs to go and find itself another project.