Orosur Mining Share Discussion Threads

[wigwammer] 08/3/2015 23:38

Augustusgloop -So if the pog goes up the shares go up. That's good.If the pog goes down, don't they just idle the assets and wait for the pog to rise again?The infrastructure is paid for, they have no deadlines on the use of the assets, they have no debt to be called in.

[rhuvaal2] 08/3/2015 13:09

corruption

[richgit] 08/3/2015 13:02

The scenario for Gold is quite simple

Without the immense manipulations of Paper Gold-Gold would be several percentage
points higher at this point-so a lot of making up to do....


A)JP Morgan et al are told to back off.

B)They simply lose control of the ability to use Paper Gold to dictate to Physical.


The latter will come to the fore when the Physical Market overtakes the Comex
so to interfere in the Physical Market they would have to use Gold that is
not some fictional 100-1 leveraged Paper.

Imagine the immensity of that leverage if the fractional Gold even supporting
a ludicrous 100-1 leverage has disappeared !!!?

What is HSBC hiding ?

[rhuvaal2] 08/3/2015 12:54

All clever stuff folks - my broker suggest to make divi's via capital gains (or losses).... these past few years one could have made 100% profit. My lowest buy was @ 7.7p :)

[augustusgloop] 08/3/2015 00:29

wigwammer,

I don't think that they will ever pay a dividend - and thus they should be valued at 0.

This doesn't mean that I think that the share price will not rise if the POG rises.

If the POG goes to $1500 then a whole load of new PIs will buy in - having done minimal research.
The share price will then rise until a few years later when the newbies realise that all the extra 'profit' has gone to everyone else but them.

----------------

Basically think of OMI as a charity.

If they do well they will pay out more to their Directors and workers and in taxes.

Read back over this thread for the last 5 years.
Plenty of people thought like you do.
They all lost money.
The directors make a good investment case.
Unfortunately the facts (the history) say the opposite.

[bigtbigt] 08/3/2015 00:08

Many were fooled by OMI's BS of a few years ago. But some of us have since wised up.

Fowler should be locked up for what he did over the years! Current management is trying harder, but still blowing smoke and trying to do the impossible. Even if they found more gold now, they would need to issues new shares to raise the required development capital, so no win possible for current shareholders. Current investors can merely watch while the management pay themselves and staff with your rapidly diminishing gold, and spend anything left over on closing down the mine properly.

Others in and around the company also seem to be very dubious characters!!!

For the record... I am not long or short this stock - just curious to see exactly when and how it all fails.

If my comments along the way help others minimise their losses, that's great. If not, then I'll take no pleasure in saying "I told you so"

[wigwammer] 07/3/2015 22:33

Augustloop,Do you believe with a $1500 pog and/or an adjacent discovery that these shares will be trading anywhere near zero?Bear in mind, your opening gambit was value=0.

[augustusgloop] 07/3/2015 21:00

wigwammer,

Do you believe that there is more gold in their mines now than there was 5 years ago?

Do you think that they mined the easy to get gold or the hard to get gold?

Read what they were saying 4 / 5 years ago.
Weren't they just as optimistic then.
Didn't they think that they were going to be throwing off cash with gold at below $1,000?

I fully expect that they can keep mining for several years - but the 'easy gold' has already gone.

They have been following the same basic business model for many years -- it has not generated a penny for shareholders.
When gold was $1900 an ounce - you still saw none of it - despite the stated models being based on gold at $900.

Read back over the last 10 years - the outlook has always been great.
For most of the time PIs thought that they were on a forwards PE of under 2.

Is there really any genuine prospect of a dividend here?

[wigwammer] 07/3/2015 20:30

Augustusgloop -Your analogy doesn't quite work - the lease isn't expiring, the mine life is extending according to the last AR. Your description of omi's ops is long on rhetoric but does little more than summarise the task facing any mining op dealing with falling prices - generate enough cash to protect the balance sheet, maintain ops and resources, and grow them a little if possible. Re divs - I doubt the div discount model has seen this much support since the 1960's, but guess it's the one that can be construed to pt to a zero value so here we are.Excerpt below from the oct12 strategic review - little here to suggest divs weren't on the table, but the pog fell. Such is life. It might rise again - I have no idea - but the optionality has a positive value, not a zero value. Of course, the pog may continue to fall, in which case I imagine being debt free by end 2015 leaves them better placed than most to get through it. The Board and the management team have set the following objectives:i. To maximise our free cash flow in the three years to 31 May 2016. We will do this by targeting San Gregorio production at between 60,000 to 70,000 ounces per annum from our existing reserves at an average cash cost of US $810 per ounce. Based on gold prices of US$1,600 per ounce for the 2012/13 fiscal year and US$ 1,500 per ounce for the following years and, after corporate costs, taxation, capital and exploration expenditure, and full repayment of all debt, this has the potential to generate significant free cash flow within the business to fill the Company's stated goals as detailed below; ii. To the extent available, pay dividends to shareholders of at least one-third of our free cash flow. It would have been our intention to start with a dividend in June 2013, and thereafter pay dividends every 6 months, but in order to accelerate the capital expenditure in San Gregorio we will have to postpone this for 6 months to January 2014;

[rhuvaal2] 07/3/2015 17:00

augustus and your twin brother UGminor write a clever spiel (you'd make fine trade-unionist leaders): you put much time into this bb, but OMI has new territories to develop or to be sold off... all is okay financially what with debt shrinking etc. Also, the management is forward looking unlike some posters here this past 24 hours.

as for the pog, fact that BRIC countries have been buying much this past year = speaks for itself. HSBC has plunged the market with closures of its seven London vaults. The world is still much interested in gold. March 20 onwards may show a different pattern once the new London market becomes clear,,

[augustusgloop] 07/3/2015 12:19

wigwammer

re property, - in your analysis, the property is still yours.
For OMI's gold, it was dug up and sold.
A better example would be if you leased a property for 10 years with the intention of renting it out.
If after 8 years, you have only been at breakeven (having not made anything towards your up front costs) then its value would have clearly decreased.

OMI typically have dug up gold from pits, emptied the pit and moved on to the next one.
They make enough money from each pit to pay their workers, directors, taxes, suppliers and fund the capex of the next pit.
There's nothing left for shareholders.

Yes, you still own the pit - but it doesn't have any mineable gold left in it.

Net result - your gold is used up (sold) and everybody but you benefited.

------------

Also - look at the long term POG chart and the plans for the business - the POG over the last 8 years was higher than forecast. It has certainly not been a time of depressed POG.
The average POG in this period has been well above its long term inflation adjusted average.

Many of these mines were planned when the POG was under $800 - and were forecast to be profitable at that price.

[wigwammer] 07/3/2015 11:26

Aigustisgloop -That's a bit like saying, my second property is empty, it isn't paying rent, so it has no capital value. And anyway, the cash has been spent on maintaining and developing the business.Cash uses - 1) maintenance capex 2) resource maintenance 3) greenfield investment mostly around their current assets in Uruguay - ie if they make even a modest find, the cash returns will be significant and immediate.Given the low pog, they have also intelligently paid down debt, which is anticipated to be zero by end 2015. They have also managed investments outside Uruguay intelligently so as to outsource the cash burden to partners.There are few ungeared miners out there, with the potential to make highly cash generative finds, trading on omi's multiples. In fact, I can't think of any. But these positives tend to get forgotten when the share price tail wags the dog.

[rhuvaal2] 07/3/2015 11:11

As I said = peeps have such different agendas here = not meek and mild ones either !

[augustusgloop] 07/3/2015 11:02

I agree with underground miner - value = 0.

Simply put: in the last few years they have sold 400,000 ounces of gold - generating about $500,000,000 of revenue.

Shareholders didn't see a penny of it.

This was the easiest (cheapest gold).
They haven't used the money to grow the business.

--------------------

OMI is a charity - everybody benefits ---- except shareholders.

Anybody that thinks this is going to change is deluded.

Everyday they take some of your gold out of the ground -- but you never see it and don't get anything in return.

[rhuvaal2] 07/3/2015 10:51

If HSBC "Honkers and Shankers" are dispersing their London gold stocks its not surprising we have the current fall in pog.

There is no reason why (under current management) the company shouldn't hand out divis in the future once the product is firmer..I have said previously that BigT (now) wants OMI to disappear altogether = presumably suiting his book

[bigtbigt] 06/3/2015 23:25

rhuvaal2 - 'out of sync' with what? Currencies have relative values, which are hard to change dramatically for long (ask Soros, and the SNB), and absolute value relative to real stuff (e.g., land, property, PMs)

Derivatives are part of the broader financial market, which needs liquidity and trust. Those two things could vaporise, and TPTB would have a harder time now stemming the consequential collapse than they did in 2008, as they have already done QE and cut IRs. But they still can implement capital controls and confiscations, and they will. If things get that bad, they will also confiscate gold, and probably trigger WW3. Cash will disappear for days or weeks - so keep a good amount on hand!!

Most likely, expect several years of grinding austerity, falling real standard of living, low inflation, low growth, low IR (probably significantly negative IRs, as QE will buy all government bonds), and low PoG. They may even resort to helicopter drops of cash to the population.

Only after all that, and if we avoid revolution, will money velocity increase and fiat values decrease, to bring the CBs their reward of inflation. ,...which they will not be able to control as people lose faith in fiat.

Eventually then, PoG will increase and fiat come to and end. But for sure they'll have other ways of enslaving us by then anyway.

OMI will be long gone

[richgit] 06/3/2015 23:13

stardrops2

So have I.

It`s safe whilst our Government is safe.

London was always considered safe and out of the hands of US confiscation,as many well heeled Elite will not buy into Gold stored in the US.
I think We can trust the Royal Mint.


Questions Arise About GLD Gold Trust

By Patrick A. Heller
August 31, 2010




In an interview last week on Canada’s Business News Network (www.bnn.ca), Jason Touissant, managing director of the GLD gold exchange traded trust, admitted that he owns some physical gold and shares of gold mining companies.

One listener to the interview wondered why Touissant did not mention that he owned shares of GLD, where shares theoretically are 100 percent backed by physical gold. He went to the website of the Securities and Exchange Commission to review the most recent Form 10-K filed for GLD.


Surprise, surprise. The 10-K revealed that Touissant does not own any shares of 10-K! In fact no officers or directors of the GLD Trust or of the World Gold Council, which is the organization that sponsored GLD, own any shares of GLD. If Touissant were interested in owning physical gold, why wouldn’t he own any shares of GLD, a stock that is marketed as being as good as owning physical gold?

In the interview, Touissant went into some detail about how the gold holdings of GLD are audited. The company that audits the physical bars is Inspectorate. They check the bars twice a year to match the serial numbers and weights against the custodian’s inventory list. Once a year, the bars are actually physically handled. Touissant claimed that the physical gold in GLD is in allocated form, meaning that specific bars are tied to specific shares.

Even if all of this information is true, there is a huge hole in the GLD audit process. HSBC is the primary custodian of the gold held for GLD. The auditors can only audit the physical gold held at HSBC. Under terms of the Trust’s contracts with sub-custodians, the auditors are prohibited from auditing inventories not stored at HSBC.

Further, the GLD prospectus states that gold being transported into and out of the vault, or being held for redemption by those who are turning in a minimum of 10,000 shares for physical gold, are all considered unallocated gold. Even more, all of the bars stored at sub-custodians are considered to be unallocated gold.

That some of the gold inventories are considered to be unallocated is legally significant. Should HSBC fail, the unallocated gold bars become part of the general assets of the bank subject to claims of all unsecured creditors. The prospectus explicitly states that, in the event of an HSBC bankruptcy, unallocated bars could result in material loss to the GLD Trust.

Are these loopholes in GLD operations the reasons why Touissant owns physical gold and shares of gold mining companies, but no shares of GLD? And why no other officers or directors or GLD or the World Gold Council own any shares of GLD? If the GLD insiders prefer to own physical gold instead of GLD shares, shouldn’t you follow their example
.

[bigtbigt] 06/3/2015 23:09

WIGWAMMER - as undergroundminor said, current OMI value is zero. They cannot and will not return any money to investors, and if they make any net profit from mining and selling the little gold they can still access cheaply, then they will blow that on bonuses and new explo (as they always have). Plus they will have to find and spend several mill on cleaning up the mine upon closure.

This became apparent 2 years ago, when even Tony Shearer gave up on them. They then had a desperate need to slash costs and make some big new find, or the numbers just could not add up. They did neither (claim of reduced cot are misleading - they just started mining high grade and easy to access gold)

I now believe it is too late for them ...and PoG is set to fall further

[rhuvaal2] 06/3/2015 22:05

BigT = I agree with your last comment: however, many fiat currencies are well out of sync' plus the fact trillions of "loose-cannon" derivatives can't be helping the global system.. Any default etc. Now HSBC !

[stardrops2] 06/3/2015 20:48

richgit

i recently bought gold through the Royal Mint i take it its safe?

[richgit] 06/3/2015 20:21

Maguire nails it.

HSBC closing London Gold vaults because they see the lucrative scams ending,and just possibly a format of default.

It is certainly a message not to hold your Gold with the Fraudulent Banks

Things are hotting up,and it looks like Fireworks will be early this year
in Mid-Summer ?

[rhuvaal2] 06/3/2015 19:17

Undergroundminor = you are an intriguing person: just like my brother who delights at the thought of other peoples (potential, but not in this case) misfortune... it is a psychotic trait..... distressing for third parties to live with

edit: not my intention to be personal....