Oxus Gold Share Discussion Threads

[edgein] 04/10/2015 12:35

Ross,

We all have different opinions, what do you make regarding the quantum in cases like HRE-V and ARMS?

I'm just quoting what OXS have released, i.e. the facts, I'm not sure if I'm unduly bullish or not. I know if I thought that OXS were going to be awarded close to costs I wouldn't continue to hold/add. As I actually see them getting fairly compensated as per RS, that's my reason to hold.

Regards,
Ed.

[edgein] 04/10/2015 12:25

from Oxs 31st August 2011:

"Among other things, the arbitration asserts that the Uzbek Government treated the Company and its subsidiaries, Oxus Resources Corporation Limited and Marakand Minerals Limited (collectively the Group), unfairly and inequitably, discriminated against the Group, and failed to provide the Group with full protection and security, all in violation of the Uzbek Government's obligations toward foreign investors under the Agreement. The arbitration requests that damages be awarded in favour of the Company in an amount to be proven and quantified in the proceedings and currently estimated as no less than US$400 million."

Then in 2012:

"The losses to Oxus caused by this expropriation have been calculated by Ernst & Young according to alternative legal and quantification theories. On the basis of a discounted cash flow ("DCF") quantification, the loss in respect of the Khandiza investment ranges from a high of USD 588.7 million to a low of USD 72.1 million, and as a very last alternative, on a restitution basis (i.e. upon the restoration of the Company's Khandiza investment), USD 9 million. The Company's losses in respect of its AGF investment have been quantified by Ernst & Young together with Wardell Armstrong International on the basis of a DCF quantification as ranging as high as USD 661.8 million and not lower than USD 480.3 million."

Ross,

I've seen and read many of those cases too and not one is a direct comparison to OXS. Many are non-producers. The most similarities comes imo from the Yukos case with a huge tax bill coming to OXS out of the blue to then be dismissed in the Uzbek courts. Imprisoning staff and general interference in the running of the company. It'll be interesting to see what the arbi panel make from the merits given all the facts, and should we get an award how it compares to that of Ernst and Young. We'll apparently know very near term.

Regards,
Ed.

[nick2412] 04/10/2015 12:04

Maytrees, $400m, yes. On the topic of Calunius, they will obviously be as keen as OXS and its shareholders to ensure the Uzbeks pay any award in a timely manner.

[papillon] 04/10/2015 12:03

hairballradical. I'd be happy with a 6p share price following the arbitration verdict as I would have doubled my money in less than a year. I'm not greedy!! Of course a 10p share price would be better; a 15p share price better still and I'd be even happier still with 20p. Anything above 20p and I'd be overjoyed. Above 30p and I'd probably have a heart attack! LOL.

I'm going for a circa US$300m award based on the 25% of their (UNCITRAL) claim that RUR were awarded (unfortunately RUR's debts almost wiped out the value of what they received). That would give an award to the value of over 20p per share based on the shares in issue following CLN conversion and after deducting a worst case scenario of 30% of the award for Calunius.

I hope I'm being conservative in my expectations. I haven't given up hope of 30p plus, but then again anything over 10p would please me.

[the stigologist] 04/10/2015 12:03

What does restoration of shareholder value mean ?

For me it isn't just the highest share price the stock reach (i.e. the capital value) it should also encapsulate the potential income / dividends lost over those years as well as the opportunity cost of not being able to re-invest those dividends.

Take the recent example of PUR Pure Wafer. A small insignificant part of their business was obliterated in a fire, yet the insurance payout was far in excess of the total company value !

[maytrees] 04/10/2015 11:56

My own view is that Calunius Litigation Risk Fund LP would not have taken this case on without first undertaking huge research and doubtless advice from City solicitors. However in 2011 was not the OXS own estimate of damages at $400?

"Oxus Gold (LON:OXS) released its 2011 results report today, in which it updated investors on the ongoing US$400 million legal battle with the Uzbek government. The company said it remains 'extremely confident' that it will be awarded a fair compensation for its investments."

[nick2412] 04/10/2015 11:45

Pure speculation on my part and it may be just coincidental but there were some phrases that are usually in the OXS results statements that were absent this time.

In the year end results statement there was a reference to working capital being available if needed. That wasn't there in the recent interims. The obvious conclusion is that it won't be necessary because an award is forthcoming. Who knows, perhaps there has been some behind the scenes negotiations and the Uzbeks have been given a discount if they cough up quickly. Quite possibly wishful thinking on my part but you never know. For the sake of balance, it's also true OXS will not be looking for working capital if the decision isn't positive. So, it may just be an indication that RS knows the decision is very imminent but doesn't know the 'verdict'.

There was also no reference to Said Ashurov. I haven't checked all the interims and results but from memory he is usually referenced. If this is the first statement that has omitted his name then that might be significant. Has a deal been struck hence no reference to him this time? I sincerely hope for his sake and as an indication of a forthcoming award that this is the case. To balance this though RS said at he AGM he is no longer employed by the Company. If that was a recent development then that would explain the lack of reference although from a 'right thing to do' perspective I would still have expected lobbying, support and reference to an unjustly imprisoned former employee.


A deal, if one has been reached or is in formation, would be great for the share price if an award is announced. It would mean the share price reflecting a relatively small discount between the net figure OXS will have to distribute compared to if they have to chase payment. As others have pointed out obtaining payment is catered for within international law but it's obviously much quicker and better if the debtor is cooperative.


It's important to remember that whilst OXS has reporting obligations they do cover themselves with the line :-


"We will continue to convey decisions on the progress and status of the arbitration when and *to the extent that we can*. "

[cufes2] 04/10/2015 11:40

Lots of hand wringing going on here . . . there are only three pertinent questions IMHO . . . is it more or less likely OXS will get a positive result . . . if yes, is the award likely to be worth more than the current share price . . . if yes, will the Uzbeks have to pay up . . .

[shaktinicola] 04/10/2015 11:25

Giant Steps - Based on reading this thread would it be realistic that potentially the share price could reach 12p?

[giant steps] 04/10/2015 10:29

Reminder


The ELEVEN key points as per notice
on wrongful conduct by the regime:


* arbitrary demand for a special dividend
* revocation of tax exemption and initiation of improper state audit
* interference with silver refining
* modification of tax code
* refusal to issue or renew licenses - phase I
* interference with financing
* failure to issue licenses - phase II
* wrongful attempts to liquidate AGF
* heavy-handed audit and coercion of AGF's local employees
* arbitrary detention and wrongful conviction of senior AGF employee
* frivolous and vexatious legal proceedings

[hectic2] 04/10/2015 10:26

We must be very close to a result with the arrival of all this negativity. Do I get the feeling a number of shorters are beginning to feel a little warm.

Just remember what RS said in his outlook statement. He would have needed the permission of the Nomad to make such statements. Bodes well for 'FAIR COMPENSATION' in the VERY NEAR FUTURE.

The directors remain confident that the Arbitral Tribunal will, in the very near future, rule in the Group's favour and that fair compensation will be awarded for both the AGF and Khandiza mining assets, which were blatantly misappropriated by the Republic of Uzbekistan. In this respect, the Board will continue to take whatever steps it deems necessary to ensure the return of value to the Company's long-suffering stakeholders.

[edgein] 04/10/2015 10:26

Interesting that some think that we'll receive a maximum of only 30-40% of the award based on previous averages from non-uncitral cases mainly (that's where most of the case histories on here have been posted from, ICSID). There is in no way that Yukos claimed $150bn! Also worth noting that their award was 150% of their market value of around $33bn. A lot of similarities between Yukos and Oxus too with fictitious tax bills and imprisonment of its staff all to undermine the business. Imo had Oxs stepped out of line the authorities over there wouldn't have had to go to such lengths to drive them to the wall, they could have revoked the licence instead. That leads RS to his comments about blatant misappropriation of assets.



We could sit and debate all day about the quantum too, imo OXS see fair value in the releases from the company in 2011, at this point RS is still confident that we'll see fair value in the very near term. I doubt very much that fair value has significantly changed since their previous guidance. In fact I would imagine that RS will be more resolute than ever to see justice for long suffering shareholders given that its over 4 years since the arbitration began. Unfortunately there aren't enough case examples of Uncitral to judge merits and quantum for a world class producing gold mine, 100,000 Oz in 2010, 300,000 Oz planned for 2011 and goodness knows how many ounces for 2015 from one of the lowest cost mines in the world.

Noone here knows more than the outlook given by RS just a couple of days ago. All this guessing could indeed stop in the very near term. Until then I'm gonna sit tight happy with the facts regarding OXS's case (see GS list of steps taken by UZ on the run up to arbitration, 11 key points). If you want to compare cases vs OXS I suggest doing so with the 2010 presentation open too as you can then compare the quality of assets and the future that was ripped from OXS holders when comparing it to those that have lost non-producing licences, had unpaid debts etc etc. Festario and P2P seem much more content now too after reading RS recent outlook compared to their posts from the not too distant past.

Regards,
Ed.

[hairballradical] 04/10/2015 09:30

Looking at the markets valuation of around 3.8p suggests that the gross value of the award is priced in around the $100M level on a relatively conservative view.

With my own breakeven sitting at around $75M level, I'd be in profit but not ecstatic. Ecstatic sits at $350M and above.

Am expecting around $225M which would nett out around the 10p mark.

There are plenty of assumptions in this incl Calunius fees, exchange rate and a tradeability discount.

Does anyone know/remember why Robert Amsterdam didn't follow through with the original claim?

[loverat] 04/10/2015 09:14

So, plane spotters do have their uses.

[giant steps] 04/10/2015 09:07

Exactly apfindley.

There are plenty of reminders on this thread about the search for assets,
starting with GK, although one imagines their aircraft fleet would be an
easier approach.

[apfindley] 04/10/2015 09:00

Goodbloke The award will be paid.The payment can be enforced in any signatory country of the New York Convention. Any assets or cash/deposits held by Uzbekistan in any of those countries can be seized as payment.As a last resort, it can also be offset against sovereign debt.

[goodbloke1] 04/10/2015 07:52

Thanks for replies.Gives me confidence Oxs will receive the award should we win.

[99jeremiah] 04/10/2015 06:27

Annoying Compulsive Troll - Filtered.

[99jeremiah] 04/10/2015 06:20

Uzbeks have around $20Bn in foreign exchange, so are good for the money if we win...

[pug151] 04/10/2015 05:25

Do you think the Uzbecks would have spent milllions on case and white if they could walk away from UNCITRAL awards?

[pug151] 04/10/2015 05:22

New York Convention / courts/ assets frozen / seized etc but it won't be us we will have sold this on to the companies who do this.