Oxus Gold Share Discussion Threads

[fairlight] 06/10/2015 21:21

My personal take on "in the very near future" is well before the end of the year probably before the end of the month - I doubt RS was given a date but I am pretty sure he has been told roughly when OXS will be informed of the decision (as was the case with Rurelec). He may have been told of this a few weeks ago but could only hint at it in the recent half yearly report due to the confidentiality agreement. I don't see why some think it is going to be longer due to the Darwin agreement. As many have alluded to the company will need financing up until the decision and beyond whilst the cash is extracted from the Uzbek government. We don't want a reduced settlement because there are no funds to run the company whilst we wait and have to give a discount for early settlement. Mr Shead and his advisers seem pretty shrewd and careful to me, which is why I believe him when he made the above statement (there was absolutely no need to use "very"). On this basis I believe we will get the settlement very soon, and hopefully it will be in Oxus' favour.

[wulber] 06/10/2015 21:06

So from affindley excellent post, the top end $1250 mn award is actually not in cloud cuckoo land!

[papillon] 06/10/2015 20:32

What the OXS share price does between now and the announcement of the arbitration verdict is of no consequence to me. I've placed my bet and I don't intend to buy or sell any OXS shares until that verdict is announced. Be that in what remains of 2015, or in 2016.

Only traders are interested in the OXS share price gyrations pre verdict, or those with T trades outstanding, or those who intend to de-risk.

The performance of the RUR & ARMS sp's immediately prior to their arbitration verdicts being announced shows that their verdicts didn't leak. I'm assuming the same will be the case for OXS.

I'll be very disappointed if the verdict isn't announced in 2015, but if it isn't I'll just have to lump it.

PS. Good post Loverat (25077)

[loverat] 06/10/2015 20:03

apfindley

Good posts above. A nice explanation for the reasons justifying the claimed amount and method.

I also recall from the link to this case that the defendants were arguing that a 'sunk costs' method should apply but this was not accepted.



p 111 onwards worth reading.. Valuation methods

Also this argument seems to have been accepted:

335 c .In addition, the sunk costs method is inappropriate because "it pretends to put the Claimants in the position they would have been in if the investment had never occurred. Yet the investment did take place, it did produce profits, and it would have continued on that path had it not been for Bolivia wrongful acts."

[wallyjumblat] 06/10/2015 19:58

And they are all very old in their 70s and Marc Lalonde is in his 80s, so FFS hurry up before they turn their toes up.

[goodbloke1] 06/10/2015 19:55

Sounds like a good neural mix too me

[wallyjumblat] 06/10/2015 19:48

Pierre Tercier is Swiss
Marc Lalonde is Canadian
Brigitte Stern is German

[apfindley] 06/10/2015 19:29

one appointed by each party, plus a third (the chair) agreed by both.

Chair: Pierre Tercier
Claimant(oxus): Marc Lalonde
Respondent(uzbek): Brigitte Stern

all sound a bit french to me ;-)
(and all getting quite old)

[goodbloke1] 06/10/2015 19:20

Thanks again Apfindly:Very knowledgeable posting.Who makes up the arbitration panel.Are they drawn from neutral countries ?Not eastern block I hope!

[wallyjumblat] 06/10/2015 19:18

DAVIUS has it spot on IMHO

"I did the same as many others, reacted to the share price rather than the actual RNS. I sold 50K shares at 3.65p (I tried to dump a load more but without success, fortunately) before considering the wording with care, and bought back 75K shares at 3.37p.

It's clear that even if we get a positive outcome from UNCITRAL this afternoon, it will be some time before we see any cash, hence the need for funding.

The terms look fine, they are small sums, and the ability to pay back early will negate the risk of significant dilution.

That Darwin are prepared to offer them up to £1.2m suggests they are on board and confident.

As to the timing, less than a week ago the debate was why they left it to the last minute to release the results, the consensus being that perhaps they were holding out for the arbitration result. One might speculate, that if Oxus were given notice say, five weeks ago, that the outcome would be "within six weeks", it would be sensible to hold on as long as possible to release their results, and likewise the funding.

So why finance now? Well, they haven't had the arbitration result, though it's due "in the very near future" it would be foolhardy to continue to wait until the money runs out. It would have been ideal to announce current funding after receiving notification of a win but that was not to be.

I also think it's highly relevant that they mention interest payable in the event of a "change of control", the implication I take from this is that Oxus may already be in discussions with specialists re a sale of the company once quantum is decided...

Todays weakness I see as an opportunity, I read the RNS as a vote of confidence in the process, not an acknowledgment of a delay to the arbitration outcome.

No advice intended, etc."

[thejaba] 06/10/2015 19:16

pug

do you have the post number?

[apfindley] 06/10/2015 19:15

goodbloke.

the amount claimed in the arbitration reflects the npv of our assets. remember we hadnt just spent 80mill and expect that back.
we were a PRODUCER of 100,000 ounces per annum, and were amongst the lower quartile of producers based on cost per ounce, something like $400 an ounce in costs. and were planning to ramp upto 300,000 ounces per annum.
we also had chinese finance of $170mill+ at a very advanced state of negotiation, to expand our production.

in these arbitration cases, we are protected by international trade agreement treaties, in this case the UK-Uzbek bilateral investment treaty signed by john major and Karimov. the uzbeks have a duty to not discriminate, and to provide a fair and level playing field for all companies.
the uzbeks broke this trade agreement in many ways and stole a very valuable asset of 3.5Moz gold, plus silver, with an estimated upside of upto 24Moz gold at agf2.

they cant simply pay back exploration costs and say there you go. they must also pay for the expropriated asset on a discounted cashflow basis, which reflects the value of the asset to us financially.
WE took the expensive exploration risks of proving up this resource and building a mine/smelter etc.

what would you think if an oil explorer spend hundreds of millions drilling deep sea wells to find oil and get a producer, only to have a government come along and say thank you, we'll have that back now. every country would be stealing back proven resources without taking any risk themselves.

as things are, the Uzbeks owe us a significant sum for a producing gold mine, and the value sought was derived by an internationally respected 'accountant' Ernst and Young, based on an assessment of those assets by an internationally respected mining 'consultant' Wardell Armstrong.

so long as no funny business, ie backhanders etc has taken place, then there is no reason that the full ammount shouldnt be awarded if the arbitration panel can derive that the assets "WERE" worth the ammount oxs are seeking.
notice i emphasise the word 'were' above, as the ammount we are due should be based on the value ON THE DATE of expropriation, regardless of what the current gold price is.

[pug151] 06/10/2015 19:04

If anybody missed it i would suggest reading a post by Davius earlier today.

[goodbloke1] 06/10/2015 19:04

Let's hope they agree to award us in the range given in the header!

[papillon] 06/10/2015 19:02

There are an awful lot of nutters around, TW.

[the stigologist] 06/10/2015 19:01

The stock has gapped up between 4p and 4.6p and then down from 4.6p to 3.3p in recent days so huge volatility intraday is possible. And that volatility has come about despite a massive RAB overhang and a new small Darwin tap. Once those two overhangs clear I feel confident we will break above 4.625p. It makes no sense for a 70:30 binary bet on 0p to 100p+ valuation range to be valued at only 4p when the Expected Return maths suggests a valuation of 35-70p is more appropriate.

[trade wise] 06/10/2015 18:59

that end of world new story. Some were disappointed the world didnt end, the las time round. What sort of nuts feel down beat when the world didnt implode and killed all of humanity ?

[papillon] 06/10/2015 18:58

You only had to look at the header of this thread, goodbloke1, for the answer to your question. It's based on a DCF (Discounted Cash Flow analysis).

"* Oxus Gold vs Republic of Uzbekistan for alleged expropriation of assets
* Legal funding Calunius on No Win No Fee basis
* Arbitration started 31 August 2011
* May 2014 arbitration hearing completed (see RNS 19 May 2014)
* Claim Range $489m to $1250m (Nov 2012)


* 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 661.8m
and not lower than USD 480.3m.

* 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 US$ 72.1m, and as a very last alternative, on a
restitution basis (i.e. upon the restoration of the Company's Khandiza investment), US$ 9m."

[papillon] 06/10/2015 18:54

If the lse post today is genuine (detailing a phone conversation with RS) then RS is basing his "very near future" prediction last Wednesday on advice from OXS's lawyers. 18 months ago OXS's lawyers predicted the arbitration verdict would be announced before the end of 2014.

Let's hope that the lawyers are correct this time.

Regarding the OXS share price what will it do tomorrow (unless it is the end of the world tomorrow! LOL)? No one can be certain, but it wouldn't surprise me if it closes lower tomorrow than today (in the absence of news). bwtfdik?

[goodbloke1] 06/10/2015 18:53

Thanks Apfindly.Just wondered if the award will be linked to what we spent on the assets?Where does the 400 to 1200 mill dollars come from.My concern is that we maybe valued near the money spent plus interest plus say a penalty

[festario] 06/10/2015 18:48

That might be a relief, in my case.