Oxus Gold Share Discussion Threads

[nick2412] 15/12/2015 22:54

Point being, PF, is that at the time they were still trying to run a business and develop cordial relationships with the Uzbeks. Calling them a bunch of crooks at this time wouldn't have assisted that objective. The important thing is that OXS would not be able to cite a specific reason for RBS withdrawing funding in an RNS if RBS did not concur with it.

[pennyfalls] 15/12/2015 22:46

You do that Nick...

But if Oxus have used that phrase retrospectively, it doesn't quite hold as much water as the contemporaneous reports does it, in which they blamed the financial climate?

[pennyfalls] 15/12/2015 22:41

The question here is: How much was down to the Uzbeks ( and how is that quantified) and how much loss of shareholder value was down to the overall Global Financial decline - and did that lead to Oxus not fulfilling contractual obligations with the Uzbeks?

If, as a result of the global financial collapse, Oxus were not able to obtain funding, and , hence, contractual obligations with the Uzbeks, it's not down to the Arbitrators to award compensation for factors outside their remit, however devastatingly unfortunate they were - ie.. The External financial climate.

This is one of the reasons I think this is so very complicated.

[nick2412] 15/12/2015 22:38

PF, not according to the RNS I have quoted from in a post in November. I would have to go through all the RNS's to find the full specific RNS. Another time pf if you don't mind ... just recovering from Bristol City getting stuffed by Derby County ...

It's fine to put the alternative view PF as emphatically as you do but your argument isn't helped when an official RNS directly contradicts your statement that "RBS did not pull out because of the Uzbeks." Firstly, you don't know that and, secondly and more importantly, an official RNS says otherwise.

[pennyfalls] 15/12/2015 22:36

What date is the RNS that states "capricious and unpredictable tax regime" ?

[pennyfalls] 15/12/2015 22:31

From RNS 23 June 2008 -
"The Royal Bank of Scotland plc (RBS) has been appointed as lead arranger
for a limited recourse senior debt facility. Oxus anticipates 100% debt funding
for the Project, thereby eliminating shareholder dilution: RBS has received the
BFS and isreviewing it as part of its due diligence ahead of loan documentation

Speaking today, Chief Executive Officer Mr Richard Wilkins said:
'In light of these ROBUST FINANCIAL indicators, Amantaytau Goldfields is
proceeding with the Project implementation."

This was a year AFTER the 2007 Tax Audit (Annual) report which said Oxus had been hit in 2006
So Wilkins says things are ROBUST in June 2008.


Richard Shead, in the 2008 annual report, then states:

"During the latter part of 2008 the Oxus Group had to adapt to the very difficult economic and financial environment. Few people would have predicted the economic meltdown in the banking and financial markets last seen in the Great Depression of the 1930s.

"This in turn has led to substantial erosion in shareholders’ value across all sectors and Oxus, like many of its peers, has seen its own market capitalisation shrink very substantially. AS A CONSEQUENCE of the current economic climate the capital required to develop the Group’s 50% owned underground sulphide mine at Amantaytau Goldfields (AGF) in Uzbekistan has been delayed."

RBS, at the time was due to the financial climate - and since they weer at the centre of the whirlwind, this is no surprise. But RBS did not pull out because of the Uzbeks

[nick2412] 15/12/2015 22:24

Pf, OXS had a $150m loan facility from RBS. This was withdrawn because, according to the OXS RNS, of the "capricious and unpredictable" Uzbek tax regime.

[pennyfalls] 15/12/2015 22:15

Nick...
Are you talking about a contemporaneous Oxus RNS at the time of the crisis?

I again read through the summaries of the Annual Reports the other day and seem to remember that this was put down to global financial conditions more than Uzbeky tax attacks..But I'll have a look again.

Wulber, how many Oxus Annual Reports have you gone through?

[nick2412] 15/12/2015 21:54

Penny, I agree with pug, it's good to see the alternative views. On RBS the official Oxus RNS didn't mention the banking crisis as a reason for the financing falling through. From memory, it specifically mentioned the reason for RBS pulling out was the unpredictable and punitive Uzbek tax regine. So that would be a very supportive factor in terms of highlighting the misappropriation / expropriation.

[pennyfalls] 15/12/2015 21:31

Nick, II agree with the point about the banking crash and talked about it somewhere else.
It's unfortunate to say the least that the banking crash directly led to RBS pulling out of a financing deal with Oxus and other investment companies giving them short shrift.

This confuses matters greatly in 2008, as to waht was directly the result of creeping expropriation, and what was general financial armageddon..
another facet of the case which confuses the issue, and must be picked apart by the arbitrators.

[pennyfalls] 15/12/2015 21:26

Ps Pug...
I don't think it's wise filtering "negative" posters - even if some post continous daily cr*p, there could be something you'll miss that might be a gem and helpful.

Also, I can see that some people have filtered me because in the next post to mine there'll be a similar theme facsimilied, so it tends to lead to themes getting confused and repeated.

[pennyfalls] 15/12/2015 21:19

Fair enough Pug...cheers.
I hope you're right, and good luck.

You may see my posts as negative, but comparing with Yukos is pure fantasy.

Think about it. Of all the 100s of arbitration cases that have ever taken place, some people choose to take THE very top one as an example.

Not only was the award hugely out of sync with most other cases, it also had geo-politics at work IMO

And Wulber cites Stern and Lalonde's last case..Why not take all the other cases involving Stern or Lalonde? These cases have no direct bearing on our case - apart from Stern is bound to exert a negative influence (magnitude unknown)

It's pure folly and totally illogical to pull random cases out of thin air and compare them to ours. Superficially some will have similarities, but what lies beneath the surface is an unknown (and this could be a POSITIVE as well as a NEGATIVE)

[nick2412] 15/12/2015 20:56

papillon, yes, the Chinese funding is a good starting point but remember that valuation didn't take into account Khandiza. OXS reluctantly took that expropriation on the chin in the hope they could retain the more advanced AGF project.

Some of the arbitration commentary of late has referenced using comparitive company valuations to an increasing extent. If this applies to OXS then the comparitive company valuations won't be current valuations but they will be based on much more bouyant P/E ratios during the time of expropriation / misappropriation. Someone else made this point earlier and it's a good one.

The other point, it was just after the banking crash and I'd expect the arbitration would take that into account when looking at the funding valuation. The other factor is that OXS as an investment was made unattractive by things that were already amounting to expropriation - something again that should be taken into account. That might be modified though as Uzbekistan is not exatly a traditionally safe investment climate.

[westmoreland lad] 15/12/2015 20:55

Hey up Blueblood, good bet here imo while PoO on the deck and other commodities
all suffering down trend.

gl

[pug151] 15/12/2015 20:42

Penny - you are one of the few negative voices I don't filter - it seems to me you are arguing for a probable award and a very modest quantum. You support yr viewpoint and provide balance I think you underestimate the likely effect of news on our still tiny market cap and undervalue the quality of our CEOS and forget perhaps just how dreadful the Uzbecks are but you may be right. We shall find out soon enough.

[pennyfalls] 15/12/2015 20:26

Wulber - are you a nutter?

Why don't you take figures of the vast majority of cases and not just two you pluck out of thin air...one of which was a unique one-off case and the highest award ever!

Hardly one to choose when you're making a rounded analysis.

[blueblood] 15/12/2015 19:33

Who had the other 50%?

[wulber] 15/12/2015 19:29

So a range of 33% (Quiborax) to 50% (Yukos), but then is it on low end dcf of $552 mn or top end dcf of $1250 mn.

[wulber] 15/12/2015 19:05

Or, if you take the last mining award where Lalonde and Stern were involved this year with Quiborax which is a similar case to OXS, 33% of their claim awarded:"the Claimants request compensatory damages in an amount of US$ 146,848,827 as of 30 June 2013, plus compound interest"Received: $48,619,578

[papillon] 15/12/2015 19:00

I definitely don't think OXS will get the full US$1250m (according to the DCF calculation) as some posters on here believe. The YUKOS US$50bn award has been mentioned many times on this bb by optimists, but YUKOS claimed US$114bn! They got less than 50% of what they claimed.

I believe the US$185m Chinese deal (effectively for 72% of OXS) is a good yardstick for any OXS award. That would mean an excellent return on the current share price for OXS newbies like me.

[papillon] 15/12/2015 18:47

But, apfindley, existing shareholders would have been massively DILUTED.

One thing that the super optimists like you, wulber & heaven above are conveniently forgetting when working out OXS's profits on 300K oz pa is that if the Uzbeks had not strong armed OXS out of AGF and if the Chinese deal had gone through as OXS wanted OXS's existing shareholders would have "lost" 72% of the company through dilution and effectively those existing shareholders would have effectively ended up with just 14% of AGF profits.

As Soul Limbo has stated CEY issued shares to fund their CAPEX, not debt. Very wise and the Chinese deal was a very sensible option for OXS.

[pennyfalls] 15/12/2015 18:29

Heaven Above and Apfindley (A phrase you often see in the same sentence as Apfindley!)

The Chinese Finance agreement was a partial debt agreement!

And Heaven Above; since we're using your rather spurious comparison with POG, let's go there...

POG produced over 600,00Ooz Gold in 2014..their Market Cap is £216Million ($300Mill)

Oxus were to produce 300,000oz...half...and only owned HALF of the operation....ie

150,000oz to Oxus..

If you compare with POG, this actually compares quite sweetly actually - but not the way you want it to -
It looks like the Chinese funding agreement proposal for Oxus was about right for our arbitration valuation.


The comparisons put Oxus at about £100Million (and that's a very good slant)


If you really feel like you're going to be offended with anything less than 15p, get prepared for an offensive year ahead. What you want and reality are not always good bedfellows.

Also, those looking at ARMS huge leap from 4p to 25p on the result may have neglected to see that ARMS were trading about £1.80 just prior to Expropriation.
Oxus at their very peak, years before were 80p, and with dilution that's 40p in today's money.

If you wanna compare with ARMS , (and I'm not saying it's a valid comparison, but if you want to do it, as many are...we'd be heading for less than 10p.

[wulber] 15/12/2015 18:23

Well it would be a nice birthday present if news came out tomorrow.

[dave444] 15/12/2015 16:57

My gut instinct tells me you all are sticking a finger in the wind!!!!!!!
I prefer to stick to EXPERT opinion!