Vatukoula Gold Share Discussion Threads

[chinese investor] 04/4/2012 09:13

'Fiji's permanent secretary of information, Sharon Smith Johns, told Radio New Zealand International last night "the wind and the rain have been nowhere near what we expected".'

[elban] 04/4/2012 01:36

charley,

if you go to an A & E ward - probably much less than 30% of attendees will be admitted to stay overnight.

That doesn't mean that there is nothing wrong with the other 70%.

The seriousness of the injuries is not the issue for investors anyway - what matters is the fact that there was enough water flowing down a shaft to cause any injuries.

I doubt that we will have any true information on how it affected production until we see the numbers in the June update. [I certainly wont be attributing much credibility to any excuses if there is a shortfall}.

[charleyduck] 04/4/2012 01:01

kemo4....Thanks for taking the trouble to post ..... It helps.

I am sure a number of us would be interested to hear more of your financial model.

At 54.5p VGM seems like a buying opportunity to me - maybe tomorrow. It would be nice to think that people on this board could make some money from here.

ELBAN - you may have missed my earlier post - 11 miners were taken TO the hospital but only THREE were admitted - as you know, journalist do like to big up the stories! O/T Good to see Galantas gaining nicely - I bt some in Oct/Nov 2010 at 3.5p after you mentioned them here - Thanks.

[janyboy9] 03/4/2012 19:55

but rainfall is just so damn exiting who care about other disasters


Movie Name: Ripping Yarns (1976)
Quote:
Eric Olthwaite: It were hard to accept I were boring. Especially with
my interest in rain fall.




The Testing of Eric Olthwaite (the most boring man in the world), Ripping Yarns

Eric: 'You know Howard? Howard Molson? He's got a new shovel. It's a lovely shovel. It's got a big brass handle, copper fittings and a nickel scoop. And do you know what he's going to do? He's gonna put it next to the other one'.



.

[fairman] 03/4/2012 19:45

kemo4:
Your model sounds very sophisticated. Do you have a discount adjustment factor for tsunamis? for earthquakes? volcanic activity? land slides? political unrest? strikes? flu? drought? civil war? nationalisation?, or is it just for rainfall?

[janyboy9] 03/4/2012 19:40

kemo4 - 3 Apr'12 - 18:40 - 10826 of 10828

janyboy:

The reason I have made the estimate is that in my DCF model I have a discount for adverse weather, therefore I monitor the rainfall in Nandi (Fiji Met Service can give you the data).


YOU NEED A WOMAN

[elban] 03/4/2012 19:26

kemo4,

the last time the mine flooded and Paxton said only two days were lost: the quarterly tonnes of mined ore fell fron 67,000 in the previous quarter to 47,000 in the quarter of the flood (including 1 month of unaffected production).

It then took another 5 quarters to achieve this amount of mined ore again.
Given that the 67,000 was right at the begining of the ramp up production phase - does this strike you as normal?

Clearly something happenned that took a load of new investment and 15 months to put right. Unless it was all a remarkable coincidence.

Does your mining engineer experience lead you to believe that many tens of thousands of tons of water falling down a mine shaft will cause minimal damage? [Last time]

If the water was enough to put 11 men in hospital, is the shaft itself likely to be unscathed? [This time.]

[kemo4] 03/4/2012 18:40

janyboy:

The reason I have made the estimate is that in my DCF model I have a discount for adverse weather, therefore I monitor the rainfall in Nandi (Fiji Met Service can give you the data).

In January Fiji had on cyclone and very heavy rains with widespread flooding etc. In the Q2 announcment they are almost bang on target in terms of 6 monthly production. SO there was no material effect on production as a result of similar rain fall. For referece VGM in the Q2 announcement says the following:

"In mid-January 2012 the north and western areas of Fiji, in which Vatukoula is situated, experienced heavy rainfall. The mine area received over 860mm of rain over a three day spell with on-going rainfall for a period of almost three weeks preventing the mining in a limited number of underground areas. Currently four development headings remain affected, however de-watering is progressing well and these headings should be accessed in the near future."

I think we have to take note at the end of para that Paxton mentions some development headings have been effected - so keep an eye out in Q3 to see if he mentions them.

Another reason I think the down time will be limited is that I am a mining engineer with some experiece in underground mines. The process will involve repair / spare mancage/ safety check on shaft and cables then back to full operations.

[shanksaj] 03/4/2012 16:54

I don't suppose even Mr Paxton knows yet... perhaps he could ask kemo.

I believe the rain is still falling and will continue til Wednesday so not much point in announcing much until they know what to report.

News coming out in dribs and drabs RNSes is also going to knock an share price pretty hard cos no one can then tell when the last bit of news is out.

[elban] 03/4/2012 16:51

kemo

true they never quoted that the philips shaft was unuseble at the time.

Prior to the flood they said about all the investment that was needed to bring production up - knackered equipment etc. No mention of any problems with the shaft.

After the flood, they still did not mention the philips shaft - until mid 2010, when they instructed its repair. They then had to begin development downthere.

Given that these stopes were supposedly the highest grade - wouldn't you think that mentioning their unavalability would have been a basic requirement.

Also, do you really believe that a flooded mine did no damage to the equipment down there. Do you really believe that millions of tonnes of water pouring down a mine shaft would do no damage?

The mine flooded - but the mine is split into parts - so not all flooded.
Men that would otherwise have worked on the high grade stopes could be transferred to the low grade stopes in the non-flooded areas. So, gold production may only have stopped for a couple of days - but the production profile of the following years was hit. [Not that they ever fessed up to it.]

Simple basic Physics - if enough water to flood a mine falls hundreds of meters down a shaft - damage will be done.

[janyboy9] 03/4/2012 16:39

kemo4 - 3 Apr'12 - 16:23 - 10819 of 10821

For clarity I expect VGM will loose circa two days of production if it goes above 5% of total forecast production then the should announce


.......................................


LOL ----YOU IDIOT

SO WITHOUT GOING TO THE MINE OR KNOWING HOW BAD THE ROCK FALLS AND FLOODING ON LEVEL 13 AND FLOODS GUSHING DOWN THE LIFT SHAFT -- AND THE MINERS HOUSES UNDERWATER........ YOU ARE ABLE TO SAY ONLY 2 DAYS PRODUCTION LOST


CRAZY JUST PLAIN CRAZY

YOU DONT KNOW SO SHUT UP


.

[kemo4] 03/4/2012 16:36

ELBAN:

Firstly: VGM never qouted that the Philip Shaft was unusable so I am not sure where you get that from. The qoute in relation to the Rains were as follows:

26/03/2010
"Underground Operations:
In early to mid January 2009 the Islands of Fiji, particularly in the Western Provinces (which includes the mine area), were hit by substantial and unseasonal rainfall. Water ingress to the mine was substantial, and this combined with our limited availability of power, and a limited pumping capacity created some concern on flooding problems at the mine. However our mine staff and management worked overtime to ensure that the mine was safe and that production was not materially affected, in total the equivalent of two days production was lost."

29/05/2010
In January 2009, in particular from January the 9th to the 15th the Northern part of Fiji, which includes the mine region, suffered excessive rains with over 1 meter of rain fall recorded over that 7 day period. January's rainfall was the highest since records began in 1936. The region suffered from extensive flooding and numerous bridges in the region were destroyed. Although the region surrounding the mine is regularly subjected to high rainfall in the winter months (November to April) and mine management had taken precautions against seasonal downpours the excessive rains overwhelmed these measures. The mine took immediate action including diverting all power to pumping and diverting underground water flows to allow the continual operation of the underground pumping stations. The mine staff performed exceptionally well under extremely difficult conditions and my congratulations to all those involved who were working long into the night to maintain the mine. It is a great credit to the mine staff that only one day's operation was lost.



The longer term effect of the water ingress was that the dewatering that we had achieved since the start of operations had been undone. Dewatering once again began in haste and the water level in some parts of the mine is now currently below the level prior to the water ingress in January"

Unqoute.

The second statement syas to me that long term production will be effected - which did take time however if you have any Idea of mine planning it takes a long time to sequence stopes, raises, gullies and access drives. Typically a yearly mining budget takes 4 months! I think investor should understand the complexity of underground mining!

[kemo4] 03/4/2012 16:25

In addition the driver for the shareprice move down wards was Wally Berakouff selling all his 9% stake in the market after he had just sold it to VGM. Thankfully he is gone!

[kemo4] 03/4/2012 16:23

Janyboy - using only a portion of the announcement is always a easy way to win the argument the full qoute was

"Underground Operations:
In early to mid January 2009 the Islands of Fiji, particularly in the Western Provinces (which includes the mine area), were hit by substantial and unseasonal rainfall. Water ingress to the mine was substantial, and this combined with our limited availability of power, and a limited pumping capacity created some concern on flooding problems at the mine. However our mine staff and management worked overtime to ensure that the mine was safe and that production was not materially affected, in total the equivalent of two days production was lost."

Hence two days not material!

For clarity I expect VGM will loose circa two days of production if it goes above 5% of total forecast production then the should announce

[andy] 03/4/2012 16:21

Kemo4,

The reports of the flooding look ominous, I would suggest a little more than 2 days downtime look likely, IMO.

They were slow in informing last time.....

[elban] 03/4/2012 16:15

kemo4

The main high grade areas were accessed by the Phillips shaft.

After the flood they couldn't use the Phillips shaft.
This was not fixed until Oct 2010 - there was never any mention of such a problem before the flood.

In the end - Gunner Paxton is very unreliable with the information released to shareholders - regardless of any disclosure rules.

Bearin mind, this guy withheld the update that let PIs new that an accelerted development program had started. All the insiders pilled out prior to the announcement. The 20 day delay of that RNS was just disgusting.

[janyboy9] 03/4/2012 15:37

kemo4 - 3 Apr'12 - 15:33 - 10815 of 10815

For all you speculators - If there is a material effect on production then the Company is required to announce otherwise the LSE activley discourages such announcements.




KEMO WE WENT THROUGH THIS YEARS AGO --- I WILL SAY IT AGAIN ----- EVERY BODY ON THIS THREAD CALLED AND EMAILED VGM WHEN THE FIJI TIMES SAID THERE WAS A FLOOD --- WE WERE ALL FOBBED OFF WITH LIES

THEN 2 MONTHS LATER WITH THE COMPANY UPDATE WAS RELEASED THE TRUTH CAME OUT

---------------------------------------------------------------------------
THE PROOF -- THEY NEVER THOUGHT THIS WAS WORTH AN RNS TILL 2 MONTHS LATER




RNS Number : 5008P
Vatukoula Gold Mines PLC
26 March 2009


In early to mid January 2009 the Islands of Fiji, particularly in the Western
Provinces (which includes the mine area), were hit by substantial and unseasonal
rainfall. Water ingress to the mine was substantial, and this combined with our
limited availability of power, and a limited pumping capacity created some
concern on flooding problems at the mine.




HOW WE ALL LAUGHED WHEN WE REALISED WE COULD HAVE SOLD OUT IN JAN BUT KEPT HOLDING BECAUSE BOARD SAID ALL WAS OK ---- UNTILL MARCH

BUT HEY THE BIG BOYS GOT OUT SO THATS A GOOD THING





HAPPY TIMES !!!!!!!!!!!!!!!!!!!!!

WHO KNOWS WHAT TREATS THE NEXT COMPANY UPDATE WILL BRING ?




.




.

[kemo4] 03/4/2012 15:33

For all you speculators - If there is a material effect on production then the Company is required to announce otherwise the LSE activley discourages such announcements.

However i do believe that the mine will have a couple of days of reduced production (becasue material falling down the shaft, would result in safety check to the shaft and the man-riding cage). two days is roughly 360 ounces not material.. I would say anything over 5% becomes material which is say two week production.

The key here is that to invest in one asset companies you have to fundementally understand the financial model - which some poster here are not quite grasping.

I will be posting over the next 2 days my model and the fundementals that drive it. Based on that you will then see my reasoning for the valution I have and why I agree with some of the post in realtion the managment overestimating in terms of production and why I think the NPV value could support a much higher Share Price

[kaos89] 03/4/2012 07:26

Same here, things need to settle down, prove that current plans are on target, including funding, then i may get back in. Still very much on my watch list but like others just a bit nervous at the moment