Vatukoula Gold Share Discussion Threads

[bulldog30] 15/5/2014 09:10

Apparently Winnifroth's great acumen lies in making pizzas down the East End of London but if a silly loss making gold company wants some pumping then he will do that out of the goodness of his heart !

[chinese investor] 14/5/2014 16:29

Gold Looking Better !

[chinese investor] 14/5/2014 12:03

Professor Smelgy,
So Your MTV Losses Were Even Bigger Than I Estimated !

Are You Going To Invest In "VGM" ?

[professor pettigrew] 14/5/2014 11:28

OH, AND BY THE WAY CHINESE INVESTOR - YOUR SILLY LITTLE GAMES ARE CURRENTLY BEING MONITORED BY MYSELF AND ADVFN.

THEY KNOW WHAT YOU ARE UP TO, AND SO DO I. DON'T THINK YOU AREN'T BEING WATCHED.

[atlantic57] 13/5/2014 09:02

Andy i was in all of those stocks and have lost a fortune on all of them.

Andy i agree these were all dire tips but as an investor i should have jumped ship long before the ship sank.

With all these Companies it was obvious for a long time that they were not delivering .

[chinese investor] 12/5/2014 16:09

We are around $1,300 oz and so we should be in a healthy position !

Question. And what gold price do you need to be cash neutral or better?
Paxo. We expect this to be – on a sustainable basis approximately US$1,100 per ounce.

[atlantic57] 10/5/2014 15:17

Probably a share consolidation on the way how about 50:1sounds familiar

[fangorn2] 08/5/2014 19:50

Wow, is it still trading. I thought this would have gone bust years ago. Superb job by Paxton driving this into the ground. One of the most incompetent chiefs ever.

[phillis] 08/5/2014 19:34

3 flucking pence!

[atlantic57] 08/5/2014 14:48

124sd

I have been a complete idiot and lost 98% of my investment and that was a substantial one.

i await the next update with interest a cheap bid would be much better than a de listing or transfer to another exchange.


Surely the institutional investors will have a say.

[124asd] 08/5/2014 14:25

Yes you are right atlantic.
I hope that the new management turn this company around. They have pumped in cash so it's in their interest to get positive results. The question is will they put in a cheap bid so the existing shareholders end up with sod all?

[chinese investor] 08/5/2014 14:09

Thank you ac123.

[ac123] 08/5/2014 14:07

Re - "absence of hard information" (previous post), there is no new RNS, true. But let me add this.

The email I got from VGM (see #1013) said the following:
"To clarify all of the first tranche has been received either via cash or the payment on our behalf for plant and equipment."

[PS they confirmed it was OK for me to post gist of email to bb.]

[chinese investor] 08/5/2014 10:59

Today I ask David Paxton the CEO of Vatukoula Gold about the news on 12th August that his company has secured $40 million in new financing from China’s Zhongrun and where it leaves investors with the shares at 8.15p.
Q. I thought this $40 million was to be all in the form of debt – what changed?A. Our partners Zhongrun opted to finance the company through a combination of debt and equity.  There was a window of opportunity for Zhongrun to purchase additional shares, above the 30% limit and they decided to invest as a combination of debt and equity. 
Q. The debt element ($20 million) looks a tad expensive – am I missing something?A. Yes although the interest rate is 13%, the interest is only payable after 3 years.  We have a 3 year grace period.  At that time we expect the mine to be generating cash – so it fits well with our plans. 
Following this news your Chinese shareholder will own 55% of Vatukoula – why is it not making a mandatory bid?A. Under the existing takeover rules, Vatukoula is considered a foreign company, as the majority of directors are overseas, so there is no requirement that an offer should be made, or a whitewash obtained.  We are informed that this rule changes on the 29th September this year – hence the window of opportunity for Zhongrun.
Q. Do you regard yourself as “independent” or “in play?”A. With Zhongrun holding approximately 60% of the company – I do not see VGM plc as ether independent or in-play.  However Zhongrun are an investment company with an eye to developing an international mining company.  We believe VGM plc is the initial part of that – so we look forward to an interesting development period. 
  Q. On a proforma basis what is the new market capitalisation?A. The new shares in issue will be 322 million, at the current price of 8p, roughly US$40 million, but I would expect a lower pricing once the new shares are issued.  So in reality a US$20 to US$30 million valuation.
Q. In the last quarter your cash costs were c$1800 oz. With the gold price at $1300 can you hope to make any money at all?A. As we have stated all along – Vatukoula is in a development stage.  We have been trying to finance this development stage for over 18 months.  We expect, once we have upgraded our development and underground ore transport fleet, we will be able to achieve our targeted level of 100,000 ounces per year.  An underground mine has high fixed costs.  If you double production, you halve your fixed costs on a per ounce basis.  That and a higher expected grade will result in much lower costs on a per ounce basis.  We believe that our cash costs will be less than US$1,000 per ounce, and as such we will be one of the lowest cost underground mines. 
Q. What will this new cash be used for?A. There is no one big item.  WE need to upgrade our underground fleet.  We would like to add to our heavy-vehicle maintenance team – a heavy-vehicle rebuild team – which takes tired old equipment and takes it down to the bone and rebuilds.  This we will do with some new equipment and then use that group to keep our fleet at optimal availability.  We also have to build a new tailings dam – this will be the biggest single item.  Also included is a reequipping both shafts below 18 level.  We see the majority of production coming from these lower levels.
   Q. On the basis of that planned capex what sort of output level and at what all in cash cost are you targeting and by when?A.  We maintain our target rate of over 100,000 ounces per year.  At that stage we expect that the cash cost of production to be in the region of US$900 per ounce.
Q. We used to hear a lot about how you would build a biomass plant using sugar to slash your energy costs. Is that plan still a runner and if so when will it happen, how will it be financed and what would the impact be on cash costs?A.  Now that we have secured the funds – our top priority will be to replace our reliance on diesel power.  The Fiji Sugar Corporation – have completed detailed design plans for a biomass project that is designed to provide Vatukoula power.  But they have not yet been able to secure the funds to develop this project.  WE feel that we are forced to go it alone with some other form of power – be it gas, heavy oil or an alternate biomass project.  We will be investigating.
Q. Where do you see the gold price heading?A. Although gold is out of favour in the western world, there is huge demand in the east.  We hear numerous stories about physical gold buying in China and Hong Kong.  The cost profiles of most of the international mining companies has risen in line with the oil price.  Oil provides more than one cost input for mining – explosives are sourced from hydro-carbons, Heavy vehicles rely on diesel rubber and lubricants – all oil priced based and transport to and from the mine relies on diesel.  Of course power is very dependent in most cases on power.  So most of the major input costs, other than the workforce are based on the international oil price. 
So given the higher cost of production – based on the increase in the oil price and the increase in the workforce cost, plus the larger take by the operating countries, the gold price must eventually rise or the supply with diminish.  So over the longer term I see an increased gold price – based on the supply demand balance in the physical market.
 
Q. And what gold price do you need to be cash neutral or better?A.  We expect this to be – on a sustainable basis approximately US$1,100 per ounce.
Q. I am sure you are aware that Vatukoula shareholders have not made money from this stock. Why should they average down at this point?A.  I still believe that Vatukoula has a long profitable future.  We have known for over 18 months that we require additional capital to complete the development at the mine.  We now have the funds to proceed with this development.  Although the market value of Vatukoula has decreased considerably – we still believe that there is value in the future production at the mine, and we expect to use that base for expansion in the future.
Thank you Dave. We will do another Q&A in a few months to review progress.

[andy] 08/5/2014 08:56

CI,

Which pub?

BID now 3p!

[chinese investor] 08/5/2014 08:56

I would like some sort of statement from this company !

[chinese investor] 08/5/2014 08:53

Michael,
Pint ?

[michaelsadvfn] 08/5/2014 08:52

Not looking good!!

[bulldog30] 08/5/2014 08:47

124.....Winnifroth was an uber bull on this stock as I recall ?