#OXS – must be there now.

 

The news is out, #OXS have cancelled a facility with Darwin to provide funding each month. Just to remind folks OXUS GOLD have no other assets except an arbitration case worth something between $500m to just over $1bn.

Company guidance in RNS was that a judgement should come in 2014. Now about to enter the 2^nd month of 2015. The company have taken the decision that they do not wish to continue having access to a funding facility.

This can only mean that they expect a decision very shortly. AIM companies are not to known to shy away from dilution if it means the wages are still paid.

A question though, “If you were the CEO of a company with a sizable holding and you thought the arbitration was going to be unsuccessful, would you try to get as much money as possible into the company or would you say, no you don’t want any more money thanks”.

Or to re-phrase the question “If you were the CEO of a company with a sizeable holding and you thought the arbitration was going to be success, would you try and limit dilution as much as possible”.

It is still my belief that Ms Stern has submitted, or will submit a pointless minority decision and that OXUS will or have won. Remember OXUS will get the decision 1 week prior to it going public.

Finally if Darwin thought for any second that the arbitration was unsuccessful, they would be selling their holding hand over fist atm and the SP would be markedly down…..it isn’t.

Happy for anybody to make a reasoned argument which isn’t positive for the RNS.

Risk and Enjoy.

#SAV – in the Savannah bee house

Well as promised I have just had a wide ranging chat with David about Savannah and a variety of things.

Firstly impressions, David does come across as a high integrity, focused, straight Aussie. Happy, friendly and relaxed. I’ve used the term bee house as that is exactly the impression I get about Savannah. It has its queen bee and an army of workers who know exactly what they are doing, where they are going and how to get there. Along the way it produces honey (Market Cap value) from the very best flowers(resources). Seriously though the work that is going on at the company is mind blowing,the attention to detail, the planning, from the population and social studies in Mozambique to support any planned development, to the detailed analyse of drill targets in Oman.

Moving on to general aspects.  David confirms the company is well funded. I do get the feeling that funding is a little prickly, however it’s done. In the distant future (my opinion), David has confirmed that funding will be looked at with a variety of options, but they haven’t started examining them yet as its too far way. We talked about the appointment of Pedro Couto as the new minster in charge of mining in Mozambique, how the ministry has been very friendly and is very impressed with how Savannah is conducting itself and how its progressing projects.

We touched on the share price and how it’s lower now than at the start of 2013 and discussed reasons for this. One of the reasons as mentioned by David is that the Savannah broker has mentioned short selling on #SAV stock, which did push the SP down. (This surprised me as #SAV is a small stock..) I won’t go into this too much, nor my thoughts on the subject, but it has evidently stopped.

Big plans in place for 2015.

Starting in Oman.

Very heavy news flow for the next 6-8 weeks. I raised that 56m @6.2%  copper was one of the best I’d ever seen,  David backed this and mentioned that it was  the best he had heard of as well. He fully expects this to be repeated when drilling starts very shortly. This is really quite an achievement considering his past experience in copper production and shows the high commercial achievability of the project.

Savannah are looking to expand the block 5 JORC as quickly as possible with the new drilling with high grade copper intersect, higher than the average for the current JORC.

The potential for Oman and the current licenses are vast.

Moving on the Mozambique.

The aim this year is to continue to grow the Mozambique JORC, David talked about making it the same size as Base’s JORC but with a higher % of THM. The JORC should increase by around 400%.

They could have gone with a higher JORC in December with a lower %THM cut off, but decided against that, wanting only very high grade, near surface, dry deposits in the JORC.

Lots of preparatory work going on in Mozambique during the wet season to keep the teams busy before further exploration work and expanding the JORC takes place in Q2.

Final thoughts.

I did express disappointment about the JORC release on the 31^st of December 1.5 hours before the bell closed… David responded that it was unfortunate and understood this, the reasoning behind it is that he had promised to shareholders in RNS’s that it would be 2014 and he tried his very best to keep his promise. Although not happy about the timing, imho it at least shows a level of integrity and that blood and guts will be spent adhering to any timeframes in RNS’s going forward.

Savannah will keep showing the rest of the exploration sector on AIM the right, professional way of conducting a company in 2015, it will see a major ramp up of resource values and sizes and we will see Savannah starting its journey from an early stage company to value that really lies just below the surface.

It’s a journey that I will take part in and I can easily promise that as I held shares at the end of 2013 and 2014 I will also hold them at the end of 2015. Short term, medium term and long term, the company can only add value from this point onwards.

#xxx - 3 multi hundred million jorc's......MCAP less than 5m.

I've watched, I've waited, I've been a good boy now I am going buy.
The biggest share holder of a company with a multi hundred million dollar gold JORC that is currently being upgraded.

A multi-hundred million dollar copper JORC, which is currently being upgraded.

A multi-hundred million dollar Heavy Minerals JORC comprising Titanium Oxide, Ilmenite and Rutile, which is due to be enlarged over the next few months.

Over £1.5m cash in the bank.

All for an MCAP of less than £5m all achieved in the first 18 months of the companies life. I've been waiting to top up and although this isn't my main top up, I certainly intend on buying half a million shares on Monday morning to add to my current holding, the price is simple just to low.

In my last blog i said about wanting to talk to David, We have both tried several times, but when i was free, David was in Italy, when he tried ringing from Italy I was travelling, but i will try again this week coming.

Once this has been done my intention is a more significant blog update.

Still the chance to buy at this level is really just a bit to strong to resist a very quick bounce back to 4p before any news seems to be on the cards.

Savannah the truth is out.

It certainly wasn’t received well initially by the market, but then I am not sure what entered David’s head to release the information on a half day of trading between Christmas and New Year.

But whats done is done and we know need to look at the info in more detail.

I know many wanted a much bigger resource than this to be defined, however we need to think about the strategy that Savannah has undertaken. Its picked a few shallow strip holes near to roads and infrastructure, its concentrated on higher grades of HM. It’s taken the view that smaller and cheaper is better and either more profitable and or easier to sell.

This is a strategy I completely endorse in the current climate, there are plenty of high cost high profit projects currently shelved. Low cost, straight to profit operations are much more in style and will likely receive funding.

We have to remember that we could easily times the current JORC by 5 or 10 if we SAV wanted to and given a bit of work, particularly with some of the larger strandlines. It could be that David wants to farm out the license piecemeal, or that he want to see Savannah as a producer.

Regardless of all this, we have learnt for more from this Maiden JORC than we have seen before.

Extraction is to be dry i.e JCB digging shallow, dumping in trucks before going to a centralised processing unit, no crushing needed, no engineering of pit walls, no underground plans, nice cheap and simple, with extraction and therefore profit starting at day 1 from surface.

Extraction costs are $1.5 per tonne, processing and production costs are $50 a tonne for HM concentrate.

In total my calculations give profit (underline profit) of $97m for these small simple initial pits. This takes into account CAPEX etc. If we times the area or JORC by 10 we get nearly $1bn profit from this license all easy low cost hanging fruit.

Production could take place within 3-6 months of Environmental sign off and DEA. Initial capex would be around $8-10m and would add $50m to Mcap.

I think we need to understand that David does things his way, with is not the AIM way. He’s earnt the right to do this by creating mid-sized mining companies from nothing in the past.

I’ve not mentioned anything about Oman yet, I think it’s an amazing setup, but not for this blog today.

Happy new year all and enjoy.

#OXS OXUS GOLD , Risk ?

Thought I would right this at the start of 2015, NYE was a hell of a ride for ARMS, even though I was only there for 1 hour, two trades with a 100% profit and a 20% profit.

ARMS can teach us a few things, not all arbitration results have a suspension period, 300-400-500% rises can easily happen on AIM (even in just half a day). MM’s can play the good old auction trick(something they played on ARMS to freeze out most buyers until the SP had doubled). All this on just a $173m award win.

So back to OXUS, I noticed something was afoot yesterday when I at 9am I put an order in for a small top up of 200k shares from some of my arms profit. Broker said “NO” £2k max at 2.14….I then tried my second broker who said he could go to ISDX and get £2k at 2.2 but that was the most he could get.

It became very obvious that stock was very very tight…and that any upward pressure would result in a sharp upward correction. Which unsurprisingly is what happened when it rose very quickly on small volume, to smash intraday highs and closing highs over the last 12 months.

So what do we know, don’t know and can address?

I’ve taken a little flak in the past for concentrating on mm and L2 behaviour on OXS, as “it’s all irrelevant until the result is announced”. This isn’t something I subscribe to. As per above and as per my posting on the forums on the 30^th this was something easily anticipated, if not to quite this degree.

So our mass seller (probably the distressed RAB) stopped offloading, preventing the only real source of shares to the market. What we also saw was larger and larger bids 500k- 1M even on the bid seeking any shares. We don’t know why they stopped selling though.

We have the BOD saying that they expected the result end of 2014, we don’t know when exactly the result will be.

We have a BOD who extended the drawdown arrangement by 6 months to cover the decision, an extension that only has 2 months left on it.

We have ARMS, that proves that arbitration decisions can come at any time and where I have no doubt that people who made a lot of money in ARMS due to the decision will be looking for similar plays, such as OXS. The profit in ARMS would be enough to buy every single share on OXS, we don’t know how much of this money will flow into OXS though.

So where does this leave us?

Well ARMS received 100% of the money they sought which for OXUS would be $400-1.2bn.

There won’t be many shares available even before a result until at least 4p so further rapid rises are very much on the cards.

It could be that RAB have stopped selling, not because they have run out of shares, but because they have been advised otherwise.

What I do hope is that any new holders have a little bit of patience, as although a decision could come on Friday or next week, it might take a little longer than that. Arms with considerable debt and cash problems and a win against somebody where getting payment will be difficult, rose to 50% of the arbitration result. For OXUS that would give 40-50p.

The auctioning trick by the MMS close of play on the 31^st was very telling, buying anything worthwhile can be difficult sometimes I wouldn't be surprised to see an auction first thing Friday.

Good Luck and Happy New Year.

BUY-HOLD-HOPE