Oxus Gold #OXS Known unknowns and unknown unknowns

Many will known that I’ve been a following for awhile in OXS, the advantage of buying back in the autumn  or prior this is that you could have picked these up at 2p or so. For those that have, a little de-risking is certainly going to happen when the SP hits 4p (or around this figure).

We saw a sharp rise last week when in the matter of an hour or so the MM’s raised the Bid 2.7p to 4p. Volume kicked off and the SP is now in the high 3p range. Quite a few new investors have climbed on board and unknowns and rumours abound in the chat forums.

In past Blogs such as http://icebergshares.blogspot.co.uk/2015/02/oxs-whats-being-arbitrated-over.html I have mentioned briefly about what’s at stake.

Why the rise ?

Well we know they  got rid of Darwin…..Note, they got rid of Darwin, not the other way round, there is no way that Darwin could back out of the contract they signed and it would be legal madness to try and force Oxus to backout for the sake of a single monthly drawn down. The most likely scenario is that OXUS simply didn’t need an extra month’s money, said they wouldn’t be using it and so asked Darwin if they wouldn’t mind closing a month early. Darwin obliged as they can’t force OXUS to draw down money.

Its my opinion that on Thursday a very large 5-8m order was placed, this was filled by a mixture of RAB shares and open market shares. With the Uncrossing trades at the end of the day simply the MM’s tallying up with each other (or passing on the RAB shares).

Known Unknowns

We know that RAB are selling, we know they have been doing this for many years, not a breakneck speed but steadily, with a view to de-risk. We know that the Manager of the RAB fund has brought over 1m shares and has not sold them, he continues to hold. We don’t known how many shares RAB have left, nor do we know RAB’s intentions for the convertible loan note.

We know that somebody has been buying the RAB shares when they come on the market (and It’s been pretty clear its not private investors). This was more notable in November but is still there imho).

We know that the panel are due to make a decision any time at the moment. We also know that Pierre Tercier hired a new arbitration assistant at the beginning of January to help him with his arbitration commitments, we also know that his only real arbitration commitment is OXUS. It is currently unknown as to the exact date of any judgement.

 

Unknown Unknowns

 

This is a bit of a fun bit, we have lots of rumours circulating on the Internet. These are all Unknown Unknowns because we haven’t yet had any real evidence for them.

Firstly, The judgement has been communicated to the two parties, however public disclosure needs to be agreed before any official announcement can be made.

Secondly, the award has been moved to Washington, this imo would be impossible, the case will only be concluded in Paris, I can’t see any Uncitral precedent that allows for the case to move to Washington, nor does the BIT agreement allow it imho. However similar cases have within days of a large judgement applied to the Washington courts for the forced selling of assets. It would be a natural move and I wouldn’t be surprised to hear that this has taken place in the release of any RNS.

Thirdly, a last minute settlement by the Uzbeks to the order of $350m.

Lastly that a takeover bid for OXUS GOLD is to be announced in the coming days in the region of 15-20p.

Known Knowns

This is a big case, it’s a potential record breaker for Uncitral and has the potential to be the largest pay out at the Paris Uncitral courts.

It will be a reputation/career maker or breaker and its significant that although Lamm (Whites best international arbitration lawyer) is leading the advisers, she is not the official representative of Uzbekistan, this has been passed to a much younger more inexperienced employee who will be talking and arguing directly to the arbitration panel.

When I received correspondence from Tim Hart this week, he ignored by mentioning of the Oxus Case. Tim is not shy about coming forward concerning his past successes, so this might be telling.

Finally only 2 cases that I can find have every had more than 8m spent on them by the claimant, funded by a professional funder, gone the distance and failed. It really is unusual for a case to fail at this stage now.

Good Luck and hopefully my next blog can talk about how Oxus will spend the multi hundred million award they have just received.