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
31st 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.
Good post. I see it the same way. Just of course, the funding bit in the future. Low sp means less money/share in a funding situation. We need to expand Jangamo JORC which cost money. We have commitments in Oman that cost money. We need project finance, not corporate. What can we do more to improve? Are there more blocks to aqcuire in Oman? Can we expand even Moz tenement? What is plan B if the world collapses?
ReplyDeleteI am very long this share so I put my money where my belief is.
Great blog again Iceberg. I am long too on this and always planned to keep for at least 3 years. A lot of Aim investors panic with short term SP dips when actually the fundamentals of this company just get better.
ReplyDeleteDid David mention any thing about JV's especially as he is now a non executive directory on one possible company?
no mention of JV's, will be interesting to watch for it though !
ReplyDeleteThey 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.
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What is the grade of HMS in the wet and if it was high should they Savannah should have included them in the JORC?
Not sure but wet extraction of hm is a very different process to dry so I can see why they would want to keep the Jorc Seperate. Indeed Jorc guidelines could well require them to be Seperate !?
ReplyDeleteI suppose that is possible with regard to dry / wet but going onto the Oman tenements, well Oman is a great country and with the drill starting at the end of January I would expect them to hit copper and gold.
ReplyDeletechow