Declaration of Independence.

Declaration of Independence.

I’ve decided to produce this, You will get a few folks that don’t believe it, but that’s up to them.

If anybody wants a £1000 wager, I will happily open up my trading accounts and books to them to prove what I am saying is correct.

It is possible to make money (decent money) on AIM without being corrupt or morally bankrupt.

At the end of the day it’s up to individuals.

Declaration of values.

1. I have never taken part in a placing. If I take part in a placing in the future I will guarantee that the shares will be held for a minimum of 6 months. This guarantee will be made to the company.
2. I have never flipped shares, nor brought or sold on insider information.
3. I have never and will never sell a share, whilst talking the share up.
4. I will always be upfront if I have a holding in a company before I talk about the company.
5. I have never and will never “short” a share, naked or otherwise.
6. I have never and will never take or receive any financial payment for any blog or posting undertaken.
7. I have never and will never receive any financial payment for any material written.(I have declined several offers)
8. ALL of the money (and its not much) that I make from the adverts on my blog are and have been, given to charities, including JDRF which is a charity that supports my young daughter.
9. I DO NOT rely on the money that I make from investing to live. It is not my profession (thank goodness)

I say the above, not because I am naive or innocent. Nor because, I am incapable of doing the above. I’ve spent many years working for consultant companies, investment banks, corporate banks as a few folks know. This includes designing and creating trading software, Risk Management and corporate regulatory reporting to the Bank of England (FSA at the time).

I know how morally corrupt companies can be, a few folk complain that things don’t happen due to insider trading etc. It does happen and it happens because they get away with it. ( I remember in my first job in banking, many years ago, being told to add a 1.5% to the standard FX rate(on top of the advertised charges) to customers, except to customers who we had a list of. Those customers who noticed what we did and complained. I was later told those complaints where upheld so they only did it when they thought they could get away with it.

I wonder how many other prominent investors would declare simply standards…….

An interesting quote taken from the Rio Tinto website.


"
Our objective is to safely discover, on average, one “Tier 1” deposit per year. These are what others may call “company-maker” deposits: the largest, lowest-cost resources that are profitable at all parts of the commodity cycle. We prioritise our exploration programmes on a global basis so that we pursue only the most attractive opportunities. We determine priorities in consultation with the product groups. Our decisions are driven not by location or choice of commodity, but by the quality of each opportunity.
Some of our operations, such as Weipa, Tom Price and Rössing, are Tier 1 greenfield discoveries by Rio Tinto where value is still being realised after more than 40 years of production. Since 2002, we have made the following Tier 1 discoveries:

Year	Discovery	Commodity	Location
2002	Resolution	Copper	US
2004	Simandou	Iron ore	Guinea
2005	La Granja	Copper	Peru
2005	Caliwingina	Iron ore	Australia
2008	Sulawesi	Nickel	Indonesia
2008	Mutamba	Titanium	Mozambique
2009	Jadar	Lithium/borates	Serbia
2011	Amargosa	Bauxite	Brazil

We operate the majority of exploration programmes ourselves rather than outsourcing to others. This ensures that we retain management control over our performance in the areas of safety, environment and community relations, as well as corporate governance. It also means we can keep the exploration programme focused on only those targets that are important to Rio Tinto. We will, however, partner readily with smaller exploration companies if that gives us access to attractive opportunities, tenure, local knowledge, or operational skills that we do not possess in-house."
http://www.riotinto.com/exploration-154.aspx


It really helps to underline both the rarity and importance of Rio Tinto teaming up with Savannah Resources on the Mutamba Titanium deposit.


Rio Tinto considered/consider this to be a COMPANY MAKING Tier 1 find for them....


They will partner with smaller exploration companies, but only if they have operation skills that they do not possess.......This speaks more highly of Savannah and their team than any ramping by any blogger on AIM.


WELL DONE.

icebergshares unfortunate events

Quite a disappointing evening, I hoped that I would be wrong when I tweeted that a single tweet might be unpopular.

Unfortunately I wasn’t with over 50 replies, and some rather not nice private messages.

1.        “ It won't make me popular but beware of the two Cornhill pumps #ceb #afpo a few placing shares in both comps being offloaded while ramping”

Quite why a simple tweet asking investors just to beware prevoked such anger is interesting. I didn’t say the companies are over valued, I didn’t say the companies were bad investments. I simple stated one aspect that I thought that investors needed to know/research before investing. Indeed in a follow up tweet I said that just because a company is being ramped while placement shares are being offloaded , doesn’t make that company good or bad. No, certain ego’s felt threatened and out came the insults.

I deliberately didn’t name any names, or make anything personal, as to be honest that’s not me. I care more about the research that folks need to perform and should do on shares, that research should include the brokers, nomads of companies and how money might be raised.

Quite often when this happens the companies are actually quite good/even very good investments, as these are actually easier to pump. The problem is more, that the crew’s move on to the next big thing and the market then becomes flooded, leading to a fall in the share price.

Two or three years ago, companies used YA, Darwin, Bergen to raise cash, investors realised that this killed share prices, as they offloaded into any hint of a share rise for small percentage gains. Now a new way of raising cash is used…

Each share is dealt with differently, but it’s clear that some folks have brought into a placement and flipped, or brought into a placement, ramped the share up, started shorting and then sold the share back down again (why not make money on both the up and down sides of the spike).

Again I won’t name investors, but the fact that, CEB, AFPO, SER, NEW, TEA, RRR all have either Cornhill as their broker or Beaumont as their Nomad, can’t be a coincidence can it? And when we have both of them together, such as with NEW we get some of the worse greed and corporate activity known on AIM.

This piece hasn’t come out of nowhere , I’ve been posting for a few months that investors need to research not only the company but the companies, supporting that company.

I do hope that those folk that seemed to take everything so personally last night, carm down a bit. It all reminds me of the bad old days on the BB’s when a single voice who dared questioned anything got shot down in flames.

Money does strange things to folks.

BTW I am fully aware that we have various (investment) groups on Twitter that seem to take everything personally. For information only I am not with any of them and couldn’t careless. The only thing that I want is a playing field that’s as level as possible for everyone.

Savannah Resources – Joint Venture of the Decade.

I’ve been a fan of Savannah Resources since the company was first created, as such I have a reasonable sized holding in the company.

http://icebergshares.blogspot.co.uk/2015/01/

Above was my last blog at the start of the year.

For the world’s largest company to consider a joint venture with a small minnow on AIM is mind blowing. Its often talked about on the BB’s but is rarer than a hen laying golden eggs.

Savannah Resources have achieved this.

They have only achieved this due to the very high professional standards the company demonstrates and the expertise and experience of the management team and BOD (including of course David Archer).

A few nicely hidden bits of the agreement are that Rio can buyout Savannah, but only for a multiple of all the money that SAV have already invested.

Scoping to be completed hopefully 2015 earns SAV a 20% share in the combined JV.

A pre-FS gives SAV 35%

A full DFS gives SAV 51%.

The full JV seems to be “Rio Tinto's affiliate of the three areas suggests a combined potential contained ilmenite content of between 140 and 170 million tonnes with a further 10-15 million tonnes of contained zircon and rutile.” This gives us a combined resource value of around $2billion for the RIO licenses, with approx. a further $1bn (very conservative) from the SAV licenses. Total (conservative values of $3bn).

The aim is produce a mine in the near short term with approx. $200m of revenue’s per year. The cost of the mine will be low and 50% of this cost will be paid by Rio Tinto. Along with this Rio will buy everything that the min produces at commercially available prices…

One of the biggest barriers and risks to "wannerbe" miners are the funding uncertainties and selling your output when the mine is actively producing. Due to this many miners have DFS’s for their exploration areas which are mothballed.

The current JV effectively cancels out these risks. Any mine where 50% of the costs are being picked up by the world’s largest mining company will not struggle to get project finance.

Today’s announcement really does confirm that Savanah is on course to become a mid-cap producer with a £100m+ Mcap. I’ve already said that I held in 2013 – all the way through 2014 and will still be holding in 2016.

I’ll leave the sentiment plays-flip flopping and P&D’s to others.

Quality Shines though and even if it’s not seen by all PI’s has certainly been seen by Rio Tinto.

Well Done.

UKOG – The magic dust fades away.

I’ve written about UKOG over the past year. So this is just a very quick update, which even if one person stops and thinks will be worthwhile.

If there is so much oil just waiting, all over the Weald to gush out of the ground, then why hasn’t the plethora of drills over the last 20-30 years found much?

The answer if we are to believe David Lenigas, is that new technology and extraction techniques now make it possible to squeeze it like a sponge and for the oil to flood out.

The new technologies that he’s talking about, are of course not particularly new as they are used elsewhere in the world, not least in the areas mentioned in the “Independent Reports” that have been commissioned by UKOG. These new technologies concern the ability to naturally frack existing fissures in the rock and lateral extensions to wells, allowing for far greater horizontal pay zone extraction.

Lateral extensions are used extensively at Wytch Farm in Dorset in similar geological formations to those targeted by UKOG. They stretch miles out to sea in an area where lateral extensions will have no impact on people’s lives. They generate on average, a few hundred barrels of oil a day per a drill.

It is important to understand that the reason that Wytch Farm is productive is that it’s a natural collection point for the oil that has migrated from the Weald i.e the movable oil.

Even if UKOG is allowed to drill large laterals under the rich homes of Southern England the output is very unlikely to meet the more movable oil found at Wytch.

The only way that UKOG will be an amazing company, is if the new technology talked about can materialise oil out of rock, Star Trek like in transporter beams…

Have a good weekend.

Open letter to Beaumont Cornish, New World Oil and Gas’s Nomad.

I tried speaking to you yesterday, but unfortunately I was told that you could not speak to me, due to internal, self imposed rules.

I wanted to raise with you a number of concerns and potential breaches of governance that I feel might exist with a client of yours “New World Oil and Gas” (NEW).

In a recent RNS concerning the open offer, which you approved they issued the following statement.

 “The current cash position of the Company (as at opening of business on 8 June 2015), excluding any funds owed to the Company pursuant to the Al Maraam SPA, stands at approximately £290,000. Based upon the current rate of spending and in the absence of raising any funds pursuant to the Placing and Open Offer, the Directors expect this balance to last for no more than three months…..

….If the Company and Cornhill Capital are unable to identify or agree on such steps, the Board may be faced with no alternative but to commence winding-up of the Company.”

It clearly says that the company has a very unhealthy financial position that will cause it to go bankrupt within a matter of weeks (maximum 12-14 weeks).

It is clear that this has been known to the company for quite a while and that the funds sought from April’s placing were needed to prevent bankruptcy. At no point until after the shares were suspended was this made public to the shareholders.

The below is taken from the London Stock Exchanges own rules for companies, which I am sure you are aware of.

“General disclosure of price sensitive information

11. An AIM company must issue notification without delay of any new developments which are not public knowledge which, if made public, would be likely to lead to a significant movement in the price of its AIM securities. By way of example, this may include matters concerning a change in:

 its financial condition; “

 

So it’s very clear that investors were mislead when buying prior to suspension by incomplete but known information on the company’s financial condition. Investors were also mislead when asked to vote in the placement as this didn’t have this information. NEW and yourself also failed to inform investors of a material change in its financial condition.

 

The following also taken from the stock exchanges clearly details where responsibility of this lies.

 

“ensure that each of its directors accepts full responsibility, collectively and individually, for its compliance with these rules; “

 

The directors must accept responsibility for this.

 

http://www.londonstockexchange.com/companies-and-advisors/aim/advisers/rules/regulation.htm

 

The below is taken from the nomads responsibilities, which is linked above.

 

“MONITOR TRADING

OR3 – The nominated adviser should monitor (or have in place procedures with third parties for monitoring) the trading activity in securities of an AIM company for which it acts, especially when there is unpublished price sensitive information in relation to the AIM company

In meeting this, the nominated adviser should usually:

 use suitable alerts or other triggers to alert the nominated adviser to substantial price or trading movements. This can be satisfied via the broker

 contact an AIM company where appropriate if there is a substantial movement to ascertain whether an announcement or other action is required, liaising with the Exchange where appropriate

 consider the necessity for arranging relevant press monitoring, particularly when there is material unpublished price sensitive information in existence “

 

As soon as the exceptionally large volumes started as a Nomad you should have noticed and requested suspension of the share price.

Did this monitoring happen?

Did a request go to the LSE?

When did these things happen?.

 

Finally we come to the open offer itself. There is considerable confusion between brokers as to who qualifies for the open offer. Many brokers are offering the open offer to unsettled holders, however the offer document and the RNS that was released, clearly talk about only settled shares taking part in the open offer. I am sure that you can appreciate that its impossible for me as an investor to accurately judge whether to take the financial risk of subscribing without having full information about who can actually subscribe. Any clarity you can provide here would be appreciated.

I am sure you are also aware that the correct documentation is also not going to the potential subscribers.

 

I am sending you this email in the hope, but not the expectation that you will respond. However I am also sending a copy of this letter to the London Stock Exchange to investigate as a matter of urgency the issues raised.

NEW, Will the Nomad perform it’s legal duty?

NEW, Will the Nomad perform it’s legal duty?

Another week, another monumental cock up by the NEW board of directors.

It’s difficult to believe how badly they are actually getting things.

The latest RNS confirms that at the EGM investors were mislead about the BOD’s pay and loan arrangements.

Despite swearing blind that they would issue an open offer, underwritten to the tune of £1.5 by Cornhill at .05p a share. They have announced an open offer at .09p a share to raise £3.5m.

Also apparently they have to raise £3.5m to prevent the company from going under, despite being happy with £1.5m only 2 months ago.

They seem happy to pay £750k to Cornhill, despite the fact that its Cornhill who needs the shares, due to their own scheming and greed.

On top of all this, the BOD themselves don’t want to/haven’t got the confidence to buy shares in the open offer….

But the above is only the backdrop for the real story.

Will Beaumont Cornish actually perform its duty? 

Let’s be clear about this, the duty of a Nomad is to ensure that the company meets its requirements to the London Stock Exchange.

New World Oil and Gas are clearly stating in an RNS that only registered holders of shares (750m of them)  can take part in the open offer.

The London Stock Exchange are equally clear, ALL holders of NEW shares, whether settled or unsettled have full rights and can take part in the open offer(common guidance is at least 2000m of these shares).

Brokers are equally unclear. There is one broker who says that unsettled shares can take part in the open offer. One broker who says that they can’t and more alarmingly one broker, whom I have x million shares with who can’t tell me either way and can’t tell me whether the shares are settled or not, because they can’t reconcile their own internal share situation……

The Nomad MUST act.

They have a legal, licensed duty to ensure that NEW comply with the guidelines and rules of the London Stock Exchange and the Board of Directors are NOT.

I will certainly be ringing the Nomad on Monday and writing to them(for evidence) to ensure that the NEW open offer does not go ahead in its present form.

On a brighter note. The LSE statement that unsettled shares should have all the rights attached to settled shares, must surely mean that a 10% holding of unsettled shares should be sufficient to hold an EGM?

The Board of Directors will be hiding behind Jersey Law, but my understanding is that London Stock Exchange Rules trumps this and hopefully the BOD can be kicked out to do a job they are capable of….(I’ll leave any suggestions for this to readers).

Icebergshares - New open offer

**Nothing that I write here constitutes advice for anybody, this is purely my own personal opinion on the current situation**

Well we’ve just had the RNS that we all knew was coming from New World Oil and Gas. It was all about the number of shares issued, rather than the issue price really.
The issue price only determines how many shares are taken up by Private Investors in the open offer and indicates a floor price for the company.

The number of shares indicates how many of the shares are going to be used to cover the short fall, obviously the lower the better. NEW could have issued anywhere between 1bn and 7bn shares. The final amount of 3.8 billion is not good, but is far from a disaster.
A few points.

Yes the company needs funds to survive, it is disingenuous of the BOD to blame the EGM NO vote on the survival of the company. The NO vote was due to the price the shares were being issued at. Everyone knew that some kind of share issue/fund raising was needed. The question is what is best for the company. Was an issue of 3bn shares at .05 good for company?, given the resulting actions today by the BOD the answer is an obvious NO, this means everybody who voted NO has actually put the company in a much better position.

Does the company need to raise £3.5m to survive? Blatantly not, given that they were happy to raise £1.5m just 2 months ago!.

Cornhill could have just paid £1.5m @ .009 for 1.5bn shares. From this it’s obvious that there is the need for the extra 2.3bn shares.


The company acknowledges that £3.5m will be raised, however only £2.8m net of associated costs etc related to this debacle. So the company has spent/will spend £.7m on this mess. Quite an achievement for a company with such small reserves!.


Next Steps


Investors need to make a few decisions.


Do they:
1) Invest in the Open Offer, use this opportunity to average down. For example if you brought 100k at .5p and your shares are settled then you can buy 500k at .09p giving you an average of around .016p. Given the base price of .09, cash in hand, assets etc a price of .12 maybe .13 as a minimum to sell is still possible. This would reduce your loss potentially from £4k down to £1k or £2k.


2) Sit tight. If the majority of the placing shares are brought by private investors in the open offer then Cornhill, it’s clients, the Market Makers and other short interested groups will still not have the shares they need and will need to purchase them on the open market. Its possible for a short squeeze to still occur.


3) Complain to your broker. If you brought shares that have not settled, you were given no warning by the broker when you brought that the shares would not settle and maybe even received indicated via a website that the shares had settled then you might well want to demand your money back. You probably brought under the assumption that you were buying shares and that the shares would settle in accordance to the brokers own statements. That you could average down in any open offer and maintain your position. Some shares have been settled, some have not. So your broker could have and should have fought on your behalf for what was yours…
You have been materially disadvantaged by your broker being unable or unwilling to settle the shares at the prices paid, this is despite a contract with them saying this. Keep it simply but demand your money back and threaten ombudsman if this doesn’t work.




What investors choose to do is up to them. Personally I think NEW will still be a reasonable company, particularly if the BOD get ditched. Money in the bank, new exciting Middle East projects about to be started. If we look at what the pile of shit SER did and how it was valued. I get the feeling that even with the open offer the price will be over .3 in the not too distant future…