Hi Kenji - there are a few chunky holders of this already but each holding under the 30% limit; it's only when they join together to make 37% collectively (the 'concert party') that it becomes incumbent on that entity to make a full offer to all shareholders under the rules - never mind the move up to 44% that they're now seeking a waiver for - sasa.
37% of a company's stock is pretty controlling, which is why at 30% an investor or concert party is required to make a bid for all the remaining shares, unless they are granted an exemption. So will the extra 7% really make such a difference?
This is really a question of trust. Do you think that the major shareholders are trying to screw us? And if so, are the board complicit in this?
The fact that the company operates in Russia is worry enough, without worrying that there is a conspiracy to steal the company from the shareholders.
The Board is long established, and not subject to change every 5 minutes like Petropavlovsk (POG). I have a fairly substantial investment with both companies, but it is POG that worries me, not HGM.
As per Thursday's RNS looks good on paper and is deemed to be immediately beneficial for HGM but is the increase in the 'concert party' involvement (from 37% to 44%) implicit in the outcome, as welcome?
The approval of shareholders is being sought to sanction it, along with a waiver of the obligation to offer a bid for the entire equity which would otherwise apply, under the rules.
The concern here? Acquiring another7% of the shs would cede effective control of HGM to this 'concert party' without paying up for the privilege, which isn't healthy in my book.
If they have further plans for the company, via ultimately gaining voting control of it, then they should have to make that offer to all shareholders under those rules beforehand.
Protecting the interests of all shareholders is what they're there for, after all - sasa.
Another wonderful expression for your phrase book.
Which I think means that the proposed purchase of neighbouring (2 days away by dog sled?) Aristus gold mining assets in Chukotka by way of new shares to be taken mostly by existing major shareholders plus about $13M debt is going to produce improved net earnings this year.
The market seems to agree, shaking off the 5.4p ex-div.
I will read the detail in due course but it has been pointed out the reports don't really help, we will just have to trust Schvidler the fiddler and chums that they know what they are doing, and that it is in the interests of all shareholders and not just those in the boardroom.
I asked the same question on LSE. The answer from Ragnarlothbrok is below.
"Dividend is 5.42p per share kenj, Sharepad tells me its going ex dividend on Thursday 26/4/18 and being paid on 25/5 . They call it the second interim dividend rather than the final dividend in their presentation (page 6) which is confusing. At the current SP, POG and rouble this should be yielding 6% in 2018 based on their 20% of OCF policy."
So far as I can determine company accounts are not worth the very expensive paper they are written on. The assurances of the auditors are worth even less. The only number I would possibly trust is cash at bank although the big 4 may be unable to verify even that.
Re HGM. Hold and take the dividend. Be glad net debt is [apparently] reducing.
no response from HGM to my enquiries why they appear to be reporting some revenues net of some processing costs rather than at the market price of gold. It is complicated enough trying to track the performance via exchange rates, but when you can't rely on ozs gold x gold price either it touched a nerve.
Probably my cockeyed reading of the report, everyone does this (99%)
FD and auditors are hunting down the back of the sofa (1%)
Trying to answer my own question, the problem here is that HGM report production as a combined gold + "gold equiv" into a single figure, even though they are different products from different mines with different market values.
Gold is gold and solds at $1,259 / oz, as expected the average market price in 2017.
"Gold equiv" is not gold nor is it equivalent it is product which has to be sold at a steep discount to the gold market price because it needs refining to remove stuff which is not gold.
When the gold is combined and diluted with the "gold equiv" the average sold price is then reported as $1,162 / oz. So ... aaaaaaagh!
Confused? I was! A difficult report to unravel and this is an issue to be explored further. Something peculiar about this and how it is reported, why not just report the unrefined "gold equiv" and its selling price separately?
"Average realised price of gold equivalents was 1,162 USD/oz for the year"
I have written asking for clarification of who is the FD / CFO, why haven't they reported average gold sales > USD 1,250 which was the typical market price for 2017, who are the auditors of the financial statement and is this the only glaring error.
Is this just a mistake or have they failed to report $25 Million profit !!!!!
Apart from which all good, 5.42p dividend welcome.
Maybe a Twitter storm could adversely affect Russian gold miners by extending the spat with the US etc. However, I think it is fluctuating currencies, threatened trade wars, excessive debt, isolationism, scarce resources, a weak dollar and volatility to mention but a few, that may also be having an effect. Other than that, HGM should find it plain sailing.
an unexpected opportunity at 138.x today, so I am back in with a good chunk at last.
Sentiment against Russian oligarch-controlled business obviously the risk (partial recovery from Poly today though), while we have a counter-balance from gold price and exchange rate movement in HGM favour. A 5p or so dividend imminent. Worth a punt that international relations will calm down.
Do we have market experience of what happens when a Russian gold miner registered in Jersey listed in London trading in $ gets caught up in a twitter storm!
I believe in gold and silver as stores of wealth/value. However, the metals have been flat lining/trending down for most of the last 12 months. As you can see from today's shenanigans, HGM, CEY, FRES and HOC which I hold, are all well down today - this afternoon to be precise. Gold and silver prices are around break even. I don't know the reason for the sp falls but there doesn't need to be one as the markets are that jumpy. I have to say that holding cash is also risky. I will explain that last comment if, like me, you have a nerdish interest in such things.
Long term, the only thing that will hold its value is physical gold, so get some.
Just a thought,
The world is in a debt mess and its not getting better.
I am preparing to be in cash or safe haven assets that store value such as gold. Because the crash is coming it has been coming for years in fact and we need to be prepared.
Is HGM is a fairly safe haven to be invested in.
Any comments negative or positive no probs. ???
A lot of speculators money in Cryptos at the moment and no sustained move away from stocks. I expect that will change when the US gets a few interest rate rises and stocks begin their downward journey. Money will go somewhere and gold might come into its own again. I remain a gold buyer and share seller.
HGM is at roughly the same price level that I bought in at. It's re-visited this level a few times over the last few months so it must be an important support level. General volatility and share price weakness is rife atm and the gold price, although solid, is not providing an equal counter balance to general stock price falls. Precious metals are trading sideways and there is no clear direction. This could change suddenly and there is plenty of issues around to spark off a return to the safe haven of gold.
I am not tempted to buy more currently and that is true for the market as a whole but I am certainly not selling.
hi and have a Good Day. marktime,
I Concur & your valid points to ponder.
The Pic a Box question for me is 2nd H Div. payment maybe a low 2.5 + p this time ...mmm eish. I'll just have to wait to mar-apr 18.
My last top-up - 1.44p so I will see , says me the blind man mmmm. ;-))
As always DYOR and happy trading.
Must have been dozing when this grazed 140p, might come round again, I would like to be back in. Share performance remains highly sensitive to GBP:USD:RUB movements, the gold price obvs holding well above $1,250, and the cost of Russian debt which has continued to fall. Hard to be sure but I expect mostly positive news when hard numbers are put on FY17 in early April, should come with a Q1 update.
For a given price of gold the more RUBs a USD buys the better ... having fallen from the mid-70's into the 55-60 range last year we have stayed there, but logic (!) says rising US interest rates and falling rates in Russia should make USD stronger ... despite US administration efforts to weaken the dollar as being good for trade. GBP has strengthened 10% over USD, never mind the logic, so otherwise good results do not translate so well into sp and dividend in pence. A stronger USD while the gold price holds up is what we should be rooting for.
The implications of the survey reports are not immediately apparent either, more gold but less concentrated deposits? My take is the extended life of assets will need investment and a higher operating cost to exploit. A prudent approach of using cash flow for investment and reducing debt to keep the AISC to its splendid low level are further signals to a slightly more restrained dividend.
You also have to ask, if you were Abramovich the erstwhile major shareholder what would you do, ... likes to take risks, with other people's money, so he might not be so worried by the $210M debt at 4.4x net earnings of $47M in 2016, he might point to the increase in recoverable asset value from the surveys.
I don't think you will regret topping up, Dingledangle, many fund managers and tipsters are struggling to find good investments to recommend. Many end up tipping gold and silver. Jim Mellon has just mentioned that he thinks gold will rise above $1500. Inflation is steadily rising, the dollar is weak atm, the bond bull run is at an end and the gold price has already responded by rising to around $1340. One reason why we are not seeing the benefit for this rise is the strength of the gbp against the dollar. That's why timing when buying gold stocks as opposed to gold, is complicated. There are too many moving parts. However, I don't see the gbp rising quite so quickly against the dollar now that it has reached $1.41. It may continue upwards but not at the same pace imo.
The fall in the price of bonds is likely to continue which will affect equities too. The price of gold should benefit and so should efficient gold miners.
That may or may not be the cause ... my view is that the policy announcement weakened expectation of dividend yield unless free cash flow is also paid out by discretionary special dividend instead of putting it to development and to debt reduction.
There has been no production news, no reported stakeholder activity, no corporate deals, no broker revision. Nothing to reduce the Russia risk factor.
This is not the only gold miner to have ramped up recently.
There may be a hope for better realisation of profits following debt reduction and a potential boost from more favourable USD-RUB exchange rates in future; or a belief that we are at the beginning of a sustained step up in gold prices.
A similar bubble early last year quickly popped. This one may have further to go, I have probably done my usual trick of jumping ship way too early, but I get anxious when I cannot relate a significant share price trend to actual business performance or outlook information. Speculation, or someone knows something I don't.
Since through good fortune the SIPP in question was already half way to 2018 target I decided to capture the HGM gain and switch across to EAT, as you saw, for a rather more predictable high income.
I still like the company for its low AISC and I will be back at some stage.
price increase seems to have followed this announcement on 12th December
"Highland Gold Mining Limited ("Highland Gold" or the "Company", AIM: HGM) today announces that the Company's Board of Directors has adopted a Dividend Policy as follows:
Highland Gold Mining aims to pay a dividend that takes into account the Company's cash generation, profitability, balance sheet strength, and capital investment requirements.
The Company anticipates total dividend payout for each financial year will be 20% of Net Cash Flow from Operating Activities.
The Board may recommend the distribution of additional cash on the balance sheet through increased or special dividends should those funds not be
equired for capital expenditure or debt repayment."
By my reckoning, wth net cash flow In H1 of $59M or circa £42M, this means £85M for the year giving a 3% underlying yield with the prospect of "increased or special dividends"
those buying either like the adoption of a policy and or think the opportunities for additional dividend paymentss is high.
Confession ... I have cashed my HGM holding in recent times. No real motivation, just quitting while I am clearly ahead and not too sure what is going on.
Puzzled why the sp has surged to 170p+ in the past month stimulated by ... well what exactly?
? gold dipping to $1250 before returning back to $1305+?
? end of year attraction to gold as a haven?
? clever investors anticipating something I don't understand?
? (no) news from the company?
The sp stuck in sub 150p territory for much of the year and I see no fundamental shift in performance or outlook, the miner is still doing its mining and Trump is still being Trump. Assets have been re-appraised but putting potential into production is still a pipeline rather than reality, likehood of a sustained dividend was already high, exchange rates have settled rather than swung back, so we just have a sentimental bubble at this time of year, or I am missing something?
Anyway, my conclusion is that the current nonsense about who has the biggest button on their desk is just that, we are as likely to see 145p again as not before April, when I will be back.
Hochschild announces Redemption of 7.750% Bonds due 2021
"Hochschild Mining plc ("Hochschild" or "the Company") announces that it has today (through its wholly-owned subsidiary, CompaÃ±ia Minera Ares S.A.C) instructed the trustee to give notice to the noteholders in respect of the redemption of all outstanding Notes with outstanding principal, in aggregate, of US$294,775,000 (ISIN: US204474AA86 (Rule 144A) USP3318GAA69 (Reg S) and CUSIP: 204474AA8 (Rule 144) P3318GAA6 (Reg S)).
The redemption is expected to be undertaken pursuant to Article V of the indenture and paragraph 5(b) of the Notes with settlement expected to occur on 23 January 2018. The redemption price is set at $103.875 per $100 principal amount of the Notes, equating to a total payment of US$306,197,531.
The redemption will be financed through existing cash resources in addition to borrowings under committed facilities, in aggregate, of US$200 million on the terms outlined in the table below and is expected to result in a significant reduction in the Company's interest payments."
$100 million BBVA/Scotiabank 1 year 1.75% (BBVA)/Libor+0.32% (Scotiabank)
$100 million Citibank, N.A./The Bank of Nova Scotia 2 years (1 year grace period) Libor+0.7%
"The early repayment of the bonds is testament to the strength of our operations and our ability to generate positive cashflows. Also, we are now able to refinance the balance of our debt at significantly better terms thus substantially reducing interest payments and improving the financial results of the company. As guided, we continue to deliver on our strategy to reduce debt and strengthen the Company's balance sheet."
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