The new marketing
arrangements Caledonia
Mining Crp New New Marketing Arrangements for Gold Exports (28th
January 2014) have just
given continued momentum to the decline in the SP. Most brokers will play down
the item as not warranting the SP declines for the sake of less than 1.4%
decrease in the value of the gold, now 98.5% as its more than affordable and also, in part surely can be offset as an expense.
For those with a longer memory, they will recall the events in
2008 (Caledonia
Update on Operations 28 Oct 2008) whereby
CMCL were not paid for their gold and had to put the Blanket Mine on care and
maintenance/suspend mining.
It’s a Geo-political risk that should be allowed for, but I hold
and will continue to do so until things either hit my sell point either way or
they’re bought out (the latter unlikely).
Atb Fraser
Edit: Link taken from comment to make it work here Fidelity Printers and Refiners, ZB tie-up bears fruit (Zimbabwe Sunday Mail)
Fraser
ReplyDeleteIve had CMCL on a watchlist for ages, but I do wish them well and as Fidelity is a subsidiary of the Reserve Bank of Zimbabwe, lets hope they cough up shortly. The crisis in 2008 saw Fidelity default on $20m in debts to the gold miners, of which CMCL lost $4m but this was a factor of the hyperinflation, which wrecked the Zimbabwean economy from top to bottom and this was under the same law as has now been reintroduced- ie all Z mined gold has to be sold to Fidelity. It puts CMCL on a bit of a tightrope, with payments and the % due needing to be monitored to ensure stability to see if they are maintained.
I guess we will all be more informed in a couple of months time.
Cheers. The Leggie
Leggie, indeed you are correct re: Default. However, my concern is how the value is determined, I have an stop loss which may or may not be triggered but that's life. Its all well and good saying 98.5% of value, but is the value based on the "market" spot or are their deduction on spot price say for "carriage insurance and freight.". With all in costs at near $1K there's headroom.
DeleteAs was rightly pointed out to me in an Email: Are Mwana Africa (MWA) planning on updating the market in a timely fashion regarding the new arrangements? Or is this something Investors are going to guess and price in themselves. Perhaps the company/NOMAD and Broker may like a prod! As per their Quarterly Operations and Exploration Update - December 2013 Quarter and with an office change notification only yesterday, one would have thought MWA would have been a bit more proactive; alas it doesn’t appear ‘that’ important…
Afterall this new gold agreement has been known about since the 1st December 2013 http://www.sundaymail.co.zw/index.php?option=com_content&id=39877:fidelity-printers-and-refiners-zb-tie-up-bears-fruit
Atb Fraser
Fraser
ReplyDeleteGood spot re MWA- I wonder if they already sell their Freda Rebecca gold via Fidelity, just a thought with no evidence in their accounts. This apart I cant see that they are complying by the new law so they could be in some serious trouble soon. If I was in, I would email the NOMAD- it often draws out an RNS that is overdue.
Cheers. The Leggie
Leggie, I in part take no credit for that element, as suggested, the matter came to me via email. Although the market has caused some significant late night working for me i.e. tonight!
DeleteHowever most parties will have not have noticed is that the MWA agreements may mean a improvement in revenue/value attained based on this agreement.
Atb Fraser
Fraser
ReplyDeleteIve done a bit more digging and the Fidelity tie up may even save CMCL money overall, given the costs of getting their gold transported safely and refined in Switzerland that they had in place previously v the extra upfront 1.4% charge. Fidelity have only been running for a few months since their re-entry into the gold market and they have made their payments in time so far, so I have moved CMCL up my watchlist as they now look like a good risk/reward bet. I could be in by the time FTML opens later :-))
Cheers. The Leggie
Leggie, apologies for my absence, but I was busy with Blinkx and STAN, so had to maintain the helm as holders got a kicking :-). Seems there's some issues that may need clarifying and the absence of an RNS (and the longer the delay) suggests it was prudent to short the stock Yesterday.
ReplyDeleteYou are indeed right, however, in the absence of a CMCL Caledonia Mining RNS there remains a risk.
I have never been so tired as today, I worked near through the night and have put my feet up now!
Atb Fraser
Fraser
ReplyDeleteThought you could be playing with BLNX :-)) They could help themselves (and their shareholders) by responding to the rumours in circulation but they have ignored rumours before and they are doing so again now- they could at least confirm AOL and Ask are still clients, or not, as its material to the companys future.
CMCL did get the dosh, but again they haven't RNSd so here it is-
http://www.caledoniamining.com/
We mention Stans Energy at sometime, as they are in a Russian arb court soon- again its a good story and they have been hammered so it could be worth further investigation here, especially as we might draw a line under RURs arb soon.
Cheers. The Leggie