By Lucian Miers — Wednesday 22 May 2013
Lucien Mi am afraid that Zak Mir, Lucky Shares and all the Bulletin Board Morons have got Churchill Mining badly wrong. I am short and at 27-29p that is the only sensible call.
The bulls argue that Churchill is in court right now trying to get $1 billion from the Indonesian Government which, it claims, stole a prize mining asset. Indeed on Tuesday a case was heard at ICID in Singapore.
But the case heard was merely to determine if the ICID (International Centre for Investment Disputes) has the right to arbitrate in this matter – not to award judgement. The idea that somehow a big cheque is on its way to Churchill imminently is just wrong.
If the ICID says it cannot arbitrate then Churchill is stumped. At 28p it is capitalised at £30 million and has cash of c£6 million. So the shares could plunge 80%.
If the ICID says it can arbitrate then in a best case scenario the case will not be settled for two years. Churchill shares may go to 50p but as folks get bored, worry that Churchill will in the end lose, the stock will drift lower as shareholders cash is spent on expensive lawyers and PLC costs. Either way I am happy to stay short.
- See more at: Share Prophets & Churchill Mining Article
Viewpoints...
1) as pointed out in a previous post, Lucian stated he was short at 20 pence? Or wasn't this the case? So now the sensible call is 27-29p.
Surely you'd be binary betting on a short position and Jurisdictional Issues are more positive for CHL than Negative. Or are parties believing/suggesting that Churchill's claim is frivolous, its initially inferred its got no value but now the hope is people will get 'bored' of the company? This doesn't mean there is no risk, but there doesn't appear to be a grasp of the basis of their [Churchill's] claim [read as basics], or what happens during the process or the possible risks including takeover post Jurisdictional Clarification (if positive).
2) There is a belief that investors have a view that the 'two day hearing' clearly describing the jurisdictional timetable and issues raised by Indonesia was in fact a ruling or hopes you believe others think it. Can any reader please message (it wont be published & is anonymous) if they believe that CHL have gained a settlement from the 'two day hearing'. I'd be interested to read their views and reasoning...albeit its felt its rather premature to consider a settlement.
3) Ironically the mention of a big cheque - Indonesia's Mining Public Relations and Overseas Investment issues may benefit from a quick settlement but of course they wont be doing that if they can prove their is no jurisdiction. [Common-Sense]
4) Shareholders cash is spent on expensive lawyers and PLC costs? Post jurisdiction there's a high possibility of Third Party litigation Funding being utilised which would remove upside and costs for shareholders but also enables a nice slice of the pie for shareholders pending a positive outcome.
Thought provoking...but showing little comprehension of the issues albeit that doesn't mean the position is flawed just the understanding.
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