Exceptional work Fraser on the de-risking & playing all the way to the end-Will be some selling but hopefully some progress made- $35M whatever dividend is recovered I'm perplexed by the statements on it. NAV looks like 10p or thereabouts - no comment about it being a disappointing value Ianh ((thanks for the scribd tips).
Thanks Ian not near email. I have to say i thought Fraser was a wanker until today. I was thinking wtf derisking on a guaranteed win. Then i sold 70% on thusday & hes right. Cheers fraser. owe you one 30% banked & will hold.
ReplyDeleteYou Summoned it up Chris. No matter the result the idea was we got out with a nice profit. I read from a distance but his blod and his comments about drisking was brilliant. Fraser thanks owe you one or two! thanks Gray
ReplyDeleterespect FRASER
ReplyDeleteGlad I rerisked early on
ReplyDeleteDave.
Fraser/Ian and all
ReplyDeleteI took some more money off the table on Friday and agree that derisking/top slicing should be non negotiable in these and other cases when the opportunity presents. Anyone gambling all on the final award level may be better off at a bookies or one of Ians goat races. I guess the stmt from Peter gave the game away as it concentrated on the end of the unhappy episode rather than the size of the award, which to me was a clue that RUR are disappointed by the award level, but they will no doubt press the button to start the Santiago listing in the very near future and I am happy to hold what I have left now for this and the power build out.
Cheers. The Leggie
Interesting, I don't see the point in smashing flies over the award, the figure is known and should be worked to. I see in terms of legal fees some negotiation of the final fee with Freshfields. I returned the favour on Ian by getting him out of bed to wake up him about some programme on TV, I'm sure he needed to know that! haha...
ReplyDeleteWhat is compelling is the power production and Santiago listing. I am amazed there wasn't an expression of disappointment in the announcement. The management and in fact everyone (myself included) assumed the figure would be substantially harder. It would appear that Bolivia's futile and pathetic defence wasn't as bad as one would believe.
For me, I'll continue investing in International Arbitration Funds/Companies. The Rewards are massive over the long-term. Perhaps some realism of working on 25% of the claim value? That’s the name of the game in investing.
For others, the fixation on this isn’t positive for them, accept the facts of the release and invest as always with diversity and common-sense. The prudent investors should have taken profit. By taking a long-term view, RUR will return to this figure, but more importantly, had people bought at X a month since the International Arb and traded the logical moves, they'd be need significantly up over 3 years even just the last 8 months.
So when investing, if this is feeling negative in terms of result look at why. I don't mean the figure I mean psychologically. Yes disappointing result however there shouldn't be a large impact on any holding. The main reason I trade CHL and OXS and latterly Rurelec as well as holding.
Have a good Sunday!
Atb Fraser
Thanks I learnt a lot more than the profit I made on RUR 30% after all costs. I am amazed:
ReplyDeletei) buying over time pays off.
ii) not feeding the greed & taking profit
iii) being comfortable
Reading your blog had taught & saved me a lot but I now feel confident. Even a result like this was a celebration for me. Hope you had a great the weekend.
Gav, the point of these cases is they're long-term. Its rare for people not to be able to derisk pre-announcements and best of all, get a few decent trades in as well. CHL a prime example. Atb and well done Fraser (previously a wanker)
ReplyDeleteFraser-
ReplyDeleteYes- surprised Chris' comment no 1 was allowed verbatim.... hehe- I guess Ian thought it should be cleared to be on here--- no doubt you will have words with him later and possibly repeat the word to him..... :-)))
Ive done a fag packet vln for OXS and CHL based on them getting a restitution type judgement in due course, in line with the way RUR seem to have been treated ie. The court has effectively put them back to where they would have been if they hadn't entered Bolivia. This works out as follows-
1. OXS- $46.7m spent on AGF stake and the rig "lost" plus $9m on Khandiza= approx. £33.75m, less debts that need clearing £16m= £18m net for OXS, which is 3.7p per share (this could be less if the funders can get more back)
2. CHL- $38.55m spent on East Kutai purchase, dev and extra land bought. This equates to just £23m, which is just less than the current mkt cap of £31m (at 25.25p).
This is obviously just based on restitution and takes no account of the asset value or DCF and as we know, the cases will be treated individually and on their merits, but it does give some food for thought and a possible basis for valuation. Plus I hope I have found all the fund raisings which contributed to the above numbers.
Any thoughts are welcome, but I had CHL as being a bit overvalued on other parameters too and Im happy with OXS in their 2p slot.
Cheers (I wont add an expletive now :-)) The Leggie
Well it wasn't the result i would have liked but the manageable loss was all part of the risk/reward decision i took. I hope the chap who was 'all in' only risked what he could afford to take a loss on. Fortunately my position was using only profit from a previous trade. There was a time i would have thrown everything at it but after a few years away from the markets and drawing upon lessons learnt from Fraser in my first stint of trading i am more than comfortable with today. Churchill mining next. I suspect it will be overhyped to the maximum in the coming weeks.
ReplyDeleteIs anyone in Severfield Rowen, London Mining or Zincox? I've been trying to find companies hoping to turn a corner. I think they could drop back further but if your short. Fraser i would love to know just to spare myself!
All the best everyone
Oli
Hi Oli, its a good question to consider if parties are short on a company.
ReplyDeleteThe risks of upside on a short on London Mining mean it would not be viable (http://www.shorttracker.co.uk/ for retailers not getting the data remember there are exemptions including Market Maker and also being under threshold. I do hold stock in London Mining and have traded between 75 and the 140 ish trend. Concerns you need to consider with both LOND and Afircan Minerals is their moisture content and whether they can obtain insurance as the moisture levels increase. Perhaps you can find some reading about that. I enclose this link as a starting point: http://www.ukpandi.com/loss-prevention/article/729-12-10-safe-shipment-of-iron-ore-fines-international-group-circular-india-2053/
Regarding ZOX, I believe Leggie still holds for me it was merely a trade sold early bought late, but can't have them all. Severfield Rowen, I've not looked at for awhile. When I have time and it's not meaning working passed midnight I'll have a look.
If you're in early enough Oli, these Arb cases present significant trading opportunities but isn't that the case with everything.
Atb Fraser
Oli
ReplyDeleteYes- ZOX was certainly undervalue around 11p and is prob fair value at 22p or so as the mkt cap is £30m but it has been dropping daily so prob worth putting on watch for a week or two if you are not in yet. They have £48m in debts (basically the cost of the S Korean plant and R&D to date), which means they need good prod levels to cover the S Korea op but I like the fact they turn low cost dust from steel mills into zinc (and hopefully zinc oxide in due course- which would double revs), plus they cut out the zinc smelter and sell the slag to cement businesses. If they have finally bottomed the numerous processing problems, the money maker will be the next plant (Turkey likely, with Thailand and Russia poss). The next 6 months could be make (my modest bet) or break. Again, diversify or in other words, don't get greedy.
Cheers. The Leggie
That was like tunnel vision this morning, it was almost like a Mexican standoff !
ReplyDeleteI sat their on opening, 3 trades through at prices not far off closing, I thought hang on a minute, so whilst everyone else was deciding what to do, I started ramming my sales through lol.
I had to break them down, but managed to get 2/3rds sold in profit by the time everyone else woke up. I thought I had the last block out as well only to see it didn't sell originally but on a day when I should have been down 25% before I clicked all in all I took a 11% hit so its not so bad.
The interesting thing however is that I will be end up with around 10% more stock at a 25% at least better price, so whilst I am down 12% in value, I will more than make it back up and at a better price with turning it as I did today.
I`m quite glad I went in with the view of worst case scenario which was a SP of 5 to 7.6p on zero award, so I was happy with the appraisal on the risk side of the coin.
Certainly made for an interesting start to the week. Its good to see some re-appraisals on CHL and OXS given RUR`s award so thank you for the information.
On a RUR note, I`m still trying to get my head round why Peter is still adamant on a special divi given the BRR cast today. Given hes stated they will pay down all debt, that leaves around what £7m. Paying even a penny divi would= £5.6m leaving probably around £3m of cash in the bank (current approx balance £1.5m + £1.4m from the award that would be left).
RUR of course will save £2.6m a year on financing costs, but given this years capex program, £3m in the bank plus the interest saving will probably last a year. £8.5m in my view would be far better with a view for furthering quicker generational capacity.
I dare say sterling will probably have a view on this...
You could argue I guess that with Santiago coming online, cheaper funding will be available (but Id still rather see the money in the bank than a penny divi).
Cheers Fraser
Steve
Cheers for that Fraser.That shorting link is really good. Never seen that information before. Interesting to see 3.44% short on LOND. I see Darwin closed a 3.3% short on JLP which might explain the rise there.
ReplyDeleteThanks Leggie. I must admit i was surprised with the move from 13p up to 23 so quick. I had hoped to get in before the increasing of the oxygen plant this month and the maintenance in march. Perhaps there will be a pull back, but if things can be implemented efficiently i agree with you the next 6 months could be promising. I will be hoping to get in at some point.
Thanks for the info guys
Oli