Monday, 8 September 2014

Morning Mumble (its cheery honest): What to do with those Kefi shares? Anglo looking to sell individual 'assets'.

It came as no surprise that Nyota Minerals (NYO) resolutions were approved (RNS). I still ask the question, even as a holder of a paltry amount why this company is continuing. Return everything to shareholders, and shut the shop is the best way forward. There was a day, some 3+ years ago I had high hopes for NYO. Then things didn't go as they planned so I shorted the stock for obvious reasons. 

The entire sector pretty much was a sure bet on a short. Patagonia Gold et al all got a good kicking as the gold bug turned into a bad case that the clinic couldn't give a dose of to cure! NYO had more woes than most, just look at the spend and then subsequent departures and sale to Kefi. KEFI got a bargain to say the least, albeit that was because they were capable of reworking the feasibility of the Tulu Kapi. The question is, what do I do with the Kefi shares, donate them somewhere, offer them as a prize? hold till they reach £10 a share!?! I don't rate the company irrespective of assets, and unless there's decent news I suspect the market will punish the SP further, I think it was last 1.5 pence . 

With one gold company long in my portfolio, Amara Mining (AMA). Its got everything one would want for now and the bets are on for Randgold (RRS) (not to be confused by Range Resources (RRL) Mr W whom purchased the wrong stock). Today's Director purchase news, although small, is a positive for the holders in AMA, One will await the initial Feasibility Study for the Yaoure Gold Project in Q1 2015. There's a low risk of a placing before the feasibility news as they're fully funded through to Q2 by my estimates. 

So Anglo America (ALL) are going it piecemeal (FT Article Ruling out Corporate Break Up) to cure 70% of their portfolio that are either under performing or should be shut (my view). Could it be that AAL's assets are so dire a wholesale approach to the assets up for sale is considered a lot more risky than BHP Billiton's (BLT). It will takes some time to sell individual assets but that facts are blindingly obvious as who would invest in South Africa after the last mining strike.

Having held Ironveld (IRON) (no long having sold all the way to 20 pence), still hold Sylvania Platinum (SLP) and looking to exit at the first opportunity and have been short pretty much everything South Africa including SLP. I have limited involvement in South Africa via import and exports, but very well risk managed. The Country is on the avoid list for the foreseeable future. Lesotho, being the exception for some higher risk exposure to diamonds in Lesotho and Botswana. 

ECR Minerals plc Convertible Loan Facility with conversion at 92.5% of the average daily volume weighted average price (VWAP) during the 10 trading days preceding the conversion date, it makes one wonder why anyone would buy shares in the company let alone a director (News today); we'll ignore the fact it's £1,150 trade!  The only asset I believe ECR have are the tax losses which would be useful to an buyer! 

With Platinum Group Metals + Gold and Silver being supported at the detriment of the US Jobs data. Has the current bottom for the metals been found? It would appear the market is starting to bet on it! 

Now to yet more casualties in the iron ore industry with Australia's small caps suffering due to the major's ramping up. Iron ore price fall starts to hurt smaller miners will be a theme for a lot of marginal producers, one wonders how LOND and AMI's current prices are fairing in the current market (Badly) and doesn't bode well for financing/strategic partner support. Even the Chinese post some really bad deals are wise to overpaying. 

This week sees us hearing about Inflation (UK) (estimated 1.8%) on Tuesday, but more importantly for FX is the ECB Report on Thursday (direct link) and to top the week off, US Retail Sales with consensus being wide from positive 1% to minus 0.5%! Now with kids in decline for another generation in America and the return to school buying season of August margins will yet again be under pressure. It doesn't look positive, with my estimates around zero to negative US Commerce Department for update on Friday. 

Trust everyone had a good weekend! The new healthier me is returning, and not a drop of alcohol!

Atb Fraser.

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