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Joe, every time I see PR that says that penny company received financing and no terms disclosed, I suspect something like this GBMR agreement:
http://biz.yahoo.com/e/060918/gbmr.ob8-k_a.html
The lending company would be stupid not to short borrower's stock (in NY, Frankfurt, Paris,...) to get better return.
I noticed your posts on GBMR board. What's your current view on GMBR and NNRF?
Thanks.
I have been looking at GBMR for some time (I like NNRF, so thought GMBR would be a good companion to this position). Well, their financing agreement updated recently:
http://biz.yahoo.com/e/060918/gbmr.ob8-k_a.html
does look scary. Brittany must short GBMR like crazy to get more shares for the loans and use them to cover position. I don’t think GBMR is a scam – they have real and useful product, but looks like they are desperate and can’t get financing anywhere else. So, they will issue “543,478,260 shares to draw down the full $15,000,000 available under the agreement” (even more if price keeps falling), then what? Another reverse split?
Let me know if I am wrong and missed something important… I almost bought this stock last week, but will keep watching for now.
Well, his previous job:
LEBEDEV, Valery
Academician of the Siberian branch of the Russian Academy of Science,
Corresponding member of the International Engineering Academy,
Corresponding Member of the Technical Academy,
Professor, Candidate of Chemistry
http://www.jccem.fsu.edu/Partners/MCA.cfm
He was General Director of the Mining and Chemical Combine, Zeleznogorsk (Krasnoyarsk-26) - well known facility (secret and closed in Soviet times).
In 1999 became Deputy Minister (States Secretary) of Atomic Energy Ministry. Was born 10/22/1941. Graduated Krasnoyarsk Politechnical Institute. Married. Two children. Hobby: history, hunting, sport. :)
<<The Option Agreement provided us the exclusive right for up to sixty (60) days from the date of the Option Agreement, subject to us conducting due diligence, to enter into a transaction with Key Brokerage whereby we would purchase seventy-five percent (75%) of the shares of Kondaneftegaz (the "Option").>>
This is very interesting agreement: SIBN can buy Kondaneftegaz that owns nothing - just paper applications for 10 licenses submitted to Khanty-Mansiysk authorities. The risk – they won't be able to win any of them. OTOH, the seller is paid by $2.2 SIBN warrants, that worth nothing while SIBN price is below that strike. So, with current market price (which I consider anomaly) SIBN will get Kondaneftegaz for free. I bet that Siberian’s CEO will spend those 60 days in KMAO trying to estimate chances of winning the auctions. He has good experience and contacts in Kurgan Region – 100% success in auctions. Kondaneftegaz participated in some of those auctions, that’s when they established current relations (IMO). Now Mr. Zaikin has to verify partner’s weight in Khanty-Mansiysk and use all his charm to raise the chances of success to 100% :).
If they enter into transaction the SIBN price should be above $2.2 in 60 days – to make Kondaneftegaz feel better. If they plan AMEX listing this year (as CEO promised) – average price should stay above $2 anyway. In any case current 1.8-1.9 range looks like buying opportunity.
IMO.
As far as I remember, Saratovneftegaz was sold to Russneft. SaratovNefteGeofizika (which is almost ours :) is a different company.
I am also adding here (sold my LBWR on "no news" run).
Anyone interested in my SIBN hype :) can find it on SIBN board:
http://www.investorshub.com/boards/read_msg.asp?message_id=13665409
As we know, Siberian Energy is exploration and development company. It has big plans (diversify business and geography and become an integrated oil business) and good management, but no proven reserves so far. The situation may start changing as early as this year with first results of seismic testing and first exploration drilling. So, what price target we are looking for?
Let’s ignore recent new expansion plans and calculate Kurgan licenses only. I also ignore NG reserves and am looking at oil numbers only. Zauralneftegaz's predicted reserves are estimated at 480 mln barrels of oil:
http://www.finamrus.com/newtopics/news028F1/default.asp ,
50% of which is a stake of JV partner - Baltic Petroleum Limited. So, we are talking about 240 mln barrels of probable reserves for SIBN. When/if these reserves are proved it will bring the SIBN market cap to ~$250 mln (minimum price for non-producing assets), with moderate production it will be ~$500 mln (look at Urals Energy as an example). Current number of shares outstanding: 11,584,497, with issued warrants let’s say it’s 15 mln shares. Using these numbers we will get PPS estimates: from $16 (no production) to $33 (“normal” production). And this is only for Kurgan fields… They will probably need to dilute the float on the way up, and they could be (and will be) bought out on the first signs of “real oil”. OTOH, we have already seen $9 spike on no news…
Conclusion: my conservative long term price target: $10-12.
I know that you know :) ... should post it as a new message.
One thing to understand about Chernobyl and importance of Nucon’s involvement there. Many people consider Chernobyl disaster as short term “nuclear pollution” problem that could be fixed fast (ala oil spots in the ocean) and forgotten. This is not the case! You can’t just cover these tons of nuclear waste by “something” or “clean the site”. Chernobyl’s block #4 is a problem for generations. This is an industrial site ("plant") that will require maintenance and investments for years. And this is not just Ukraine’s problem or fault. It was inherited from FSU and is a permanent threat for all EU countries. Doesn’t matter what economic conditions are in Ukraine or Russia, the old Europe will keep paying hard cash for Chernobyl project. So, for any participating company it will be a stable source of revenue for generations to come.
IMO.
Imagine: small pinky company XYZ “has entered into an agreement with GAZPROM to co-lead an international consortium of European and Russian companies to provide equipment, technologies and services to GAZPROM” and “this Agreement enables XYZ to place a significant number of its owned and licensed technologies in GAZPROM facilities”? Wouldn’t it be a “strong buy” to say the least? Now replace ”XYZ” by “Nucon-RF” and “GAZPROM” by “ROSATOM” - that's where we are with this investment. ROSATOM is Russian State nuclear monopoly (ala GAZPROM) in making , and Nucon is in unique position in right place and right time.
Brent, thank you for your PMs (I can't respond privately).
Well, guys. I have rather big position in SPRL, and... I am removing SPRL board link from my favorites. You win!
Market discounts Russian stocks because of general investment risk, related to the country. Just look at the latest research:
http://www.dolbear.com/Publications/CountryRankings2006.pdf
Russia is at the bottom of the list between Papua New Guinea and Zambia (with low grades for delays in permitting, corruption, etc.)
ROSATOM will control ATOMSTROYEXPORT after buying another 2% of it's stake. So, construction of all nuclear stations outside RF will go through ROSATOM, which is on it's way to become "Nuclear GazProm":
http://lenta.ru/news/2006/02/09/atom/
<<Nice! Nucon's CEO 'IS' former RF Dep-Minister-Atomic-Energy!>>
2C, I was going through different Russian sources, and that was my guess also. But... Valeriy Lebedev is very common combination of Russian first and last names. For example, Director of LAES (St.Petersburg Nuclear station) is also Valeriy Lebedev.
Do we have any direct evidence that all three Lebedevs or any two of them is the same person?
Life is a gamble. Plain and simple.
2C, I am not trying to stalk you... but I started NNRF position today. This is one of the most solid picks of yours - should be traded on big exchange right now... maybe not 10-bagger like NDOL or AURC (although, with small float like this you never know) but pretty safe investment with big potential. My only regret - I was actually watching it at 0.7-0.8 range, and didn't buy then. Will keep some funds ready to average down...
May post occasionally here. I do have some Chernobyl background... unfortunately.
Another point to Joe's comment: vodka in Russia is very different from "Stolichnaya" you can buy here. Not for a weak stomach. So, SR, if you are going to drink with workers take Mylanta... just in case. :)
Are you kidding, 2C? The Governor of Chukotka Roman Abramovich
http://www.chukotka.org/authority/distr-adm/governor/abramovich/
is the No. 11 in Forbes Richest List with a net worth of $18.2 billion:
http://www.russiablog.org/2006/03/forbes_rich_list_includes_32_r.html
If he wanted he could open branches of NYT and WSJ in Anadyr (capital city of Chukotka).
Bema Gold Corporation: New Licenses Acquired at the Kupol Project Area and Additional High Grade Results
Returned From the Newly Discovered 650 Zone
VANCOUVER, BRITISH COLUMBIA -- (MARKET WIRE) -- September 26, 2006 -- Bema Gold Corporation (TSX: BGO)(NYSE: BGO)(AIM: BAU) is pleased to announce that its 75% owned Russian subsidiary, Chukotka Mining and Geological Company ("CMGC"), has been awarded two new licenses surrounding, and adjacent to, the Kupol Project located in far east Russia where Bema is currently developing the Kupol Mine. With the acquisition of these two licenses, Kupol West and Kupol East, CMGC increases its overall land position in the Kupol Project area from approximately 17.5 square kilometers to an approximate combined 425.5 square kilometers. Furthermore, additional high-grade drill results have been received from the recently discovered 650 zone located south-east of the main Kupol vein.
http://www.marketwire.com/mw/release_html_b1?release_id=166743
I was very concerned about NDOL before merger announcement. It was just regular penny stock. Everything changed now. My take: AURC and NDOL are very similar companies in similar business. The main difference - NDOL has executed already, the result is known for any patient investor, and manipulation games (which I suspect include Frankfurt) are almost over. AURC will eventually finish with similar reverse merger (IMO). But will be played hard until then, just like NDOL has always been. It could be subjective, but I don't worry about my big NDOL position even being in red (like now). Can't tell the same about my tiny AURC position, which I already sold once, and may sell again. BTW, why was the Frankfurt announcement included in this financing PR? Do you have an answer? Coincidence? I don't claim anything, but I do know what some lenders do with shares of the companies they finance.
P.S. Now my post will be deleted, and this is your fault. :)
IMO.
Someone mentioned earlier that only “certificate holders” are counted. So, 1000 shareholders of Ameritrade ("street name") would be shown as one certificate holder. Unless all newcomers request stock certificates (flipper with certificate is really funny :) nothing is going to change.
this is true. Many companies discover themselves listed in Germany, although they never applied for trading there. At least,we see this information in Aurus PR... Was it NewConsult requirement for getting the loan?
I believe that statement "raw materials can be a financial instrument" is applicable only for Russian sources of financing. Can't imagine Swiss company taking raw materials in Nerchinsk as collateral. What would they do with it? Anyway, eventually we will find out about the terms of financing from company filings, O/S data, etc. On this stage of development I, actually, don't have any problems with dilution, but (you can put me in bashers-flippers camp now :) I do have problems with Frankfurt exchange... This is a cloaca of naked shorting... They kill even stronger NYSE stocks (check history of NFI, for example).
This definitely doesn't look right... and hard to believe.
We are talking about significant increase in O/S now (do you believe it's true?), which means she misled you.
<< ...increase in O/S was "NOT SIGNIFICANT"... She really is a nice girl... I would think the current O/S count is probably about 115 million>>
IHDR,
maybe that girl wasn't that nice after all? :)
First, 0.07 cent a share given to reach 10,000,000 dollars comes up with not 1,500,000 but ~ 150,000,000 shares (142,857,143).
Second, where all those numbers from?
"In the mining sphere, Mitsubishi intends to invest $50 million in the Kupol Gold mine development in Chukotka. The cost of the project is estimated at $425 million and production is expected to begin in 2008. An international consortium is planning to mine 16 metric tons of gold and 2.2 metric tons of silver annually. The deposit's total reserves are estimated at 171 metric tons of gold and over 2,000 metric tons of silver."
http://en.rian.ru/analysis/20060925/54252957.html
Good thing: all eyes are on Russian gold. Kupol now, Klyon next?
Bad thing: if Kupol production "is expected to begin in 2008", don't expect anything from Klyon before that.
IMO.
I do:
http://www.investorshub.com/boards/read_msg.asp?message_id=13530365
Just Magma contributes about 10 times more to NWOG production numbers than SaratovNefteGeofizika. Comparing NWOG to Urals I noticed that w/o those acquisitions NWOG looks more like exploration (not producing) company. And reserves "under production" have much higher multiplies than idle reserves "waiting for production". Magma would dramatically change the picture.
I do think that SaratovNefteGeofizika is very valuable asset. And big part of this value is not just their reserves and production, but geophysics service contracts in Saratov region, Kazakhstan(?), etc. Due to these contracts NWOG will basically become the part of any success in this region. I remember a month or so ago I posted about big oil discovery in Saratov. It wasn't one of NWOG fields, but SaratovNefteGeofizika had done all preparation work, hopefully made a lot of money, and received congratulations and official "thank you" from the local government.
leebret,
of course, I agree that current shareholder would benefit from any scenario, that’s why I am here. :) Still, I would advise “current shareholders” to keep average cost low enough (at least below my ultra-pessimistic $0.9). $2.17 is not written in stone… Actually, your scenario: “they are playing games with buyers who are ready to buy NWOG right now” is the only case when the fixed price like $2.17 (and more) could be negotiated. It could be the case, of course, but somehow I came to the conclusion that move to AIM was delayed because Magma deal isn’t closed yet. As I tried to show, w/o Magma AIM price would be cut in half.
Now, moving to OTC BB… It’s my opinion, that if they keep trading in US while doing AIM IPO, it will significantly hurt the whole deal. Most of the trading float will still reside in US, will be subject to price manipulation, and drag price of London’s shares down… I watch/own some very good and solid NYSE traded stocks with history of 15-20% dividends, that are beaten down for years by naked shorting, etc. Possible solution for NWOG – start AIM trading after expiration of 1-year restriction (June, 2007) – then US shares will represent just tiny part of the float. In this case AIM trading would be like another buyout – independent pricing of NWOG shares "from outside".
So, fast buyout offer would be the best less painful and more profitable solution for current shareholders. But I am afraid we will need some patience here… the torture should definitely stop by June, 2007 :)
NWOG doesn’t need to offer all outstanding shares at once. That’s why we have different scenarios:
1. They issue new shares up to 1 bln allowed. Not likely. They promised that wouldn’t use new shares for financing.
2. Insiders can release some of their shares. Doesn’t sound right. Their shares are restricted. Although, I am not sure whether those restrictions apply to foreign markets.
3. They can announce tender offer for NDOL pinkies (like buying significant part of the float for $0.6 - just an example). These shares would go to AIM IPO at higher price. This is a “normal” scenario, but there are some moral/legal issues with claiming that your shares are worth $2.17, and buying them much cheaper then. However, nobody forces individual investors to participate in tender, so maybe it’s OK.
4. My favorite scenario (see earlier posts): they leave US markets completely, move all shares to London, and give US investors a few options to cash out close to IPO price.
All IMO.
SIBN's Kurgan's contracts are 100% secure... at least until current Governor keeps his office. First, Mr. Zaikin has a superior contacts/influence in the Region (both business and personal). Second, on these early stages of exploration and development none of the Russian Oil Majors is interested in these licenses. The fact that SIBN is expanding to HMAO is very encouraging because it makes this company more diversified and secure investment. In Kurgan we, actually, have "all or nothing" situation. If/when they manage to detect first signs of "economical" oil - PPS will skyrocket and bidding war will begin. And this could happen as early as this year - according to Baltic Petroleum (JV partner) first test results should be known in October and December.
Pinkie, yes, $2.17 is a magic number now. But I think NWOG management doesn't have much direct influence on AIM pricing. Listing procedure includes a serious audit, that will be certified by Nomad, who will visit NWOG places to make sure that they are for real, etc. I believe Nomad will base IPO price recommendation on existing AIM precedents - like we are trying to do, just with more real data available. Buyout offer is in the past now, NWOG insiders can only dream about $2.17 and work hard to make it happen... unless they already have another buyout offer in hands.
IMO.
Agree. I tried to include NG reserves in SaratovNefteGeofizika but... you are right - estimates are mostly based on oil reserves. Even oil production isn't that reliable. Besides, it's my feeling that NWOG can significantly increase production really fast. Do you have any other estimates or ideas how much NWOG is worth in London?
I am trying to estimate the share price that AIM would assign to NWOG. Even posted the first version already, but messed up with production numbers, so asked Moderator to delete it. Here is an updated version.
Perfect company for comparison - recent AIM IPO:
Urals Energy - an independent exploration and production (E&P) company with its principal assets and operations in Sakhalin Island, Timan Pechora (including areas in the Nenets Autonomous Okrug and Komi Republic) and the Republic of Udmurtia, Russia. The Company is focused on the integration of its five recently acquired subsidiaries and the exploitation of their assets. In addition, it is actively seeking to continue to grow and diversify its reserve and production portfolio through exploration activities and the acquisition of additional E&P companies or assets by taking advantage of the ongoing rationalisation of E&P assets in Russia.
http://www.uralsenergy.com/cp_overview.htm
They use production “per day”, which I suspect is a trick (some of the wells, located in extremely cold places – Komi, Nenets AO, are probably idle big part of the year, so they don’t want to advertise “per year” production numbers). Anyway, we are doing “conservative” estimates, so let’s assume it’s 365 day/year production, means ~3.3 mln BBL/year.
Urals (6/30/2006):
Production: 3.3 mln bbl/year
Reserves: : 225 million bbl
Market Cap: 82,681,136 shares * 386 GBX ~ $580 mln
http://www.uralsenergy.com/newsdetail.asp?news_ID=6249
NWOG (6/30/2006):
Production: 894,250 bbl/year
Reserves: 208 million bbl.
Est. PPS (P): $0.26
Est. PPS (R): $0.89
http://biz.yahoo.com/iw/060620/0137585.html
NWOG with Magma:
Production: 7,000,000 bbl/year
Reserves: 345 million barrels.
Est. PPS (P): $2.03
Est. PPS (R): $1.47
http://biz.yahoo.com/iw/060621/0137767.html
Adding to this NK SaratovNefteGeofizika improves numbers further (by 600 + mln bbl production and 40 + mln bbl reserves + NG production):
Est. PPS (P): $2.24
Est. PPS (R): $1.66
http://biz.yahoo.com/iw/060629/0140235.html
Urals also owns some refining capacities, but NWOG, as I remember, owns some gas stations in different regions, so let’s assume that they have equal value.
Conclusion: Including Magma in the mix really makes a difference. That’s why this acquisition is linked to AIM listing in NWOG PR.
To be honest, these numbers are less than I expected… Based on reserves (production numbers are not reliable) conservative estimate w/o Magma, SaratovNefteGeofizika, Oil India, etc. is ~ $0.9/sh . May be Urals isn't that good example after all :)
P.S. Reading yesterday’s posts was very depressing… One suggestion to the board members: to keep discussion on relatively civilized level please use “Ignore” feature. It’s not that difficult and very effective. IMO, ignoring somebody doesn’t mean any disrespect - just technical solution that improves your comfort level. I do ignore some posters after yesterday’s experience, and encourage anybody to ignore my posts. If you think this post is "pumping" or "bashing" (like some suggested yesterday) - click "Posted by: eik", then "Ignore this Poster". No offense, really.
Joe, good post on CWRN board!
Regarding your NDOL comment:
“I sold out of NDOL (too late, of course, but not at a loss) because I eventually decided that the increased share count with the merger made it a VERY different stock than it was pre-merger. Everyone who hasn't left says they are still in it for the same reasons, but they can't be. At least, they can't have the same expectations. It's just not possible when your share count goes from about 250 million to 600 million.”
Although, I sold too early, even before they announced new share structure… counting new shares wouldn’t give you correct estimates for new merged enterprise. First, you need to count new assets contributed by NWOG, and, second, position of NDOL/NWOG in Russian economy (comparatively to old NDOL) will give you new higher multiplies. And this is a problem, of course. “First” and, especially, “second” are not clear and based mostly on speculations.
Outstanding Shares (pre merger): 337,865,401. Outstanding Shares (post merger): 605,400,387. The dilution was 79%. Supposedly, NWOG contributed 59% assets in new company. So new company would need to issue 337,865,401*100/41 = 824,061,954 if they had done “equivalent” dilution. In terms of “old NDOL” they actually improved company’s “per share” multiplies (about 36%). Plus this should be adjusted to reflect new more attractive "face". Even old NDOL was traded in 0.2-0.3 area with out any problem, so the new NWOG should be priced 0.27-0.4 w/o any new stuff: acquisitions, India, London, Putin, etc. And we know - this "stuff" is worth a lot! :) Current 0.18 price is equivalent to “old” 0.13 (again, ignoring all new developments). I considered NDOL a buy at that level. My lowest purchase was $0.08 – which is $0.11 in new prices. Are we going there? Hopefully not. I am building my NDOL position right now.
Just some arithmetic exercises… We don’t have enough information, so I have the right to consider those numbers unbelievably low. $0.11 would be the opportunity of the Century. I don’t think we will get there.
What do you think? Please, let us know when you buy NDOL again…
Thanks Joe. Nice analysis, as usual. I'll post some questions regarding your NDOL comments on Brent's board.
The PR you cited is not the last one. On June, 21 they said that "NWOG has won the tender for the acquisition of the Magma Oil fields... The company is expected to conclude the transaction over the next several months, and may be simultaneously executed with a listing on the Alternative Investment Market (AIM) exchange in London, where the debt financing is being arranged. The company does not expect to issue any common equity to enable this acquisition."
http://biz.yahoo.com/iw/060621/0137767.html
There is no mentioning of September here, "next several months and simultaneous listing on AIM". So, if AIM listing is delayed it may affect terms of Magma acquisition.
I didn't read all today's posts yet, but just looking at headers is very depressing... Bought another 9000 shares @ $0.175. Even with my comparatively low average I am losing money on this position, but somehow don't feel like I need to blame anybody... Parkin, Shmarkin or even marcq who made me buy today. :)