NML is due its interrim results now, last year it was the 28th of this month.

They are setting up a new site to explore/research/analyse and all the equipment to do this should be on site now, and drilling should start soon, all this extra news should be covered in the interims.

does anyone have any further positive views on this company ??

Dont think theres a big sell there would have been more aggressive moves by the mms to fill the order asap.Its more than likely a placing on the cards at 4p thats waiting in the wings.Probably get news about the first diamonds along with yet another placing which means weeks more of depression as the placed shares come to the market to kill any rally in its tracks.

asmith2,

You coule be right, I think a placing is a distict possibility, but not at 4p, that's too optimistic IMHO.

My guess, at these levels would be 3 - 3.5p, as it will surely have to be at a discount to market price?

They MAY, of course, simply borrow the money, rather than dilute further, and I believe they have a facility arranged should they require to do so.


This is starting to look interesting IMO.

ASMITH2,

If a company places shares with an institution, it doesn't necessarily follow that these shares are then quickly dumped on the market! In fact, the only circumstances where this happens in my experience, is when the placing is with penny share bucket shops eg CE/HB, when those parties sell their shares to their customers at a profit, who then subsequently sell out. I would be very suprised and dissappointed if a placing was done with the penny share bucket shops.

Any other institution is not going to invest in a placing only to dump their lot on the market the next week. For one thing, they will probably have a lock-in agreement and/or warrants.

All in all, a placing will be seen as a good thing by the market in this case, as it will be expected that the company will use the cash to quickly bring in revenue from the mining, rather than it being frittered away just to keep them afloat like in some other companies.

But as Andy says, they also have banking facilities available to them, and since the company is going to be bringing in significant revenue streams in the near future, a short-term option such as a loan would be much better than an equity placing.

mjr,

Nicely worded.

I too would be disappointed if they placed with CE/HB, as they deal with placings from distressed companies as a large discount to the current market price.

CE / HB could be the last port of call for a company that needs cash to survive, and has explored all other routes without success.

I do not see NML as such a company, and feel sure they will be able to raise funds without taking the bucket shop broker route.

A cursory look at the interims shows low cash; although the istuation has been cleaned up since December, under 1m of additional funds were obtained. It seems likely that the April visit to London was to organise cash. Moreover, NML have said that they want to develop a second field in parallel. The problem is that the cap is so low at around 4m. Given that this is expected to be dwarfed by the value of the first year's minings it seems preferable for funds to be a loan, possibly convertible in the future when no one will worry given the anticipated capital growth. The alternative, and this does seem quite likely, is to await the completion of this initial phase in June when we were advised that projections should be available. The sp jumps and a placing is made at a higher value. If it is to be a placing then this strategy seems the obvious one. We could well be talking about annual earnings at greater than the current cap. for goodness sake!

Eric

Eric,

Yes I too think they could well be aiming to do a placing after the initial production run, and a ramp up in shareprice, but that requires them to deliver first, and that suits me.

On the otherhand, those buying in when they announce news run a very good chance of instant dilution, and a drop in price as the placing will almost certainly be a discounted one IMO.

Hard one to call at the moment.

Worth adding that there is very little in the price re the initial production output. We already have sound geological figures from qualified people. With more research in th epipeline it is really a one-way bet at the moment. Sooner or later there is going to be a real run on this share (IMnshO!).

Eric

Theres something just not right about this company at all.The fact that you can buy below the mid price shows how weak this is and is very likely to fall from here 3.5 / 4.0 will be the next quote or 3.75 / 4.0p when the market makerrealises hes run out of mug punters at 3.975!
There has been huge selling into every single rally now I wonder why that is...!Just doesnt sound right to me..

Basically, the selling into the rallies is shall we say 'low' or 'non'-risk takers selling to risk-takers ie you and me.
The low or non-risk takers for whatever reason want to remove the risk on their shares, which they may have received from convertable loans or fees for work done etc, and they have no interest in investing for future growth. Their sole policy is to convert their shares into cash as soon as possible.

That's my take on the selling, anyway.

One day, the seller will have sold all their shares, and the overhang will be gone. That situation is often when you see the biggest and fastest gains.

mjr1234,

Are you saying that the placees that bought at lower prices are the sellers?

And don't you think they are risk takers, if they bought when the company was not as developed as it is now?

I believe the Badenhorsts have only sold 1 million shares, and so not too many of the sales are from people that have been paid in kind, so to speak, IMHO.

Andy

They are risk takers, but of the kind that are happy to take a turn and move on, unless there is immediate prospect of better things. If not take the margin and get rid of the risk. IMHO

This would be subject to any lock-in agreements which are less likely with additional fund-raisin than with an IPO etc.

sd

This company has no money left a handful of diamonds and a load of rubble to shift through.Meanwhile who is going to pay the wages and all the bills yep youve got it you are there will be yet another miserable placing at 3p.And yes to the same sellers as before who will sell them all at 4.5p or above.This company is like a scratched record the story never changes.I therefore think it wise to Short the Pants off this dog to 2p.!

You mean they have a lot of diamonds worth a lot of money.

Remember that all the Directors and the mine operators have stakes in this company, some of them very significant stakes.

It is in all their interests to get the share price up and to ensure the company is a big success.

The Directors have options going up to 50p+.

An alternative explanation for the drop in share price (in the absence a large sell trade), is that the MMs are wanting to destroy sentiment in order to pick up shares as cheap as possible from holders throwing in the towel, before news arrives, whereupon they can sell them off at a large premium.
They are certainly doing a good job of it with some posters on here and other bbs by the look of it.

mjr1234,

they have to prove those diamond resources before we can count them surely?

They have not so far announced grades and values from their sampling and trenching which has been going on since last September.

With regard to your comments about directors and contractors having stakes in NML, I would just like to point out the folowing.

The directors and Badenhorsts have not actually bought their stakes in NML, they took them in lieu of cash to preserve cash as exploration and production were delayed by the bad weather.

Their options do not cost them anything, they are awarded at no cost, and are simply available should the shareprice pass certain milestones, up to 50p, and so are not significant IMHO.

Marketmakers do not generally hold stocks on their books, they aim to balance them, and avoid risk, particularly AIM stocks.

Whether they took them in lieu of cash or whether they are options, it is definitely in the Directors' and the Badenhorsts' financial interest to get the price up and increase the value of their holdings / get the price to the options grant levels!

Re: Marketmakers,

In an ideal world they do not hold stock on their books, balance them by the end of the day etc etc.

But in practice, and ESPECIALLY on smaller AIM stocks, it is obvious that they do hold stock on their books, and they also go short very frequently if it helps them make money.

This much is obvious from the number of 'Market Maker holdings' declarations you see, and also from debacles such as the 'Room Services' group where EVO went short of twice the entire issued shares or something similar. That was an extreme case of course.

Just had someone get back to me on this theyve been doing a bit of ringing around and the rumour is another placing is on its way but not with the usual suspects for whatever reason.That means the placing is in the last chance saloon bucket shops so expect a low price.

"Not with the usual suspects" could just as easily mean Rab Capital or Gartmore in this case, couldn't it?

mjr1234,

I agree, it IS in their interests to get the mine up and running, just that they themselves haven't actually bought into the company, IMO, they simply had to accept shares in lieu of reumeration due to lack of cash.

I genuinely believe MM's don't hold much stock of anything, and go long or short as the situation dictates.


ASMITH2,

I would be VERY surprised if that rumour were true, personally.
if it were, it would be very bad news for the shareprice, IMO.

City Equities once offered me EPO @ 3.75p, when the offer was 4p.
I checked the news, and surprise surprise, EPO had just done a placing at 2.5p.... to City Equities!

the EPO SP fell to 1p very quickly after that.