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 ??

The fact that the Directors chose to be paid in shares rather than cash is equivalent in my mind to buying shares out of their own pocket.

takahe,

No they did not take options in lieu of fees, they took shares.

With regard to the options I was talking about, see the RNS for early November 2004.

mjr1234,

No they probably took their fees in shares because they were low on funds, and didn't have much choice, which is not a criticism, in fact probably the only thing they could do.

That is not the same as buying shares out of their own pocket! (IMHO)

If my salary was 1000 per month say, and one month I got paid 1000 shares instead at 1 each, then that is the same net effect as if I had took my month's wage and bought 1000 shares at 1 with it.

Anyway my point of view is that the main benefit to shareholders in the long-run of Directors owning shares, is that they provide a big incentive to build up the value of the company, ie their interests are aligned with those of the shareholders and this is the case however they acquired the shares.

This in my mind is a better situation than companies where Directors get paid big cash bonuses whatever happens to the company share price.

The Badenhorsts had the option of taking 90:10 shares:cash or 60:40 and chose the former. That's good enough for me.They have been on that ground before!

mjr1234,

Sorry but I can't agree with that, they didn't buy their shares, they exchanged their fees for shares, almost certainly because cash was low, and there was probably no other choice at the time.


I agree with your second point, but sadly, even after the fees to equity swap, messrs Cross and Healy don't own that many shares, much less than the average ADVFN holder for example.

On your last point, I do agree, although in NML's case there wasn't the cash to pay "big cash bonuses" anyway.

Who are these mysterious "ADVFN holders" and where can I find out their holdings?

mjr1234,

They are not "mysterious" at all IMHO, and if you read the NML thread on ADVFN, they reveal their holdings from time to time.

There is at least one person with a claimed 2,500,000 approx, another around the 2 million mark (claimed), and several around the claimed 1 million mark.

takahe - 08 Jun'05 - 16:33 - 666 of 668
The Badenhorsts had the option of taking 90:10 shares:cash or 60:40 and chose the former. That's good enough for me.They have been on that ground before!

>takahe & mjr1234

I have to agree with Andy. When the Badenhorsts agreed the deal, it was for 60/40 cash to shares. Obviously, because the company was short of working capital, they were asked if they would accept 10/90, cash to shares. They accepted, because they were offered a sweetner in the form of a better share price. It was as if the company had given them an extra $195,000 (@$0.10 per share) to accept the deal. The Badenhorsts could then sell the shares on the market and make back the cash they would have been given.

It's not a case of them wanting shares rather than money. If I had a deal with you for 1000 to buy your car, but couldn't stump up all the cash, just 500, but then I offered you a Rolex worth 750 that you could sell (and pocket the extra 250) you'd be mad to turn it down.

It's the same case with the convertible loan. The person who gave the company the loan was opting to receive the shares (not cash) a year after drawdown and 6% interest. But they forwent the interest, because they could sell the shares immediately to minimise the risk that the shares would lose value. They fixed the deal for the conversion at 4p per share. So if the share price went below this, the lender stood to make a loss on the loan. If however he recovered the shares and sold them above 4p, then he could make a profit for every amount over the 4p that he originally did the deal for. We saw from the RNS that only 13,333,334 shares were transferred to Al Wakalah, so the other shares may have been disposed of, to minimise the risk.

The Badenhorsts simply accepted an offer they couldn't refuse. An extra $195,000 for doing nothing except having the difficulty of selling the shares. They've already sold 1 million shares. I wonder how many more they intend to dump?

Blimey, there's some big-hitters over there then!

I do read the ADVFN thread from time to time, but didn't realise anyone held such a large amount.

>mjr1234

These holders make no secret of the fact that they hold massive amounts of NML. I wonder if they will seem so sensible if the company reports that they are having difficulty recovering the amounts of diamonds that they said they would.

We already know that the weather has held them back. If the rainy season is that bad, then their production figures are going to suffer during October to April of each year. That's half the year. They are aiming at an average of 10,000 carats per month during the first year, followed by 20,000 per month within six months to a year. If they are having as much trouble as they suggested, I seriously doubt that they will do better than 7,000 carats per month or even 5,000 carats per month IMO. They would still be profitable at this level, but nowhere near the levels that they predicted they would be.

On top of that, the big seller is bound to take advantage of the news to sell into the strength and drive the price back down again. This will only cause the share to flat-line. Hardly what they want to encourage the institutional investors.

Regarding the weather situation, I don't think it is an issue, as there is a big mine down the road - catocha(sp) I think, owned by one of the majors. This seems to be going great guns, rain or shine. Can't think why it should affect NML's mine.

I believe it was only an issue when transporting and installing the heavy equipment on site. Now everything is set up, the weather is largely irrelevant imo.

Regarding the Badenhorst brothers, I would say if anything, they appear to have bought more shares.
We know they were allotted 4,126,500 each as fees, but the latest holdings rns stated they held another 4,040,000 jointly.
I can't see where this 4,040,000 came from?

Anomalous1
Do you know that for a fact about the Badenhorsts' choice? I am surprised. A friend of mine knows them quite well and that is not the story I heard. They are very optimistic about the mine.

Seems like some interesting afternoons posts!!

How come Healy had death threats does anyone know??

Also didn't nml do their homework as to the accessibility to the mines and potential costs??

Does it not alarm you that the so called experts - 'the brandenhorst bros' are selling shares??

I am not having a go, but are just asking questions. I am grateful of any responses (like earlier this aft)

Andy, although I don't hold FDI, the analyst told my mate he reckons 3 over next few years... I would probably keep em to let them run its course on that basis!!!!!! I know a broker at redmayne bentley n leeds that has been buying these for fun since 60p...

What do you vale nml at?? Do you think that 5m is fair or 'cheap'???

mjr
I think the weather is not expected to be such a problem now that the infrastructure is established. Petra are not far away and they seem to cope. Even in Botswana,this year, there were problems with rain

Healy's death threats are grossly exaggerated. A young lout with a grievance
made them in his cups on a BB and a poster reported it to the police.The chap posts endlessly and is obviously unstable, but not dangerous. He has now taken to trashing the EPD thread on ADVFN for no reason at all.
Who is claiming that the Badenhorsts are selling shares? Rather difficult to know that, surely?

legend,

How come Healy had death threats does anyone know??
> No idea, never heard of this.

Also didn't nml do their homework as to the accessibility to the mines and potential costs??
> I'm sure they're only human, and just underestimated the costs involved. Not an issue any more.

Does it not alarm you that the so called experts - 'the brandenhorst bros' are selling shares??
> I don't think they are selling shares? Looks like they may actually be buying?

What do you vale nml at?? Do you think that 5m is fair or 'cheap'???
> CHEAP - see my response earlier.

mjr1234 - 08 Jun'05 - 17:24 - 673 of 679
Regarding the weather situation, I don't think it is an issue, as there is a big mine down the road - catocha(sp) I think, owned by one of the majors. This seems to be going great guns, rain or shine. Can't think why it should affect NML's mine.

I believe it was only an issue when transporting and installing the heavy equipment on site. Now everything is set up, the weather is largely irrelevant imo.

You seem to misunderstand is that Catoca is well developed with proper roads. The access to NML's concession C9 was so poor, that they had to build a lot of the roads themselves, just to get the trucks to the minesite. Despite all this building work and the promise from the directors that they would "Go for it" the moment the equipment was at the mine site, they then claimed that they were unable to do much work for 4 months and that they would start the mine in February. Then (because the weather was so bad) they delayed this to March and in the end it was delayed until April.

NML does not have proper roads. If you check the site, you'll see that it is just mud tracks:



So you can see, when it rains, the mud slows everything down and makes it very difficult for the machinery to work. You also have to understand that NML is on the Lapi River.



So they are actually in the flood plain. If it rains (and word is that it buckets down) then a good deal of the earth they are moving contains a lot of water. So they waste a lot of fuel and time transporting a lot less ore and quite a bit more water.

Although the company have claimed that the weather will not slow them down much and admittedly it does not rain all the time, the sheer weight of water does stop work. If they do get as much as they did in the last rainy season, they would be lucky to work 3 or 4 days in every 7 - if that IMO. Remember, they don't work 24/7. They can't afford for the workers to pinch the diamonds in the poor light. One of the reasons why they have these guys:

Poor light?

Regarding the roads, if you look at other pictures on the website, you will see that the roads leading to the mine are in fact proper roads. The picture you posted showed tracks on the actual mine pit, where they are actually mining, so of course there are no proper roads!

It seems quite clear you are on a downer with this company and are inventing all sorts of excuses why they are doomed to failure?

I say lets wait and see, and leave it to the professionals..