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 ??

Andy, if you really think there should be a thread on TDM, I will see what I can do. But it is a stock fraught with all the usual, unfortunately.

It doesn't just have similarities with PDX, but also with BPRG, PRM, TRK - the business model is the licensing of intellectual property. PDX and to a lesser extent, TDM have had to modify that slightly, but the basic premise is very similar.

Wendy D - 09 Jun'05 - 18:19 - 721 of 725
He was definitely the source of the emphatic statement that a "barge" meant double production from day one - i.e. 20k carats per month, mined from both sides of the river by a plant situated on a barge in the middle. Think about what you know of alluvial mining - it's a ludicrous proposition to start with, even if you are dredging!

Absolute Rubbish by Wendy D She knows full well who was the ultimate source of the stories about the barge and I pointed this out to her on the ADVFN thread.
The source of the rumour was none other than Shane Healey, NML's finance director
The information on the barge was passed by him in a telephone call to one of the shareholders. That shareholder then passed the information to others in the Group. Shane Healey represents NML, regardless of the fact that Wendy calls him a bean-counter. I was told by Gunnergonk (another ADVFN poster) tht he spoke with Shane Healey and was passed this information. Shane had no right to put out stories such as the barge if the information was incorrect. I had no reason to believe that the information Gunnergonk gave me was incorrect and I know that Wendy D knew about the information coming from Shane too.

Wendy D has deliberately withheld stating who originated the barge information and the 'mining both sides' story as she knows that it proves my point. An NML director was the source of the information (according to Gunnergonk) and Wendy believed this was true too. I can prove that Wendy knew about it, because I have an email from her in which she mentions it:

From: Wendy D
Sent: 01 November 2004 15:34
To: 'Anomalous'
Subject: RE: skjimey

I have always been suspicious of the Healey emails. Shane is an accountant, not a geo nor a mining engineer. I have been baffled by the content of some of his notes, as they just don't make sense. This business of "mining both sides" is a case in point.

Important to remember, too, that all those emails were solicited by shareholders. Naturally one would expect honesty in any reply, but it just goes to show that the more you badger them, the more likely you are to get information which is misleading and can very easily be misunderstood.

I do not believe these people are crooks, though. They would be hardly likely to organise a meeting for shareholders if they expected to be lynched for lying before the evening was over. Similarly, no company director would be stupid enough to put misleading information "on paper" - as it were - to shareholders.

Thursday should make a number of things clear.

-----Original Message-----
From: Anomalous
Sent: 01 November 2004 15:18
To: 'Wendy D
Subject: RE: skjimey
Importance: High

Hi Wendy

Yes I saw that, but I let it pass, because I didn't want another war to break out of "you know something, so you should post it".

I'm very concerned about NML. Although Gunner and I spoke about it over the weekend, it is possible that the directors were leading us up the garden path in a pump and dump operation. If this is the truth, I doubt that they will be allowed to leave the country as people will be anxious to pass some of Shane Healey's 'emails' to the FSA. I just hope that they are intent on releasing another RNS, otherwise it could get very messy.

Best Regards
_____

Anomalous
Co-ordinator
RSV Shareholders Action Group


-----Original Message-----
From: Wendy D
Sent: Monday, November 01, 2004 3:06 PM
To: 'Anomalous'
Subject: skjimey


I note that he has posted a hint about the new grades for the AK6 and BK11 kimberlites - he has said all along that he knows the grades, for some weeks now.

X.xx cpcm - very interesting, and much better than the historic Debswana figures provided by Leon.

So you can see for yourself that the whole issue of the barge and mining both sides was known by Wendy D and that the information originated with the directors of NML.

So you have to ask yourself why Wendy tried to deceive you in post 721. Wendy D has been embarassed on the ADVFN BB, because it was through her refusal to accept incontravertible information, that the directors had failed to declare their holdings, that the directors are now under investigation by the AIM Regulatory Department for non-compliance with Directors Declarations Rules.

She attacked me in a similar post on the ADVFN BB and this was my reply:



Yet another load of trash from WDurham. Does she realise that the people she is attacking in this post is non other than NML's Finance Director - Shane Healey - a mere bean counter by WDurham's own estimate.

wdurham - 9 Jun'05 - 18:49 - 1589 of 1590
Not quite fair, Campbell.
I am sure he tells the truth as he sees it. He only presents FACTS after all. Or what he tells us are FACTS - though they are often only the product of his imagination.
And I quote:
"Anomalous - 19 Oct'04 - 19:52 - 4858 of 5103
>Wendy
I believe my info on mining both sides is 100% correct. They originally planned to start just one side. When it was decided to mount the processing plant on the barge, they said "What the hell" and decided it would be easier to hit full production right away, by doing both sides of the river at the same time. That way they can keep tight security on the ore pile feeding the processor.
Night-time is their worst enemy. Once the ore is exposed, the artisan miners (and some of the staff) will be in for the quick kill. It would be pretty easy to spot a few on the bed surface. The idea to mine both sides simultaneously, cut down on the security problems and build up a reasonably large stockpile to keep the plant fed at full speed."
NOW, folks - does anyone recall the company planning to start "just one side" of the Rio Lapi? Does anyone recall the company saying "What the hell!" and deciding to hit full production (20k carats per month - although this is not stated in this particular post) right away by mining both sides of the Rio Lapi? Does anyone recall the company saying they would be operating a double shift right from the start, and buying loads more excavators and bulldozers and lorries to do it with?
Course you don't!
It's all a figment of Anom's extremely fertile imagination, based on his incorrect interpretation of a conversation reported to him some weeks after the event by someone who didn't understand fully what someone else who knew damn all about alluvial mining was talking about as a possible option. And even after being challenged a number of times, he stuck to his FACTS - which later proved to be simple garbage. And was he angry? Goodness, the screen flamed with his total indignance when he learned that his carefully constructed house of cards was based on nothing more than his imagination - there was no barge! The righteous rage was incandescent.
We knew the idea was preposterous all along, of course. But there you go - that's Anomalous for you.

The lies about the barge were passed to none other than Gunnergonk, who then propagated them around the group. Even you (in an email) admitted that you had heard about the barge story and didn't believe it. Yet Gunner swore that Shane told him about the barge. It was only when we found out that the story was a fabrication, a lie that was passed to Gunner, that we realised the company had been fabricating quite a few stories.

Even csmyth was at it. In his posts he stated the company was operating on 1st November he wrote:

"People are getting too wound up about the difference between exploitation and exploration. Nobody has been issued an exploitation permit in Angola yet at all, including Petra. This doesnt mean that companies cant mine diamonds though (Petra obviously is). NML is commissioning their plant and will ramp up to expected capacity in the next few months (which is normal mining operation procedure). They have recovered diamonds and this will result in cash flow for them. I have every confidence that John Cross will produce to the throughput specified in the technical summary (20000 carats per month)."

Yet 6 months later and they still hadn't started the mine. He also said:

"So far, NML has got the equipment on site, it is operating, and they will ramp up."

6 months to ramp up production? - what sort of Mickey Mouse outfit is this?! Even Walt Disney could do better than this and he's dead!

The company has told one fib after another to placate the anxious shareholders. The recent news I heard makes me believe they are still up to their old tricks. I'm not going to say any more, but the smarter ones (if there are any in NML) will be able to work out what I heard.

The simple fact is that the company has been feeding stories to the shareholders to convince them that nothing is wrong, when in actual fact the management continues to be incompetent.

Where are the NML broker notes?

Where are the NML Institutional Investors -

Oh Yes - THEY CAN'T GET ANY!!!

No-one can forget the biggest story, the one put about by Shane Healey.

"The diamonds are only one metre down"

and

"You can pull handfulls of them"

and

"We're going for it from the start"

At least when I found out that they had been telling fibs I called them for what they were. At least when I found out they were not going to start of schedule I warned everyone. At least when I noticed the share price would go to 4p, I warned everyone. At least when I saw that more dilutions were on the way, I said so, the NML management didn't. They had you all believing them at that meeting when they said they had enough funding.

WDurham is a case in point about believing that nothing is wrong. Thanks to her, the directors of the company are now facing an AIM investigation into their dealings. If WDurham had accepted the in-controvertible data that we had in March, then I wouldn't have had to contact AIM (in exasperation) to prove conclusively that there were discrepancies. I tried to warn the directors, through one of the regular posters. Three times I asked her to contact the directors and get their house in order. But she did nothing. So it's not surprising that WDurham provoked an investigation that could result in a rather large fine for the directors. I just hope that she feels responsible enough to pay the fine on their behalf, rather than hide on this bulletin board, fooling the other regulars that nothing is wrong with the company.

You should be ashamed of yourself Wendy.

At least I had the courage to admit that I had believed the lies told by the company. They had fooled me good and proper with the stories. They fooled Gunner too. The poor guy couldn't afford to lose money in that way.

The company had put out these false stories and false claims about when they would start operations and some of their 'henchmen' like csmyth have helped perpetuate the story by saying they would be operating in a few months. 6 months later - still nothing. So I've looked at the company data and checked their statements and found that the company did make poor estimates. My estimates were better. The share price did reach 4p. They did dilute. They didn't start in February.

So keep on supporting the company the way you are WDurham, because when this all goes pear shaped because the share price does not get above 8p, don't say I didn't warn you. The rest of the NMLers believe your 'authoritive' posts, but the Minmet people don't. They know you better than that.



So you can see, Wendy D has a bit of a reputation. The Minmet shareholders remember her quite well and not fondly at all. Many of them feel that she led them down the garden path with her support for Minmet. Even Wendy admits that she's had to pay quite a price for her mistakes there.

I had no reason to doubt the information passed to me by Gunnergonk. He said that it was from Shane. I checked the Project Summary and the company releases to see if they corroberated the data and the statements - they did.

It was only in early November 2004, that we finally found out that the directors had misled us very seriously. In questioning someone who works for NML, I found out that there was no barge, no mining both sides and most importantly of all - the company had not started the mine as thy had promised.

Shane Healey had repeatedly stated that they were:

"Going for it from the start"

He was asked about this and he said that they meant to start mining immediately they arrived at the mine site and at full speed. Not working up to full potential as is the normal practise. As I pointed out, Shane Healey is a director of NML. When he makes a statement, he is making it on behalf of the company as a whole. Yet as Wendy has stated, the statement does not tie in with normal mining practise for alluvial operations. Shane is (by her own words):
"A mere bean-counter"
Yet this bean=counter is a director of an alluvial diamond mining company and making statements about their operations - of which he knows next to nothing about.

The Operational Directors, Shane Healey and John Cross, came to a meeting in November 2004 in London. The people that attended this meeting came away afterwards and told us what they said. They said:

1. They would be operating the mine by February 2005

2. They would not need any further finance (from dilutions) as they had all the funds they needed from the placing and the convertible drawdown.

3. That they would be able to recover the first 5,000 carats in about 2 weeks after start up.

ALL THREE of these statements have turned out to be false.

1. It took until April to start the mine. Not 4 months but 6 months after the statement and a full 12 months after the original planned start date.

2. They have so far carried out TWO major dilutions since that statement about the funds. The first time to the Badenhorsts, to convert the cash payment into shares (because the company obviously had too little working capital) and to the directors, to convert their fees. The second time, they raised 500,000 purportedly so they can explore the kimberlites. Yet the data suggests that the company has had absolutely no revenue from their operations, so they needed some extra funds. By their own admission, they are using $400k per month during mining and have been operating for close to two and a half months now. That's a good $1 million used up with no visible revenue. If they had received revenue, they haven't stated so and they should have declared this price sensitive information.

3. Even this statement seemed at odds with all the project data, as they would have needed to have been operating at full exploitation rate to find 5,000 carats in that timescale. All the data suggests a work up with 3,000 carats in the first month, 6,000 in the second and 10,000 in the third. The management have made no announcement to state that they have reached this goal of 5,000 carats at all. They have recovered some diamonds, but from the data they supplied it was very little, and the quantity of fresh ore used could not be determined as they only mentioned 'ore concentrate'. Something completely different.

So you can see, that the management have even failed to complete the targets they talked about in their presentation meeting.

What's more, there's one other goal they set that they may also fail to achieve. They said that they would be cashflow neutral by the end of June 2005. To be cashflow neutral, they would need revenue (which they have not announced) and they would need more than is being spent ($400k per month). In fact, strictly speaking to be cashflow neutral for 2005, they would need to have obtained revenue equal to the entire amount spent on the operations for year ending June 2005. Something that is highly unlikely.

They've even failed to obtain any brokers notes or attract any institutional support for NML. One of the reasons is more than likely because the project only represents a revenue of $6.75 million for the first 18 months with the possibility that there will be NONE afterwards. What Instituitional investor would trust a company, where there is any liklihood that the company will be without a revenue stream 18 months after start?

It's obvious, the 'big boys' are not interested in NML whilst they only have a 40% chance (or less) of bringing in the other areas on the known data at present. Even the kimberlites are by no means certain and Catoca stands a much better chance at getting the license than NML do, because Catoca is already operating a huge Kimberlite processing plant 20-25 km down the road. In Endiama want the NML kimberlites brought into production as early as possible (so that Endiama can get the revenue) then they would be better off handing the C9 kimberlites to Catoca. Until the matter of the C9 Kimberlite licenses is resolved, I very much doubt that NML will get anything in the way of institutional support.

So you can see for yourself, that Wendy D was deceiving you with her stories about me. She was leaving out important information about who originated these stories about the barges and mining both sides. It might be a good idea to find out why she wanted you to believe that I created them, when I did not. Could it be that she is just vindictive towards me, or maybe that she was embarassed by getting the NML directors in trouble. I tried three times to get the NML directors to sort their own problem out. But Wendy denied that there was a problem and got them into trouble as a consequence.

Why is she deceiving you? Your guess on this is as good as mine. But what we do know is that Wendy is not the only one deceiving you. The NML directors have been as well....

I really can't be bothered to read that diatribe beyond the first page or so.

My original post made it perfectly clear that I was aware that the "barge" theory did not originate with Anomalous. But it was only Anomalous - as his own posts from that time prove - that seized upon it and asserted quite categorically that production would be double (i.e. 20,000 carats per month) from Day 1, because they would "mine both sides of the river". The whole concept is preposterous, and only someone who knew very little about alluvial diamond mining would have taken such a theory on board in the first place. They didn't have enough mobile plant to do it with, just for starters! Nor did they have any mechanism for shifting gravel from the river bank to the barge. It's just stupid. Oh, and the production figures do NOT bear out his theory. Check them out, if the topic interests you. They gybe perfectly with the original plan of 10k per month for the 5 months following workup, and 20k thereafter when the second shift would be introduced.

I could probably defend myself against the rest of the umpteen pages of bile if I could be bothered, but I do not consider Anomalous' imaginative pejorations and allegations worth even reading in full, let alone acting upon. I have him filtered on ADVFN, and will probably follow suit here. Someone who reports a company several times to the FSA and AIM because "Wendy made me do it" is not worth the effort.

Deceiving people is not my style, I'm afraid, and anyone who knows me knows I don't lie on bulletin boards. Ever. Life's too short.

This Anomalous1 is clearly a very sick and disturbed individual who was made it his full time occupation to denegrate NML, its Directors and its shareholders.

FILTERED!

More rubbish from Wendy D. I don't know how she can lie so blatantly.

They didn't have enough mobile plant to do it with, just for starters!

Of course the company had a mobile plant. They say so in their own project data. If you don't believe me, just look at this from the NML Project Summary:



and this picture (which is not the Badenhorst's equipment):



The same project summary also points out that the company does intend to use dredgers - possibly dredging barges, to mine the gravel from the river bed in the later stages of the project. As we can see from these two parts of the same Project Summary:

AND


So to claim that the whole barge episode was a figment of my imagination is Wendy D trying to deceive the reader.

Gunnergonk told me, that Shane Healey told him, that the crushed ore would be moved to the barge by conveyor belts. The same conveyor belts that can presumably be seen in this picture of the Badenhorst's equipment:



Wendy D then goes on to say:

"I could probably defend myself against the rest of the umpteen pages of bile if I could be bothered, but I do not consider Anomalous' imaginative pejorations and allegations worth even reading in full, let alone acting upon. I have him filtered on ADVFN, and will probably follow suit here. Someone who reports a company several times to the FSA and AIM because "Wendy made me do it" is not worth the effort."

I gave Wendy every chance to recognise that there were contradictions in the declarations. I gave the company three chances to make the changes themselves, but in the end, I gave up trying to convince her and asked the AIM regulators to do that instead. The company has made two RNS. The first was inadquate and the second contradictory, so the AIM are continuing their investigation.

Wendy D in the meanwhile, tries to pass the buck for her responsibility by stating that the report was nothing to do with her. When in actual fact there are numerous posts on ADVFN that prove it is down to her intrasigence to even recognise that there was a problem. Even her fellow shareholders were telling her there were discrepancies and she ignored them.

I do hope she feels responsible enough to dig into her pocket and pay the director's fines. I will keep reminding her of this (and the press) when the announcement is made.

And as for her deceiving shareholders - ask the Minmet investors and they'll tell you plenty. The company liked her posts so much, they gave her some kimberlite in a presentation at the AGM, before Minmet hit problems.

It's like a broken record....stuck in a groove.
It is ridiculous, in my opinion, to even think of blaming wdurham for the present situation. The individual doing the constant reporting is obviously rather bitter, and certainly twisted in logic. He may even get himself into some trouble.If the company has mis-reported something, it should be dealt with, but it hardly seems to be a serious matter for pages and pages of repetitive invective from Anomalous1 and a great deal of personalised mud-slinging

>takahe

The big difference is that I have taken the trouble to do some in-depth research which the others obviously haven't done and I've come up with startling information. Shocking information in fact.

By all means, ignore my posts if you like, but then you will very probably have cause to come back to them in the future and wonder why you didn't notice what they said.

Let me put it this way... I've spoken with people who've been in the industry all their working life, and even they have serious doubts about NML. When the 'alarm bells are ringing', only fools ignore the warning signs and say that nothing is wrong.

Anomalous -

If you could understand half what you read, you might be useful. In the event you are just plain dangerous.

But never mind, if you want me to take the blame for you reporting NML to the FSA and AIM on umpty-ump occasions about everything down to whether they change their socks on Mondays, please be my guest. I am sure most folk will realise that you really didn't want to do it - I forced you against your will to report every little infraction of the rules that you could imagine. Folk will, I am sure, make allowances for your bigoted, narrow views, because it was all my fault. I stood over you with a large bull drover's whip, beat you into submission and forced you to do all this snitching.

Yeah, right.

Where's this "squelch" thingy? (Edit later: no worries - FOUND IT! What joy...)

Oh - and before I forget, will someone explain to thicko-Anomalous the difference bewteen "mobile plant" and "a mobile plant".

Just so you have the full picture, here are a few posts by Wendy that show that she's been equally condeming NML and their management:

Well, my comment is a simple one.

If the rains are so serious as to delay workup to full production by a further three months above and beyond the "end of March" start that the management predicted only weeks ago, that makes a complete nonsense of the projected figures that they published this time last year.

Whilst I fully understand that constructing a plant during the rains is rather different to later operating that same plant during the rains, how do NML propose to maintain production for more than 8 or 9 months of the year?

The further delay in gearing up to production, in itself, does not bother me, as I have been expecting just such an announcement. Things always take twice as long, etc....

But having always described the current management as shambolic, I now find myself concerned that their entire business model for the future is deeply flawed, and was put together without the slightest understanding on the part of an equally shambolic previous management of the task they were about to tackle.

Having said all that, though - the current market cap still looks stupid even if you cut annual production by half.....

I like this bit:


But having always described the current management as shambolic, I now find myself concerned that their entire business model for the future is deeply flawed, and was put together without the slightest understanding on the part of an equally shambolic previous management of the task they were about to tackle.

Wendy decided to slate the NML management before the Monday RNS. Now she's after the shareholders. Oh dear, she doesn't know which way to fire!

Anomalous1
In depth research, but you don't mention what the shocking news is? If you have insider information which puts you in a position to suppress a share price and to say this openly, that is very serious.

Let me say that I have shared this information with both the FSA and the AIM regulation team. They are aware of the seriousness of the implications.

I've also received information from other sources that make me even more concerned, as this does indeed question the credibility and viability of the operation.

I have not had this information verified, but I do trust the source implicitly, as the person has the highest integrity. I will pass this information to the regulators in due course.


The information is not 'inside' and no law has been broken. Therefore, anyone of the shareholders could have obtained this information themselves, if they had done enough research, or contacted the appropriate people. I am satisfied that the regulators are also 'concerned'.

This post was made by me in early March and shows that I deduced (correctly as it happens) that the sellers could have been the Badenhorsts and the Malaysian Bank with the convertible note. We have since seen from the RNS's that the Badenhorsts have 1 million less shares and Al-Wakalah reported 3,333,334 shares less than they were issued with.

Anomalous - 11 Apr'05 - 17:09 - 4322 of 5408 edit
>Andy
I tend to agree with you. There is clear evidence that both last year and this year, someone or some group have been selling into any strength. This is one of the reasons the price has been held back, despite some relatively good news.

We must assume that the seller, whoever they may be, are selling at a profit above 4p, but unwilling to trade below this price. The natural assumption is that the seller is one of the placees. Many people believed and stated this last year, even though we couldn't prove the identity of the individual or group.

There are some disquieting facts though.

1. The volume of sells since the pattern was identified is far greater than 20 million, the total of the placing.

2. The amount sold in each tranche (+100k) is relatively small and insignificant. Which means they may be taking great care not to depress the share price too much. So they can come back for another bite of the cherry a short while later, after the usual BB investors soak up the surplus.

3. The placing was with a number of people. So any coordinated action 'conspiracy' is unlikely. But....

4. The sellers always seem to pick opportune moments, such as the release of good news, to 'dump' another load. Do they know when the RNS's are going to appear? Do they sit there waiting or have they placed a standing instruction with their brokers?

IMO, there is a seller and we can probably identify at least two of them. I say 'probably', because without any clear proof or a statement from them we can not be certain.

The likely candidates for the present sales are:

A) The Badenhorsts - they accepted the shares in lieu of cash. It could be that they need the cash for other purposes. Even if they do know what's in the ground, having such a large shareholding may not have been in their plans. They might be converting some of these back to cash on the market. They are not directors and are only required to report if they are over 3% and cross a whole percentage point. They could easily sell and we would be none the wiser.

B) The Malaysian bank that arranged the convertible loan note - as some have agreed, the bank taking the shares now rather than later indicated that they wished to convert their debt back to cash at the earliest opportunity. It was not a vote of confidence, as the deal would have given them the capital value and the interest, into shares at 4p a year after drawdown.... Jan 2006. So by taking the shares now, they too could be selling some back into the market above 4p and taking a swift profit on any sum over 4p. If they sell at 4.5p, they are getting a 12.5% gain on their investment. If they believed that it would take some time for the good news to come, then this would enable them to reduce the overall risk of some problem depreciating the share price below the 4p conversion price. Again, they would not have to report until they cross a percentage point.

These two are the most likely 'usual suspects'. BUT the one thing that does worry me, is that there was no declaration for the Malaysian bank when they received the +3% interest in NML upon conversion. There was the announcement by the company in the RNS on 20 Jan 2005, but not the proper one required by AIM for notifiable amounts. Now it could be that the foreign holders are neglecting to make their official notifications. Which then brings in the possibility (although remote) that the seller(s) are in actual fact directors.

I believe that a statement should be made by the company about the convertible note shareholder and why they failed to notify as required under the AIM regs.

Of course, Wendy D made this post in return:

wdurham - 11 Apr'05 - 17:55 - 4326 of 5408
Anomalous -
Have you followed up any of that Monroe stuff? If you had been bothered, you would see that the Badenhorsts are probably the very last people to be selling. They have been planning on a move to the C9 area of Angola as mine managers for quite a long time....can you imagine why that might be?

And your logic really is ass-about-face with the bank. No-one takes shares NOW in lieu of debt if they are at the head of the queue to get their investment back, plus interest, at expiry - unless they think the shares are going to be worth considerably more than the debt plus the interest. Because remember, there is no way NML could have just shrugged and said they couldn't pay - the bank would have got theirs.. But as mere shareholders the bank have given up all the rights and security that being providers of finance gave them, and taken their place at the back of the settlement queue along with you and me. So they must have taken the equity now for another reason, wouldn't you think?

But then it suited you to believe that both the Badenhorsts and the bank took shares with the single aim of selling them at the first available opportunity. It suited you to describe them as so lacking in faith that they were not prepared to wait for cash, but wanted a convertible insturment NOW so that they could get their money back straight away, before the share price plummeted and the company became insolvent - or at best, unable to pay them.

Perhaps I should remind you that there is no need to de-ramp any more now that you have bought back?

Wendy D also said this:

wdurham - 11 Apr'05 - 18:11 - 4330 of 5408
Actually my OWN logic is a bit woolly on the question of the finance provider.

But the basic premise remains. If you can convert a debt to equity at a fixed rate now or later - but if you do it later you also get a whole year's interest, then to do it now demonstrates that you believe the share price is going to go up sufficiently to offset the interest you would have earned by waiting for expiry. So whether they sell stock along the way or not, the bank clearly believe the share price is going to rise at least by enough to recoup the interest they have foregone, in addition to any profit they might make. And converting now DOES enable them to sell stock over the next 12 months when the price rises enough to make it worth their while.

So they ARE a candidate for the seller - but having "paid" 4p and a year's interest per share, I can't see them selling at these low levels unless they think 10% profit now is better than 100% profit in 6 months?

To which I replied as follows:


Anomalous - 11 Apr'05 - 18:26 - 4332 of 5408

I don't believe that I am the one that has the situation "Ass about face", it may be you. Consider this:

1. We do know that the convertible note was convertible into shares 12 months from drawdown. We do not know if the company had the option to repay in cash rather than issue the shares. This was not stated in the RNS. So it is safe to assume that the bank was to receive the capital and interest into shares at the fixed rate of 4p.

If the share price was to be so much greater by January 2006, then it would be stupid for the bank to take the shares now, when they would be worth so much more after 12 months. May I remind you what the RNS said:

The Company has also arranged a standby finance facility of up to US$1.25 million by way of a convertible note, convertible into NML shares at 4p within 12 months of draw down. The loan notes will bear interest at 6% per annum. The facility has been established to be drawn down at the Board's discretion should the need arise and will be available for 12 months.

So by receiving the shares now, the bank could be selling at 4.5p for a 12.5% gain, rather than waiting 12 months (at great risk) for a 6% gain. As you know, this company has not exactly shone when it comes to meeting their deadlines or expectations. It is only prudent for the bank to possibly take measures that reduce the risk of not receiving their capital sum back after 12 months. The logic is inescapable that they have taken the shares now to convert as much back as they can with a 12.5% or even 25% profit.

Let me refer you back to the Badenhorst deal:

NML has purchased from the Badenhorst Combine CC of Kimberly, South Africa, its entire working plant of alluvial diamond mining equipment. This is a cohesive unit comprising, pans and conveyors, mobile sort house, excavators, loading shovels, trucks, cranes and numerous other equipment necessary for the mining to commence. It is important to stress that this acquisition is a working plant including mobile workshop, spares, tools and accommodation. This is a key acquisition for mining in remote areas where spares and supplies are difficult to procure.

The cost of the equipment acquisition is US$1.26m. This will be paid in three tranches, US$126k in cash (paid), the issue of 5,040,000 fully paid ordinary shares in NML (US$504k) to the vendors at US$0.10 (approximately 0.055) per share and a final cash payment of US$630k on or before 30th November 2004. This
purchase brings to US$2.0m the total value of diamond mining equipment acquired
by NML since March 2004.

NML will make application for the 5,040,000 new ordinary shares to be admitted
to trading on AIM and admission is expected to occur on 9 August 2004.

The Badenhorsts agreed a deal that would give an initial cash payment (which was paid), a tranche of shares (which was issued) and another and final cash payment (which was eventually converted into shares by the company - probably because the company was short of working capital). The Badenhorsts may not have bargained with having 13 million shares in the company. This is far more than a notifiable amount, even if NML are registered abroad.

The subsequent RNS said:

As a show of confidence in the company's strong future, the Badenhorst brothers have converted the amount outstanding to them of US$630,000 to shares. NML purchased the alluvial diamond mining equipment from the Badenhorst Combine for US$1.26 million. Subsequent to this acquisition the Company engaged the owners and operators of the Badenhorst Combine, Piet and Neels Badenhorst as mine managers and operators.

The Badenhorst brothers are on the mine site in Angola managing mining on a day
to day basis. The issue to the Badenhorst is 8,253.000 at A$0.10 per shares (4p)

So the combined Badenhorst holding was 5,040,000 + 8,253,000 = 13,293,000 shares. The 3% notifiable limit is 4,931,342

I don't dispute that the Badenhorsts accepting shares is a clear sign of confidence in the project. But when they struck the deal, they didn't agree to accept 13 million shares, they only wanted 5 million. So if they did need that cash payment for whatever reason, it would be a natural conclusion to sell some of their holding, but not all of it. They wanted the cash. They got the shares. They were probably advised if they still wanted the cash, then all they had to do was 'mine' the market for the readies.

Lastly, even though I am a holder, I am more interested in the truth, even if it doesn't serve to increase my investment. I accepted the revision of the estimates on the EPD forecast, not because I considered my figures faulty, but because I considered that it is far better to strive for the truth, than to ramp a share, fooling any prospective trader/investor, just to make a quick profit. It is not my style to ramp and lie. I'd rather seek the truth.

I then described and pointed out why the convertible note holder might want to sell now rather than later:

Anomalous - 11 Apr'05 - 18:45 - 4334 of 5408

>Wendy

But the basic premise remains. If you can convert a debt to equity at a fixed rate now or later - but if you do it later you also get a whole year's interest, then to do it now demonstrates that you believe the share price is going to go up sufficiently to offset the interest you would have earned by waiting for expiry. So whether they sell stock along the way or not, the bank clearly believe the share price is going to rise at least by enough to recoup the interest they have foregone, in addition to any profit they might make. And converting now DOES enable them to sell stock over the next 12 months when the price rises enough to make it worth their while.

Your logic is still flawed. Look at these scenarios and see which you think a bank would choose:

Scenario 1. - the current situation
Share Price currently: 5p
Issue price: 4p
Lost interest = 6% profit
Current premium = 25% profit
Net Profit = 19% profit
Can sell at any time to reduce risk

Scenario 2. - the convertible deal
Share Price currently: 5p
Share Price Jan 2006: 12p
Issue Price: 4p
Interest received (in shares) = 6%
Current premium = 200% + interest 6% + premium on 6% = 12%
Net Profit = 218% profit
Can sell at any time after 12 months - but with risk that scenario 3 might occur.

Scenario 3. - Oh dear!
Share Price currently 5p
Share Price Jan 2006: 3p
Issue Price: 4p
Interest received (in shares) = 6%
Current premium = -25% + 1.5% loss on 6% interest
Net loss = -20.5% loss
Can sell at any time after 12 months - but who would want to?!

A short while later I replied to Mclellan about her post. You'll note that I did query the fact that the directors had not notified in December 2004, even though I noted this earlier in the year:

Anomalous - 11 Apr'05 - 19:08 - 4337 of 5408
>Mc
We're not saying it is the Badenhorsts, just that it might be. We're not implying that the management have done anything wrong either. They are only required to make the declaration when the declaree tells them he has over 3%. I'm not saying that the directors are selling without a notification, but merely pointing out that the lack of notifications from them too is also a 'concern'. Remember that the directors did receive shares in lieu of payment. But there was no RNS to follow with the figures. I did query that if you remember. Of course the placees are free to sell when they want to. Anyone is.

Please keep your hat on! We're just debating why there's been no notifications, yet there's been more sells than the original 20 million placing. It could be that some of the 16.5 million placing is filtering in too.

I seem to remember that we were all having a big debate about the mysterious selling back in September and October.....just before we heard the bad news from the company about the delays. This time, we know that good news is on the way. So any selling right now is certainly going to be regretted by the seller in the long term. Unless of course the seller is on some new placing.............................. Doh!!!

This was the first time I mentioned that the company ought to be notified about the discrepancies:

Anomalous - 11 Apr'05 - 20:00 - 4339 of 5408

If anything Fiona, we might be making a quick reminder to the directors to check that they have complied with the regs. I'd hate to think that they ended up paying a penalty because of a missed declaration. It's silly to miss out on it, but even the chairman of Evolution is under investigation for failing to make the obligatory notification regarding Incite Holdings.

Then Wendy D replied to my post about the bank scenarios agreeing with my reasoning:

wdurham - 12 Apr'05 - 07:40 - 4350 of 5408
Anom -
I do accept some of your reasoning re: the bank - after having said yesterday that my own thinking on it was a bit woolly, I thought about it a bit more, and realise that there IS some substance to the idea that they could be taking profit at this early stage. But 16.6 million shares is rather more than 3% - and there has been no notification.

If you review the Badenhorst's recent history, I think it highly unlikely that they would be selling stock at this stage. And they too hold more than 3%.

However, we can all argue until kingdom come, and still have no idea at all of what is going on. If those that OUGHT to be notifying NML of changes in holdings are not doing so, there is little that NML can do about it. They are governed by the rules of AIM, due to their listing on that market. But it still may be that - as in the recent case highlighted by Griffin - certain people believe that as NML is a company incorporated in Australia, they do not have any disclosure obligations towards them.

It is now down to NML to simply get on with the job. Only by producing results of significance can they regain credibility and convince people that the stock is worth holding rather than dumping for 5 or 10%.

I don't propose to argue the matter further - it has no resolution, and therefore arguing is pointless. The various possible scenarios have been put forward, and folk can make up their own mind. 8-)