Holding The Cat By The Tail - 88E & MTR

During the last few weeks It would seem that offering an opinion has been met with an unhappy response, if you dare to offer a contrary view or in fact question a valuation you are dragged over the coals and hung out to dry! ironically enough most of the companies mentioned and gaining the most attention over recent weeks are companies that I've either penned articles on earlier in the cycle (at a much lower share price) or I've held ongoing relationships with management. 

A year ago I penned an article on the decline of social media along with the psychology of junior market participants (Investors) today it would seem a war zone by the virtue that your subject to vitriol if you offer up a side order of reality. Below I link a few articles that are completely overlooked instead replaced by the unsophisticated approach of decrying democracy or free speech. At risk of sounding like Tommy gun I accept that those that really don't know any better react this way but its the sure-fire way to lose ground and quickly. I accept calling top or going against the tide can be a pain at times but life's full of chores. 

Interview by myself with PJ or Metal Tiger here conducted in 2014  (always happy to offer PJ a platform and in fact urge he consider revisiting the story for interview) he could explain how the business '' Metal Tiger '' warrants today's £12m market cap based on data. Grab/soil samples, drill samples and rock chip samples coupled to heavy director buying. As I understand these type's of results so far are not enough to give a JORC compliant resource estimate. Adding a well-heeled director or chairman offers no guarantee although accept that true quality is hard to come by. As things stand my opinion is it smacks of spoofing the market, I have no problem in commending PJ and his team nor do I have an issue in commending investors who have made a turn from MTR however It's pertinent to understand how today's valuation has arisen. Paul and I would often talk about the lack of valuation being given to a company which was working hard to get noticed and prove it's concept.I'd like to see the now CEO give a rationale on £12m valuation and where Metal Tiger is in the cycle? 

Clearly the concept is good or at least has now been accepted by the markets, I just feel that to advance operationally then the company will need capital finance or investment to do so. Which explains why commenting on the reality of today's state of play is such a hard pill to swallow as the savvy or the certain GR Inv. friends know as I do that this really isn't being taken seriously on its merit. I wish PJ, MTR and all investors the best of luck and should this continue then I'd say it would do so firmly supported by a bull run or super cycle in the commodities area they focus. If anyone can make things work its a spivy accountant and a 100 bagger chairman in Grammer. 

88Energy oh the initial bain of my life, late last year I covered this company suggesting that now was time to consider the buy case or punt on the company, The article is here: Titled ''time to punt on 88Eneregy'' the shares traded at 0.50p yet calling for people to consider derisking at 0.90p and consequently scaling back further or in total at 2.65p was met with a backlash from the faithful 88 investors following a Waco style investor commune in believing the business is fair or worse undervalued at a £110m market cap. I've covered much of my rationale to buy and sell (even if the imbeciles only choose to focus or see me as negative) however the testament of time will show true value.

The train wrecks coming, just remember who whooped and hollered for you to '' jump on-board ''

Bests 

Doc 

The Best Thing About The Future Is It Comes One Day At A Time...

In November 2015 I looked at ECR Minerals a company I followed back in the days when the Ex Director and CEO at Metal Tiger was a mere mortal private investor himself, this was a company that had a whole host of problems namely the board that were in place at that time. After shareholders voted to remove the board Mr Clayson took office as top trump, some could argue he made it there by default or as trusted confident to the group that voted the old management out (Hartford & co) During 2015 it was clear that the company was not clearing debt quick enough to give itself enough opportunity to get back to market to refinance. 

I spoke with a number of city related parties in 2015 who agreed that things looked tight for ECR, however the conclusion was drawn that if ECR could clear the YHA death spiral and acquire enough capital on an interim basis then the business stood a chance to gasp air before swimming ahead, shares had traded in a liquid fashion at approx 0.05p-0.08p as it transpired Mr Johnson of Metal Tiger agreed the idea wasn't such a bad one and himself proceeded to offer the company money although with a twist. The bar was set at 0.02p (Heavily discounted to the earlier sessions building up to it)  

At this point it was clear that the convertible debt remained in place and it was my view that the slack was expected to be taken up by retail punters, once the loan notes were satisfied there would be a pre placing string of news at which point the financiers (Inc MTR) would be presented with an opportunity to sell at a level that very few genuine investors in ECR (A company the MTR CEO was an Ex Director) could take advantage of.

This was an opinion I had based on my findings as it was clear that there were city related options open to ECR yet they chose to run with MTR and a select group, I want to state that if MTR had supported ECR (As publicly stated) through to them satisfying their funding needs before dumping its position then I would hold a very different point of view which is why over the last 12/14 weeks I've simply stated my funding concerns for ECR and remained observant. However this has not been the case!!! ECR still needs money (Death Spiral, CLN,Placing surly coming) with support now very thin. 

Metal Tiger hardly set the bar high on support and in the face of funding needs, it will be interesting to see what part Metal Tiger, The Birmingham Boys and the GR Investors have played in this awful mess. (That's a story all of its own, why? how and who are the backers which causes Metal Tiger to travel up to Walsall and surrounding regions to regularly present)

At this point I want to state that other than applying market mechanics and logic I'm simply observing, asking questions and noting events which have taken place, ECR is typical of many companies listed on aim where constant funding results in little to no material progress thus rarely rewarding those funding the business, clearly one or two clever instrument providers may make a quick turn or an old board member and friend but what about the little man, what have they seen returned under the Clayson's stewardship? 

There's a number of questions about the musical boardroom chairs, the grass root investors of the midlands coupled to the after market approaches of those attending events to welcome '' The group of HNW Investors mission statement of buy more shares '' 

Somethings just doesn't sit well with this chain of events so more due diligence is needed, I welcome any infoformation on the companies mentioned before drawing any conclusion. 

All the best 

Doc 

#JUSTSAYING...

ShareProphets was a hive of activity on Friday lunchtime as Tom was blindfolded, spun around a thousand times and then asked (by Brokerman Dan) to publish an article. This to me smacked of the typical modus operandi of someone jumping up and down, making noise to gain attention. On Friday two barrels declared war on a number of City boutique broker houses. I wonder if that war will see capitulation as quick as the war he declared against the ShareProphets site.

The obvious thing I see is a complete lack of common sense from Tom (by allowing the shite to be spun here) along with an embarrassing contradiction of where the '' FIGHT '' lies or who its held by. I remember Tom and Dan referring to Ben Turney as flip flop - Really… #JustSaying

OK over to a few points that have gripped my shit over the last few days.

I'll start with the commentary yesterday against the two named broker houses. For the avoidance of doubt I'm as cautious of brokers as I am of a dodgy second hand car salesman telling me his 25 year old Escort XR3i has only covered 13,000miles from new. They all talk a lot of pony; however on this occasion I felt compelled to share my own experiences.

I have delt with half a dozen of these houses in the City including the two named in Friday’s blasting by a convicted armed bank robber #JustSaying, I have to say that my experiences overall have been good with a number of brokers (of which I have dealt) delivering a clear and concise message, which left me with little doubt. Business was always a focus but there were also a number of helpful pointers shared on other things from FX trading (by the way Bill Holiday comes highly recommended) to looking at ISA options. The young mavericks can often be uber useful.#JustSaying

It disappoints me to think that a certain theme or line is followed by the comments shared on this site. ShareProphets’ readers made their feelings visibly clear in the comments section of yesterday’s piece and it seems many of them share my misgivings about its publication. So much so on Friday evening the slow mumbling of '' The Block Tom Winnifrith Campaign '' started to surface. Personally I value Tom and believe his exposing companies has been invaluable, to block that is similar to closing your eyes to a problem however the movement looks to be gaining traction and that won't be good for either the blocker or the blocked. I call on people to deploy some common sense.

( Note: I accept that investors have a right to decide on what they support or what they do not.)

I joined Tom back in the very early days of ShareProphets and have been an unequivocal supporter publicly, although at times disagreeing on points or in fact arguing the toss as can often happen. I put this down to a healthy dislike for spivvy toffs playing at being from the streets, whilst shoveling smoked salmon, asparagus and eggs benidict down their cake holes, smoking with their pinkies up.

That aside Tom’s a good stick and one who more often than not gets it right. On this occasion he was wrong in my opinion #JustSaying.

What happened in 2015 with Sefton Resources (no matter how much flannel is thrown over it) was a total mess, which quickly developed into an absolute disgrace. I see the phrase pump and dump bandied about like a war crimes’ act by certain folks. I guess the Sefton mob that advised people to buy whilst selling and vice versa or the main players who proclaimed they weren't selling as the alleged turn around into Indonesian Oil assets would see the share value accelerate towards 1p in fact used the inflated market interest to cash in #Justsaying. Finally let’s not forget that £1 salary, which quickly became a £50,000 exit fee coupled to a healthy option package – before all that awkwardness over the ex-directors identity!

I suggest that a pump and dump (in the most obvious format) played out in front of our eyes, with the main advantage to the scallywag was Sefton issued options and the remuneration buck shee...#Justsaying

But getting back to my main point, I also would like to point out at his point that my involvement with City boutique brokers is new (overall during my time in the markets). I do limited business as I'm from the tight arse north and not particularly wealthy, thus prefer to execute 80% of my trades business with Hargreraves Lansdown. I won't say that all brokers are good guys as in my opinion they're an evil necessity '' I mean how dare they make money when you are'’.

Bad ones of course make money whilst pissing your million quid down the swanny #Justsaying.

My last point is MX Oil a company I have supported since its conception, Predominantly its presence in the markets has been positive and profitable for investors. A tiny £1m shell company that accelerated to over £10m market cap in no time at all (#JustSaying), as it fought to win potentially world class assets in Mexico and gaining a revenue stream from production in Nigeria. In a depressed oil environment where lots of people hurt, I'd say overall the company has performed quiet well.

I'm not sure how much help it has been publishing the potential fundraise price of the company on the ShareProphets. The company was completely open about its funding needs prior to the potential to raise which was mentioned in a number of articles. I see it as counter productive as it actually weakens the chances of a favourable price which in turn hands a bigger % gain potential to the dreaded flippers. Again I'm not sure how well that was thought out by the editor but I'm sure he'll lambaste me for today’s coverage so welcome an explanation. #Justsaying

On the last note, I suggest that MX Oil (whilst not particularly impressive of late) will hopefully overcome any near term hurdles and jump back like all well run companies should. #JustSaying

The testament of time will demonstarate that -/+ 

Keep your peckers up

Best 

Doc

*Note: I submitted the article to Tom (Editor @ Shareprophets) who declined to publish this piece, I wish to state that Tom has never stopped me from writing about companies good or bad. The shareprophets is an excellent site with an incredibly talented team, Tom has not only been a pleasure to work alongside but has also become a friend. I receive zero compensation from the shareprophets and operate completely independent, If the article has offended Tom then I'm sorry. However I believe in the right to express ones opinion under democracy and free speech.

DocsLaymanChatter XLIII

This week we talk more about the markets events, much of it has been filled with the excitement of the CEB resources podcast with Justin Waite of sharepickers in which Dave talked about his future plans within the listing remit, this has been questioned by some market commentators citing '' crossing the line '' having met Dave I'm fully aware just how professional he is in everything he does, more so how annoyed he would feel at the thought crossing the line as he's an extremely professional individual (I say let the powers at be decide) however the story looks pretty good for those invested.

On the flip side we see Sefton resources hit the rocks, as sad as it is for investors there was no shortage of warnings. I recall being interviewed on the ADVFN podcast (ironically) advising that the smart money would move from SER into CEB and low and behold they both suspend on the same day. SER in utter failure and CEB pending an update on the 26th October 2015. SER lost 98% of it's value whilst CEB gained 100%+. Regardless of the propaganda pushed out by the axis of evil the testament of time always proves those that are fit to operate at this level.

Only the strong survive, and knowing the game is just as essential....


I shan't revel in the SER demise as I genuinely hope investors can recover from this but advise investors learn from this before jumping in feet first in the future.

Today's tweet of the day came from Bang bang Levi...

BrokermanDaniel @BrokermanDaniel

@Chairman_Nick Where's the sefton Resources money gone you thieving bastard! £1m in cash July 31st!! Where's it gone?

Barron Wuffet then went on to reveal his Intelectual hand...

''Hope you have legal insurance YOU BASTARDS when i find who has stolen the money ie £700,000 in 90 days i will be after YOU '' #SER

Clearly the boys have learnt a hard lesson in Karma, I just hope that they can find a place in which they can find positive expectancy moving forward.

At nobody is watching o'clock ADVFN released there results '' Ouch!!! '' what a mess, they fought off an approach to requisition the company via a legal battle (Irony here too) which left the board exasperated but just about still in control. The balance sheets look like a train wreck which may help explain why the Advfn board of directors agreed to join the Sefton hot seat, again messy but cash heavy (ut oh sorry the money has gone) and in typical Laurel and Hardy fashion you now have a situation where Hodges and Chambers are involved in one company that's today suspended, damaged and with dwindling cash, whilst clinging onto Advfn who could if they don't cut costs quickly could find itself trading insolvent.

The hot spot in the results is other administrative expenses of £8.755m from revenue£9.2m Losses increasing from £454,000 (2014) to £1.56m (2015). clearly the company makes plenty of money however the distribution of that is not keeping shareholders in a healthy place with an ever expanding waistline. Advfn shares closed down on it's 5yr low of 65p, which I anticipate will look worse come Monday morning when the markets reopen.

I suggest that the focus should be on regaining what was once a potentially strong and prosperous business model instead of cavorting with Barron Wuffet and Bang bang Levi.

Keep your peckers up

Doc

DocsLaymanChatter XLII

After a long break we are back talking markets, the Marco picture remains uncertain with the micro markets becoming the frog like science project that many 80s kids endured at school. Mining seems hot on the agenda for 2015/16 with a murmuring of positivity towards the buy side of blown out resource stocks. The catalyst to change is the complete grounding of all normal correlation as trading pairs appear to have divorced one another over the last year. Gold,Oil and currencies all look disconnected which paints a perfect picture of  anarchy.

As the years draw on we flip from understanding market mechanics to applying them which is actually two different concepts. I accept that some people follow the blogs etc and get it... Others however do not which leads them to believe there is a more sinister outlook of the markets. I want to be crystal clear when I say '' I have made the bulk of my money in the markets from technical analysis coupled to a clear vision of market mechanics '' the latter I see as following short term momentum & sentiment which by its very virtue is nothing more than a technical extension. Call this what you will but the testament of time has proven this works time and again.

Lets look over the markets and perhaps evaluate the movers & losers across the small cap markets as well as a quick look at the bigger fish in the pond. Remember we have to be able to forage in other areas otherwise we handicap ourselves, forcing us back into the net when the trawlers about to haul.

Paragon Diamonds: Caught my eye this week, the confirmation that a heavy weight bear raid was underway was quickly addressed by the company with a bullish sounding RNS which suggested the company were very nearly there. However a number of points remain unclear, how will they fund the PLC costs as this is not a part of the debt facility with the balance sheet looking thin at £300,000 with an outstanding loan £500,000 now overdue to suit. PRG needs another $80-$100m (By PM admission here) with the mines not due to get into full production for 18-24 months. ITGT are still apart of the future plans but not in the financing at this early stage. Finally Friday we're informed a significant shareholder was selling as of 23/9/15, I must add PM sounded extremely confident which mirrored the RNS they put out. I get the feeling there is more to this than meets the eye however should Paragon navigate this difficult period then the business offers real gem stone potential '' Time will tell whether its a 1p or 10p company ''.

CEB Resources: We first flagged these up at 0.25-0.30p, many investors attended a P.I get together in London where we were fortunate enough to hear a little about Whitby's plans moving forward. Dancing Dave did not disappoint as he described his plan to farmin into producing (revenue yielding) wells in which CEB would optimise and increase production & revenues. I've covered much of this over the many months yet feel important to recognise a guy who stands outside the office and personally greets (by shaking hands) each and every attendee whether or not a shareholder.This says a lot about the man, I anticipate the market shall not have to wait much longer, it just leaves us waiting to see if they still have enough rock & roll to get the market to its feet.

New World Oil: New was a taboo company for quiet sometime however one of the most major events over recent months has taken place. Aside from short comings of a self professed oil analyst accidentally spending his mums pension buying half a company. The alliance trust who acted as a brake on the stock by consistently selling into the market at 0.07p has now been taken out, which will mean that on any consistent buying we will see the companies share price rise like a salmon at spawning season. I have it on good account that the vote is with Adam Reynolds joining the board '' I'll be pledging my 1% of the company to that vote '' however to me it makes no odds. If they want to drill the market will speculate on it's outcome as recently witnessed with Red Emperor from 1.5p to 7p before its duster. To further compound the unofficial vote, I believe the Reynolds call has 35% or more of the vote as we speak, if the Board don't walk I'd look to carry out a full forensic review of the companies books and practises as clearly there is a reason these guys are clawing at these positions.

Glencore: Wow what can we say other than that collapse from 350p to 180p before bombing out at 66p was a real wake up call for the big boys in the game. Billions has been wiped away from the companies market cap and we as investors are left perplexed at who'll be next. The rebound has been strong although I anticipate another scorpian sting down to 45p area should there be a sniff of further bad news.

Keep your pecker up

Doc

Thoughts Moving Ahead...

As of the 1st September (today) I shall be open to working on projects which create shareholder value and stimulate positive expectancy, this will not come from working as an IR/PR relation to a company but more open to discussion which leads to a winning formula. I anticipate some people will question this announcement and statement so for the avoidance of doubt I DO NOT work with or in any capacity formally with public listed companies currently but more importantly DON'T want to be ring fenced from considering an extended idea pathway which may-well lead to positive expectancy / returns. Having worked tirelessly for 5 years within the aim markets and much longer within the wider markets, I believe the winning formula is not to act as a conduit or mouth piece for companies but more offer a solution translation between the retail and corporate disconnect thus affording both worlds the opportunity to interconnect.

There will be NO paid for promotions nor will I deviate away from the current method of working within the markets as an out & out investor. I have found personally that remaining a lone voice in the face of prosperity or adversity as the crux to securing credibility which appears to be in scarce supply within the London Markets. I want to reiterate this is not to suggest things will change but more allows me to remain transparent to followers etc in my idea's of helping to harness value for listed companies and its shareholders. During my time there have been many many offers to align me with certain operations within the City which in turn I have never felt compelled to engage however as time draws on I have passed up the opportunity of input as I've never felt there was the acceptance to do so. I now feel a sense of clarity which may enhance my ability to find solutions & success from my experiences.

I hope this message is open,clear and to the point. '' Ultimately I'm an investor running a majority held (retail) Hargreaves Lansdown broking account looking to compound gains from a well structured strategy '' which now involves the potential to engage ideas which lead to enhancement.

 

All the best

 

Doc

Meeting With Prospex Oil & Gas

This week I had the pleasure of meeting Ed Dawson of Prospex Oil & Gas, I found Ed to be quite an affable yet cautious man who clearly didn't want to talk out of school, so on this occasion I became a good listener. The company raised £1m and is currently capitalized at £1.02m which kind of suggests the risk has been taken out of this aim cash shell, so whats PXOG and Ed planning for the future?

I talked about the attraction to aim cash shells from my own previous decent track record with Oil & Gas shells, none more so than UK Oil & Gas or Mx Oil (formerly Astar Minerals) The catalyst to great returns are a clear and concise outline of what the company intends on doing to trigger value creation for shareholders, particularly those bonkers enough to get in early.

Rather than waffle on in a sales pitch manner I prefer to look at the facts, Dawson and Co. come from an institutional/hedge fund deal flow background, the impressive back story of creating a $100m deal with industry majors or a consistent year on year place on the hedge fund podium at RAB capital it became clear that the guys at PXOG are more than well positioned to have a fair crack at progressing Prospex Oil & Gas on.

The simple way for this to happen would be to vend in some attractive assets and bingo '' we have a result '' however Dawson wasn't to willing to let the cat out of the bag on how this would happen other than to remind me that he doesn't want to piss on the chips of people who have been prepared to back the company in its embryonic stage of the cycle. The early move advantage often comes from showing foresight which is where I am personally as a shareholder of Prospex, some can argue that this motivates me to give a one sided appraisal of the situation but to be brutally frank there isn't actually to much we know right now.

Its important to understand the strategy -

To acquire meaningful assets with high impact near term deal flow not dilly dallying with shooting seismic for the next 18 months. (Check)

It's important to understand the Boards back story -

This comes by the virtues of historical success, ED worked successfully in finance & management of Junior O&G companies whilst holding a keen analytical eye on what works against what doesn't. (Check)

Getting a sense of capability and Viability -

Does the company have the capability to make this transition in tough markets and is there enough interest to build. (Check)

The surrounding influences within the company -

The management team has a historical (combined) Billion dollar deal flow from seed to sapling sized business before well engineered moves into the junior natural resource arena. (Check)

(Note) - Whilst I hold a bullish outlook on Prospex I do however understand the need to move things along, I feel confident that a deal will be done sooner rather than later however in light of transparency I would suggest should the company not secure a deal this year then they are at risk of becoming another modest cash shell wasting space on aim.

I'll be talking more about PXOG in due course.

All the best


Doc



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(These are but opinions derived from my own experiences and thoughts and are not adopted as a statement of fact)