Tom Winnifrith Bearcast: Fragrant Prosperity. It's 'avin' a Turkish, more like the sickly smell of weed
Oops... this is more than a bit embarrassing for Goldstone Resources (GRL), its boss Ms Emma Priestley, hapless Nomad Strand Hanson and indeed the wider AIM Casino, aka the world’s most successful growth market. Shares in Goldstone were suspended at 1.30 PM as it appears the company does not actually exist and has not done so for half a year.
Anyone would think Goldstone Resources (GRL) Non-Executive Chairman Christopher Hall didn’t want anyone to buy his company’s stock. After his glum statement in today’s interims, it’s no wonder the company’s share price has tanked 20% to settle at 1.99p. Shareholders in Goldstone would do well now to ask the company two questions. First, how does the gloomy Hall manage to get out of bed every morning? Second, what the bloody hell is he doing as the company’s Non-Executive Chairman if all he can promise shareholders is that “little more progress can be expected”?
West Africa-focused AIM dog Goldstone Resources (GRL) is waiting for imminent infill auger probing results from Homase in Ghana before it drills to expand the gold prospect’s near-surface oxide resources from 100,000 oz. to towards a hoped-for 250,000 oz. in line with the strategy adopted by 33.4% shareholder and fellow AIM counter Stratex International (STI). Goldstone, whose shares at 2.62p (following a one-for-10 consolidation last autumn) have plunged 99% since their 2004 float, is hoping to add significantly to Homase’s present resource of 602,000 oz. at a low grade of 1.77 grammes of gold per tonne of ore, as it seeks joint venture partners to participate in -- and fund -- its other projects in Senegal and Gabon.
Goldstone Resources (GRL), the unloved West African gold explorer whose shares have fallen 98% in 10 years, is entering a new era, which long-suffering investors must hope will radically improve its prospects. Shareholders have approved a package of measures, including a £1.4 million investment by fellow AIM counter Stratex International (STI) and the replacement of Goldstone’s chairman Jonathan Best by Christopher Hall of Stratex, putting Stratex into the driving seat.
As boss of an AIM mine exploration company which has lost 97 per cent of its stock market value since floating 10 years ago, Jurie Wessels, chief executive of South Africa-based Goldstone Resources (GRL) is determinedly upbeat about its proposed new deal with fellow AIM company Stratex International (STI). Stratex, which has gold interests not far from Goldstone’s projects in West Africa, has agreed to pay £1.25 million for 33.4 per cent of Goldstone at a discounted 6p (after a tenfold share consolidation) -- provided the City Takeover Panel agrees to waive what would otherwise be its obligation to bid for the entire company.
Stratex’s (STI) investment into Goldstone Resources (GRL) looks like a smart bit of business. After Randgold terminated its exploration Joint Venture in eastern Senegal with Goldstone, at the start of April, the future looked pretty bleak for Goldstone’s shareholders. Their company was running on fumes and there seemed little prospect of an imminent commercial deal for the Homase/Akrokerri project in Ghana. There were serious questions whether or not Goldstone would survive. Although the price of today’s deal is pretty disastrous for any long term holders of this stock, they should, at least, retain half of the potential value in the business (assuming the deal completes and Stratex exercises its warrants over the next eighteen months). Even though the immediate market response to this proposed deal has been muted, if it does go through then a rerate could be on the cards for Goldstone’s share price.
It is unfortunate what has happened to Goldstone Resources (GRL). The company still needs to explain the unacceptable delay in releasing the news that Randgold Resources (RRS) had terminated its crucial Joint Venture on Goldstone’s Sangola permit, in eastern Senegal. However, the disappointing results of the drill campaign were no-one’s fault. Today Goldstone has released its “Sangola Results Interpretation”. Shareholders have little to cheer about.
Someone really needs to explain to me why the termination of a hugely important Joint Venture shouldn’t be considered as price sensitive information, deserving of immediate release to the whole market. This afternoon, Goldstone Resources (GRL) blithely dropped a bombshell of an RNS on its shareholders, telling them that yesterday Randgold Resources (RRS) terminated their Senegalese JV. Not today. Not this morning, before the market opened. Not during the first three and a half hours of trading. Yesterday. Do the rules really mean nothing on AIM?!
This financial writing business can be a funny old game. This morning I started to write a fairly pessimistic piece on AIM-listed Goldstone Resources (GRL), after I read about comments made by Randgold Resources’ (RRS) Chief Executive Mark Bristow concerning his company’s Massawa gold project in Senegal. By the time I had got to the end of my downbeat assessment I had actually completely changed my mind. What he said could be very bullish...
Goldstone Resources (GRL) is a company I quite like, but we can’t ignore today’s bad news. The latest attempts by Randgold Resources (RRS) to find a sufficiently high grade gold deposit in Goldstone’s Sangola permit, in eastern Senegal, have failed. I expect the shares to drift lower over the coming months.
Goldstone Resources (GRL) today announced that the company's strategic partner Rangold has interpreted the assay results which proved disappointing. Oh dear. It gets worse.
Three weeks ago Tom Winnifrith asked “Goldstone (GRL) drilling results; can it really say this?” At the time Goldstone released less than impressive drill results together with some, how shall I put this.... errr.... “bullish” statements. Fast forward to Friday and, yep you guessed it, Goldstone tapped the market for a heavily discounted placement, 30% lower than the closing price of July 5th.
GoldStone (GRL) announced drilling results from its Ngoutou project in Gabon on 4th July via an official release which I, charitably, describe as optimistic. I understand that companies in the “jeux san revenue” exploration game must always put the best spin on life ahead of the next fund raise but there are limits.
Goldstone Resources is another stock flagged to me by a Twitter follower, someone who I am already starting to respect in terms of his judgement regarding small cap recovery situations.
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