Pinned valuation:
12-April 2024: Same thing applies here as I wrote last night for Capricorn Metals (CMM). I haven't updated price targets for either company for years, but they haven't cared much about that and have just got on with it.
Both CMM & EMR have ex-RRL (Regis Resources) people working for them, but these are the people that built Regis into one of Australia's top 5 gold miners back in the day - at Duketon, not the later management who overpaid for 30% of Tropicana and are dragging their feet on McPhillamys because the costs blowing out has made it hardly worth the effort now, and it will take an enormous effort to get McPhillamys up and running from here, and I've recently lost faith in the current Regis management to get that done in any sensible timeframe, but I digress...
Emerald through it's Cambodian subsidiary Renaissance Minerals has developed Okvau which became Cambodia's first commercial gold mine, and the Cambodians seem reasonably pleased to have the new industry in the country employing locals and producing money and benefits for the locals and the government.
Warning: The following two sites do use pop-up ads and cookies, so best to use a pop-up blocker and a cookie cutter (good firewall) or maybe skip the next four links:
https://www.khmertimeskh.com/501396101/cambodia-produces-nearly-9-tons-of-gold-minister/ [22-Nov-2023]
https://www.phnompenhpost.com/business/first-commercial-gold-mine-online [21-June-2021]
There are a few coyboys and locals trying to mine gold themselves in different parts of Cambodia without proper safety precautions, and than can have tragic consequences:
https://www.khmertimeskh.com/501285265/gold-mining-pit-accident-in-central-cambodia-claims-four-lives/ [06-May-2023]
That image (above) is from that tragic incident referred to in the article linked to above the image.
Emerald's Okvau mine, on the other hand, while it looked quite rural in it's early days compared to larger scale mining operations in other countries, has become a decent sized mine and processing plant now, and they do follow proper safety guidelines as well as ahering to the local laws and regulations.
Source: https://www.phnompenhpost.com/business/australia-gold-industry-adds-lustre-cambodias-diversification-plans [23-June-2021]
Excerpt:
Australian charge d’affaires Luke Arnold said compatriot Renaissance Minerals (Cambodia) Ltd’s commercialisation of gold in southwestern Mondulkiri province’s Okvau area will underpin Cambodia’s goal to diversify its foreign investment profile and assist the Kingdom in building a more resilient economy.
Arnold and Australian embassy second secretary Rhys Haynes on June 21 joined the energy and environment ministers and other senior Cambodian government officials for a ceremony marking the commencement of gold mining operations at the Okvau Gold Project in Mondulkiri’s Keo Seima district.
Owned by the Australian Stock Exchange- (ASX) listed company Emerald Resources NL, Renaissance established the project – Cambodia’s first commercial gold mine – and will operate it.
Arnold said the embassy is “pleased that an Australian mining business is helping support the Royal Government of Cambodia’s goal of diversifying its sources of foreign investment.
“Investments from Australia, like this project, will ultimately assist Cambodia to build a more resilient economy and a balanced strategic outlook in our region.”
Prime Minister Hun Sen on June 21 took to Facebook to congratulate all parties involved with the commercialisation of the project.
He said the undertaking was nearly 14 years in the making, following successful feasibility studies and environmental impact assessments.
Construction of the necessary infrastructure and facilities to support the gold project started in mid-2020, with a total investment of around $120 million, he said.
“The start of operations makes it clear that our past efforts in the mining sector were indeed viable, and we can extract natural resources from underground and reap their benefits for our socio-economic system, with high accountability for the environment and society.”
“[But] the launch of the gold industry is not just an invitation to encourage people to take up gold mining businesses – it is one of the most risky ventures, and requires a lot of capital and specialised skills,” the prime minister cautioned.
According to the embassy, the Cambodian government estimates that the Okvau Gold Project will generate more than $300 million in tax revenues and royalties over seven years, which will provide vital funding for public services and help offset the economic impact of Covid-19.
Emerald Resources has committed to applying high environmental, social and governance (ESG) standards throughout the project, in line with the Organisation for Economic Cooperation and Development (OECD) Guidelines for Multinational Enterprises and relevant Cambodian legislation, it said.
It added that it understands that the project’s Environmental and Social Impact Statement was the first of its kind to be audited to the International Financial Corporation’s (IFC) Environmental and Social Performance Standards.
And the charge d’affaires said the IFC’s audit “sets a high bar for future projects and will help ensure that the emerging Cambodian mining industry can attract interest from high-quality international mining companies, which will be more likely to deliver benefits for the Cambodian people and minimise negative environmental and social impacts”.
--- end of excerpt ---
Hopefully that's more than just talking the talk, and they actually walk the walk and do what they say they will in terms of minimising adverse environmental impacts and setting a high standard for future Cambodian mining projects to meet.
The main thing is that the wealth is being shared around, instead of ALL of it being siphoned out of the country. Many of these countries need the experience and investment dollars that companies like EMR can bring to the table to unlock the wealth that would otherwise mostly stay buried underground. However with $300 million in taxes and royalties (government estimates, see above) flowing back to the Cambodian government over the initial 7 years of this mine - assuming the mine life does not get extended further due to further gold being discovered - as is often the case, it is little wonder the Cambodian government is so supportive of this project.
The market often doesn't know what to do with Emerald, because there is no history of Cambodian gold mining to look at, as Emerald are pioneers at developing and operating a commercial gold mine in Cambodia. Their share price continues to grind higher however as they keep presenting more and more positive news and no real negative news.
Then there is Bullseye Mining, a private (unlisted) gold company that owns projects in Western Australia. Emerald made a takeover offer for Bullseye back in December 2021. Here we are now, 2 years and 4 months (28 months) later, and they (EMR) still only own 78.26% of Bullseye Mining, and that takeover is still ongoing - it just keeps getting extended and extended.
Emerald have control of Bullseye, including controlling their Board, with the two companies having the same company secretary (Mark Clements) and the MD of EMR, Morgan Hart, now being the Chairman of the Bullseye Board. The Bullseye Board has always unanimously recommended that shareholders accept Emerald's offer, so that's not the sticking point - it is 2 or 3 stubborn shareholders who are holding out for a higher offer and refusing to sell. My understanding is that at least 2 of them are Chinese companies. Anyway, it appears that Emerald is going ahead with its plans for Bullseye and their WA gold projects with or without the support of those minority shareholders who are refusing to sell their Bullseye shares, and with 78% of the shares under their control, Emerald have effective control anyway - it's just messier with minority shareholders, but still doable.
You can read more about Bullseye here: https://www.bullseyemining.com.au/site/About-Us/company-overview
And Emerald here: https://www.emeraldresources.com.au/about/
WA:
Bungarra Pit, WA.
Cambodia:
Okvau Open Pit, July 2023.
Processing Plant.
Okvau Maintenance Crew.
Ball Mill Reline Crew.
Further Reading:
EMR:
MNN Awards: Hart's Emerald a quiet achiever (miningnews.net)
Executive management - Emerald Resources
Board of Directors - Emerald Resources
(24) Emerald Resources NL: Posts | LinkedIn
Tim Treadgold: Why it's time to take a closer look at Emerald Resources - Stockhead
CMM:
Ex Regis team to take reins at Capricorn Metals: sources (afr.com)
capmetals.com.au/corporate/senior-management/
(24) Capricorn Metals Ltd: Overview | LinkedIn
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As I said, EMR and CMM both have ex-Regis Resources (RRL) people there from the earlier Duketon build-out days, and many of those guys were together at Equigold before Regis.
I no longer hold Regis Resources, Capricorn Metals or Emerald Resources in any of my real money portfolios, however I do have a CMM and an EMR position here in my Strawman.com virtual portfolio. I have made money on CMM and EMR and lost money on RRL both here and in real life. I should have realised that the best part of RRL were the former management, who all turned up at either CMM or EMR. RRL has been a poor investment for most people after they left. EMR and CMM on the other hand just keep on grinding higher.
Just to go a little deeper on that ex-Regis and ex-Equigold element to both EMR and CMM Boards and Management teams - here's some stuff I did on that in December (2023):
The dark yellow/light orange highlights all refer to Regis Resources (RRL), and the blue refers to Equigold who were acquired by Lihir gold for $1B in 2008 (see here) and Lihir were aquired by Newcrest Mining in 2010 for a whopping $9.5 Billion. They severely overpaid. It was a cash/shares deal and Newcrest shares were overvalued at the time also so the price ended up being around that $9.5 Billion mark, up from the $8.5 Billion offer that NCM had first made. Then in 2023 New York Stock Exchange listed Newmont Goldcorp acquired Australia's Newcrest Mining (NCM) for US$16.8 Billion (A$26.2 Billion).
Here's what Intelligent Investor had to say about Equigold back in January 2006:
Equigold’s miserly miners
The misers at Equigold could show most miners a few things. Number one hard hat Nick Giorgetta has a long and successful history in the gold business. Year after year, the Equigold team manages to do a lot with remarkably little in the way of capital or geological endowment. American steel colossus Andrew Carnegie is quoted as advising businesspeople to ’watch the costs and the profits will take care of themselves’. Equigold seems to work to a similar philosophy.
Giorgetta himself owns 14% of the company and the rest of the board speaks for 20%. Whatever happens in the gold business, you can be confident that Equigold’s management will be acting in the interests of shareholders.
Mt Rawdon and Kirkalocka in Australia are Equigold’s current producing assets, although it hopes to get the Bonikro project into production if and when the political fog lifts in the Ivory Coast. Equigold sits squarely on our watch list, not for the ’blue sky’ over the Ivory Coast, but because of its astute management.
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Source: https://www.intelligentinvestor.com.au/recommendations/all-that-glitters-is-not-gold/54831 [January 2006]
Here's an interesting graphic I found from 2014, also featuring Nick Giorgetta:
Ahh, the memories...
OK, back to today, one decade later... No, hang on, let's roll back again for just a minute. Wayyyy back. To the early 1990s when Mr Nicola (Nick) Enrico Antonio Giorgetta (pictured above) was the MD of Samantha Gold, who later changed their name to Resolute Samantha in mid-1995 and then to Resolute Ltd in late 1996 and then to Resolute Mining Ltd (RSG.asx) in September 2001. Meanwhile Nick was a founding director of Equigold, then Managing Director until 2005 when he retired as Equigold's MD and assumed the role of executive chair until Equigold's merger with Lihir Gold in 2008). Nick then became non-executive chair of Regis Resources from May 2009 to October 2015, although Commsec shows Nick as having remained on the RRL Board for 7 years, until May 2016. More lately he's been a private investor, including in OreCorp (ORR) where Nick sold the 11.07% stake in ORR that he and his wife held (through their super fund, Rollason Pty Ltd) into the Perseus Mining (PRU) takeover on April 5th (8 days ago). He certainly likes his gold!
But anyway, enough about Nick. My point was that a lot of the Equigold people ended up at Regis, and even more of those who worked at Regis ended up at Capricorn (CMM) and Emerald (EMR), and if you've followed RRL, CMM and EMR, you'll have realised by now that the talent has well and truly left the building at RRL, and most of it has ended up at CMM & EMR.
True that @skaex - EMR was Cambodia only but with the acquisition of Bullseye Mining, they're now in WA also, as are CMM, so you never know...
By the way, have you ever seen a takeover last as long as the Bullseye one?!
https://www.emeraldresources.com.au/about/about-emerald/#:~:text=December 2021,exploration company Bullseye Mining Ltd. [Emerald Bid for Bullseye in December 2021]
https://www.australianresourcesandinvestment.com.au/2021/12/09/emerald-targets-bullseye-with-off-market-takeover/ [December 2021]
https://takeovers.gov.au/reasons-decisions/2023-atp-11 [2023]
Two and a half years! Worth the wait? We shall see!
