Re: CVI - Cityview Corporation
I have studied the NML situation a little and can make the following comments to you. I think this NML saga was not one of political risk, as many suggested (not that risk does not exist)but this was a case of perhaps not understanding how things work in that country.
I draw your attention to a series of NML releases to AIM market.
11 April 2005 Release to Market
http://www.advfn.com/news_Licence-Application_10940388.html
New Millennium Resources Limited announced today that following its successful progress to alluvial diamond production the Company was in a position to make application for a Kimberlite mining licence on its Rio Lapi C9 concession in Lunda Sul Angola.
The Rio Lapi concession abuts the Catoca Mining Society's lease and is approximately 20km north of the Catoca mine which is one of the largest diamond mines in the world.
Kimberlite exploration carried out by third parties in the late
1970s and as recently as four months ago indicate that at least three
kimberlites exist on the Rio Lapi C9 concession. To find alluvial diamonds and source diamond bearing kimberlite on the same lease is unusual and if proven would yield substantial reserves of diamonds and offer great opportunities for the Company.
It should be noted that the Company has not been given access to the results of this exploration at this time. This application will not detract from the Companies main focus which is on alluvial diamond production.
As can be seen form the above NML statement:
NML was granted an alluvial diamond licence at its Rio Lapa C9 concession.
They had been given every assistance and in fact had achieved production level status. They had not, and were not going to receive the Kimberlite licence for that tenement, exploration was being carried out by other parties on behalf of Endiama “in the late 1970s and as recently as four months prior” to NML making the application.
They acknowledge that their main focus was alluvial production.
01 June 2005 Release to Market
http://www.advfn.com/news_Issue-of-Equity_11453576.html
New Millennium Resources Limited announces it is issuing equity in order to bring forward its exploration program on the kimberlite prospect at its Rio Lapi concession in Angola.
It was our intention to carry out this exploration during November and December 2005 and to fund the project out of cash flow from the alluvial operations. However, it has become necessary to move this plan forward six months to provide hard data to prospective major joint venture partners who have shown an interest in our kimberlite prospect on C9."
Exploration on this concession has been carried out by third parties in the recent past. We now need to prepare to carry out our own exploratory drilling and analysis. It should be noted that this exploration will not detract from the Company's focus on its alluvial diamond production which is now fully operational.
As can be seen form the above NML statement:
Only 7 weeks after applying for a Kimberlite concession they are already calling it “OUR” kimberlite prospect on C9."
They chose to bring forward exploration without having been granted a permit. They were already trying to woo prospective major partnersbut needed to provide hard data on the Kimberlite prospect. The importance of this will become more evident later.
This seems a very strange way to do business in Africa and a sure way to aggravate Endiama, their existing local partner and the African elite. Were they were in fact, by making public announcements way in advance, playing a silly game of brinksmanship with the Africans?
Again, they had faith that the “fully operational” alluvial plant would be cash flow positive.
1 July 2005 Release to market
http://www.advfn.com/news_Trading-Update_11764754.html
On 1st June 2005 the Company announced that it had become necessary to move its planned kimberlite exploration forward six months. This was to provide hard data to prospective major joint venture partners who have shown an interest in its kimberlite prospect.
The Company is in the process of obtaining extra equipment to devote to the kimberlite project. The equipment is being sourced out of South Africa and shipped to Angola. In the interim, equipment on site has been redeployed from the alluvial diamond operation to the kimberlite prospect. This is a temporary measure only however, as a result solid projections and forecasts cannot be made at this time as indicated in March.
The potential to introduce a major joint venture partner and therefore enhance shareholder value rests with the Company's kimberlite potential. The decision to devote on-site equipment to this end is vital to achieve a successful joint venture.
As can be seen form the above NML statement:
They ceased production at the alluvial mine. This would no doubt upset their local partner and Endiama, and would perhaps have put them in breach of their contract. Talk about biting the hands that feeds you.
They could no longer guarantee that they would meet solid projections and forecasts as indicated in March. This would have upset shareholders.
Endiama had not granted Kimberlite exploration approval to NML and were working with Catoca on the Kimberlite. Was NML feeling threatened? Were they now out of control in trying to lock in a Kimberlite concession?
The New Millenium CEO, John Cross, resigned soon after.
06 December 2005 Release to Market
http://www.advfn.com/news_Issue-of-Equity_13420101.html
Under the new CEO Shane Healy.
New Millennium Resources announces that it has an agreement to raise #5 million by the issue one billion new ordinary shares at an issue price of 0.5 pence. The funds will be used to assist in the acquisition and exploration of a kimberlite diamond concession in Angola.
Shane Healy commented:
"It is clear that alluvial diamond licences on their own have little appeal to the investing market. Company has been hampered in its quest for a kimberlite licence by its inability to prove up financial capability. This placement addresses that problem. We are in discussions with a range of parties with regards to the acquisition of an interest in a kimberlite licence not the least of which is Endiama on our C9 concession at Rio Lapi."
As can be seen form the above NML statement:
They are looking for a new Kimberlite acquisition. Seems the crash or crash through strategy with the Angolans did not work.
This is the first time we read that on of the obstacles was that NML was unable to up a financial capability ( they could not raise $100M in two weeks during the holiday period like some
)
To top it off one of the licences they are interested in acquiring is the very same C9 kimberlite licence they tried to steamroll earlier.……………………………………………………………………………..
So make your own judgement on what went wrong here. I suggest:
No money
No contacts
No respect for Angolan methods. (almost Australian like behavoiur)
Change of preferences mid stream.
I have studied the NML situation a little and can make the following comments to you. I think this NML saga was not one of political risk, as many suggested (not that risk does not exist)but this was a case of perhaps not understanding how things work in that country.
I draw your attention to a series of NML releases to AIM market.
11 April 2005 Release to Market
http://www.advfn.com/news_Licence-Application_10940388.html
New Millennium Resources Limited announced today that following its successful progress to alluvial diamond production the Company was in a position to make application for a Kimberlite mining licence on its Rio Lapi C9 concession in Lunda Sul Angola.
The Rio Lapi concession abuts the Catoca Mining Society's lease and is approximately 20km north of the Catoca mine which is one of the largest diamond mines in the world.
Kimberlite exploration carried out by third parties in the late
1970s and as recently as four months ago indicate that at least three
kimberlites exist on the Rio Lapi C9 concession. To find alluvial diamonds and source diamond bearing kimberlite on the same lease is unusual and if proven would yield substantial reserves of diamonds and offer great opportunities for the Company.
It should be noted that the Company has not been given access to the results of this exploration at this time. This application will not detract from the Companies main focus which is on alluvial diamond production.
As can be seen form the above NML statement:
NML was granted an alluvial diamond licence at its Rio Lapa C9 concession.
They had been given every assistance and in fact had achieved production level status. They had not, and were not going to receive the Kimberlite licence for that tenement, exploration was being carried out by other parties on behalf of Endiama “in the late 1970s and as recently as four months prior” to NML making the application.
They acknowledge that their main focus was alluvial production.
01 June 2005 Release to Market
http://www.advfn.com/news_Issue-of-Equity_11453576.html
New Millennium Resources Limited announces it is issuing equity in order to bring forward its exploration program on the kimberlite prospect at its Rio Lapi concession in Angola.
It was our intention to carry out this exploration during November and December 2005 and to fund the project out of cash flow from the alluvial operations. However, it has become necessary to move this plan forward six months to provide hard data to prospective major joint venture partners who have shown an interest in our kimberlite prospect on C9."
Exploration on this concession has been carried out by third parties in the recent past. We now need to prepare to carry out our own exploratory drilling and analysis. It should be noted that this exploration will not detract from the Company's focus on its alluvial diamond production which is now fully operational.
As can be seen form the above NML statement:
Only 7 weeks after applying for a Kimberlite concession they are already calling it “OUR” kimberlite prospect on C9."
They chose to bring forward exploration without having been granted a permit. They were already trying to woo prospective major partnersbut needed to provide hard data on the Kimberlite prospect. The importance of this will become more evident later.
This seems a very strange way to do business in Africa and a sure way to aggravate Endiama, their existing local partner and the African elite. Were they were in fact, by making public announcements way in advance, playing a silly game of brinksmanship with the Africans?
Again, they had faith that the “fully operational” alluvial plant would be cash flow positive.
1 July 2005 Release to market
http://www.advfn.com/news_Trading-Update_11764754.html
On 1st June 2005 the Company announced that it had become necessary to move its planned kimberlite exploration forward six months. This was to provide hard data to prospective major joint venture partners who have shown an interest in its kimberlite prospect.
The Company is in the process of obtaining extra equipment to devote to the kimberlite project. The equipment is being sourced out of South Africa and shipped to Angola. In the interim, equipment on site has been redeployed from the alluvial diamond operation to the kimberlite prospect. This is a temporary measure only however, as a result solid projections and forecasts cannot be made at this time as indicated in March.
The potential to introduce a major joint venture partner and therefore enhance shareholder value rests with the Company's kimberlite potential. The decision to devote on-site equipment to this end is vital to achieve a successful joint venture.
As can be seen form the above NML statement:
They ceased production at the alluvial mine. This would no doubt upset their local partner and Endiama, and would perhaps have put them in breach of their contract. Talk about biting the hands that feeds you.
They could no longer guarantee that they would meet solid projections and forecasts as indicated in March. This would have upset shareholders.
Endiama had not granted Kimberlite exploration approval to NML and were working with Catoca on the Kimberlite. Was NML feeling threatened? Were they now out of control in trying to lock in a Kimberlite concession?
The New Millenium CEO, John Cross, resigned soon after.
06 December 2005 Release to Market
http://www.advfn.com/news_Issue-of-Equity_13420101.html
Under the new CEO Shane Healy.
New Millennium Resources announces that it has an agreement to raise #5 million by the issue one billion new ordinary shares at an issue price of 0.5 pence. The funds will be used to assist in the acquisition and exploration of a kimberlite diamond concession in Angola.
Shane Healy commented:
"It is clear that alluvial diamond licences on their own have little appeal to the investing market. Company has been hampered in its quest for a kimberlite licence by its inability to prove up financial capability. This placement addresses that problem. We are in discussions with a range of parties with regards to the acquisition of an interest in a kimberlite licence not the least of which is Endiama on our C9 concession at Rio Lapi."
As can be seen form the above NML statement:
They are looking for a new Kimberlite acquisition. Seems the crash or crash through strategy with the Angolans did not work.
This is the first time we read that on of the obstacles was that NML was unable to up a financial capability ( they could not raise $100M in two weeks during the holiday period like some
) To top it off one of the licences they are interested in acquiring is the very same C9 kimberlite licence they tried to steamroll earlier.……………………………………………………………………………..
So make your own judgement on what went wrong here. I suggest:
No money
No contacts
No respect for Angolan methods. (almost Australian like behavoiur)
Change of preferences mid stream.
