important observations..., page-6

lol...

It was a joke guys...

Anyway, a few musings to follow...

Cheers!

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Strange scenario...

Previous holders sell...which of course is absolutely fine.

But then spend all day telling everyone how bad the stock is...over and over...one assumes in order to convince others to join them on the outside?

I can't quite understand this. If I sell out of a stock, whilst I may well continue an interest...indeed even post on it from time to time...there is no way I would continue to post 10...15...even 20 times a day on it.

I doubt genuine sellers would.

Seems some are making an extraordinary effort to post a negative slant…none of which is factual, just a negative slant on what are clearly very grey areas of the business plan.

Lol…welcome to West Africa!

123enen…it appears to me you have not in fact “sold out”...no...you have merely "traded out" with the view to buying back in...otherwise I suggest you would not be spending hour after hour trying to convince everyone to sell.

This is your focus is it not?

This is fine by the way...I just wish you would be honest and not think we are all fools.

The reality though is you are offering an opinion, albeit one well argued, but an opinion none the less based on less than clear “issues” which have obviously raised their head.

I believe your argument has merit…but I also believe the thrust of your argument to be just plain wrong.

Anyway, in spite of your considerable effort to convinces us all to join you, the stock is not exactly tanking...so I can understand if you are in two minds about your temporary exit and perhaps solace in numbers by convincing others to follow suit.

But enough of the posting observations...

For me, technically CVI is seeing a very significant shift in trading activity right now...the drop-off in volumes and lack of impact the players are having is both technically important and indeed enlightening...it is now as clear as day the vast majority of recent shorting activity was Opes Prime sponsored, no doubt facilitated by the “Global” placement selling and indeed wider market carnage.

The particularly strong "retail flavour" of the CVI register does not help any in this regard either.

Regardless, the immediate shift in trading patterns from the end of March (and the Opes purge), where they likely cleared the books on the last of their CVI positions (they had about 300k about a week prior), is clear evidence that at least part of the recent problem for the stock has been addressed.

With Opes responsible for some 10% of trades this year prior to their demise, it equates to an impact on CVI's trading volumes of about 1m shares per trading day!

This is a significant level of “interference”.

It is also likely to have been shares sold first...then bought back later...such was the pattern of the Opes model.

There is a significant irony here...

Those "negative types" who get their lollies off poking sticks into the wounds of suffering "investors", some of which I assume are very much "Opes types", were talking down the stock on the grounds we are not achieving short term goals...lol...last time I checked, "short-term goals" were the realm of the traders?

I always find it hard to get my head around this argument…they typically talk of technical breaches, about as trader focused as you can get, then turn it to a “told you so” exercise against investors?

For the record, I beg to differ with those who suggest CVI is non-achieving, although I do understand why they say what they do.

Personally I view Smyth's achievements in Angola as both significant, especially for a small company like CVI, and indeed comprehensive in their wider strategy...I feel it unfortunate that people insist on using use short-term focus to measure long term objective.

There is a much bigger value picture here, although to be entirely honest, it is a rather complex one which by it's very nature does not engender "investor" types...well not yet anyhow.

This for me highlights the dichotomy we face here.

In CVI we have significant value equation, some of which could come very quickly...this is clearly attracting the "traders".

But CVI is also a long term value equation, with a focus on value creation on the back of early mover statu,s on what may best be described as a return to the Gold rush days of old. This short term activity is attracting the traders, whilst the underlying development progression of these projects is clearly an investor centric one.

Angola is open for business after a long and protracted war...there are areas were previous resources could be relatively easily developed...and others almost virgin ground, but with known geology and known occurrences of significant minerals.

We have our foot the door of opportunity here...it is a once-off and will likely close within as little as 6-12 months. Whilst we already have a basket heavy with goodies, we also have plenty who will step in to help if the basket should get too heavy...or indeed heavier...so why not grab all we can?

BHP were heavily on the ground...they were filling their basket...but now they are not.

Think about that?

Now...I mentioned I met with Smyth and would not be selling out...this is very much a fundamentally focused view and not influenced greatly from some ephemeral, minute-by-minute "analysis" of share price fluctuations based on "credibility" swings.

I have seen this sort of thing in another company…all manner of prognostications about a persona “credibility” not only entirely wrong, but often quite criminal in its execution…clearly driven by agenda.

I will admit though, the question of “credibility” is a significant problem for Smyth...perhaps some self inflicted, perhaps some not...but clearly an area that needs to be addressed if we are to move to the type of company, with the type of register, that cannot be targeted by those intent on points scalping.

The view on his credibility may well be wrong, but that doesn’t mean it does not exist,

I will say it again...the key here is register profile!


Whilst traders are a necessary component of any register...indeed even desirable in some way...their impact needs to be regulated if a company is to enhance its capacity to access funds from the market.

Fair to say, recent efforts with the Global facility were in my view as close as it gets to shooting one's self in the head in a corporate sense...and like any head wound, it often requires one learning to walk again.

Last week CVI made a few tentative steps...and this week, it stood under it's own efforts. It may be fragile...but with a little help (read self control) from family members (that’s us), CVI will be up and running again in no time.

So…what did I get from my meeting with Smyth?

As I see it, all is fine...although I would not be expecting anything on the oil pre EGM.

I think it is fair to say I offered my views on the whole Global placement process more than once…and have since received a call from Smyth suggesting he does agree with my argument. I also believe however it was a facility that really was useful to the company in ways we may not realise for some time. None the less, it was a pretty shabby way of doing business…and a way of doing business clearly not needed, either then, now or in the future.

I do believe Smyth has got the message on this subject though…perhaps from more than one or two people?

lol

In reality, one of the problems I sense for Smyth is having so much to do…with so many diverse projects…in so many different places…and the resulting time-poor approach to “reading the market”…it is one thing to have family and friends advise you on market matters, even brokers give their opinions of what they think, but another entirely to learn from a hands-on market participant what the market actually thinks.

You need to be either very much hands on in the markets to gauge fully the nature of market sentiment at any given time…which the vast majority of CEO’s thankfully are not. As such, the alternative is to seek counsel from someone who is.

If Smyth has any glaring flaws, my guess would be it lies in his capacity to nut out the fine detail…he is very much a big picture player.

The fine detail however can make or break a micro-cap moving through the initial value transition phase…and managing the profile of the register is about as critical and “fine detail” as you can get. My hope is that this is being addressed even now and that future inclusions on the register will be better handled.

If you need $2 ask for $4…if you need $20, then ask for $40…and do it all in one hit!

This will tell the market you are in control…it will also remove ongoing doubt of getting caught on the wrong side of a placement and most importantly, provide confidence we have a degree of financial security and not be subject to external placement related weightings on the stock.

All in all though, frankly, I do feel we are in good hands...Smyth and Co do not need CVI for wages, or even market "farming" as some are suggesting...they clearly see a pot of gold at the end of it all and are going for it. I sense a bunch of guys who love the game, would probably work for nothing and who's focus is on "achieving" runs on the board and above all else, gaining access to an area many of them have been after for decades.

This is the bottom line motive in my view…and for mine, an important observation.

It really is like a colonial times land-grab in Angola...and if it were not for the quality of ground "available" and attractiveness to Smyth (Egan mainly on the minerals I suspect), and obvious time drain on all concerned, then we might have one or two projects more advanced by now…and perhaps more easily “measured”.

As we now stand, Catabola is the most advanced “active” project on our books, in fact it appears to be the only active project, but to this date is still very much an unknown quantity and far from easy to value. I repeat my previous view that I hold great expectations for Catabola however.

In reality though, both Cachoeiras De Binga (copper) and Luachisse and Nhefo (alluvial diamonds), are our most advanced value equations, with the latter potentially the most easily measurable in a relatively short period given commitments to enter production before the end of 2008. We just need to see the numbers, which I am sure Smyth will release once the projects have been secured.

There is no doubt we have far too many and far too diverse an array of balls in the air right now to make a realistic attempt of value assessment…it is virtually impossible…beyond of course something along the line of “lots more” than currently…lol

Smyth has been advised by the instos, with whom I agree, that the Tony Caplin report is the right way to go to raise our profile with the right people...to provide a benchmark for measure…I believe he carries a following due to his reputation to dig deep with his reports as they are not simply paid infomercials.

I suspect Smyth expects the “Caplin Report" will be the turning point…whilst I partly agree, I do feel the real money will be waiting for the first definitive sign of value “measure”…be it minerals, oil, refinery…whatever…lock it in and they will come.

In the meantime we must endure the vagaries of little people pretending to be big traders on the stock…who can only do so however due to the poor way in which the Global placements were actioned.

Did I mention I wasn’t too keen on the Global placement process?

lol

Offshore decision in my mind is linked to onshore…clearly through Flacon…and whilst I can sense block 6 is particularly attractive to CVI, I suspect we may well take most if not all that is offered here. The prize in my view will be participation in at least 3 and maybe 4 on shore blocks, with likely percentages in the 15-20% range…(my view, not Smyth’s)

I believe the discovery of at least one 100mmbls field is expected onshore, whilst offshore has existing discoveries over 160mmbls in Block 6 and significant exploration upside. The heavy oil which was perhaps less attractive at $20/barrel has changed somewhat at US$110/barrel.

Smyth suggested he was interested in an Iron acquisition near Wambo...I guess this could land any day...or not?

Maybe this will be the stimulant the market is waiting for?

lol

Diamonds are very attractive, Smyth didn't want them, Egan suggested he was mad if he didn't. Egan has diamonds experience.

It is thought the refinery will likely be bank financed, maybe with a minor equity component (my comment not Smyth’s). Simple process of securing supply (already have that from Sonangol), securing off-take contracts (lol…oil...not hard), then putting the "maths" before the right people, I assume with the view to sharing the profit stream? I suspect Smyth already has the “right people” lined up.

I sense the Indians are on the scene here and the "prominent Angolans" are possibly a little edgy...but Smyth keeps reminding there is room for everyone, they need so much more than all of them can provide anyway.

I do get the feeling CVI are in with one or two of what are probably several groups within the Angolan elite, all madly trying to lock in projects in competition with each other...I gather from Smyth’s comments however that the tension between competing forces may be merging towards a more cooperative approach?

In this regard, I suspect the Angolan’s perhaps more than anyone else have found their own goal posts moving under the force of a flood of international interests moving in…this of course does not help CVI’s cause, however it does not end it either.

I think the whole situation really is very liquid!

I had some 60 questions for Smyth, most of which I could throw at him via email at any time...as such I decided not to pull them out in preference of reading him on a more personal level.

First impression is of a confident, informed, highly educated person...(lol, which CEO isn't)...but I also sensed a degree of nervous energy...like someone in a job interview. I sense he was truly surprised at the way the market has sold our stock down recently…I equally sensed he is re-grouping in this regard.

I suspect Smyth and crew are not always fully in touch with market perceptions given their hectic programme, internal corporate focus and likelihood to be caught up in the "Angolese process"...and as such, not always able to get things out to market in a timely and "market relevant" manner. I feel some of the previous rather clumsy disclosures, or perhaps lack thereof on a few other occasions, may well be a direct product of this “distraction”.

Perhaps the most significant issue for me here is the fact they do not need the money…so why bother?

I think I can safely say this whole Angola effort really is about a bunch of guys getting their hands on an area they have always been interested in...but have previously been locked out of.

I think this is an important point we all need to understand when we try to determine likely motive here. Sort out the motive and suddenly all other fears diminish…especially the odd curve ball that we can virtually guarantee will come our way from time to time in this art of the world.

Important not to throw the baby out with the bath water as some appear top be doing.

The Canadians, Chinese, Indians and US are all rushing in here...Smyth insists we really are looking at a one-off opportunity to secure the "best bits" in the immediate future, after which the competition will be just too high...and perhaps entry "costs" far too prohibitive?

The copper province will clearly attract interest…Oxiana have introduced themselves, ...as have the Chinese...obviously it is far too early for this sort of thing though. In the end however, all these potential suitors will effectively just help in upping the ante for an eventual BHP takeout…the key for interest from the likes of BHP is scale and in my view we are well on the way to achieving this.

So herein lies the focus in my view...create a commodity basket, with big boy toy attraction, add as much value as possible and flog it off in a raffle to the highest bidder.

I am going to meet up with Egan in a couple of weeks...probably with Tony Shoer of PLV...so the two of us can really get a feel for the minerals side of things.

Sorry there is nothing more specific guys...time was running out and I thought it more important to measure the man in terms of market doubt...questions can always be addressed any time.

At the end of the day, for all of us, the dilution versus asset value (read market cap) equation is all that matters…as such, we need to look for the first real sign of measure…be it resource, definitive oil, diamond, iron agreements, formalisation of the refinery details and any other number of quantifiable developments.

We do however need some form of quantifiable asset, with title and definitive measure…when it comes, so to will the market.

I do not think this is too far off.

Perhaps the most important event for mine would be anything that addresses ongoing funding requirements, which I think most would agree is the single most important aspect facing the company at this stage in their life cycle.

I am sure sanity will soon prevail…and existing prices will start to reflect those few assets we can apply a modicum of measure to.

Good luck all.

Cheers!