Fright night at Uranium One

[miningmx.com] --

Uranium One

If there’s one thing investors do not like it is to be taken by surprise. Even worse is to have trading in your chosen share suspended.

Uranium One committed both sins this week when trading in the share was temporarily suspended on the Toronto Stock Exchange.

That followed a Reuters report that one of its operations in Kazakhstan had been highlighted by government as a deal in which assets had been sold to foreigners illegally.

Uranium One shares dropped 30% ahead of the suspension. When trading resumed later they carried on down to lose 40% on the day. Eina!

The shares subsequently recovered 21% the following day after assurances from Uranium One that its assets were acquired in accordance with Kazakh law and the transactions approved by the Kazakh authorities.

Uranium One intends having follow-up meetings in Kazakhstan this week and will provide more information to shareholders as it becomes available.

The development is most unfortunate for Uranium One given that it finally seemed to have turned the corner after the debacle with the Dominion Mine which it was forced to shut down. The share price was recovering nicely.

Then again, that’s why investors allocate a higher risk profile to miners operating in Kazakhstan and the other “stans” of that volatile geopolitical region – something that had been raised at question time at various Uranium One presentations.

The ‘stans” seem to make South Africa look positively AAA-rated which must benefit the various uranium projects being developed here.

Trans Hex

We have to admit it is very tempting to say “we told you so” given what happened with Trans Hex’s webcast presentation out of Cape Town held on May 26. Ah, what the hell. We told you so! We could not hear what CEO Llewellyn Delport was saying and the presentation slides did not come up.

The problem affected various other journos and analysts in Gauteng. According to Chase Kuyper – the Pretoria-based executive for Corpcam which organised the webcast – there was a “problem with the line from Cape Town” which the Corpcam techies on the ground in Cape Town could not attend to because they were too busy doing the webcast.

"Ja well no fine!" is about the only answer to that.

On the plus side Delport did phone back when approached that afternoon and we were able to put follow-up questions to him.

Judging by the financial results it seems the reason for this new approach by Trans Hex to its investor relations is to reduce costs.

We think that’s a false economy and the company risks alienating financial reporters, analysts and fund managers based outside of Cape Town.

There again, we are old-fashioned and prefer using the “mark one eyeball” instead of relying on pixelated images and with good reason.

As any practitioner of neuro-linquistic programming will confirm, it’s the body language - such as the way the eyeballs flick when answering a question - that can be far more revealing than the actual answer. You cannot pick that up on a webcast.

Rockwell Diamonds

The bust-up between Swiss-based Pala Investments and the three “executive directors” on the board of Rockwell Diamonds - David Copeland, John Bristow and Mark Bristow – is turning increasingly legal.

On May 27, Pala demanded that the “minority directors” - their term for the three directors they want to remove from the Rockwell board – withdraw and re-issue the proxy circular that was published on May 20.

According to Pala the three have "wilfully created a situation that is confusing and detrimental to Rockwell shareholder interests". Reason is they have put additional resolutions on the agenda for the June 17 meeting requested by Pala.

Pala also threatened to take legal action in the British Columbia Supreme Court if their demand was not met.

On May 28 the “executive directors” replied that Pala was “attempting to stifle shareholder democracy by pushing an agenda with only their options for shareholders.”

They added they had instructed legal counsel to defend their right “to take their case to shareholders".

So yet again the biggest winners from a confrontation like this could be the lawyers and surely we don’t have to remind investors how the “legal eagles” cleaned up in the Harmony/Gold Fields tussle?

Please note we have not called them “vultures”. We like vultures, many of which are endangered species and get enough of a bad press as it is.