What a dirty week that was. Down about €10,000
I can honestly say it does not bother me though as I still have a lot of confidence in the prospects offshore Namibia and the fundamentals for gold and silver are greater than ever.
I received word that the deadline for public comments against the final permit for CMC Metals is June 4th. The water licence was granted "uncontested", so I have high hopes for the granting of the final permit which will lead to a share price multiples of what it is now (14 cent).
I picked up 1050 more shares of Chariot just before closing yesterday using the last €1,000 cash in my account. They have their AGM on Monday and the restriction placed on Petrobras (PB) as part of their 2009 farm in agreement ended today. As way of background, PB farmed into 50% of the Nimrod block in 2009. BP then farmed in, buying 25% from Chariot, and then finally they bought another 20% but this time from PB.
To give you an idea of the potential, the Nimrod block has prospective recoverable resources of 4.9 billion barrels, i.e 1.2 billion barrels for Chariot. At $3 per barrel, it would give Char a market cap of about £2.2 billion or £8.60 per share. It would also de-risk the other blocks held 100% by CHAR. At that share price my €3,800 worth of shares would be worth approx €45,000. Of course it is possible that Nimrod has zero oil and in that case my shares would be worth next to nothing.
Investors are speculating why PB sold some of their stake to BP. On one hand you can speculate that since 2009 they have lost confidence in Nimrod and wanted to de-risk. On the other hand you could say that they took a look at the Tapir South 3D seismics and the 25% chance of success there and believed that they could takeover CHAR on the cheap prior to the Nimrod spud. If this is the case, it is working out beautifully for them. The price drops to near cash levels just when the share purchase restriction ends. They start picking up shares and then launch a takeover. The market cap of Chariot is currently £130m.
We have the G8 this weekend, so hopefully something positive will come from that. Another can kick maybe!