Master Investor readers are here invited to read a report that I issued about twenty years ago. I had been offered the chairmanship of Kryso by Craig Brown and Vassilios Carellas, both then aged about 30. Craig died in sad circumstances about three years ago whilst Vassilios has become a consultant of ARC and Fire Ring.
I ceased to be chairman after an extraordinary tangle of administrative improbabilities. This tangle need never have happened if it had been the case that the Nomad, one Brett Miller of Ruegg, whom I dislike, and RAB, whose modus operandi I disliked even more, had addressed Kryso as I had wished. For instance RAB proposed just days before the flotation that Kryso absorb a useless silver mine in northern Tajikistan in which RAB had invested. I do not agree with this spivving around: it just causes trouble.
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“Regular followers of my column will know that I have the chairmanship of Kryso Resources PLC, a gold miner in Tajikistan due to float later this year. Wearing this hat I left London on 18th September 2003 the better to acquaint myself with the staff and operations.
As most of you know I do not speak Russian, still less Tajik. But the executive directors of Kryso are bilingual in English and Russian. This latter is the language of administration in Tajikistan as a result of the historical involvement of Russia in Tajikistan’s affairs. It’s hardly surprising that they are fluent. The finance director and administrator is a 34 year old New Zealander and chartered accountant who first rocked up in the territory about ten years ago while the general manager is a 31 year old South African mining engineer and geologist who distinguished himself at a well known Tajik mine about nine years ago. Each has taken Tajik wives. As a result, they are taken very seriously by the Tajiks.
They have also had the good sense to recruit as a third executive director, Abuali Ismatov, who is an extremely successful Tajik businessman and who acts as an immediate entrée to solving the morass that is Tajik administration. He is trusted by all for his common sense and fellowship. I took to him hugely – indeed he is one of the most remarkable characters that I have ever encountered in my life. He is 44 years old. He was a champion wrestler in Tajikistan and must still be a comfortable 23 stone – the weight being centred on his chest, neck, legs and arms. As most of you know this is in contrast with your correspondent whose weight is identical but centred on his gut. His wife informed me that on the first occasion she took a meal with him – some twenty odd years ago – he ate seven and a half chickens. Certainly on the night before I returned to London, he must have polished off three quarters of a turkey. There was no sign of discomfort. And that was subsequent to several other courses and before a setting of quails – all despatched with equal gusto. (Incidentally, for those who are interested in alternative medicine, he pooh-poohed my use of Imodium and handed over a Paris goblet full of Vodka and a teaspoonful of salt stirred into it. I felt right as rain in twenty minutes.)
Kryso’s principal first operation is at Pakrut some 106 kilometres north east of Dushanbe, the capital. The first 50 kilometres are simplicity itself on tarmac. Thereafter, matters become increasingly difficult as the road narrows. Towards the end it is necessary to cope with occasional boulders sticking a foot or so out of the road. The road is frequently narrow and I found myself looking down into the valley and the Pakrut river itself – a rushing ice-cold torrent. I did not mind when there was a mere three metres down but when it was fifty metres I preyed that Abuali, as driver, would not make a mistake or the road crumble. Of course, at the time, I did not dare ask him whether he had ever come off. That would have been desperately rude. That noted, curiosity got the better of me when we had got back to Dushanbe in the evening by so enquiring. Unequivocally, ‘never’ was the reply. I felt slightly ashamed. On reflection, it is not possible to be a champion wrestler if you are not nimble and a good judge of control pedals and distance.
The base camp at the prospective mine is led by a whitebeard (Tajiks have a great respect for age – at 57, I was thus honoured to a degree not enjoyed at home). He had fought in the civil war when these hardy hill/mountain dwelling folk lived on honey and their sheep. Believe me, they are tough. He has twelve children. I explained to him that I have two as a result of ten seconds work and that I do not therefore attach much importance to his minute’s work. Rather, I said, I admired his wife who had had the task of bringing them up. I think he found this fair banter. After all, orgasm is a universal currency.
The men treated us with great courtesy. In Beyond the Oxus, Monica Whitlock, a former BBC World Service correspondent who here covers the Central Asians, asserts that the Tajiks may be poor but that hospitality is absolutely central to their lives. I can confirm this. Further, any offers of financial assistance towards meeting the cost of hospitality would be regarded as extremely insulting. These fellows are not welfare statist.
They had killed a sheep for us that very morning and skewered it on sticks freshly cut from the trees, leaving delicious knuckles for further savouring. The drink of choice was of course Abuali’s vodka (he owns a distillery). Amazingly, the excitement of all these fresh smells, views and ideas meant that I did not feel drunk after a bottle of vodka. Indeed, the excitement held over to that night when I thought it inevitable that I would nod off instantly. Instead, as I tried to doze, fifty metre drops became five hundred metre drops where I could see the eagles circling below me. Vertigo stopped me sleeping. Actually, I did not sleep for four nights – it was necessary to sink the usual bottle of champagne and one of Gevrey-Chambertin on my return to London to ensure that I was knocked out. I suppose that that is a case of more alternative medicine.
The day was remarkable in many different ways. I know that a few readers will tell me that eagles etc. are all in a day’s outing. But, for me, they are the exception. Since this is not an ornithologist’s slot, I will not further demonstrate my ignorance by trying to identify the fantastic eagle that swept down the valley above me. It was at least six foot in wing span and coloured brown and black. Apparently, such an eagle can lift a sheep.
My visit to Tajikistan was not just centred on a trip out in a big country. For, on the other days, I met the head of the parliament and also the deputy prime minister. Each was good-humoured, welcoming and enthusiastic – they know they desperately need economic development and employment for their country. HM’s ambassador, a careful fellow, Graeme Loten, with whom I also had lunch, was realistic but hopeful. For instance, it is clear that security measures in Dushanbe have been lately greatly relaxed. However, he mentioned that the President had recently closed down an opposition publishing operation. I regard that as rather an unhappy development. But one can see it from the President’s point of view: he knows that his country must have stability – about ten years ago there was an appalling civil war (Note 1). The Tajiks cannot risk their recent hard fought-for hopeful vista.
Many will ask how I think this Kryso issue should be priced. By law I cannot tell you. Sorry. But I would remark that the Russians first drilled out the beginnings of what will, I trust, prove to be the Pakrut mine about twenty-five years ago. There are many hundreds of metres of adits. Many samples have been taken. This work is being reviewed by Kryso as I write. I am of course in no position to judge geologists’ findings. But I was very encouraged by the noises made by the geologists. Therefore, I am minded to the view that Kryso does not in practice face geological risk. I think I also know that there is virtually no management risk.”.
During our visit twenty years ago I was taken to meet the Vice President of Tajikistan (Note 2). Security measures meant our having to walk backwards and forwards within the president’s quarters until we had cleared the possibility of our carrying weapons.
Note 1: I was told that a feature of this war was that a prisoner held for execution would be forced to drink vast quantities of petrol which burst alight when the poor fellow was machine-gunned.
Note 2: Eventually, the VP was poisoned. The Chinese took over Kryso but never paid cash. They just took control and used this fact to strip Kryso of any chance of ever making a profit. This has not proved good for investors originated in London.