Gordon Stein, CFO of CleanTech Lithium, explains why CTL acquired the 23 Laguna Verde licenses. Watch the video here.
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I meant his glass GB
The time may come when everybody wants to top up and you may not be able to buy them.
Brexit blues, gold rising, problems solved.
RA, time for a top up.
Personally I think communication, acting like a CEO and treating shareholders with respect are the first things I would like to see improve as a priority.
Of all the issues that I am concerned about with HUM FCF is not one of them so I don't really have a view on it.
RA you have been pretty negative in your posts on HUM, which is absolutely your right, but if you are going to be negative at least make sure your posts are factually correct. I am not against negative posts but would expect anyone who comes on here to be negative and wants to be taken seriously at least has a grasp of some simple facts. We had a former "friend" from the other side of the pond (allegedly anyway) whose agenda was blatantly clear and just spouted blatant lies. I am not putting you in that bracket but at least check simple publicly available information.
Reverse Alchemy, I did try to point you to the update earlier in the other thread quoting the precise details you need to read. As sands1971 has pointed out, the likelihood is they will make use of the loan immediately and I expect they will make use of the overdraft facility if not to simply secure cash-flow over the next couple of months. Yes interest this year will be higher but no more than an additional £1.7m so we are talking about £6-7m covering all interest payments in the coming year. Once the second mill is operational in Q419 there is scope to grow production from the 110-125koz projection. I believe 2019 exploration costs have already been worked into the AISC target. What we don't know yet is whether $800/oz is based on the lower end or upper end annual production estimate so I think it's premature to suggest costs next year will balloon to $900/oz for the year.
RA again you need to read the RNS "In the event this overdraft facility is NOT secured, the Company will provide a further update" so I think you can assume that the facility has been secured and therefore is not late as you incorrectly suggest.
Sorry RA but you come on here pontificating about how bad things are and you have not even got the info from the last RNS? That is very poor in my book.
Maybe you should pay more attention to where you are invested then, how the hell could you not know?
"the Company has agreed to borrow an additional CFA5.5bn (circa. US$9.5m) from Coris, its existing lender, to partially finance the US$13m capex requirement for the second ball mill"
I thought the overdraft was the safety net and that the loan would be drawn down and spent.
Free cash flow in the year to date will not include repayment of the $9.5m loan or equivalent overdraft facility which is being used to supplement increased expenditure in Q4 and for the new ball mill. There is interest of $1.7m worst case assuming fall draw-down of the overdraft facility but otherwise it's free cash this year, to be repaid in 2020. Things aren't half as bleak as you made out earlier today but time will reveal all.
Sorry RA, I have just checked and stand corrected, you are correct. This most likely partly explains where the Q2 cash went despite reporting reasonable AISC numbers.
Per World Gold Council:
The initial development of a new open pit or underground mine, including related infrastructure should be considered non-sustaining. If a second pit or a second underground mine is developed at the same operation, the initial stripping or surface underground development should also be characterised as non-sustaining if it meets the materiality thresholds for a ‘major project at an existing operation’.
So, on the basis of the guidance above, the stripping and development costs for both open pits probably were excluded from the AISC numbers entirely.
On the ball mill, the World Gold Council's guidance states:
“Non-sustaining costs are primarily those costs incurred at ‘new operations’ and costs related to ‘major projects at existing operations’ where these projects will materially benefit the operation. A material benefit to an existing operation is considered to be at least a 10% increase in annual or life of mine production, net present value, or reserves compared to the remaining life of mine of the operation. Companies should publicly disclose the ‘new operations’ and ‘major projects at existing operations’ that are considered non-sustaining. ” The determination of classification as sustaining or non-sustaining requires judgment by a company’s management.
I think HUM have guided a material increase in LoM production from the ball mill, so again, you're probably correct in assuming the ball mill will be excluded from the AISCs.
As shareminator mentions below, AISCs include capitalised mining costs, which are released over the life of mine. These costs have already been paid for as part of the mine build, so there is no associated cash spend in the year of gold production.
Using RA's "back of a fag-packet" approach to calculate free cash flow below, you'd need to add back an estimate for these capitalised costs, which he's conveniently forgotten to do in arriving at his figures.
HUM have had a nightmare in Q3 but I don't see the outlook is as bleak as claimed by some posters.....