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Gold in Pounds up 1.9% today, 3.4% in a week, 18% over 3 months. I worry that its just a dream, and will wake up.
IMO $2200 POG for next year is conservative, looking at yesterday reaction of POG out of labour data from US.
Given the opportunity POG wants to go higher and hopefully by next year inflation will be lower, possibly, also helped by more geopolitical stability around the world and lower oil prices. Unless another war pops up somewhere else .....
Good Morning Gavster
Thank you for your analysis. Your figures make a lot of sense and, if anything, I hope that they tend toward the conservative (which is the way I tend to go when looking at things.)
The only thing that I would hope is that the costs assumption for next year is overly conservative. Given that the uplift in production comes from the Mintails operation with an AISC of less than $1000 I would hope that – even allowing for local inflation – the blended AISC would be no more than $1300 and hopefully less.
I also hope that next year will see the introduction of semi-annual dividends (which don’t make sense on a small dividend but do at the level that we should be seeing) and/or the introduction of a share buyback plan (given the painful impact on us poor foreigners of the dividend withholding tax).
ATB
Hi all. Results estimate Update. Only 6 weeks away until year end. Average Annual guidance (186k-190k) = 188k oz.
Q3 Jan to March, average POG = $2066, assume AISC $1350
Q4 April to June, average POG so far looks around $2310-ish, assume $2300 will be the average and AISC $1350
Q3 earnings estimate ( (Guidance of 188k for H2 - H1 production of 98.5k ) / 2 for the quarter = 44750oz ) x ( POG $2066 - AISC $1350 ) = $32m
Q4 earnings estimate ( (Guidance of 188k for H2 - H1 production of 98.5k ) / 2 for the quarter = 44750oz ) x ( POG $2300 - AISC $1350 ) = $42.5m
Add that to the $42.6m from H1 (Q1+Q2) makes total of $117.1m for the year.
IMO even being cautious means a dividend of around 2 cents or 1.6p in December. At a 6% yield would mean an SP of 26p/27p which is about right so far.
For 2024 to2025, Their estimate is 215k to 225k production, taking the average of that 220k and an AISC of $1400 and an average POG of $2200 all means potential earnings of $176m and a dividend of 3 to 4 cents, 2.8p.
With a yield of 6% that's an SP of 46p, and in 12 months from now, that's a 100% increase on investing today.
That's a nice reason to hold or trade to a good position IMO
80p is fair.
Indeed.....trebling NPV from MTR Project , costs down POG up some $450/OZ WOW.
Same will be for total production of 190K this year, results will be fantastic, expecting increasing dividend ?!
Nice. Guidance maintained. This should firm up the SP. A post I did. Few weeks ago speculating annual results of 185k oz should be pretty on the money.
Whats not to like ?
Maybe I am watching too closely today. Are we are being held back, slightly down today when all around the FTSE is up (even questionable companies are up several % today) GDX rose by two and a half percent yesterday, POG is still up 15 cents from Friday, buys outnumbering sells today, yet we're own nearly 1%.
Tried googling to see if anything is up at Barberton or the mines, no results, no load shedding going on.
I am nervous about production going down as the silence is getting louder from PAF, but a drop is already priced in with their 2nd half of the year guidance so low.
Thoughts ?
Looking good for a return to above 24.5p today.
GDX was up yesterday and the JSE shares closed at 24.3p
Everyone is still forecasting a drop in POG, but not happening yet.
We'll see.
Nice chart, Gavster. Looks positive in long terms. The only concern is surge this week. Too strong momentum downwards at flat gold. Somebody needed money or burned £0.5M up to drop the price. Oversold drastically today. I guess the play has not finished yet. I will keep cash for two weeks when the trend exhausted.
Yeah, if we could all predict the market we'd all be millionaires much sooner. I bought back yesterday at 24.5, and could have got less than24 today. At least the SP bounced off the trend line on the one hour chart which I mentioned this morning. Image showing that here. https://postimg.cc/c6Ld2kLF
GDX is up and VanEck Vectors Gold Miners ETF are both higher today too. POG recovering too.
We'll see..
An improved production guidance RNS would be nice to see Mr Loots ?
Gavster, thanks! Good information about Eskom. Almost insiding. Unfortunately algos don't make any link between production and load shedding. Too complex for most of investors. I don't think take off will happen before RNS or directors deal. Still waiting for lower price to jump in. What is embarrassing that I can't predict SP at all. Yesterday it grew on falling gold, today it's falling although POG higher than yesterday.
Interesting
https://www.visualcapitalist.com/visualizing-global-gold-production-in-2023/
Trek
Yeah, I jumped back in yesterday with my trading cash, the good news type feeling in South Africa could have a great effect on our guidance, production and so the SP too. 33 days without load-shedding so far.
The one hour chart shows an uptrend with a current low around 24p, the daily chart shows the bottom of the trend around 20p but that would mean the gold price breaking down to around $2130 on its daily chart uptrend. POG one hour chart is on a down trend, and the POG bounced right off the bottom of that trend yesterday. Down trends of course break upwards and that would be about $2350.
https://mybroadband.co.za/news/investing/534721-cautious-optimism-about-load-shedding.html
https://www.news24.com/news24/southafrica/news/33-load-shedding-free-days-crime-is-down-business-is-up-as-lights-stay-on-20240502
Thinking aloud about China's relentless gold buying as part of the speculation they are preparing for an invasion of Taiwan. Would the USA/West step in and out bid China to stop them getting it, so sending gold on a tremendous spike upwards ?
Looking at prior SP behavior, today's rise is rather unusual. Low volume anyway. I am waiting for 23 ish to get in back.
So you think PAF will break rank, defy its history and behave like an American growth share...
Well I'd love to see it !!
Nope. All to do with EPS and PEG.
Most US stocks yield 1 or 2% and hedge fund managers still get all excited about that! FRES and CEY yield is pathetic.
Back in.. Now very overweight.
If there is a retrace to 23 or lower, I will be massively overweight..
Yield has loads to do with mining share market valuations, see FRES/CEY/GLEN/RIO etc. Hence why the mid 20's for PAF is a barrier. The market would only price PAF at 80p if there was seen to be a corresponding return, and that would be dividends and so a reasonable yield. Or if the POG went absolutely nuts, say $3000.
The UK based shareholders are subject to holding tax but not the SA holders.
If there is a 2c/3c dividend with the yearly results in August/September, then an SP in the late 20s/30s would be justified, which is about right if there is to be a gradual rise towards Mintails coming on line end of the year and production included in results for 2024 to 2025.
Nothing to do with the dividend.
That's taxed anyway.
P/E multiples here are far too low.
PEG also.
IMO To justify an SP of 80p they would have to be paying around a 5p/6p annual dividend. Not anytime soon, but perhaps in several years.
Just load up :) nothing goes up in a straight line and gold will eventually cross 2500 this year once interest rates start coming down. This is normal pull back every time fed farts…
Still making $1000 per oz here.
Targeting 240-250K production next year.
$250M profit.
10c EPS (pre tax)
10x P/E is reasonable = 80p.
Agree about the chart, I was watching from 4pm today, unlike me as I tend to try and do anything but watch the market that closely as it tends to make me buy or sell too early. The gold price was bouncing off recent support at 2294, and PAF on about 24.25 which would be good to buyback my sale of the wow afternoon in the 25s, but IMO POG will break lower than 2294 and PAF could present opportunities in the 23s or lower. A really positive update increasing the annual guidance should strengthen the mid 20s which would also be great for my long term holdings. We'll see.