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The USA economy is in deep trouble as the media, banks and FED play around with data that are lagging indicators. Already Wall street is miles away from the reality of main street USA. The FED is between a rock and a hard place with the fiscal debt interest running hot. At some point everyone ignores the FED and the media goldilocks stories and bank manipulations.
Shanta and Centamin on zero stochastics and the RSI levels have nearly halved in a week. Rapidly approaching oversold before we get to the FED meeting.
PoG off another $10, if US bond yields rise again this week on unfavourable interest rate news there could be further falls....
Shanta is so undervalued it is crazy and poleaxed again this morning on low volume. At least we have the dividend.
Agreed. Silver’s small size makes it a prime candidate for being squeezed.
You wouldn’t want to be holding those bags if / when that volcano goes up, of course, the US Federal Government (and Citizen) will be the ultimate bag holder in all scenarios.
Last Sunday night’s punch up in the Hong Kong Gold Market cost “someone” about USD$30b
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That's a lot of money
Last Sunday night’s punch up in the Hong Kong Gold Market cost “someone” about USD$30b
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Check this out HarChris
https://www.investing.com/equities/newmont-mining
Interesting point booboou
https://www.lbma.org.uk/prices-and-data/london-vault-data
Silver stock at LMB is below 1 year world whole production (1,000 million ounces)
Gold Stock al LBM is above 2 years world whole production (112 million ounces)
IMOV, silver is going to be squeezed earlier than gold.
I thought you were saying only a handful of gold producers were turning a profit currently but evidently not as everyone you just mentioned will certainly be profitable.
If you mean they all command a higher PER then yeah i'm sure that's true but there are genuine reasons for that. Size brings with it less risk - those billion dollar miners will generally have strong balance sheets, considerable economic and political mite in their jurisdictions, often multi jurisdictional (which Shanta should be with WK) etc
But with every extra dollar that hits Shanta's bank the risk reduces and the risk/reward in comparison to more established gold giants gets ever better.
It’s a paradoxical investment proposition Gold and years of wild money generation and zero percent interest rates have suspended gravity.
On the one hand you have non-western central banks snapping up physical gold deliveries at rates not seen Post WW2.
You’ve got the LBMA, COMEX, GLD, etc. emptying themselves of all physical stocks trying to prevent a blow up in their paper markets.
You’ve got massive private / retail physical gold take up and ownership in non-western countries, but very little in western countries, and when it comes to investment houses / funds of various forms in western countries their exposure to Gold makes up somewhere between zero and nothing in terms of their portfolio percentages.
All Gold producers that I follow are making good margins now on $2k Gold, but they are hated in terms of investments (this is a wider issue in western economies where people only seem to want to invest in 7 companies worldwide).
The Reserve Currency of the world is running 7-8% budget deficits in order to get 1-2% growth, that’s just blatantly not maintainable long term.
Sonner or later however, we will have our day, last Sunday night’s punch up in the Hong Kong Gold Market cost “someone” about USD$30b in order to smash it back down, I’m guessing an even bigger paper v physical smackdown is on the cards very soon as physical levels in the West get drawn down.
Hi HarChris,
In your portfolio there are small British miners.
I'm taking about big ones: NewMont, Barrick, First Majectic, Hecla, Fresnillo, New Gold, Kinross and so on. Take a look at their balance sheet and you'll get the main idea.
Agnico is a pretty nice exception.
And I love this one : SilverCrest Metals
Yeah true and nice post, I was referring to gold miners that have developed production but if 1755 was also including explorers then obviously those won't be turning a profit. Good point re hedging, something to always keep in mind with gold where it is, will turn out to be a blessing (most likely) or a curse.
Of that list SRB also hedge some of their gold, they took out a 12 month hedging contract in Feb at $1800/oz.
"Gold miners" can be roughly divided into 3 categories: explorers, developers and producers. I guess 1755 looked at the first two categories. Only producers are making money. Of course, it can be a mixed bag. For example, Shanta is a producer for NL and Singida, and explorer for WK.
Second point is that one should be careful with AISC extrapolations. For example, if HUM management screws up, as they usually do, their AISC for Q4 could be north of 2000. That's probably a reason they did 30% dilution a couple of days ago. :) CIG will now have 43% of HUM, so they are primed for a hostile takeover. Risk is everything.
Don't forget that both CEY and HUM are now hedging their gold production (not sure about the others from the list), so they would not participate in any possible upside in the gold price. Shanta is not hedging.
Price earning ratios? As I said virtually all gold miners will post a profit in 2023 with how POG has behaved and so any negative earnings ratios you are seeing (with perhaps the odd exception) will become positive once full year results are in.
Heavily indebted companies like HUM in the list below will turn a much smaller profit in 2023 but the interest and debt repayments are not large enough to take them from $1450 aisc to a group loss with POG averaging $1950 for the year.
This is an unloved sector with arguably every miner in it undervalued relative to the cash they are generating but as I said Shanta is my top pick for the combination of growing and stable production, great margins, low and manageable debt that will now be below cash position, low capex doubling of Singida output and then the crowning glory of WK. Oh and an excellent ceo in Eric that will hopefully pass on his wisdom to whoever takes the reins.
And what about PERs and debt?
This isn't exactly true. I would imagine that nearly all gold miners are turning a profit at $2000/oz. From the ones I follow:
THX - AISC $1300/oz
SRB - AISC $1500/oz
HUM - AISC $1450/oz
CEY - AISC $1300/oz
CMCL - AISC $1250/oz
So as you can see all have pretty wide margins and all are comfortably turning a profit with POG at $2000/oz (no matter the debt repayments or financing costs etc). Shanta's AISC is up there with the best, especially with Singida performing so well up until now and also has fairly low debt, low capex growth opportunities with Singida, enormous growth potential with WK and is still relatively cheap compared with peers, so remains my number one gold pick.
Things are getting really bad in the business cycle in USA from what I am picking up on the grapevine from people with business operations over there. If anyone else with business contacts over in USA has different views or same views it would help our own intelligence then depend on rosy media points of view.
The pull back in bond rate and the anticipation what the FED may need to do that was originally played out before NFP was possibly not stupid, but a window on a reality that is quite possibly unfolding. The latest NFP figures were actually fiscally pumped in delivering health services. What was interesting was the demand in nursing homes staff shot up. In some parts of UK, I gather from some people who are currently dealing with these circumstances that the time to register a death is now currently 10 days and to bury someone can now take over a month. The UK is apparently experiencing a high mortality rate on excess deaths at this time.
I want to wish everyone all the best and to look after yourselves. My own view on gold is that it has a seasonal January/February uplift. I also believe the incoming RNS drilling data is important along with Kenya resource updates. I hope the Kenya results can deliver a maiden reserve figure.
Tony
Taking a look at others gold miners balance sheet I noticed that almost none of them are making profits (hight or negative PERs) and/or are highly indebted (miners working for banks or streamers). That's not the case for Shanta Gold.
However, the main con for Shanta is its tiny size that makes Shanta uninvestable for most funds, ETFs and big investors.
But, on the other hand, this is a huge pro for small investors that can get into and ride a small size hight prospective miner.
It's worth looking back to 2020 when Shanta saw a five year high of 20p and stayed well above 15p for almost half of that year.
Revs were $147m, EBITDA $63m, net cash was $37m (healthy placing) but Singida was still to be built. Upcoming production guidance for 2021 was 80000/oz.
This year we're looking at ~$190m revs, EBITDA ~75m, net cash around $5m, guidance for next year to be at 105000/oz.
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With virtually no additional shares issued since the end of 2020 and comparing then and now it's hard to conclude that there's any justification for Shanta to be trading below the level it was from mid 2020 onwards. That 15p-20p range should be back on given patience and time for these profits to flow through to the books and if sentiment turns then really new five year highs should be reached.
It's average price that matters, not a spike in either direction.
Average prices over Q4 must be close to $2000, an all time high, and SHG is most definitely making bank!
Over ramping ? You mean research and opinion , I hardly ramp this I’ve been here 6 months and hardly post normally.
What’s transparent Dave is you’re unsuccessfully trading this and I’d say your posts are a lot more tedious , they basically are pointless. And point out the obvious.
If you were invested you’d be happy for me to be positive !
By the way Dave golds over 2000 again big wow !!! What you going to do Monday when it’s back to 2020-2030 ?
Your becoming more than a little tedious Publican with your over ramping
Dave don’t worry your not invested :-) have a lovely weekend
If gold hits 1700 alert me as I might worry. But in all honesty nobody cares about the gold price losing 30 dollars as it might just be easily over 2000 Monday again
Gold sub $2000 again...
Code I’m a trader and sold
Hope you get burned .
Personally I think it’s great short term people leave as cheap as possible and I might be lucky enough to get some more come April !
Funny how people lose the mind over a 10-15 dollar drop on gold
Hardly any volume today on Shanta it closed at a false price yesterday and is only marginally down
Be surprised if theirs much appetite among sellers this price and suspect we will be back over 12P next week.
Like the other poster said the trend is up