'The International Monetary Fund has warned that Deutsche was so closely entwined with other big banks, its failure could bring the global system crashing down. And a US arm of Deutsche Bank failed a Federal Reserve stress test for the second year running, due to balance sheet weaknesses. The lender has a derivatives portfolio of £35trillion – more than half the size of the global economy – which some analysts fear is a ticking time bomb.'
1.Following the recent successful fund raising there will be 52 million shares in issue. At the current 73p/share the M'Cap will be just £38 million - significantly discounted to the current NPV of $195m (£2.60/share), based on $1250/oz gold. Mark Child owns more than 7% of the company so has plenty of 'skin in the game'.There can't be many £30m market cap companies on AIM that have 2 billionaires as material shareholders with 7.2% owned by Ross Beaty and 10% by Jim Mellon. In addition, the World bank/IFC & Oracle Management each retain around 7.5% of the company.
2. CNR has 2.33 million oz of high grade gold in one location at 3.9g/t, three times the industry average (1.08m oz of Indicated). The curent resource is from just 10% of the land package and the company believes that 10 million oz is a realistic target. CNR has the biggest resource in mining friendly Nicaragua, despite the presence of B2Gold, which is well established in the country and also highly profitable. '.
3. The PFS highlighted three production scenarios which include the potential to produce over 1.2M oz over a 12 year LOM with average annual production of 137,500 oz gold for initial 8 years. The economics detailed in the PFS were already robust but have recently been significantly enhanced by the publication of the Whittle Optimisation report with the open pit production ounces increased by more than 20%.
4. The IRRs average 30%. Gold production for the first 5 years ranges from 91,000 oz gold to 165,000 oz gold per annum (but could be increased in future with the inclusion of the Mestiza resource) with an AISC of under $700/oz. The recovered gold over life of mine ranges from 796,000 oz to 1,437,000 oz gold. The average pay back of upfront capital costs is between two and three production years highlighting the outstanding economics and versatility of La India Project..
5. The average value of ounces in the ground in recent sector M&A deals has been around $50/oz. CNR's resource is currently valued at around $19/oz.
6. The EIA was submitted in late Nov 2015 - we await the outcome this summer following the recent public consultation (a week or so ago). Land purchases are also being done - we await news. The billionaire Ross Beaty has just come straight in with a purchase of 7% of CNR. His track record suggests that he will probably do one of two things: A) develop the project with a view to a sale, or B) put us into production.If and when the permit is signed off his intentions will probably then become clear.
Good to see a steady rise happening here. No doubt the rise in gold has helped today. Furthermore, we edge ever closer to the EIA (hopefully) being granted. If and when that happens we become a genuine takeover target.
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