It is well worth noting that the last placing on 4th April saw the SP rise from around 40p to 65p and then onwards to 85p. Most of the money was raised from current cornerstone investors - Ross Beaty took 58% of the shares, Jim Mellon, MC and subsequently by the IFC who maintained their % holding. I suspect that the next raise will see the same faces providing the bulk of the money. These are cornerstone investors who will most likely not sell their shares for the foreseeable future (Ross Beaty's geo has planned the latest drilling progams after a comprehensive study which has caused the company to talk about a 10 million oz District, so Ross knows the potential here!!). The last placing was extremely positive for the company. The strategy should be to get plenty of good news out and then raise funds at a higher sp (hopefully) and if the market reacts in the same way as the last placing we could be in for a major rerate. The fact is that the 20,000m drill program will add huge value potentially. 3 million oz will mean that production can be increased to 200k oz pa in future and that makes CNR a target for the mid-tier producers. 2017 should be a positive year if things go to plan! Let's have the EIA permit please Nic Gov! Do not worry too much about a placing - it is likely to be positive for shareholders.
Pickwick, there was £2,272,992 at the end of June and cash burn in the first six months was £1,100,000, so should be about that amount remaining now. At some point in H1 2017 some money will be raised to fund the planned 20,000m drill program (will cost circa £3 million) to add 800k oz to take us over 3 million oz at 4 g/t. The aim will be to get plenty of good news out there first - drill results (looking good based on visual inspection of cores), EIA permit issue (will add significant value and massively derisk the project), TSX listing etc.
The drill program will cost roughly $4.5 per oz (worth $1170/oz) and if we list on the TSX beforehand, exploration ounces in high grade resources are currently valued at roughly $40/oz in the ground on that exchange.
1. There are c. 52 million shares in issue and at the current 47p/share the M'Cap will be just £25 million - significantly discounted to the current NPV of $195m (£3.1/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. Scout drilling is underway to highlight the potential.
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 $11/oz.
6. The EIA was submitted in late Nov 2015 - we await the outcome (hopefully in the next month or two now that the election is done and dusted). Land purchases are also being done - we await news. Assays are currently at the lab for the first three holes of the scout drilling (4 completed) which have hit mineralized zones of 11, 12 and 25 metres width and the first results should be back this month (or early Jan at the latest). The drill is currently drilling on the exciting Real De La Cruz concession which trenching has suggested has potential to host a wide breccia type open pit. Meanwhile we could also hear about a move to be listed on either the TSX or in New York where gold explorers are currently valued much higher on an ounce in the ground basis (on average 40 x higher on the TSX).
Couple of comments suggesting that the bottom has been established! More in hope than with respect to the chart I think! Not sure there is any evidence at all at the moment that this is the end of the downtrend. Some support at 46-47p ish but we saw that broken at 67p, then 60p, then 52p etc etc. Far to early to call it one way or the other, but since we're in the downtrend I'll call it more likely to drop further than to reverse at this juncture.
This SP will not hit its highs of a few years ago until it either starts production or is sold.I am more than happy to add more shares over a period of time but again only take out my initial investment and bank shares.Over the past 14 months I have been doing the same process in 88e
Listened to his Ohio speech today. It seems he means to do most of the stuff he promised. If so we should see a big rise in USA inflation next year and beyond and although I am no economist that should be very positive for gold.
Datafeed and UK data supplied by NBTrader and Digital Look.
While London South East do their best to maintain the high quality of the information displayed on this site,
we cannot be held responsible for any loss due to incorrect information found here. All information is provided free of charge, 'as-is', and you use it at your own risk.
The contents of all 'Chat' messages should not be construed as advice and represent the opinions of the authors, not those of London South East Limited, or its affiliates.
London South East does not authorise or approve this content, and reserves the right to remove items at its discretion.