They are due. In fact I would have expected them by now. Not sure they will show much that we don't already know. I prefer the quarterly updates to be honest because they show the current picture. But they are definitely due.
As pointed out previously, they have not yet forward sold 75% of their annual production. They probably will do so but so far this is not the case.
I tend to agree with you stocks that it is prudent to do so when you are managing the debt. I would hope as gold prices rise and the debt burden eases that they will lessen the hedge programme. However, at the moment it remains a decent strategy.
With the gold price rising, the unhedged portion is obviously benefiting and with production currently exceeding the required run rate to meet guidelines, this should materially benefit the bottom line. We should be in the position next year of having a low cost, 80k+ oz gold producer with very manageable gearing in a gold bull market. I suspect that this will be a pretty good place to be at that point.
Mmmm Yes but there is market uncertainty over the debt situation and this imv discounts the SP somewhat. In addition you have to value a stock like this on EV rather than simple MC.
As I said before yes a good long term investment but because they have already forward sold 75% of this years production (I've previously extracted the figures from RNS announcements) there isn't much to be chased here currently on any gold price rally. Plus there seems to be a persistent seller. So for these reasons I'm out for now.
As Dibs has me filtered he won't be able to read this. However, I would like to comment on a couple of his points as I believe that they are either inaccurate or misrepresent the situation.
Firstly, on neither a gross nor net debt basis is the current debt 'over 50% higher than last year'. On a gross basis, current debt is $74.7m compared with $52.7m a year ago (41.7% up) whilst on a net basis current debt is $58.4m compared with $43.5m a year ago (34.3% up). But the debt is not being used to shore up a failing business, it is being used to invest in improving a well performing business. The key facts are that institutions are willing to lend the money (they are - pretty good considering the lending environment for miners) and whether the debt is supportable. It is and I have complete confidence that they will be able to repay the convertible next year.
Secondly, the amount of hedging by my calculations is less than 75% of production. It was 30k oz Jan - Jun and 32k oz Apr - Sep. So to my calculations 47k over the 9 month period. I accept that this is at a rate of 75% of annual production guidance but it would be wrong to say that this amount is already forward sold. I accept the fact that it is likely this process will continue. But hedging makes sure that the business can meet its obligations going forwards. Surely at this stage of the business it is better to be sure you can cover your commitments than run the risk that the gold price will go against you?
One thing that is not pointed out is that current production is running ahead of guidance. Q1 production at 24.3k oz is massively up from Q1 2015 at 13.5k oz and well ahead of the run rate required to meet the annual production guidance.
From my perspective I see a gold miner that is increasing production, investing to make sure that the production moves forward in the future at reduced costs and is prudently managing its revenues to ensure that the debt can be managed and repaid. I consider that to be a pretty good company to invest in going forwards.
That said, with the seller in the background it is true that there will be pressure on the share price. I suspect that the gold price will be volatile as well to further make the environment unpredictable.
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