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Shanta Gold Share Chat (SHG)



Share Price: 6.75Bid: 6.50Ask: 7.00Change: 0.375 (+5.88%)Riser - Shanta Gold
Spread: 0.50Spread as %: 7.69%Open: 6.375High: 6.875Low: 6.375Yesterday’s Close: 6.375


Share Discussion for Shanta Gold


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Daisan
Posts: 1,153
Off Topic
Opinion:No Opinion
Price:6.50
RE: Shanta
16 Jun '16
Alfieapple,

It is only fair to point out that SHG has a rolling hedge programme in operation which accounts for about two thirds of production currently. Naturally this will rise in value as the gold price rises but will lag. For a company with their debt profile it is a prudent move but it does mean that they do not immediately fully benefit from a rising gold price. On the flip side, they are currently generating a lot of cash even at their hedged levels so it is very undervalued.

Assuming a strong gold price going forwards, I expect this to be one of the better performing gold miners (I like AAZ and a couple of others a lot as well).
 
alfieapple
Posts: 154
Off Topic
Opinion:No Opinion
Price:6.50
Shanta
16 Jun '16
Its a buy from me, Good hedge against the current market.
alfieapple
Posts: 154
Off Topic
Opinion:No Opinion
Price:6.50
Shanta
16 Jun '16
SHANTA GOLD (SHG.L) is a Tanzanian based gold producer that currently produces from its New Luika Gold Mine (NLGM). There is c1m oz of high grade material which has produced 81,873oz gold in 2015, 10% higher than guidance. Over the next 4 years the company expects to average 84,000oz per annum at an all in sustained cost (AISC) of $750-800. The AISC for Q1 2016 was c$600.

 

If they achieve the above then the company is generating free cash flow of c$40-50m USD per annum based on $1250 gold. This is highly levered to the gold price given the company’s current valuation and debt profile, below.

 

SHG has not benefitted from the rally seen by many of its peers due to the outstanding convertibles of $25m which were due in July ’16 to April ’17. The recent fundraise of $10.5m + $5m silver streaming deal means the company can restructure the convertible, paying back $10m now and pushing the remaining $15m out until April 2019 with the same exercise price of 27p but a slightly higher coupon of 13.5% from 8.5%.

 

The remaining bulk of the debt is a senior secured facility on very good terms  with Investec - $30m  @ Libor + 4.9% with payments starting in 12 months to 2020.

 

By 2019 the company should have paid off almost all of its debts through cash flow.

 

The company has various satellite discoveries that could expand the life of mine, and continues to explore for gold within 30km of site.

 

The company also has another 1m oz+ stand-alone gold project called Singida which has been subject to a village relocation for many years. The company hope to resolve this by H1 2016. There is currently no value attributed to this asset. 
jollyspeculator
Posts: 20,539
Off Topic
Opinion:No Opinion
Price:6.50
yep
16 Jun '16
"absolutely spot on"..er..perhaps not, dibs ..esp with pog above 1300
stocks
Posts: 881
Off Topic
Opinion:No Opinion
Price:6.50
RE: bye bye
16 Jun '16
Dibs is going to miss out...his deramping was obvious
jollyspeculator
Posts: 20,539
Off Topic
Opinion:Buy
Price:6.625
bye bye
16 Jun '16
dibs
Dibs61
Posts: 9,486
Premium Chat Member
Answer
Opinion:No Opinion
Price:6.125
Olderandwiser
10 Jun '16
Such flattery from you also, spending your precious time researching my posting history. Actually, over time, the vast majority of investors don't make any money - fact. And if you invest on AIM it's often about timing and frankly you know nothing about my trading history do you?

IMM - yep always happy to hold my hand up when I get it wrong. Well done.

SHG - I have called it absolutely spot on to be fair.

Now, there's a good chap, take a tip, concentrate on your own research. ;)
Dibs61
Posts: 9,486
Premium Chat Member
Answer
Opinion:No Opinion
Price:6.125
Olderandwiser
10 Jun '16
Such flattery from you also, spending your precious time researching my posting history. Actually, over time, the vast majority of investors don't make any money - fact. And if you invest on AIM it's often about timing and frankly you know nothing about my trading history do you?

IMM - yep always happy to hold my hand up when I get it wrong. Well done.

Now, there's a good chap, take a tip, concentrate on your own research. ;)
Olderandwiser
Posts: 4,329
Off Topic
Opinion:No Opinion
Price:6.125
RE: jolly
10 Jun '16
Dibs61, looking back over your past posting history to Feb, I wonder if you have made any money at all. You seem to have been a perfect contrary indicator at tops and bottoms- SHG, KGLD, IMM "SP Rise postponed until 2018 - 10/2/2018" Hmmm.
Daisan
Posts: 1,153
Off Topic
Opinion:No Opinion
Price:6.125
RE: jolly
9 Jun '16
Difficult to compare the two as they are chalk and cheese. Dalradian is a great deposit in a stable area (although one where permissions are tortuous even though there is little doubt as to the huge benefits to the community) and will ultimately attract a major as it is the size of resource that they go for. With one caveat. It is narrow vein and majors prefer bulk deposits. Narrow veins are trickier to mine.

You also pay a very high price indeed for Dalradian's deposit, especially considering that hardly any of it is in the measured category currently which is the category that is usually assigned a value. Would it be churlish to point out that the market cap. of Dalradian is almost four times Shanta's? And I suspect by the time they are producing Dalradian's debt will be a LOT greater than Shanta's current debt.

One last thing on the comparison. Shanta is a gold producing company. It has already gone through the considerable pain of studies, mine development and operational start up. And those pains, as anyone who has invested in miners will know, are considerable indeed. Dalradian has not even completed a feasibility study yet.




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