George Frangeskides, Chairman at ALBA, explains why the Pilbara Lithium option ‘was too good to miss’. Watch the video here.
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@JC thanks for link @ https://www.youtube.com/watch?v=BZNkO3DZr9U Robbie very positive & informative ... my Key Takeaways are:
Who are GCAT & Valuation:
> GCAT is Kenyan Explorer AND Producer @£13m MCap is approx. 1/3rd or similar pure Explorers with no revenue
> Kilimapesa is working licenced underground & opencast mine with $20m plant infrastructure in SP for free
> Prior owner GoldPlats were not miners so minimal exploration in 607koz JORC @Kilimapesa
> Robbie stated he would be a buyer at these cheap levels and expected a strong rerate in SP
Exploration & Resources:
> Spending $300k/month on drilling & funded from cashflow
> Updated JORC due end Q2'22 targeting 2Moz resource at higher confidence as inferred > indicated > measured
> Stated 85RC & 12DD holes in Kilimapesa hill so far with regional drilling starting soon
Production @Kilimapesa:
> Confirmed just under 1koz/month production in Jan-22
> Production Plan lays out month by month route to 24koz/annum by end Dec-22
> AISC $1,200 to $1,250 at 1koz production & will drop as production increases as Fixed costs spread across more ounces
> Heap Leach now 15kt capacity (guess 3x 5kt pads?) with RNS on HL capacity due soon (guess commercial 100kt pad?)
> Heap Leach is low CAPEX & OPEX but trade-off is %recoveries lower than CIL plant (guess 60/70% vs 90%+)
Tanzanian Assets:
> bought from Resolute, deal closing soon & RNS to confirm with clear path to production
Commentary:
(1) Robbie acknowledged he would like to grow GCAT faster BUT very reluctant to use Equity financing to do so as it dilutes current shareholders and he is largest one! This is a big hint to me about use of debt funding which maybe why he is in London to explore Tanzanian mine funding options & costs.
(2) Current Free cashflow (FCF) at 1koz/month & AISC $1,200/1,250 with POG @$1,850 = $600/650 per ounce !
> Low FCF = 1koz x $600 x0.79 = £475k/month profit or £5.75m/year so P/E = 2.26
> High FCF = 1koz x $650 x0.79 = £515k/month profit or £6.2m/year so P/E = 2.1
(3) Target @Dec-22 at 2koz/month & AISC $1,100 (my guess) with POG @$2,000 = $900 per ounce as I am expecting POG to recover strongly into H2 2022 and with bulk of gold produced from HL the AISC will drop as both OPEX drops and fixed costs spread over twice the current ounces ... my target sub $1,100 AISC for GCAT at year end
> Target FCF = 2koz x$900 x0.79 = £1.4m/month or £16.8m/year so P/E = 0.77
(4) Q1'22 production: 54,121t processed at 1.75g/t but no idea how much through CIL@80% recovery or Tailings @52% recovery .... plus Jan-22 production stated as "just under" 1,000oz. Heap Leach was commissioned end Mar-22 but now 15kt/month easily adds 450ozs/month @1.72g/t stockpiled with 53.5% recovery going forward
I topped up again as what is on offer is compelling at these prices with considerable growth, modest $AISC and going lower on higher production with firm and likely strongly growing POG !
ATB APR
ID78 - not to confuse you any further, but RM also said that the heap leach pilot plant was funded out of cash flow (8mins into interview).
Still, even if it pays for two thirds of the costs, that's not bad for a start up with hopefully lots more to come.
‘In January we produced just under 1000oz’
Spot on Aprogerson, thank you.
Hmmm …. is he saying they can do 12000oz per annum now, and without the HL pads??…..
I’ll take another listen- thanks again Apro!
ID78 I'm sure Robbie said that Jan-22 was 1koz production so the quarter was far more
ATB APR
I made a mistake earlier. If exploration is $300,000 a month. Gold sales are 1000oz ever 3 months, bringing in around $650,000 then this does not pay for the exploration ($900,000 for the quarter).
The 1226 oz for Q1 is getting close, but still not quite covering the exploration costs.
I’m sure Robbie said exploration was funded by gold production so I am (again) a little confused.
Need to change my username to confused78 :)
Looks like there's a decent chance of finishing blue today. Fingers crossed.
@dancing Fred
Yes, exploration $300,000 a month
Profit from gold sales closer to $650,000-$600,000
Gold sales easily find the exploration :)
@legalwolf
I agree regarding the forward selling and as you say why be in London? It has to be to work on financing. ..
I love it when the word 'Ramping' is used alongside Robbie in the right way!
ATB folks and enjoy your weekend.
Exploration drilling costs have been paid from current profits
Thanks for responding Suggins, that would make more sense. Much appreciated!
‘AISC of $1200-1250, when it was $960 in Q4 of last year (prior to switching power supply to decrease costs?‘
I think the 960 was limited to production cost rather than the AISC which includes wider business costs. So there has not been a significant cost increase just a different metric reported.
Yes , a good interview. Robbie is the largest or second largest shareholder. Good to know!
- AISC of $1200-1250, when it was $960 in Q4 of last year (prior to switching power supply to decrease costs?
- Exploration costs are half of the profit from gold sales
- Drilling moving of the hill, need to explore all the area to get (hopefully) to the 2mill oz, so again questionable how big an increase we will see at the end of June. However previous RNS statements said things like ‘confirmed expected gold mineralisation which strongly correlates with expectations’. So it sounds positive.
- Producing 1000oz a quarter
- Heap leach pads, CURRENTLY doing 15000tons a month
- ramping this up to a serious tonnage (15kt a month is not serious!)
- majority of oz to come from heap leach which is low capex and low opex
- so >12000oz from heap leach
Ramping up June, July, August, Sept… so Q3 update (in Nov) will make for interesting reading.
Great interview, drilling looks to be completed next week. Looking forward to news flow starting next week and lots of it coming imo GLA
Really good interview, I enjoyed that.
Thank you Robbie for your continued hard work.
Feels like Caracal are motoring along on all fronts. Exciting run up to the end of this quarter!
GL to all onboard here.
All round great interview. I think he mentioned the 24koz a year number 11 times, in this short interview. Clearly the top item on his cheat sheet notes for the interview. He knows its in the bag and a promise he can throw out with abandon. Normally a sign that he'll beat it, comfortably.
Listening to him about the finances, one thing we can breath more easily about is that there is no (forward sold) placing. I was pleased to hear RM recognise the dilution that would be involved at these levels in coming to the market now, and about exploring alternative options. I just wish that he'd have delivered that kind of message from the outset (I said this a few ago rather than being wiser after the event).
Also wondering why RM is jetting to and from London. Could it be to explore said alternative financing options?
That was an excellent interview, credit to Jeremy re the questions and very well answered by RM.
cheers for the link JC. A good watch. GLA, Dan
Itsyou; how much processing is required before you can get a decent yield with a heap leach ? Some crushing etc must be required.
‘In January we produced just under 1,000oz’ ; nice to know.
"The majority of the ounces (of gold), with our program are going to come out of this HL facility "
So >1k pm from HL
If the current plant can do 1k pm, as he said it did in Jan, is there a need to fund and install a second Ball Mill, extra CIL Tanks, etc?
He said they've inform the Market "very soon" about the proposed larger HL project.
Robbie, 'A very important point to make...The majority of the ounces (of gold), with our program are going to come out of this HL facility which we are constructing, and HL is low capex, low opex - the disadvantage of HL is that you sacrifice a bit on recovery but it's low capex, low opex, so yes we expect that number ($1200 -$1250 ASIC) to come down between now and the end of the year when we get to that magic number of 24,000ozs a year'