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I doubt they'd be many workers on minimum wage working at the gold mine, they'd all be skilled or semi skilled jobs
I would have thought a wage increase would have been costed in.
I am all for the company watching costs but there are also local political considerations and social responsibility aspects in job creations. If we consider a very conservative profit of say $500 per oz (and that is after the AISC which include labour) and an average Kenyan salary of $1270pa - 12% increase by $150 per annum per worker - the likely direction of POG is likely to make good that increase in the next 18 month on just 1 of our Oz sold per worker. Just for context. The bigger picture for me is having a well motivated work force with the background support of he government and local community - it makes sense on so many levels to me.
ATB
@JC Kenya along with most African countries are in a tough spot and this along with subsidised fuel is to reduce chances of civil unrest especially as food prices will be heading higher and food is a large portion of most families budgets.
GCAT has some protection as it switched to mains power that is predominantly hydropower, but has a large workforce so if a higher minimum wage comes in may be reluctant to employ more staff and may opt for more mechanisation instead.
ATB APR
It's 12% on a small number andI am all for paying the workers a decent wage for hard graft. I would encourage the BoD to go further than the minimum frankly - without the workers just what do we have here?
Costs might going up:-
https://english.news.cn/20220501/6bf7b1b947b04cca9e3553e850234a0d/c.html
I like the fact that the company is looking at prospects in different countries, not all eggs in one basket.
GLAGH
@Bebeto Reef deposits also tend to be very profitable as they are parallel sheets of mineralisation and are usually high grade
If you listened carefully to the latest interview and you'll hear we should get the Reefs tenement by the end of May. That alone will push our JORC resource to 2m oz. They are also drilling in the Kilimapesa area for the next 2yrs as well as looking to drill in Tanzania.
By the end of the year we'll have quadrupled production and have a 3m oz resource
@IAAGB & Headder Whilst I was in GGP it 12x bagged & did not earn a penny as it was a Junior Explorer.
GCAT is difficult to value as it is an Explorer, Developer & a Producer which at SP=1p or £18.5m MCap offers good value measured in raw P/E, potential £revenue growth over multiple timeframes and/or JORC compliant Resources in multiple mining friendly jurisdictions.
I think of GCAT as an Explorer/Developer with a small and rapidly growing mine attached to it that generates enough revenue to fund development instead of hitting PIs to raise cash via selling its equity as most Juniors have to do.
Valuation - Producer based on Gold Production only
> Current GCAT MCap = 1.025p x 1,824,978,590 =£18.7m @29-Apr-22
> POG = $1,950
> AISC = $1,000/oz to $1,050/oz ... from 29-Apr-22 interview vs my calculated Q1=$989/oz
> Production Dec-21 = 872oz production or 10.5koz/annum equivalent
> Production Dec-22 = 2koz/month when Phase 3 production expansion complete
> Assume Average production Jan-22 to Dec-22 = 1.5koz/month
> so revenue 2022 = (12x 1,500oz x $1,950) = $35.1m or £28.1m (USD=£0.8)
> so Costs 2022 = 12x 1,500oz x $1,050/oz = $18.9m or £15.1m
> Free Cashflow (FCF) = £13.0m
> P/E ratio = 18.7 / 13 = 1.44 for 2022
If we assume GCAT does NOT grow production after Dec-22 then 2koz/month will give
> so revenue 2023 = (12x 2,000oz x $1,950) = $46.8m or £37.5m (USD=£0.8)
> so Costs 2023 = Costs 2022 = $18.9m or £15.1m
> Free Cashflow (FCF) = £22.4m
> P/E ratio = 18.7 / 22.4 = 0.84 for 2023 onwards
... and if POG does what most analysts think is it going to do in late 2022 then FCF multiples up very quickly
ATB APR
Always good to see agenda driven posts that want cheaper entry. GLA
I like this forecast - but then I would
https://caracalgold.com/wp-content/uploads/2022/03/03-22-Morning-Miner.pdf
So what was the revenue of GGP and EUA when they multibagged? What was their PE?
No, I have just looked at other companies and applied a similar valuation here; look at goldplat, that's currently self funding expansion, has low debt and at 8p is on a current pe of 3, not a forward one.
Galante gold is trading on a forward pe of 2 for end of year if you like to extrapolate into the future. Basically, if you don't value companies on the revenue and think that they are going to multi bag just because of a 2M Oz resource that's going to make £14M a year you are going to get frustrated and sell.
Sadly more agenda driven posts.
So basically you think this Gold Producing company currently expanding production with JORC proven assests should be valued as an explorer diluting shareholders to continue exploring unproven assests?
I've got around 1.6p by end of year as follows;
aisc (subject to change following heap leach results etc.) 1100$, gold price of 1800 gives operating profit of £13.M after the 1% royalty to gdp.
Minus admin costs of £3.6M = £9.4M, minus tax (assuming nsx listing), so earnings of £7.05M. Given the risks to further dilution ( am guessing that to get to 50K ozs could cost £25M extra) I would put a pe of 4, which gets 2p with current shares as it's a small cap miner with only PI's buying the shares.
Tanzanian acquisitions of £4.5M, part cash (from a raise), part share payment, plus another around 50M shares to gdp, so add £5M to market cap gets 1.68p a share. Now, you could, at best argue we should have pe of shanta gold (struggling to fund mine developement from earnings plus debt) which is trading on a pe of 7 and has had some institutional investment inflow into their shares. Then that puts market cap at £56M, or about 2.9p a share, probably in h2 next year.
Near term, I can see another pull back on Tuesday following the after hours RNS on Friday as the balance sheet scares people off prior to the q1 results.
Now, if anyone feels like sharing their valuations please post below, I would love to hear how we are going to get to 20p, as far as I can see, if we get 50Kozs in Kenya, plus 70Kozs production in Tanzania in 5-6 years plus a few more 20-50k ozs potential projects I can see 10p tops, so outside of hyperinflation I just don't see it.