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You reminded us that guidance will be at the LOWER end but aisc at the UPPER end and asked how likely it was to meet 1350.
I'm saying totally impossible.
Guvvi,
No sure what you mean.
Naturally, hitting production guidance at 100k rather than 110k will result in a higher AISC than if hitting the higher end of production. Lower production equals higher AISC and vice versa. So not sure what you mean with your statement "impossible to meet the upper end of one based on the lower end of another?"
BB2.
BB2 - f'ing impossible to meet the upper end of one based on the lower end of another? I'm actually now asking myself what this business is worth if you value Yanfolila at zero.
I'll let you know if i roughly work it out.
Dan will manage at least half of the guidance - AISC will be on the upper end of it...
It may have been possible if the issue had already been sorted at the start of q4 but we are nearly 1/3 through already and the issue isn’t sorted. So I don’t think it is possible to achieve the annual guidance
I like many think the value here is compelling, but Q3 update was an absolutely shocking "own goal" ... not enough equipment!
Who would have guessed you needed enough equipment to dig out the ore to be able to extract the gold? You learn something every day.
ATB APR
No Wilco. Betts forgot to add some fanbelts and hydraulic fluid in his Amazon basket when last shopping. Absolute joke of a reason for a drop in production!
Guvvi,
......... Due to lower contracted volumes of material being mined than was anticipated in the mine plan for Q3, our current model for full year production is forecast to be at the lower end of the guidance range of 100,000 - 110,000 oz, and AISC at the upper end of the guidance range of US$1,250 - 1,350 per oz of gold. The Company notes that, all other things being equal, meeting this forecast is based on the mitigation measures, as described above, being successfully implemented by our mining contractor, bringing mining volumes back to contracted levels ....
They are forcasting PRODUCTION to be at the LOWER END of guidance of 100,000 to 110,000 (so approx 100,000 oz) and AISC to be at the UPPER END of guidance of $1,250 to $1,350 (so approx $1,350).
AS such, Q4 will need production of 30,623 (100,000 - 22,781 - 24,494 - 22,102) at approx AISC of $1,000 ($1,350 x 4 = $5,400 - $1,494- $1,386 -$1,520).
If they manage that in Q4, that will throw off approx $24m of cash assuming avg gold price of $1,782.
But is it possible? Q3 2019 gold poured 30,484 AISC $849, Q4 2019 gold poured 33,892 AISC 839 , Q1 2020 gold poured 30,282 AISC $875.
So yes, it is possible. But is it going to happen.........
BB2
That's the problem isn't it.
The paper value of the assets is far higher than here but HUM have just stated that they're back in debt on a terrible production/AISC quarter so what does the "market" do in the meantime?
Your guess is as good as mine.
Also in the interests of disclosure i'm not selling i still think this is cheap enough vs its prospects for me.
But i will not be happy with myself if Q4 is also either a miss or somehow awful and i'll have no sympathy for myself. I should already be expecting it !
Must admit, struggling to get my head around the lack of excavators reason given. Presumably these are always on site so why were they so materially down on availability? Issues in the country affecting availability of replacement parts/engineers perhaps?
Forget 6 weeks, i'm happy to stay for a couple of years if the value is compelling. But do we have a very capex dependant and non cash generative yanfolila now? It feels that way.
If so what is the value of this? Hard to say tbh.
I think for me the concern is that there is no clear indication that the issue is resolved. So nearly 1/3 of the way into the quarter without resolution. They aren’t going to meet the annual guidance and I think they know it. That’s galling for me.
Abject performance. Didn’t they appoint a new guy to get control of the Yanfolila operation, and if so what has he been doing? It’s all very well finding new reserves but when they come to mine any of it, it all goes to hell. Shareholders haven’t seen a penny from Yanfolila, even the next two years production will go to pay the capex on Koroussa. They need to get a grip.
There goes my average, might top up but market is bombing this
I think some of this is priced in a bit too i.e noone expected 1250 to 1350. I think you've got to be ultra conservative valuing this business. Very frustrating.
I think you have to see it as the money guys wanting in - hence this BS update - tough call now guys, pick up again at teens or leave it alone for six weeks ahead of the January update.
I wouldn't blame anyone for bailing or picking up - no way to call how this goes over the next month or two.
It looks like the drop in ore mined is due to the lack of excavators from the contractor. Betts truly couldn’t organise a p*ss up in a brewery if he wasn’t on top of this!
Where I'm happy to draw a line under a crappy update, is that this (and much, much more) was already priced in. Wanted more, but it doesn't affect the overall value prospect much. The drilling and POG, will hopefully mitigate the immediate damage.
@bonkers
Unilever saying prices across the board up 4.1% and the consumer is going to have to deal with it for years. I've no issue with the gold price but the business i own can't do a years work without running into half a dozen serious operational problems !
I think gold is a good place to be for a business like this but by christ they need to sort it out.
Morning.
Still absorbing this - gold pushing back at $1,800 as I type - a lot to unpack here.
I'm happy to allow people to miss targets etc or fail operationally every so often it happens to every company even my own. But these guys just keep consistently missing things for a range of reasons and give you an excuse after the event!? Reiterating full year guidance but at the upper end still... are you for real? The chances of that happening are so unlikely i don't know what to say. As someone above said that would require a level of production unheard of from these guys in years. The next time Dan Betts does an interview and exclaims he doesn't know why the market isn't valuing this higher he can be sure it's because the market is assuming the information from the board is wrong and making very conservative assumptions instead.
On the plus side i still think their prospects looking forward are very good and most of this failure is probably reflected in the price. The market cap is very low and for the reason this RNS highlights - nobody believes a word of what the board says on operations.
Think for many this will be a hard one to swallow. Been told all year that production will be weighted to H2, not only was that not the case, we didn't even match H1! Grades weren't as good as predicted and amount mined was obviously well down. Nothing good about Yanfolila results tbh
5% off yesterday. Leaky much? Pathetic. New leadership needed.
Hopeless Q3 underperformance. Requires 32k in q4 to meet minimum annual guidance.
Some how I can't see that happening. A bunch of Muppets.