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Still a significant improvement on Q3 2018 when production was around 102koz...
I'm expecting 120-130koz in Q3 plus another 40koz from 3rd party. The hedging remains in place till Dec so around 50% hedged at 1286 and 50% at around 1500 so looking at 165-180 million for the quarter plus whatever margins they are getting for 3rd party.
I must be missing something. Why is everybody expecting c130koz production and c$170m revenue for Q3. From what I have read on the recent presentations the c130koz production excludes third party concentrate bought in of which they have c60kt at 2oz gold per tonne. They have been processing this concentrate since July so I would expect at least 40k oz and increase of $60m revenue as hedging should have run out. As usual with POG I am confused
I have never argued about the value of the company, I agree with most of what you say, I am interested in "real profit" AFTER all the crap, the reality is that if the share price goes up, which SHOULD happen, then we will all be happy. I make no bones about the fact that based on fundamentals this company is massively undervalued, and due a re-rating, but the two PS, have a track record of overstating things, and this has happened on numerous occasions including just before the rights issue, when they informed that the debt refinancing talks were going well.
They were going that well that the company nearly collapsed, and small shareholders lost a lot of money.
Hopefully, they have learnt from their mistakes, but it still leaves a sour taste. And at the end of the day, if we are talking POG we should all want the same. The company to expand and flourish.
Rusty I disagree. Ebitda is an accepted standard especially for capital intensive industries with a long term time horizon. And it's rising very quickly. This will feed into free cash flow. Plus the asset base of the operation itself. POX worth more than the market cap of the company. But I suppose that's irrelevant as well. I don't see it that way. POG worth more than 320 million is what I maintain and why I continue to buy. Operation update on 17th Oct.
I am not interested in EBITBA, I am interested in what is left after the debt amortisation and anything else they like to hide is taken out of the equation.
EBITBA is just an accountants way of fudging the figures. ( In my opinion. I do agree the company SHOULD be on a growth trajectory, BUT, what other rabbits do they have to pull out of their hat , like the "clouded" land deal.
My point is that the company is on a growth trajectory. The previous discussion was on the basis of whether the company will go bust. That's changed. So the bond convertible discussion is no longer as relevant. Pog will generate 2010 million in ebitda this year, next year 300 million and the following year 400 million. Debt to ebitda ration set to fall to less than 2. Looking at some 800 million in revenue.
Companies rise then fall. Pog is on the rise and undervalued at today's price is the point I'm trying to make.
I've also been in POG, not for a few years but since 2007. For what it's worth..
Hedging might end soon, but I am sure the company will hedge more for next albeit at a higher price than last time, as it was the mere fact that they did not hedge in the past, AND Peter gambling on the gold price that nearly caused the fatal collapse of this company.
Hedging is not a bad thing as it will guarantee profitability, and if the gold price continues to rise, thats good as well as the next year we can hedge at a higher price.
What we dont want is the gold price to drop, and it affecting our future prospects. ( My opinion only )
PVX233,
I do not see how pointing out that we cannot repay any of our debts before Nov 2022 constitutes " Over-complications on this thread about bonds and convertibles." What depresses me is the ignorance and sloppiness of the two financial brokers. If they cannot get simple facts like this correct, just what is their research and opinions worth?
I have been a shareholder here for many years and fully appreciate the current upside offered by the completion of the POX hub. But as Rusty points out we are still struggling to turn a decent profit, hence rolling over the Convertible Bond issue rather than repaying it.
We should as you say be making some healthy profits soon. It is a pity that we will have to sit on this money for the next three years, rather than actually pay some of it back.
The reason brokers are upgrading is that the metrics are changing. It's simple really. Over-complications on this thread about bonds and convertibles. POX is transforming the business and generating more cash at an increasing rate. So the share price will follow.
Q3 production update on 17th. Last year 102,000oz. This year some 20% more at a much higher gold price.
Hedging ends soon, too. Pog going to be generating large amounts of cash for such a small market cap.
I think what they are alluding to is having " real profitability" which should allow them to be able to increase cash to reduce liabilities when due.
I agree the wording in not clear, but, at the moment we are not even generating free flow cash which was proved when we had to increase the bond issue. But, it looks as if this has been done for the right reasons and if proved correct, should lead to a big increase in share price, BUT, in my opinion only in the longer term, not like the 35p someone alluded to in the last month.
I believe, in the short term, the convertables will keep a lid on the share price, like they did previously, but longer term, potential has to be excellent. Unless they change the goalposts which they have done in the past.
If I was running the company I would be looking to buy back some of it's own bonds, especially the convertibles. I have seen other companies including genel energy try this manoeuvre.
Two brokers have upgraded POG in the last couple of months, both to B-.
It is good news that the brokers are more positive about POG's prospects, but some of the wording seems very similar, and IMO fanciful.
S&P today
"and a potential to reduce leverage meaningfully from 2020."
FITCH 22 Aug
"potential for significant deleveraging to take place by end-2020 based on higher production, lower costs, and third party concentrate increasing the utilisation of the POX hub."
POG has two basic loans.
1) A $500m bond issue repayable in full on Nov 2022.
2) The recent $125m convertible bond issue repayable in July 2024.
Neither of these loans is repayable (except on certain conditions) before their due date.
So I fail to understand how these brokers think that we may significantly deleverage from 2020.