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ShearClass, we're now below the IPO price. I've averaged down again today but now I'm over my allocation limit for this one. Hopefully, you're in a position to add more than me.
My average is 83 so we'll need a 40% rise for me to break even lol. Doesn't sound great but I feel this share is worth a lot more at these gold prices. The Gold price seems to have gone into a pennant around 1490, let's see how that goes.
Regardless, I think we just have to sit tight and wait 1-2 quarters till Resolute resolve their issues and ramp up the new mine. We can collect the dividend in the meantime.
Monk, do you know when's the ex-dividend date? I searched online but couldn't find anything.
Unfortunately I qualify so I will do that for a bit of fun - hopefully this extends to UK holders/listing. Presumably it is on the website - I will have a look tomorrow.
From September 2018 report-
Dividend Policy provides for a minimum of 2% of revenue in annual dividend • FY18 dividend of 2.0c per share totals A$14.8m which equates to 3.3% of FY18 Revenue •
Shareholders with 5,000 shares or more can elect to receive their dividend in gold as part of Resolute’s innovative collaboration with the government-guaranteed, Perth Mint.
I will need a significantly larger investment than I have before I could be the proud possessor of an ingot.....
Hi Monk - how many shares do you have to hold to get physical gold?
Hi dimi, you may remember that I was very weary of CEY largely because the management seem to constantly mislead - I also have concerns about Egypt and their 50/50 deal - I am not quite so enamoured here as you and Monk but I think your switch was sensible. ATB
You clearly have far more experience of gold miners than I do, so it is reassuring to see that you are backing RSG.
I only started to look at this as it is held within UTL (which I hold), I was then considering it for the upside when it makes it to the FTSE250. However, the more I have looked at it, the better it looks as a longer term holding . The only other miner I have held is BCN which I have been in and out of making a little each time. The problem with most (eg bcn, sxx) seems to be having enough capital to get them to a point of being cash generative, RSG has just about reached that point so it makes it more of an investment and less of a punt (in my opinion). It will be interesting to see how it goes over the next year.
Nice one Monk, I've also topped up this morning. Sold most of my Centamin shares and averaged down here. Took an 18% loss on CEY but not happy with the management there and that's hard to fix. I feel Resolute's problems are much easier to fix. The main risk here is IMO the jurisdictions, but for Africa they are pretty good.
And yes, we're back at the IPO price but if you think about it gold back then was $1344. Are the problems really so bad so that we can discount the $150 extra in the gold price? Mining is hard. I've been through 3 mine ramp ups this year with Equinox Gold, Gold Resource Corporation and Victoria Gold and only Victoria has so far gone without a hick up. They are not at full production yet though so I expect something to go wrong there as well. I'm sure they will get Syama up and running even with a bit of a delay.
One last thought - only recovering the losses from the last few days should give us a 14% boost on today's price. So on the money I invested today I will hopefully get a 14% return in let's say 6 months (for the mine ramp up) even if gold goes nowhere. Personally, I'm happy with 14% per year, 14% in 6 months is an excellent return.
I almost forgot one other thing - if you hold enough shares you can have your divi in gold!
Topped up again on this mornings dip. Becoming more cautious on averaging down after doing it too much with metro....
Not sure about my strategy of selling most of metro when I did, I would have retained more if they had got the bonds off before I sold. The flip side is that it released cash for events such as Friday. I have been in and out of CSP and had it lined up as an option to trade on Brexit news, I did not realise so many other would as well! I did not make back anything like as much as I lost on metro but it helped a bit.
Monk thank you for taking the time to think this through and post your thoughts. It helped. I accept that many issues faced by other companies/miners cannot be fixed and RSG’s current issues can. Increased production is certainly a good prospect. Getting onto 250 must and will be positive and significant. The loan repayment could certainly be an issue particularly if a fund raise was done at or indeed below our current SP - a significant risk but they have options and do not appear to be under any pressure to act. Higher cash generation should make it less risky but the price has been falling so people are reluctant to add or invest. I can’t help but think the IPO price was well judged and that early investors will have done well leaving those of us who came in later nursing losses. I will probably stick with this perversely would add on a significant fall - I will carefully read the financials at the end of the month and think about it again then.
I will stick with my position on MTRO - I have averaged down all too many times and have left myself with a much larger holding than I wanted or envisioned and I am well down - I can barely bring myself to read the board anymore and certainly get no benefits from any comments there but I do not think they will go bust and virtually no matter what I will hold now until it is around £5 which I still think is likely but goodness it has been an unfortunate investment so I fully understand your approach and actually think yours is wiser investment strategy. ATB
Big B you were asking for a case to remain invested.
Firstly, a warning, I am no specialist in analysing mining companies but these are my thoughts.
The roaster problem although not trivial, is a clear, defined problem which should be capable of being resolved in this quarter. The production report indicates that the mine is on track to meet its full production target next year.
From their Denver meeting report, their forward guidance is an annualised production of 490k; if you total all the estimates in this, the H1 report, and other reports, this actually looks quite conservative, going forward to 2022 the numbers come to nearer 750K (this figure is also mentioned in a presentation in July),
My understanding is that their standard listing is a step toward a premium listing, if the Mcap does not fall further then it should (just) make it into the FTSE250 when this happens.
Risks- gold prices, 2/3 of production is in Africa with associated risks (although with more diversification this is reduced), AISC being higher than anticipated. Cash flow to cover debts.
There is the $130M loan for their purchase of Toro mentioned at the end of the H! report, they say ‘Resolute is currently evaluating refinancing alternatives.’ The loan is for a ‘six month term capable of extension for a further six months in one month increments and is capable of repayment after three months without penalty’. It is not clear what means they will use cover this but issuing equity is always a possibility with the resultant risk of dilution for existing holders. Will reduced production this quarter have made this more, or less unlikely ? The quarterly activity report and financials which will be released at the end of the month may clarify things.
The increasing production rates means that the company is becoming more cash generative, coupled with this now being over more sites, makes it less risky than it was. I am using this drop to top up a little and will review when the financials are out at the ned of the month.
Re metro - it took out a good chunk of my profits for the year but I did not want to be over invested in banks this month. I will probably go back in when things are clearer, although it will mean probably missing the initial big rise.
It seems to me that other than RSG is cheaper than it was and may fall to pre float price there are no positives out there - disappointed in myself.
I am still suffering with MTRO Monk but strangely my % loss showing against RSG is far greater than my % loss on MTRO - I chose my words carefully as the amount I am loosing on MTRO is significantly more than I am loosing here. Sticking with both so let’s hope they come good.
I cannot imagine that a cracked reactor will be a quick fix .
They were planning on 120k for Q4 so if it is off line for the whole quater then they will be about 30k short of 400k unless they do better on their other sites . Production at Ravenswood was supposed to increase this quarter and Mako seems to be ahead of predictions. It may have been that with no problems they would have exceed their target, so although down, it may not be as much off as the headline guestimates indicate.
The target was only upped in August to 400K (from 300k) when the share price was a lot higher (although people may have been factoring this in already).
I've messed up here as well. I bought too many shares at around 92 even though I posted on here I won't do it. So I didn't follow my own plan and now I'm down almost 25%. Not too concerned long term, as I feel this is a short term hick-up but I should be buying a big tranche now. Instead I'm out of cash and thinking what shares I can sell so I can average down. Also I can't really average down too much because as I said earlier I bought too much earlier.
In case you're not invested though I feel this is an excellent entry point.
Looks like this will cause them to miss their annual production target of 400k Oz, could present an interesting opportunity if it falls back a bit further to IPO price or a bit below.
It's my fault Big B - I purchased some after the results looked ok - with some funds from selling out of metro.....
Talk about compounding mistakes.
Last quarter this part was 12% of production - so it is not as if all production stops (if I understand it correctly). I am only down on todays fall and had planned on holding this for a while so I am staying in for now (not that is any reassurance with my recent track record).
I am reluctant to post negatively about a share I own but this just keeps getting worse. I was disappointed by the loss of 18 days production from unscheduled maintenance but as soon as they get the system up and running it has cracked and the company now think they are unlikely to achieve forecast production in the quarter. I can accept that new technology can have issues but I am pretty disappointed with my investment here - I should have sold out when I first started to feel uncomfortable but here I am - thinking very hard about my next move. Can anyone give me some positives?