Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
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Err,no they can't. they are in a closed period!
Now down 50% on the company's latest 16p placing. This will be a test for Eric & Luke since they unloaded some 5 million shares at 13.2p last March. They can now buy the shares back at a c.35% discount. That would be a far better way of showing their confidence in SHG than anything they can say in their interviews and jam tomorrow promises.
Redhill and other readers,
There is little chance that investors would put up with another placing especially at a low share price we have at this time. Shanta has the opportunity to extract 2 Million ounces of gold for the Tanzanian Government to earn income over future years. That wealth is considerably larger then holding back on current owed VAT. The company can choose to leave it in the ground and nobody wins or they deliver what they say they are intending to do and the Tanzanian Government delivers what it said it would do. So far both parties are doing what they promised each other. Eric implied this is the hardest task in discussions that he faces and you can hear it in the presentation. If VAT monies flow back this is a win win result for all stakeholders from later in 2023 and all parties involved contributed to that success. Investors have a choice to continue in Tanzania or go somewhere else. The challenge or test in 2022 is whether promises by all parties are going to continue being kept. Success breeds success and both sides have to believe in that principle and generate confidence and provide the showcase for tomorrow and that is what also excites young people and their ambitions and that applies across all sectors of activity. I hope my own investment here is part of that showcase. I would be really disappointed if it is not the case. Tony
If money for Singida become tight then surely is would be best to take out a short term loan rather than dilute shareholders.
Of course it should be over 10p but if there is still a stock overhang then we have to wait until its cleared.
Still bit of a shocker this reached 8p :(surely cash in the back and the useless dividend should place us at least 10p
Ever get the feeling some people want to get in on a cheap placing? ;)
Let's face it.....you've really only got this quarter left before higher grades start being mined again...and then following these quarters of better numbers you've got Singida to look forward to in the new year....with tidy amounts of cash being generated then and the option to get rid of any debt again or accelerate WK.
No its not double the AISC. The company guided the AISC at $1250 average over the year. The company is using the cash in the bank as it processes lower grade ore with no pillar blending in H1. Half way through the year use the pillar grade at 7 g/t which is blended with the remaining lower grade ore. The mine plan from January 2023 is 3g/t as per the presentation that some of us listened to. Its everyone's choice what they choose to believe from the CEO. In the meantime doubling of rock milling which is a modest cost of the total cost is not double AISC.
It's all about grade. Cannot believe we are processing 2g per tonne ore when last year it was 4.
Effectively that is double the Rock moved and processed and double AISC.
Reality is that costs total $20m a quarter which means 20k ozs cost $1000/oz and 13k cost $1600.
I reckon revenue loss is $10m a quarter which is the same with the fall in unrestricted cash of $10m in the last quarter. The fall in ore grade prevents self funding of the other projects.
Guidance of 33% in 1st half of 2022 is 25k ozs at best, so further grade fall off can be expected before it moves into promised higher grades
Inflation is an important point, Ontarget, based on other costs from other miners, we may be looking at 10 / 15% annual increases in labour / material costs at the moment, that’s going to have an impact.
It will probably be the case that progress on WK / Singida will be slowed down in order for cashflows to “catch up” with expenditure, that may cost us 6 months of progress into 2023, it’s not a major issue if you can see it out from a personal investment perspective, beyond that, who really knows what’s for the macro conditions, the way the world is just about anything could happen, I would worry ourselves greatly beyond what is out of our control.
It’s a slow build-up from here, but I can see great things once we get to this point in 12 months and the investment case to 100k+ becomes clearer.
Labour and equipment costs are rising significantly (according to Eric in yesterday's webinar), due in part to increased competition for labour within the country - a side effect of it becoming more investment friendly. On top of this they have to keep increasing plant capacity at NLGM to counteract the ever-decreasing grade (again in the webinar). Then you have ongoing exploration at WK and elsewhere, and a new mine to bring online at Singida.
It's going to be an expensive year, and highly dependent on what the gold price does to determine whether a placing will be needed.
$15.9M undrawn + $4.3M Vat payable being returned (outside of historical $23M under discussion) + $4M debt facility to aid cash flow. Income net of all running costs and taxes at current cash flow per month in H1 is $1.6M at 1840 gold price but lets run with just $1M to give $6M. Second half the income is above $2M to give $18M projected for Singuida. So they have around $36M if the gold price holds above $1800 an ounce, they hit targets and do not have any significant problems over running on the AISC target. Singuida expenditure remaining is well under $36M as a chunk was spent late last year and the grand total original cost was under $32M. It is a tight, but can be done. If they pull this off it would be a huge achievement and the company value would be significantly more than its current enterprise valuation. I would say two mines with 90,000 to 100,000 ounces in production is 16p-18p range with minimal debt.
Derived as unrestricted cash and the sale value of doré available for sale at the end of the Period. Liquidity of
US$15.9 m excludes US$4.3 m VAT Verified for Refund by the TRA in January 2022 and excludes US$4 undrawn on
the Company’s US$5m Stanbic working capital facility.
Company presentation under footnote 1.
First time that unrestricted cash has not been reported under the financial heading in a quarterly for a while.
Replaced by drawdown facility which is not going to last long.
Last time cash and liquidity was reported this low, a fundraising followed in 3 days.
Are they really going to fund growth within stated timescales by generating cash internally? I think someone is having a laugh!