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Edit...
*with circa 1.5 million cash and (2) million gold lost
Barely no improvement in Q2 production but the cash slide seems to have halted with circa 1.5 million cash and 1 million gold lost versus the previous quarters heavy slides. They managed to avoid using the debt revolver too which I fully anticipated a drawdown of by the end of June.
Question now though is how much of the circa 16 million cash and gold at hand will get swallowed up by the tailings dam issue? Remember lower production will increase the cost.
Given that the full dividend represents circa 82% of cash and gold at hand, it's hard to see how they can maintain the current dividend 14 million, fix the dam and increase production with the reaming 3million dollars. That's also presuming they're at least cash flow neutral from here on out.
These aren't difficult sums allviewswelcome
It was going to 60 anyway, for reasons I set out back in April...The latest issues have just hammered in the nail.
This is down to the high 60s because of the issues surrounding the tailings dam and political issues, nothing to do with the very reasonable levels of debt taken out to increase the production. The drop from the 90s has been since the protests and we all know it.
Impossible to call a bottom, this will be a horrible hold until they've sorted out production and reversed the slide of earnings and cash, in addition to the charts putting in some reversal signals.
40p might be enough to motivate me in the absence of any confluence though.
BushyTailed, what is your buy in price here and really nice doom mongering from you here.
Really surprised that works, but congratz.
Ooops....I'll just place those here lol
"BushyTailed
Posts: 2,389
Price: 106.50
No Opinion
RE: Share Price18 Apr 2023 09:22
That is a very long winded way of saying capex is up and production is down.
Cash is the only thing that matters, the less of it there is and higher the costs the more likely dilution is.
Debt revolver will kill anyone paying more than a £1, I reckon this is going to 60p but we'll see."
You'll see, enjoy the ride
Personally Reza is an honest guys not prone to making misleading statements. I cannot see the the company has done anything wrong. Yes it is all rather unfortunate but in the long run it will not matter.
Is this fact or just your personal view?
Dividend is obviously getting cut, sub 60 looks a possibility now
Sure but was there any reason 3 months ago to believe there'd be a protest? not everything is foreseeable. Especially as they haven't even picked up any pollution.
It's also not a great look to put out a 5 year strategy with annual production targets, then 3 months later put out an RNS to say production guidance to be revised.
I tend to agree but then as holders we are clearly biased.
Just have to close our eyes for a few years on this one until the new mines ramp up and we make $30m profit p.a.
Not good to hear about these types of issues but a few things stand out:
- "No contamination, or a higher incidence of disease in the neighbouring population, has been identified."
- "The Company is therefore confident it has sufficient tailings capacity whilst the second tailings dam is constructed."
Only drawback is:
- "the Company expects to curtail the parts of its Gedabek operation ... and the Company will revise its production guidance accordingly."
So yes some near term impact... but this is a conservative, well run business and environmental concerns + construction set backs are par for the course in this industry. Not sure I see a huge concern for long termers?
So it seems there has been some protesting at a village near Gedabek due to mine pollution which has caused a mine closure. Clearly not good news as most of remaining 2023 revenue coming from Gedabek (Gilar opening at some point this year). Not much news out there, agree need and RNS- if mine reopened over the weekend should see a jump back to 90p otherwise likely more of a drop to come
So cash has been cut in half since December 2022: think I'll wait for the next fund raise before buying.
Doesn't take a genius to work out if there's not an RNS on Monday down she goes.
And if there is one down she probably goes.
However there's a lot unknown about any stoppages at the moment and surely something should have been mentioned on the 12th
SP is in serious trouble here. Wait for the turn rather than guessing the bottom.
Todays RNS looks fine to me as we are in a transition period. SP does not reflect the true forward value of this well run company.
Everything hunky dory and just sit tight and wait. This is a well managed conservative statement company.
I love their thinking.
If anything the announcement understates the drill results. In the table showing the drill results every hole produced some very decent results. Clearly its early days but the results but meaningfully add to the already decent resources estimate which has already been increased in march this year
Great news which should stop the downtrend in SP. Production soon as well.