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Very significant news, I’ve been critical recently but this is hugely significant.
1. Removes any risk of a default on the upcoming note maturity.
2. Gives a tick for corporate governance from an independent source
3. Favourable financing rates - this is proper development finance not speculative notes.
4. Gives a clear path to the next increase in production up to around 60000 Oz per year.
5. Given the prepayments they have made, their free cashflow generated in the next 2 years should almost fully cover the development anyway - it allows for acceleration and not just cash in, cash out development, but net debt in 2 years time should be reasonably minimal.
Big step forward
Spike - agree, massive news and as you say great terms on interest rates which vary 3-7%. For me it's a very clear RNS and with the Assaubayev family owning 65.5% their interests should align with all other shareholders in terms of both increasing shareholder value of company in both capital and dividends as CEO Aidar Assaubayev summarised at end of RNS:
“Securing the development funding at attractive terms, indicates our partners’ confidence in the prospects of AltynGold. We are now in a position to implement the expansion plan towards 1mtpa production within two years in line with our strategic growth plan. Achieving this milestone will significantly increase shareholders value and set the stage for a sustainable dividend policy.”
At 1mtpa run rate, 82% gold recovery and 2g/t, I calculate gold production increase to 53k oz p.a. However a 2.5g/t would provide 66k oz p.a. and 3g/t 79k oz p.a.
In theory this should remove one of the shackles that has been holding back ALTN for many years.
I guess with so much of the company held by Assaubayev family there is minimal chance of a decent sized fund manager buying in, because they won't sell below about 250p minimum ... which is my estimate of their average holding cost.
However I also feel the 1mtpa run rate gets us to something like a 60k oz p.a producer and at current prices / costs I really would expect that to equate to a market cap somewhere north of £100m
... a re-rating has been a long time coming, but if it doesn't happen maybe the family will be happy to approve a 20p p.a dividend instead !
"..... but if it doesn't happen maybe the family will be happy to approve a 20p p.a dividend instead !"
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That would be nice. But we have heard the 'dividend' rhetoric before....and there is always something to spend the cash on e.g. another processing plant & mine infrastructure at Teren-sai....an even bigger company yacht!!
I think you're a little unfair even joking abt a company yacht. If directors are guilty of anything it's long-term investment. The haven't diluted stock and take amongst the lowest wages in the lse. They've build up this company successfully and I think they shld be given a break.
I think your a joke giving a break to what rubbish updates and more lies and false dawns ?
baldie is right i would not trust these clowns as far as I could throw them you included !
"I think you're a little unfair even joking abt a company yacht. If directors are guilty of anything it's long-term investment. The haven't diluted stock and take amongst the lowest wages in the lse. They've build up this company successfully and I think they shld be given a break."
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Researchcentre, as you correctly spotted, it was a joke about the yacht. I sometimes joke about gold plated toilets in the executive washroom.
I would agree that the management should get credit for taking mining underground and increasing production. But I reserve the right to criticise because they have made some very odd decisions. But progress is being made. They don't have any more excuses now and the ultimate mark of success will be gold poured. Good luck to all shareholders.
The market hasn't spotted the potential here....that's what I keep telling myself!!
BALD EAGLE The share price has never recovered from the revelation of these very large forward payments to the mining contractor.
The very fact the company had been warned, was clearly aware of the concerns of the auditor but has ignored the matter, they are still carrying on with the practice - poor form and clearly concerning.
I have been investing in the sector for many decades and have never ever come across a situation where a company hands over $5m/$6m/$7m+ to a third party in advance of work.
The value destruction the forward payments have created is totally self-inflicted, any 'normal' company would have changed policy instantly, assured the auditor, assured the market, assured shareholders, they continue unabated.
I continue to hold, albeit a smaller number of shares but am unsettled about the aforementioned practice, we know management has delivered on operational matters but this company would be valued 20%/$30% higher if they had that $7m+ in the bank as opposed to handing it to a unknown third party.
Buster - the problem with the auditor has been solved.
The auditor quit.
So right now, with no auditor, what is the likelihood of suspension?
50/50
20/80
90/10
???
Altyn is standard listed and I believe the only requirement is that they release audited financials within 6 months of year end, which would be June-23, so I'm not sure its anything that is imminent.
The question is can they get a replacement - BDO resigned due to the issue of advance payments and Altyn not being able to prove a lot of the information including whether there was a related party connection so which auditor will take it on with that issue?
Again though its just poor corporate governance, no information has been given to shareholders about the resignation so again any trust is eroded.
When did the auditor resign? Was there an RNS.
I thought the issue was resolved and the auditor was 'sort of happy'!!....on the understanding that Altyn would improve their governance. Must have missed this!
The AltynGold website shows BDO as one of their 'advisors & partners'. I tried to use the link to BDO site (read more) but was warned of a security threat, so didn't risk it.
Fun, fun, fun.
Cannot see any RNS that has BDO stepping down as Auditor.
You can find the resignation letter at companies house
https://find-and-update.company-information.service.gov.uk/company/05048549/filing-history
Again I don't like the fact that this has not been RNS'd
I suspect they are urgently trying to find a replacement before they have to inform the market. But the news has leaked.
I wonder if this was linked to delay in securing the funding?!
If Polymetal in a heavily sanctioned high-risk political jurisdiction like Russia can find a new auditor after Deloitte resigned, you would think Altyn shouldn't have a problem. They should look up Polymetal's new auditor MHA MacIntyre Hudson, considering both miners work in Kazakhstan, there would be some large synergies for MHA MacIntyre Hudson.