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From 2020 AR:
The significant expenditure relates to the planned Teren-Sai processing plant which will be a conventional carbon-in-leach (“CIL”) gold recovery plant, similar to the existing one at the neighbouring Sekisovskoye Mine.
"they are suggesting annual output of 65,000 oz"
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Surely that would suggest at least a 1Mtpa processing plant at Teren-sai....unless grade is significantly higher than 2.5g/t
From the 2019 CPR : "The Sekisovskoye LoM shows a considerable ramp up from current production levels to the
anticipated target of 2Mtpa RoM production. RoM production is planned to be ramped up to 1Mtpa
using the upgraded processing plant, with a further ramp up to 2Mtpa RoM requiring an additional
processing plant"
I don't know what the capacity of the CIL plant will be at Teren Sai, but they are suggesting annual output of 65,000 oz -see the website.
"I am prepared to put my house on it, but the wife is included."
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So the third processing plant at Teren-sai will take total processing capability to 3Mtpa?
" they have already told us they are mining ore zones 3-8 (2.29 g/t), ore zone 10 (2 g/t) and ore zone 11 (2.29-2.33 g/t) which corresponds with the recovery currently being achieved."
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DofM, where did you get this information from please?
The grades associated with the ore zones seem very low. The lowest grade I could find - albeit on a per level basis - was 2.69g/t at 250-300 masl.
Bald E, no there will be an upgrade to the current plant at Seki to 1M tpa and further 1M tpa plant constructed at Seki to take it to 2M tpa. A further CIL plant is proposed at Teren Sai. I am prepared to put my house on it, but the wife is included.
From the latest report: "There was a substantial development of tunneling amounting to 5,657 linear metres, including 353 metres on transport decline No 2 allowing access to 640,000 tons of reserves at levels +161, +164 and +178; and 352 metres on transport decline No 1 allowing access to 110,000 tons at levels +150 and +163."
That allows access to 750,000 tonnes at a head grade of circa 3.36g/t
If they can process that ore in the coming year - or incorporate a large % - then this should substantially increase the grade of the ore being processed.
"There are two more plants planned, a further one at Seki and one at Teren"
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DofM, I don't believe you are correct. There is only one further processing plant planned. The current plant will be upgraded from 850ktpa to 1Mtpa.
An additional 1Mtpa plant will be built in the future - possibly at Teren-sai - to take processing capability to 2Mtpa...as part of the 6 year plan.
So that is one plant upgraded and one new to be built.
"With the introduction of more specialised drilling rigs in 2021, the Company is also targeting a lower level of dilution of extracted ore which should result in a noticeable improvement of grades in Q2 2021". They issued that statement half way thru Q2, so one would expect they have prior knowledge........
Bald E, yes thats how I see it. There are two more plants planned, a further one at Seki and one at Teren
They are now funding the expansion to 850 ktpa out of cash flow. Why would you drive the decline down at huge expense, which they are doing, and not process ore thats grading 2 g/t and very profitable at an AISC of c $1,000 p/oz ?
Why wouldn't you drive the decline down and development to high grade areas (better than the average 3.53 g/t JORC reserve), lift head grade and fund mill expansion through cashflow rather than spend money on the mill to process ore marginally better than the cut off?
"Initial funding of c $50m is to achieve 1 mtpa at Seki. They have raised c $30m of that. A further $15.7m of capex is earmarked for the next 2 years . Further funding will be required to get to 2 mtpa by building a second 1 mtpa at Seki. Forget Teren Sai, they haven't issued guidance on the plant there, other than to say its planned to produce 65,000 oz pa, its still being drilled to establish the resource."
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DofMeister, so they only need to raise circa $20m to reach 1Mtpa?....when in 3 years time production will go from 850ktpa to 1Mtpa.
If you are correct then capex over coming 3 years:
2021 => $11.4m
2022 => $4.3m
2023 => $4.3m (estimated by me as $20m -$15.7m = $4.3m)
If they are processing 850ktpa then that should probably be generating enough profit to fund the expansion to 1Mtpa....so debt shouldn't increase much, if at all. Although chances of a dividend would be zero.
I thought the second processing plant is planned for Teren-sai btw?
Bald E, have have confused yourself. Initial funding of c $50m is to achieve 1 mtpa at Seki. They have raised c $30m of that. A further $15.7m of capex is earmarked for the next 2 years . Further funding will be required to get to 2 mtpa by building a second 1 mtpa at Seki. Forget Teren Sai, they haven't issued guidance on the plant there, other than to say its planned to produce 65,000 oz pa, its still being drilled to establish the resource.
That planning if met not ever met with this lot of bungling clowns , Its one thing planning but another delivering so just live in hope Badie ? If they promised a dividend would you believe them ? No ,
Can someone please explain what Alytn have planned for the next 6 years because my head is hurting!!
"operating the Sekisovskoye Mine at 850kt annual capacity for three years"....so presumably they will then ramp up production at Sekisovkoye to 1Mtpa, whilst building another 1Mtpa processing plant at Teren-Sai over the next 3 years (their 6 year plan...NOT 9 years as suggested in the latest results!!).
Capex over next 2 years is $11.4m (2021) and $4.3m (2022)....to reach and maintain 850ktpa.
Presumably in 2023/24 the plant will be upgraded to 1Mtpa at cost circa $8.4m to $9m (God only knows how the $40-50m figure fits into this equation)...."the Company has estimated that it will require an initial funding of US$40m-US$50m to attain 1Mpta target"
Almost as an afterthought: "Further funding will be required for the secondary 2Mpta target."
That's $45.7m to build a new 1Mtpa processing plant at Teren-sai PLUS the costs for developing the open pit mine there.
From EY independent competent persons report (July 2019): "Further, it is the intention of Altyn Management to ramp up production to 2Mtpa over a six-year period. This plan involves an increase in the capacity of the existing processing plant from 0.85Mtpa to 1Mtpa for USD8.4m and the construction of a new 1Mtpa metallurgical plant and tailings dumps for USD45.7m."
So 'only' $8.4m to upgrade current plant to 1Mtpa....which doesn't seem to agree with the figures in the latest report.
Just reading a bit of 'Sekisovskoye project history' and found:
"In 2007, the Group built the ALTYN MM plant that was capable of treating 850,000 tonnes of ore per annum."
This agrees with what I remembered. It does not agree with the latest report that seems to suggest they need a large investment to take the plant from 500ktpa to 850ktpa....when it shoudl
ld already be at or near 850ktpa capacity. So I would have expected a small amount to update equipment but not the big sums being mentioned. Those new offices they are going to be build must be spectacular!!
DofMeister, thanks for the pointer to the grade info.
"Just increased my holding to 1.1% of the share capital."
That would be over £400,000!!
Bald E, if you look at the 2019 AR it has the same diagram of the mine layout as the 2020 AR, but with the indication of grades for each ore zone, increasing with depth. You can see what they are currently mining from the 2020 AR. Just increased my holding to 1.1% of the share capital.
Dofmeister, you seem to have more information than me....or read the report(s) when I glossed over them.
Your explanation make sense....although it would be good to know when they will be reaching the higher grade ore (>2.5 g/t).
Where did you get your information please?....it will save me having to search through countless documents.
Indo, they have already told us they are mining ore zones 3-8 (2.29 g/t), ore zone 10 (2 g/t) and ore zone 11 (2.29-2.33 g/t) which corresponds with the recovery currently being achieved. We also know that the grades improve with depth.
Gold in the ground is the miner's asset that he monetizes by mining. JORC attempts to give owners and investors confidence that the asset has been estimated with sufficient rigor to achieve the JORC statement, thats the underlying foundation for JORC. Page 3 of AR indicates they are at RL 100m on the left hand ore body and Rl 200m on the right with the center ore body looking ready to go. So you ask a good question- where's the grade? Good question for the recently appointed Director he must be wondering also? Surely you guys are entitled to some kind of explanation?
Indeed the Renaissance note raises more questions than answers for me. Mined ore is only around 550kt pa for the next 3 years rising to around 750kt in 2024. That's pretty disappointing with all the investment (and continued investment). But they are doing around 600kt now and have 700kt already prepared for this year . Grade doesnt reach 2.0g for another 4 years. Yet in the AR the CEO say "extracted ore which should result in a noticeable improvement of grades in Q2 2021." (Doing 1.75g now) Grade improves with depth anyhow so we should be seeing incremental improvements anyway before any operational initiatives to up the grade. Personally thought the note was a bit underwhelming in the short to medium term in terms of performance.