Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
London South East prides itself on its community spirit, and in order to keep the chat section problem free, we ask all members to follow these simple rules. In these rules, we refer to ourselves as "we", "us", "our". The user of the website is referred to as "you" and "your".
By posting on our share chat boards you are agreeing to the following:
The IP address of all posts is recorded to aid in enforcing these conditions. As a user you agree to any information you have entered being stored in a database. You agree that we have the right to remove, edit, move or close any topic or board at any time should we see fit. You agree that we have the right to remove any post without notice. You agree that we have the right to suspend your account without notice.
Please note some users may not behave properly and may post content that is misleading, untrue or offensive.
It is not possible for us to fully monitor all content all of the time but where we have actually received notice of any content that is potentially misleading, untrue, offensive, unlawful, infringes third party rights or is potentially in breach of these terms and conditions, then we will review such content, decide whether to remove it from this website and act accordingly.
Premium Members are members that have a premium subscription with London South East. You can subscribe here.
London South East does not endorse such members, and posts should not be construed as advice and represent the opinions of the authors, not those of London South East Ltd, or its affiliates.
It is good to see CMCL have justified their statement a few months back that they still predict to achieve the 2023 production guidance (75k-80koz) especially with the issues encountered and reported back in August.
After the completion of the new shaft - I was hoping to see the AISC being reduced a little - looks like it will not happen in 2024.
Mr Eish,
If the COMPANY holds up to what they propose and become a 250kozpa operator with revenues in the order of 500m$ and profits after tax of 100m$ paying dividends of 30% of PAT - then there is little to stop the MCAP reaching (20x dividends) = $600m.
The spanners for the SP is - how much the shares gets diluted on the way to pay for all this or if debt increases / Au price drops.
Will have to wait a few years to see - but shall monitor.
Well, if the FED Pivots and US Interest rates come down, or a Black Swan of sorts hit us (the financial markets), or Wars expand (hope not cause that would be serious!) , US has trouble selling their Treasuries/bonds, new banks collapse , then now that Au has broken 2070, I am told that it is to the races to $2500/Oz , the next resistance level!! Gold's highest on Gold Seek was 2081 today!
So I cannot and will not be surprised if Caledonia swoops up to 1500, why not!!!
GLA, Eish
What did Zimbabwe do to land in this economic predicament? Afterall, Mugabe, who did all the damage is long gone? Why has the world NOT seen Zim with a new lense? Must be the crocodile in charge, the man who orchestrated the Bulawayo Massacres and has followed the same old pathway of suppression of freedom of speech and stealing elections.
So nothing will improve unless there is a "re-think" in Zim, IMHO! Particularly reverse crime and corruption at the highest level etc... Good governance, afterall, they have had bad governance and that only helped the Cadres at the top! I don't think the white displaced farmers will be back. They are well settled at "St Elsewhere".
Taxing the rich might also not quite be the solution, the borders are so permeable and they end up in SA etc...
But, Zim will follow the BRIC line, I guess? Not The West?
Encouraging mining could be a great income provider and should not be discouraged!
Wonder why CMCL did not fly higher with the latest spike in POG?
Quite embarrassing that it took them this long to rectify the error -- and that despite it being pointed out to them by a shareholder on the results call! As of this morning, they have not even updated the underlying filings on the website so that they match the correction announced through the RNS! Are these guys constantly snoozing?
Can't be bad news.
Shame to see him leave, really. I guess he was not let go, but the RNS did not state either as to why. If it is for health or retirement reasons, it would have said so. So all a bit odd and discomforting that they need to find an adequate replacement for him in this critical phase of development!
My hopes for a complete breakout for Gold and other precious metals soon. It's a fait accompli, surely!
https://kingworldnews.com/this-is-going-to-send-shockwaves-through-global-markets/
Take note of the first graph: Bond Yields Have Broken Down As Bonds Have Seen An Upside Breakout
Https://www.reuters.com/markets/commodities/zimbabwean-miners-set-big-profit-slump-next-year-report-2023-11-06/
Will this scenario affect us as well at CMCL?
Hoping the POG can sustainably break free from and over $2000/Oz! Soon!!!!
USD has been doomed forever yet it’s still the de facto global currency. 10yrs were above 5% before and yet things tend to sort themselves out. Basel 3 has been and gone and yet made little tangible difference to the POG.
But none of that undermines the appeal of holding physical gold or producing miners with little debt.
The bull case for smallcap miners, however, especially those with leverage or that need cash is still a long way off imo!
Why take on all that risk when you can pick up a basket of high yield ‘on the cheap’ or even just park cash on deposit.
For sure low cost gold producers with little debt should do well but then that’s not new. They just may do better but be selective.
Is CMCL one of the chosen few… that’s the question and I am still not convinced.
Usual caveats
Trek
Https://kingworldnews.com/michael-oliver-10-21-2023/
If he is right, CMCL (the small junior miners) might fly and the financing of Bilboes could be easy-peasy!
Gold might be "King " again?
Your opinion?
I see US Debt, a panicked US Central Bank, Wars not coming to conclusions and possibly escalating all pointing to higher POG/S. The US 10 year treasury in trouble.
Perhaps Gold miners and particularly the Juniors might fly if POG rises?
Mr Peleliu and others,
CMCL did state in the Corporate Presentation 2023 (page 14) that the peak funding for Bilboes is $250m based on the actual FS on which CMCL purchased the mine. CMCL then stated that they will be looking at completing their own FS based on a phased development to minimise the initial capital investment and reduce need for third party funding.
Note : The company is currently running around $40m pre-tax profits.
I would like to think they can get a level of phased production from Bilboes using 3/4 years of internal cashflows plus (say) $70m external funding : making up hopefully $150m - which I would like to consider in calculations enough to get the Bilboes mine running to at least 50% capacity - and then over the following few years increase to 100% capacity through internal cash flows from Bilboes balance sheet only.
This is speculation and is my opinion based on assumptions on an unembellished model as the original FS is not available (if it is then please - someone please make link to document) and I am hoping the COMPANY makes available certain items from their own FS when complete.
An additional item - the COMPANY still maintains 75-80K oz for the year. If the company can balance books and pay dividends on production of 75k, then with the new shaft adding more reliability - and based on the 21.7koz production for the last quarter - if this can be maintained over the year then it will add 11.8koz, or extra revenue of around $18m, above what they planned to run the company including dividends & CAPEX investment.
I suspect certain financial decisions shall already be made by the COMPANY before shareholders have visibility of the FS.
https://www.reuters.com/markets/commodities/caledonia-explores-funding-options-build-zimbabwes-biggest-gold-mine-2023-10-19/
Caledonia explores funding options to build Zimbabwe’s biggest gold mine - Reuters News
19 Oct 2023 13:02:49
Gold miner wants to raise $250 million for Bilboes mine
New mine could boost Caledonia's output to 250,000 ounces
By Nyasha Chingono
HARARE, Oct 19 (Reuters) - Caledonia Mining Corp CALq.L is exploring options to raise $250 million needed to develop its Bilboes project into what could be Zimbabwe's biggest gold mine.
The company, which also owns the Blanket gold mine in Zimbabwe, could raise the money via a combination of debt, its own cash reserves and equity, Maurice Mason, Caledonia's vice president, corporate development, told Reuters.
The Bilboes project could potentially produce about 170,000 ounces of gold annually, boosting Caledonia's total bullion output to around 250,000 ounces, Mason said.
Caledonia, backed by investors including Cape Town-based fund manager Allan Gray, is one of a number of mining investors that are searching for new opportunities in Zimbabwe even as the economy buckles from ongoing challenges such as intermittent power cuts, scarcity of U.S. dollars and hyperinflation.
Caledonia, which plans to construct the Bilboes mine over two years, is doing studies to find solutions to reduce the up-front capital, Mason said.
"It will be Zimbabwe biggest gold mine by far," Mason told Reuters via email. "We are considering phased capital raising, but that will depend on the outcome of the review of the feasibility study."
Mason said that while investors were cautious to commit to big mining projects, "our experience has been for quality projects with good returns investors have been supportive."
Zimbabwe has been struggling to attract big investors from
early 2000 when its economy imploded following the government's
seizure of white-owned commercial farmland for
distribution to Blacks.
The scarcity of dollars means some investors often struggle or fail to remit profits.
While Caledonia has been able to pay dividends from its Blanket mine, Mason said in general terms some international investors remain concerned about repatriating profits from investments in Zimbabwe as well as about the country's policy stability.
"Foreign investors need to know that they can repatriate the fruits of their investment," Mason said.
Gold is among Zimbabwe's top foreign currency earning commodities alongside shipments of tobacco and platinum metals mined by units of Impala Platinum IMPJ.J and Anglo American Platinum AMSJ.J.
Caledonia, which has long sought to expand gold output in Zimbabwe, acquired the Bilboes project last year. Its also searching for more gold deposits at Motapa and Maligreen projects.
(Reporting by Nyasha Chingono
Editing by Felix Njini and Jane Merriman)
(( NyashaMark.Chingono@thomsonreuters.com ;))
Agree with you, Fr.Jack.Hackett. Just to add, this share is also not highly traded, just a small (excellent) little miner in a difficult environment and of course political environment. Not that this seems to affect them, not sure how they do it as Zim babwe has been badly run down ever since Mr Mugabe decided to cause chaos in Africa's once-upon-a-time Bread basket! A friend of mine currently touring Zim from SA tells me he is going to resettle in Zim as there is no atmosphere of hate (versus SA). I enjoy holding my few hundred shares as they never disappoint paying a dividend!
With the world in turmoil and particularly debt off the scale, the blinking fiat currencies must buckle, for sure! LOL!
Just have a look at US debt soaring into Trillions now over the last 6 months! Trillions of USD's are large numbers and that FED is clueless, surely! They have to pivot?
Mr Cat,
I am sure you are just having a whiz and that you would never let posters on a website dictate your investment position.
There are a few things I would like to say from my experience being here:
1) When I read through all the historic RNS for the last 8 years from CMCL and then compare to what actually happened - I find the BOD are as truthful as possible - and I have not read anything to believe they have ever given information which can/maybe considered not accurate or can be mis-interpreted.
2) This share discussion here maybe a little civilised compared to other stock discussions you are involved in - however I am sure it wont stop you investing if you so wish.
3) Main issue I do have with CMCL to date is that unfortunately, they have had a few on-site fatalities over the last two years - which I know are a huge concern for the company and I am sure measures are actively being taken to address and improve the safety records.
4)One other point on the share discussion - there are very few posters here - and the ones that post post infrequently. If more energetic eager posters here then maybe we get more visibility on the day-to-day events at the mine - such as number of trucks delivering ore, how the rains affect the mine each day etc etc. As you know - even on EUA we often see visibility of the amount of stripping etc. I search for information and it is limited - could do with contact living near Blanket mine - however the company is still good at updating LSE with progress.
Was thinking of a buy in here but that clown Fr J H is enough to scare off any investor!!!!
As an additional bit of information - looking at the Corporate Presentation 2023 (Slide 14) The COMPANY provide table of Gold Price v NPV for Bilboes.
Au $1320/oz, NPV(10%) $126.9m : Au $1500/oz, NPV(10%) $225.2m : Au $1650/oz, NPV(10%) $323.3m
If you then extrapolate and apply this to recent gold price :
Au $1881/oz, NPV(10%) $474.3m (today's price)
Au $2000/oz, NPV(10%) $552.2m
Over the years I think they have earned the right to be trusted, they have steered the company through some difficult times, economically in the country and the currency woes, while at the same time sinking the central shaft from cash flow was a great achievement.
Even though we have had some set backs with the new venture I trust the board
to get Blanket running at optimum levels to give the financial support required to the Bilboes project.
Nice to see the sp stabilise.
Agree, with a lot of other companies I'd have been thinking here we go, directors lying about future prospects to save face and deal with the profit warning when it comes. With these there is a good element of trust and what they say is what they mean. He thought that problems had been resolved and things were back on track to meet targets and it looks like that is exactly what is happening.
Mr L stated in July that he believe they still get to 80K.
This company provides gold and and the BOD provides honesty - nice to have in todays life (especially the honesty).
Great to see that the dividend got announced this AM. Gives me hope that Q3 production is in-line with expectations...
Thanks Bismark, I know ur handle from somewhere. Actually I never knew about that. I only knew about the Aussie owners. I got on board with SGZ just before the French Connection which at the time seemed like a stupid thing to do but I just thought wtfdik ! The flagship at Cononish seemed to have everything going for it so I sat tight for a few years. Glad I ejected 50% a few weeks ago and I'm not stopping here if it hits 888 I will be jumping back out till a retrace. I need the cashflow. Never known the stock market be this tough.