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In true Galantas style, ignored by the market. I've just bought again at 4.6p. In my opinion this is a bargain if 2019 goes according to plan, and so far Galantas has delivered everything that's been said on the tin.
Not far to go until we are back in production, gold at $1400 today with a weak pound.
Expecting production clarification and update news within weeks and over the summer.
Every $100 rise in Gold is an additional $2.5m straight to the bottom line at 25,000 Oz per year. Typical Gold bull run as political tensions rise and fiscal policies become strained.
https://twitter.com/KitcoNewsNOW/status/1140378661792542721/photo/1
Can't think of anything out of the ordinary at the AGM, nothing has been mentioned. Anything contentious is usually notified to the markets before hand.
Nice to finally see a few blue days !! Gold at over $1,300 / Oz and the £/$ at 1.27 all help to put that little bit of extra shine to the margins.
Hi. Looks like there's the, AGM on 27 June, looks like the usual re-election on BoD, reappointment of Auditors and reconfirmation of stock option plans (in lieu of any pension scheme).
Are there likely to be any other matters of business like clarification of financial results or projected earnings?
TT that Ross Beaty chap seems very interesting and the adventures of Dalradian make for + reading as, well.
Thanks TotalTrader. Totally agree on the dilution point, can be a tad frustrating and have caught a cold on AIM a few times (heady days of Pan Andean where I ended up the wrong side of that).
Will do further research around the useful points you make.
Many thanks and best wishes.
Hi DM, looks like you had the problem bequest of all explorers - buy early and it's dilution after diliution after dilution - I have had a few of them myself !!
Galantas is now out of the exploration and planning stage and is now into the mining phase. That means the risk side is very low but the reward side is very high. At 25,00 Oz per year the EPS is almost a half of the sp and with the increasing gold price it could turn out to be as high as half. After that it's a move to 50,000 Oz and increasing the resources. At these prices it's a bit of a no brainer really.
Of course this is Aim so if you intend to buy in and get out in 6 months then the sp could be anywhere !!
Have a look at Ross Beaty - he is one of the largest shareholders in Galantas and an incredibly succesful investor who is very picky where he invests. In fact outside of his own companies I think he was only invested in 5 other companies and one of those was Dalradian so that is a good plus point.
Gold looks to have broken through its range and heading upwards as the Trump/China trade war intensifies so for me it is looking very good.
Hi everyone. I bought these at about 16p many years ago and keep an occasional watching brief (e.g. Environmental challenges and rights issue).
What's the main view of this board on how this company is progressing: +, - or neutral?
Reading recent posts it's appearing that there is a glimmer of hope. Gold is at a crazy high price so I had hopped this would be raking it in by now but I do appreciate the debt position.
Good luck all.
Good work Gavster - that answers the question on concentrate grades and thus the value per tonne.
I would hope that the annualised concentrate by year end would be greater than 11,000 Oz. the mill will be working on 3 shifts by then which I guess means 24 hours a day 6-7 days a week give or take. Supply of Ore is never the issue in this type of mine it is always milling capacity. I wopuld personally like to see it heading towards the high teens but I might be a touch optimistic on that front. I would hope we would see a 25,000 Oz run rate by mid next year - Galantas say sometime in 2020.
The investment to get it from 25,000 Oz to 50,000 Oz should not be too great. Most likely front end crushing and grinding rather than floatation tanks - I doubt it will be more than £3-5m.
One can only see Gold getting stronger as the run to safety is likely to continue with the USA/China trade war. So £25m of revenue on 30,000 Oz is a distict possibility in 2021 with a good set of 2020 results as well. At those levels there is some pretty hefty profits and cash generation to be ploughed into additional exploration and of course dividends.
Hi TotalTrader
Looking at those older links. The concentrate grade doesn't seem determined by the ore grade.
Yes, around the £300k does sounds about right. I had an answer back form GAL confirming concentrate grades would be similar to what they were before when last in production, and that their target of 30,000 then 50,000 ounces of gold per annum remain in place but some improvements would need to be done to the plant to reach those targets once production starts. From that I think we could infer that initial production would also be similar to previously as far as tonnes of ore processed.
If so, then by the end of the year we could be looking at say, an annual gold production rate of:
50,000 tonnes of ore at around 7g/t leading to 11,000 Oz of Gold.
With plant improvements, production and resource expansion all going to plan with a constant newsflow, a mid to long term investment here looks to be an excellent prospect.
With your estimate of 85% of gold price, 30k oz pa is a tidy £25m in annual revenues.
Thanks Gavster - i scanned through some of the old RNS's myself today. The concentrate bags from 2011 had a gold equivalent (Gold + Silver + Lead) of 3.57 Oz per Tonne with an original grade of 4.73g AU / tonne. Our current grade is higher, but assuming the same and a concentrate price of 85% of the gold price then 100T equates to £282k. As I said this could be much higher due to our higher grades.
I doubt Galantas will be able to release the exact amount yet. Concentrate bags are usually sample tested at both ends i.e. Galantas and the customer before a concensus is reached. Hopefully we will see another RNS once this is known. News flow feeds the share price and also interest in the share.
At the old grades we need about 2400T of concentrate to be around the numbers in the last broker report for year end., or considerably less if the grades are higher. Stoping on 3 levels will feed the mill and this bring on the extra shifts.
Good to get some activity on this board !!
Hi TotalTrader
I'm assuming that the plant will be making similar concentrate to what it made before. Looking through these results from when they were mining open pit, there is a table quoting the grades for the concentrate each quarter.
https://www.galantas.com/news/galantas-announces-q3-2012-results/
https://www.galantas.com/news/galantas-reports-third-quarter-2011-results/
No harm in emailing GAL and asking.
I do feel that the news flow will increase in the coming months now the gold is being mined.
Hi Gavster and welcome aboard.
Were the grades from 2010/11 in an RNS? My understanding is that the value per bag (depending upon the final testing results) was about £1,300 to £2,000 per bag so potentially upto £200k including the final 25T.
A good start considering the early state of the mine. I am not sure how of that will go to paying off the £1.6m loan. the loan does not need paying off until Dec 2020 if I remember correctly so no rush to pay it off and money in the bank is more valuable.
In terms of mined Oz I think we will see circa 30,000 hit next year and then with a small investment an increase to 50,000 Oz maybe 12-18 months later. By then there will be money in the bank to undertake the underground drilling Roland talks about which should increase the resource to extend the LOM. I fully expect to see a 20+ year mine developed @ 50,000 plus Oz's per year.
Hi All.
In the video he declares 75t. Going back to 2010 and 2011 the concentrate grades per tonne ranged between 90 to 130 g/t. Given that then this could mean roughly (100 x 100) / 31 = 322 ounces plus some silver, so £300,000 plus towards the loan. Not bad. I bought a holding today to hold into the next year or more. I like the target production, the story not changing, the amount of his own personal cash invested and seeing it be it slowly through to production. We'll see once it's all on full production.
Target production = 25k oz = £25m per year in revenue, current market cap £13.5m.
Remember this.. https://www.galantas.com/operations/interim-2012-resources-and-preliminary-economic-assessment/
The Galantas evaluation covers three scenarios, all at a gold price of $1,375 per ounce, as stated below. A. The targeted annual rate of 50,000 ounces gold within concentrate, but allowing one year for construction and mine development with no production, then the second year at a reduced rate
of 30,000 ounces. This scenario gives a mine life of 5 years after the first construction year.
B. An annual rate of 40,000 ounces gold within concentrate, again allowing for one year construction and mine development with no production, then the second year at a reduced rate of 30,000 ounces. Costs were split into ‘fixed’ and ‘variable’ but with labour costs treated as fixed, i.e. the same as for the 50,000ounce case. This scenario gives a mine life of 6 years after the first construction year.
C. An annual rate of 30,000 ounces gold within concentrate, again allowing for one year construction and mine development with no production. Again, costs were split into ‘fixed’ and ‘variable’ but with labour costs treated as fixed, as for the 50,000 ounce case. This scenario gives a mine life of 8 years after the first construction year.
The average ore grade used in the study is that calculated for the combined resource of Joshua and Kearney veins, 8.19 g/t Au, with an allowance for mining dilution of 10%, considered appropriate for the mining method to be employed.
Net revenues are calculated without corporate taxes, amortisation, depreciation or the cost of financing. Case A, at 50,000 ozs/year, gives total Mine Life revenue of £80.1million after deduction of capital and operating cost, IRR of 81% and NPV at 5% discount rate of £62.6million (US$100.2million).
Case B, at 40,000 ozs/year, gives total Mine Life revenue of £75.4million after deduction of capital and operating costs, IRR of 69% and NPV at 5% discount rate of £57.3million (US$91.6million).
Case C, at 30,000 ozs/year, gives total Mine Life revenue of £71.3million after deduction of capital and operating costs, IRR of 54% and NPV at 5% discount rate of £51.2million (US$82.0million).
So there we go - revenue will be forthcoming in Q2.
A little unclear if it is 3 x 75T shipped or 3 shipments totalling 75T with a further 25T to follow. But either way revenue is on its way and ramping up. Interesting to see the value per bag.
Touch and go whether Q2 is profitable - probably a little too soon but Q3 should be.
A very understated interview, which is always the case with Roland. The key points though are:
1) Self funding by August - backs up what he has said previously which means no more fund raises.
2) Stoping on track for 3 levels which increases output.
3) Douible shift and then 3 by year end which increases output.
4) On track for an annualised rate of 25,000Oz by 2020/2021 which should correlate to an EPS of 1.5-2.0p.
5) Main entry built at a gradient and overall dimensions to take 40T vehicles - i.e. increased output.
6) Overall aim for in excess of 50,000 Oz / year, self funded.which is over 3p per share (not double the 25,000Oz due to historical losses will have been absorbed by the time 50,000 Oz are reached so tax is payable !).
7) Drilling to continue and self funded with the aim of a 2m Oz resource.
What's not to like. At 25,000 Oz the sp is multiples of its current sp. At 50,000Oz it's more multiples again and at 2M Oz with an operating mine it's a very saleable opportunity to both our neighbours and others, most likely at £50-100m.
The other solid point here is the consistency. Unlike other Aim companies the story does not change - it's been the same for a number of years now and the company just gets on delivering on that story.
What about future revenue?
Great sign that Galantas/Roland is starting to promote the company by attending presenting at UK Investor Show, QEII Centre, Westminster, London on 30th March 2019.
Is anyone attending?
A significant RNS which baiscally implies one of the most important things to PI's - no more share dilution. Positive cashflow from later this year means the company can stand on its own two feet. Run rate increasing to 24-30,000Oz per year by next year or the year after. Personally I feel that we will hit the 25,000Oz run rate early next year. And 25,000 Oz's means an Operating Profit of circa £9.5m by my calculations. That means lot's of spare cash for drilling to expand the resource and of course a good dividend.
For those that subscribe to Research Tree there is a broker report from Whitman Howard that gives a traget price of 17.3p and only uses the 521,109 Oz as its resource amount. Once the additional resources talked about on the website are proven up where does that take the SP - much higher than that is the answer. Adds weight to my numbers in earlier posts.
That said I won't talk about spread again - the day after I mention the 4% spread it increases to 9% !! The joys of Aim !!
Good progress in today's RNS showing the multi level approach to the Kearney Vein and the route commencement to the Joshua Vein. And look at those intersection gradings 10.3g/t over 3m including a 27.42g/t over 1m - in Gold terms that is a serious WOW !!
It has not escaped my notice either that the spread has shortned considerably over the last few weeks - it wasn't so long ago when we were in the death grip of the MM's 20% spread and now it's just over 4% - that clearly indicates they have reclassified this share and are open for business.
When Dalradian was bought by Orion Mine Finnace recently for £315m it had inferred resources of just over 6m Oz of Gold - no planning permission and no Mine. We have over 521,000 Oz inferred with a full local resource potential of between 2-3m Oz as well as potential in the other mining licenses owned. Equally we have planning permission, a mine and are currently mining resources.Doesn't sound too bad to me !
Good update