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jg, a very good post - I wish I had written it !!
With a 1p valuation, I guess we must all feel quite happy in this share, subject to resolving the debt matter, because it is a gold mining company and many of us might be overweight in it. If, and God forbid, we get a Corbyn government the stock market and £ will crash and we will have widespread despair, if today's Questor analysis in the Daily Telegraph is believed. The share price in this producing gold miner seems to me not only to have outstanding potential for going much higher but is also a good defensive stock against UK or World economic problems. Once the debt is resolved surely the market will realise this and wake up to Metals Exploration.
When we talk about Q4 we have only 5 weeks remaining, and the holiday season loses 1 week of that, so I’m predicting a resolution in the next few weeks, hence my recent top ups. GLA
Interesting to see peoples predictions for Q4 figures here and I hope they're correct. The current production issues highlighted in the last RNS haven't been discussed though.
We were told that October has seen maintenance reliability fall due to unplanned downtime (power transformer failure and pump issues).
We were also told that BIOX oxidation performance will take a hit in Q4 due to design air levels not being achieved and the blower being bought to remedy this doesn't arrive until Q1 2020.
I would have expected the predictions for Q4 figures to be less given the above or are other improvements expected to offset these setbacks? Would be good to hear some thoughts on this.
Took another 500k first thing
Very good discussion today fellow posters lots of good points put across today the uncertainty that is screaming around the world this year is another shocking reminder that the only true currency will always be the commodities I. E gold silver etc etc.
Hence whenever there is uncertainty with the monetary system gold and silver are the first port of call where the world runs to even the BANKS... Cough cough. Have a good evening my fellow share holders.
As we are sharing views and opinions here’s mine.
I was always a believer that the banks would take a haircut. I.e. Accept 50 cents on the dollar for their debt. The fact that the banks have given us a 9 month indefinite payment holiday to see how the new management team can turn things around, during which time we have made massive!!!!!!!!!!! HUGE!!!! Enormous!!!! Improvements which have demonstrated quarter on quarter on quarter results never seen before by MTL in the companies history the last of which saw sales of almost 19k ounces of golf bringing in 28m revenue in 1 quarter all suggests the banks are happy to wait and agree a deal which benefits everyone. No point agreeing a deal which MTL can’t afford to pay, looks bad on everyone. Equally (and I’ve said it before) we have a leader in DB who will only agree a deal that is right for the company.
I do believe we will get a deal and the share price will re rate very nicely for all. I also believe that DB will make sure the major take a haircut on their interest payments (as Lee mentioned) there is NO way given what I’ve said about him above he will allow us to move forward with 20 percent interest payments. This is crazy, unsustainable and would only have been agreed by a desperate man (the previous CEO) the major know they need DB more then he needs us. He’s completely turned this around.
I also agree with Lee’s previous statement, spending 5m now on updating everything that needs upgrading, maintenance etc... whilst we are paying no interest is pure genius and means when an agreement is reached we are cooking on gas!
We are trading at almost the same price as we were 10 months ago, when the market thought we were going out of business, the banks had given us an ultimatum (which we turned down) there was going to be no nomad, we were going to be delisted from AIM and we were losing 3m a quarter. In January I would have said this is a risk at 1p but one that could be very very rewarding if everything goes to plan. At 1p with everything that has happened through q1, 2 and 3 it’s a screaming buy.
Of course there are still risks, it’s a mine, but from January’s 1p to today’s 1p we have ticked 8 out of 10 boxes, de-risked the **** our of this company and have the big one still to tick (refinancing)
The main shareholders don’t want a hair cut and any dilution in the number of shares in issue.
There’s not many shares in public hands and the Candy’s have the most.
The major holders want more % and I’m very positive on that....
Keep your nerve and the result in share price will be very good :-)
Thank you for your response Volmer, I hope a haircut on the debt would take place, but I doubt it very much, the banks hadn’t made that style of offer before and insisted we raised extra capital from fund raising in the past, of which we refused, the debts are not too large to handle, they are less than half the total cost of the venture, and only a tenth of the gold value in the ground, the fact we couldn’t pay them was the poor performance from the previous management, 2 years they spent to reach 49k ounces in the second year was dire and that’s how we fell behind, Darren Bowden in his 1st year (2019) is set to produce around 69k ounces at an average £150 dollar ounce increase, its a world apart ($37 million extra) and that’s what will pay the loans, next year (2020) will be even better, I would guess 85k ounces and another $24 million top line over 2019.
I’m expecting a haircut on interest, not from the banks either, but from the major shareholders, if the banks give us 10 quarterly payments, that would be fine, spare capital could be used to lower the major shareholders loans.
We are not a basket case, we a profit making gold mine, so don’t expect any charity, we really don’t need it, keep up the good work DB.
lee, in the most friendly way may I suggest I think you have missed the point. Refinancing discussions are continuing and the big issue is will it be the simple rescheduling of debt that, I think, you assume or will the lenders have to take a haircut?
The key issue is what level of debt can the company sustain. History says it's much less than the debt outstanding currently. Therefore, I would not be surprised if a haircut is being discussed.
IMO there is no point in speculating about the future while the debt issue is outstanding. I say this because the lenders will obviously read the interim results, analyse them and draw conclusions just as you have. Perhaps they also read bulletin boards. Who knows.
I like good anlaysis and a positive or negative conclusions. Let it all come but after the refinancing is announced.
In this context, I would only say the company has been unable to sustain a lower level of debt than it has currently, that the gold price is an important variable, mined ore gold grades are lower than plan and that current cash costs/AISC are too high. I am not making these comments for discussion but will happily discuss once the refinancing has been completed.
I'm a shareholder.
I have been invested here for over 3 years, I know the small details of this company and its journey, this is my honest prediction on what will happen in the very near future, Q3 produced $6.9 million profit from a record 18850 ounces of gold production, of which allowed MTL to spend nearly $5 million on capital improvements (investigations, repairs, servicing etc etc) leaving $5.2 million in the bank, thats the accumulated cash over the last 3 quarters, so if we add expected earnings from Q4 we can expect a minimum of $6.9 million profit again (I expect more as improvements continue) so assuming we spend another $5 million on finishing the repairs and improvements to the plant, that would leave us around $7.1 million in the bank, of which the bank could take its 1st repayment of a brand new refinance schedual, $6 million would be a good start, leaving us $1.1 million in the bank and an ever improving mine efficiency, repairs completed, our capital expenditure will drop drastically to say $1million for the remaining 2020 quarters, thus net profits will rise to a minimuim of $6 million each quater, rising over 2020 and payments can contine, perhaps payments can rise to $7 million in a year and $8million in 2 years, 10 payment and the banks capital and interest are cleared.
Thats what the banks have been patient for, they have allowed us to have a payment holiday to let us get the roof fixed, and build up some running capital, which is now at a level where repaying them is now certain and not a wish.
We had an offer from the banks earlier this year, a refinance schedual with relatively easy payments that insisted we raised $20 million upfront as part of the deal, which the Major share holders rightly refused, as it would dilute the hell out of existing shareholders, so, we got a better deal, a payment holiday, thats got the roof fixed and finances are improving at an amazing rate, imagine when we are producing 20k ounces gold and $30 million income, operational costs at $18 million, capital expenditure at $1 million and repayments at $6 million, we will have $5 million clear in the bank every quarter, I believe 20k ounces is dead cert from Q1 2020, but possibe this coming Q4? maybe, we have gone from around 16K Q2 to 18.85K Q3 in one quarter.
Bullish, you bet, I'm a numbers guy, the numbers dont lie, we are recovering and the banks know it, finance will be reset and hopefully at a better interest rate from both parties (banks and major shareholders) that would help but is not a must.
A share price re-rate will come with this re-finance news, its whats held us back all year, news will spread, AAZ comparisons will be right, and a shareprice to reflect it, multiples of today, I am holding 3.8 million shares and are in profit.
GLA.