The next focusIR Investor Webinar takes places on 14th May with guest speakers from Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund. Please register 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.
Three, Mako in Senegal, Bibiani in Ghana and Syama in Mali. Production is from Mako and Syama. They are currently looking at what to do with Bibiani- whether to develop, or sell the mine.
Syama will almost certainly be extended by developing an underground mine at Tabakoroni which will feed the current oxide processing plant after it has been modified for sulphides.
They are doing drilling to look to extend the LOM at both producing sites
I believe that they have holdings in three listed exploration companies (Dimi follows this more closely so may be he provide more details about these? )
They sold Ravenswood in Australia earlier this year and retain some financial interests in future production.
How many mines do Resolute mining have? And are they drilling / exploring in another mine in Africa? Does anyone know? ML
slight drop after results imo until the next leg up
Great results and at the same time gold is at $1850 as I write. Truly explosive combination for the share price! I think we'll have a new all time high for gold sooner rather than later.
I was a bit concerned about the failure to reduce net debt but I recommend listening to the conference call for an explanation of this. Also after listening to the call I feel more confident that they can maintain production at current levels going forward.
There was no mention of it but their results indicate that their listed investments increased from 18-35M.
Yes up 12% on ASX
Snapshot: 107k oz poured in Q2 - on track for 430+k oz full year. Syama gold recovery rate up.
Up 12% on Asx.
Start of the re-rate that will really kick in over Q3 as Syama improvements continue and the 2/3 non hedged production at $1800+ that should produce high profits and cashflow.
Nice to see the shorts closing Monkshood. Im looking forward to the quarterly update in a few days. This gold miner is severly undervalued in comparison to its peers, and renewed confidence in the production and cost numbers at Syama is the key to a rerate imo.
Great news! I've just run the numbers and it does make a big difference for the NPV of Mako.
Most of the info was released in December5th rns. The main difference is that with the higher POG they have reduced the economic cut off grade to 0.6g/t which is probably why the ASIC has increased. Still a nice 5% rise today.
Daily gross shorts on the asx for last Friday below 1m (0.7M) - first time I have seen them below 1M since I have been checking (last September).
Results later this week, these will be really what determines the SP going forward.
No wonder they were keen to buy out the financing royalty...
Extra 350k ozs = an asset that will produce an extra $300m+ operating profit with today's gold price and the $900 AISc taken into account.
Yearly target production is rising too and no extra investment needed to the existing facilities to accomodate this additional production. Its just a pure win. Nice.
The SP graph goes gently upwards despite the shorters. I look forward to the next production report.
Thanks (again) Dimi. We have not actually got the 300m for Ravenswood yet...
Was the ASIC for this high for the past couple of years because they were just clearing up the lower grade stocks ? Surely it would be expected to drop once they are in full production? Anyway, other than for the royalty payments it is now history for rsg., but it is useful to see how your valuations work.
So, if they are looking for a bigger project than Bibiani they would need to spend 200M? (unless this is just an excuse that they are using as justification for its sale) .I think that they will need to show a return to net cash first or it will not be popular.
Net shorts are still reducing but they have not let go yet, gross shorts had been running at about 10% traded volume per day (on asx), but almost 1/3 rd of yesterdays trades were shorts.
It will be interesting to see what the quarterlies are like and what the response is.
Monkshood, you were right! It was quite tricky to value!
I had to account for the ramp up from last year's 2.7mt ore processed to the 5mt they are predicting. That gives me though 110koz. I said that would be achieved in 2022. Then I said they would get to the 220koz only in 2026 and left LOM as 15 years. The problem then was that I have the numbers for the operating costs (mining, processing and wages) for last year and for 2.7mt (54koz) and now I have 200koz. So I left wages the same and slightly lowered the processing and mining costs to get to operating costs of $1200. They gave AISC of $1200 and royalties are quite small so that's the number I aimed for. I suspect that my model overestimates the operating costs as for 2019 I had $1500 and they said the AISC was $1400. That's also how I'm accounting for the capex required for the expansion. I wasn't able to find the number for the capex!
Anyway, the number I got for Ravenswood's NPV was $295 or A$425 at $1500 gold. We got $300. Normally operating mines aren't selling at a discount to NPV (0.7 in this case) but in this case there's an expansion to production that needs to happen, i.e. there's a development aspect to is, and this is an optionality play basically. If I lower the gold price to $1400 suddenly the NPV drops in half to A$200.
Unless they already have some big deal lined up, I wish the Board would stick to digging gold and selling it. Selling assets is unsettling for everyone.
Results out on 22st July 2020 I understand!
Thanks for that Dimi. If you apply the same valuation to Ravenswood how does the value you get compare to what they received? (although the valuation of this is quite hard to really know until 7 years out!)
I know Ravenswood was not the cheapest to run but it was a large resource (@200koz p.a) with a 15year LoM, seems odd to sell it then say they are also selling Bibiani as they need a 'bigger project' .
I can see why you may sell sites why the PoG is high - but is it the best time to be buying?
I've done my own valuation model using the numbers from the 2018 study (LOM 11 years, ore processed 1mt/year, grade 3.6, recovery 89.9%, 3% royalty to account for the $64m for the government, operating costs $645/oz):
https://www.miningnewsfeed.com/reports/ResoluteiMining_Bibiani-FSUpdate_07132018.pdf
Using gold at US$1500 I get US $264m NPV. That said, I don't think $RSG.AX is going to get anything like full NPV for the asset. Developers trade at what, Average 0.5 of NPV? So that gives us US$132. Probably should apply an Africa discount to that too, so 0.6 of NPV. That's US$105.
At the same time an excellent project like Orca gold's is valued at US$70m atm (that's the company's market cap) and it has roughly the same resource size. Okay Sudan is probably worse than Ghana but still. So anything over US$100m might be a bit of a stretch but I feel we might be able to get $90-100m.
We are now into the 2nd quarter- only 30Koz forward sold for this quarter and this is at $1526oz. If there are no issues then it should be a very good one.
Gold coming to the boil nicely - futures are at $1806. Quarterly update to come which should build further confidence in the production recovery at Syama. Hopefully see costs starting to fall there too.
Rsg is a good place to be right now imo.
Thanks Dimi
I suppose that they have not actually sold it and they had said that it was being reviewed following interest so probably why there has not been an rns.
However, I do agree that the intent to sell is clearly stated here which is a shift in position from 'looking at options'. They have production and quarterly reports out over the next two weeks which would have been a more appropriate place to clarify the situation than an interview.
I would like to see them get some steady production from Syama for a few more quarters and to significantly reduce debt before splashing out on another project.
On a more positive note there was a big jump (7-8%) on the asx last night and shorts are down to 3% (probably now under from daily gross shorts for the past week ).
Monkswood, our suspicions have been confirmed, we're planning on selling Bibiani! Here's an interview with the CEO:
https://www.miningmx.com/top-story/42417-resolutes-welborn-expects-to-divest-of-ghana-mine-bibiani-in-2020-despite-covid-19-delay/
Basically the main argument is that 100k oz production per year isn't big enough.
What's funny is that I checked for an RNS this morning and there wasn't one. At the same time they broke the news through the media yesterday. Personally, not too happy about that but at the same time I'm glad we're getting rid of Bibiani. I wasn't impressed by the asset from what I saw. Hopefully we can use the cash to buy something nicer!
Yes it is undervalued! After all its a gold miner. With lots of gold as an option as share or as gold.
Some comments that Resolute could take out Tietto Minerals (ASX:TIE):
https://spotlightmining.com/blog/the-kangari-african-round-up-6/
Nice to see it moving up today, results (and poor hedging) out and complete soon.