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He has been a long standing critic of gold so it is amazing to see his company take a half billion dollar stake in Barrick. This should weed up some of the institutional short selling and allow gold to make higher highs quicker. But we shouldn't get too excited yet as Berkshire Hathaway's pf is still dominated by Apple (~44%). Barrick Gold accounts for less than 0.5%
Last week's speed bump did not last long, futures are already back up to near $2,000 today.
Us markets open - lets see the power of Warren Buffett's endorsement of Gold , if any!
I reckon worth anything from $20 up to $50/oz
the great man's fund has bought into Barrick Gold, 1/2 $Billion.
That is seen has significant because he has absolutely rubbished gold as an investment option and steered clear for as long as anyone can remember, so what does he know think? He is seen as a major source of wisdom by so many investors, whatever he does gets scrutinised and adopted by others - will certainly help support gold next week as it's an endorsement of the wisdom of investing in the sector.
Opposition getting very close to accusing the Donald of preparing to cheat in the upcoming election, god know what will happen as we get close to the election - perhaps he'll cancel it and declare himself president for life or chain himself to the oval office desk and say he's lost the key.
Lots of uncertainty means fear and ultimately a desire for safety.
jointhedots - a measured overview of TSG's future prospects. Thank you, it's much appreciated by us LTHs.
I took a look at the last update and did a few calculation to try to interpolate what is going on and what the likely outcomes for this and next year are.
It is very interesting that H1 this year is the same (near as damn it) as last year, V25 clearly balanced the outcome. On the basis of that and the fact it is opening up I believe the year end outcome in terms of profitability will be the same or slightly better than last year. May be disappointing to some to hear but the company has said so, but this is a year of building for the future - the key is the BoD have the choice and could effectively pick the desired outcome as V25 is so good.
However, for next year , wow , with more V25 feed stock and a full year of strong gold prices profits will soar.
It all hinges on the % of feed stock from V25 and the main area and if the poorer grades in the main area (still good by industry standards) can be improved by accessing new ground.
This year the modest quantity of V25 ore contained a massive 19.8g/tonne which saved the period, whilst the main area appears to be approximately 3.5g/tonne if my maths is right , well below historic levels of over 7g/t. The difference is stalk and IMO they can now simply add the quantity of V25 ore to the mix to achieve the desired outcome - great position to be in but very tempting.
Lets first assume they go all in on V25 in 2021, and make a few broad brush but credible assumptions that they produce the same quantity or ore and all cost remain the same as in 2019 and grades don't change from what we know - in reality they should be improved upon as they have the time to open a new work areas in the main area and the Rouble has fallen.
In a nutshell for 2019, at 7.8g/tonne, an average gold selling price of $1,399/oz produced a revenue of $63.1m , so assuming a gold selling price of $1800/oz the additional revenue , that's ADDITIONAL not total and so most should go to the bottom line:
All gold from V25 at 19.8g/t = ( (19.8/7.8) x (1800/1399) -1) x 63.1 = $143m best case at $1800/oz
50/50 with main area at 3.5g/t = ( (11.65/7.8) x (1800/1399) -1) x 63.1 = $58.2m
25/75 with main area at 3.5g/t = ( (7.57/7.8) x (1800/1399) -1) x 63.1 = $15.7m
All main area gold at 3.5g/t = ( (3.5/7.8) x (1800/1399) -1) x 63.1 = -$27.1m worst case
The difference is huge on processing V25, assuming all else remains the same. the third calculation is simple like for like on grades and simply an improvement based on gold price.
In 2019 profit before tax was $12.6m AISC and production remaining similar then profit should soar in 2021 with any
performance improvement. In the meanwhile 2020 will be steady state, the company said "Our key priority in 2020 is to maintain stable gold production and cost performance at our flagship asset, the Asacha Gold mine."
Strong Buy IMO
94p was a good top up price....drop overdone, gold already moving back up today and new records will be set I think in this econmic enviroment - it's going to be tougher as the year progresses imho
This share certainly continues to support its intermittent punchy retrace reputation !!
I did a small top this morning at 92p though , as that's a lot more off from 110p than the gold price fall justifies imho.
Still very long and strong here but am unlikely to add more now.. and still have a 150p ish price target here in 2020... although that's a bit more of a stretch target now, clearly
mytton - I did the same this morning, great price, but I couldn't get the highlighted 92p, eventually got 94p.
Says all we need to know about what's going on. price deliberately trashed to encourage sellers, same for most Gold shares. MM's making hay whilst the sun shines.
I first bought into these years ago at around 34p, but I feel more confident now at around £1 with the gold price so high and the macro- economic backdrop, apart from being in Russia(built into price), what's not to like.
tacet - wow $10K/oz
I'd like to dream, but I won't hold my breath mate I think the optimists need Armageddon elsewhere to achieve it, who knows though with the biggest bunch of idiots in my memory running major economies. South china sea tensions are largely ignored here but tensions with many countries are high, loads of other risk areas also exist around the world who knows what could happen to switch the world to risk OFF mode.
A major uplift is always possible as is a slump, anything above $1800/oz is great for TSG, but this is going to be volatile, the boss of Barrick said the same yesterday, he also said he is more interested in the where the gold price settles than any spike or dip. Makes perfect sense for Barrick and TSG alike - that is the price level that determines company revenues unless they hedge.
Lets be realistic , anything over $1800/oz as a base provides for an excellent performance from TSG, the highs and lows simply give the traders a chance to fleece PI's who often react wrongly or too late.
Topped up but was unable to buy even £2500 worth without it being a "pending transaction".
Eventually went through at 96. I think I was ripped off .
Don't worry, it won't be long, the pull is still well above a level to justify that price, news has been against gold today, even Russia claiming a treatment for Coronavisus has eased fears. News will be good news may on one day then stitch and be bad for the SP but none of it changes the underlying proposition that the company is on the verge of a significant performance improvement.
We still don't know what the average grade of V25 or the full production potential, but all evidence is pointing to exceptional performance which I think has not yet been recognised by the market.
Still waiting for TSG to test last years 130 highs when gold was trading at $1550/oz...
Commentators have been suggesting a pull-back for a while now, to supposedly let a little air out of the bubble before the next leg up. So lets get it done, it will be short lived IMO, as the reasons for a much higher gold price is still clearly in place -
POG is going to be volatile and and so TSG will follow, the higher it goes especially in a short time the worse - remember only a week or two ago we required multiple tries at $1900/oz of gold
The point I want to make is don't react to every movement, I'm sure no one on here is as this is not really on the list of short term traders and idiots, but it's surprising (part of the problem with the market) and disappointing at times that many PI's are so nervous the sell for the slightest perceived risk.
TSG will be exceptionally profitable at anything over $1800/oz and as vein 25 starts to contribute more, profitability will soar as higher grade source material means more gold for less tonnes mined.
MM shake out day. There is normally one before the next leg up.
You might want to take a look at CNR as well. I went into that before here and there definitely feels like something is cooking....just read the BB and RNS etc
Ah, didn't spot the Jan 9th date. Not a busy board over there then!
Thanks.
hgm had a good run but is subject to a lowball offer so instead of waiting I sold.
Good luck mytton. I'm relatively new to TSG as well.
Not too sure what bounced out of HGM means....thought they'd had a good run lately
Kragero, that was a subscribers personal comment on the board there in January!
Like I said, I don't trust charts, but would rather have one that said strong buy and not sell.
Greetings!
I got bounced out of HGM so I have moved over here to TSG
@Alwaysone,
They might say it's a strong buy, but where do they get statements like this;
“ Price has taken a bit of a beating of late due to recent news”,
Not that I trust or follow charts, but strong buy currently
https://uk.tradingview.com/symbols/LSE-TSG/
Well, we don't need metal detectors here lol, as poeple are piling into gold stocks and thsi is one of the best small cap stocks imho
https://www.abc.net.au/news/2020-08-05/gold-rush-in-outback-queensland-as-prospectors-comb-cloncurry/12518732
https://www.theguardian.com/business/2020/aug/05/after-covid-19-just-how-high-will-prices-go-in-the-2020-gold-rush
https://www.fxstreet.com/analysis/focus-on-real-yields-why-the-gold-rush-isnt-nearly-over-202008041900
https://www.spglobal.com/platts/en/market-insights/latest-news/metals/080520-russia-jan-may-gold-output-up-3-supported-by-record-prices-stronger-mining
tacet - there's no hope for me then, down the slippery slope.
Come to think of it there have been quite a few lying, cheating company directors I've felt like strangling over the years. I suppose murder is quite evil. I'm sure I'm not the only investor who has felt that urge though, seen many express similar on the BB's.
Well I've just doubled my holding here, as it just feels like this one is on a coiled spring, but what do I know!
Some of you LTHs have done very well already, and I looked at this a couple of months back, but chose a health stock instead - did OK but feel a bit safer here now what with the world economy as it stands now.....
I'm in Condor Gold as well which is doing rather well - good luck all