Charles Jillings, CEO of Utilico, energized by strong economic momentum across Latin America. Watch the video here.
If Dugbe is worth so much why is Pasofino (pure play Dugbe) worth the princely sum of CAD30m?
Mr Stalker bailed for a reason.
Relying on Dugbe to dig us out of the hole is under the prevailing gold price - fantasy. Maybe different if gold was 2.5k
Dear or dear what a bunch of wide eyed rampers. I'm invested in this stock and regularly castigated in another board for allegedly being pro SRB and anti that particular stock by a particularly unpleasant ramper on that board.
All I asked was - what happened to the license? It's absolutely pivotal to getting this company to the next stage of its development, the management have gone into enormous lengths explaining progress and why the management belived in Clive's own words to me back last Dec "it's less than a bump in the road". It was originally promised for Q2 and then Q3 and now towards the end of Q3 and update. An ideal opportunity to at least reference (as they have done in previous quarterly reports) it you would have thought but no!
And you lot like the 3 stooges all wide sagely and and in true post even rationalisation mode say don't be stupid why would they mentioned it?
Well I wonder who is being truly stupid here...
Yes I plucked $100 profit per oz out of thin air. I have no idea how GDP are going to split the proceeds with the third party supplier.
Btw I've never understood why GDP can't extract the gold for themselves rather than relying on a 3rd party. Is it just down to volumes or is it some specialist process that GDP lacks and the 3rd party supplier doesn't?
This company is an excellent example of how by attacking a myriad of problems typically faced by all companies success starts at first slowly but then snowballs. Towit:
- buying up the substantial minority interests thus increasing the share of profits to us shareholders
- keeping all the ECOWAT govts sweet in Ghana
- cautiously using capital but not being afraid to expand where the marginal revenues demand it e.g. Brazil
- opening up new processing capabilities - PGMs
- keep buggering on with the gold rich stockpile. Looks like they can finally get that processed (OK yet more approvals still needed but...). OK they need to spend 650k more than planned of which 300k is already spent but hey cash still goes up to 3.6m
If they make say $100 oz pure profit on the processing thats, hey, $8.2m. They're currently only worth $15m.
Mr Market you are seriously bonkers. Or else I'm missing something big...?
I don't buy the message that trucking Coringa ore back to Palito is a viable solution except perhaps for the best ores and in the very short term.
What is going on with the application? Palms still to be greased...?
Dugbe with the current price of gold is marginal at best. No one will buy it otherwise why has Pasofino's price crashed and IS left.
Actions speak louder than words. Still at least HUM didn't sink the money into getting reserves statement out otherwise they would already be well and truly bust.
The only hope is that they manage to get Guinnea up and running without having run out of credit first and then use the know how gained from all the **** ups in Mali to run a proper operation. Thinking about it, it's a big ask...
If anyone thinks Dugbe has value then I think they need to think again. A 5% discount factor is a joke when US fed rates (yes those counted as risk free) are 2.5%. I wonder what the NPV would have looked at with a more realistic 10%?
Before you all jump up and criticise me for deramping, look at the Pasofino share price since publication.
Other than that I broadly agree with the more balanced views on the board. It's cheap because it's cheap for a reason. A cash crunch is coming from which it may not survive and Dugbe will NOT be the ace in the hole.
Thank you Bismarck. Silly me I was assuming that they would be telling me how much my existing holding would be diluted relative to what it would be after the transaction. Instead they add the new and old together and quote a figure based on the proportion of the new relative to the combined total. To me that is meaningless.
Am I being cynical when I say this makes the investment appear to be less of a betting the farm approach than is actually the case?
In addition to the smelter royalty the RNS states they paid a "total consideration of 5,123,044 Caledonia shares representing approximately 28.5 per cent of Caledonia's fully diluted equity."
Yet when I look at the accounts they state the no of fully diluted shares is 12.2m. 5.1 into 12.2 is nearer 40% not 28% so...
what am I missing?
some sensible comments on this board for a change. It's what they broadly hinted at at the AGM no better no worse. They need to keep tracking costs down in line with the deflating gold price otherwise its curtains.
I note USD60m was drawn down at the end of Q2 - not much left although the O/D still remains in play.
This stock is not for the feint hearted. If you can't afford to lose what you have left sell otherwise stick but don't invest anything more until either one of three things happen. A) Gold price goes up B) Costs are sustainably down C) Kourassa starts producing.
Of course they could go bust in the meantime...
@Dogger
In order to expropriate it the Russian first have to take it. Looking at the latest news regarding Southern Ukraine that is not looking very likely. At this price the company is a steal but as blink panic rules the roost the price could still go much lower.
I'm watching and waiting...
"I don’t think anyone’s getting “carried away”"
Really? A selection from today's posts...
"To add to the great news today....
"Looking better all the time here....
"Another winner for us!...
"Fab news/results...
"Serabi IS THE GLODEN GOOSE ....
"This is a game changer....
"Told you phenomenal was a contextual concept!...
The original point of these boards was for people to swap ideas and learn in the process. They've just become a sink for irrational utterances and artfully posted comments. In other words a sewer inhabited by fools and knaves.
You carry on "promoting" if you want to. I'll try and maintain my sense of perspective and act accordingly
The results are OK. Yes long intervals but the grades are barely economic 0.25% is no great shakes. AAZ have discovered similar lengths at 0.45% and are in the process of developing the ore-body for next year. Mr Market has pronounced...Meh!
Perhaps when the core is drilled then I might be more excited...
13p eh?
Methinks your tits are in for a long wait...
I know it is early days but the company promised that the reserves statement would be out by Q2 and they have kept to that. The results were mildly positive and slightly better than my expectation . So all in all a good start post AGM.
The bigger tests lie ahead.
Stay solvent and mine profitably!
OK I said I'd cover what I thought was now the main risk - liquidity. Again this is my interpretation on what was discussed not the gospel truth.
It's pretty clear that the plan when $100m was borrowed that although the majority of the cost of Kouroussa would be met by the loan Yani was expected to at least break even in cash terms and hopefully contribute to the cash spend.
Clearly things have not turned out that way. First the bad news:
- Yani has underperformed and has been a cash drain resulting in a likely shortfall of cash to complete Kouroussa
- in case anybody hasn't noticed there is world wide inflation and thus budgets are under strain and are likely to overshoot
- the VAT issue was not budgeted for and it thus a negative
And now some better news:
- Dan confirmed that the Kour project is still wthin budget. All the materials are fixed price but some other costs e.g. travel consummables will not be. Despite this is believes it is still within budget. He professed surprise that they have not yet received unexpected costs due to inflation but they are on red alert for this
- the $100m loan is covenant light and thus the bank is unlikely to call the loan in except in the case of outright default
- $20m of overdraft facilities are available and unencumbered
- there is room to flex working capital as it is not particularly stretched right now
- there is the possibility of going back and requesting another $30m. Whilst not guaranteed Coris bank are keen to diversify away from BF and amazingly Mali is seen as lower risk
So all in all it's squeaky bum time. If we reach the promised land then Anthony was laying heavy hints the grades at Kour are even better than officially stated and having learned the hard lessons of mining at Yani, know how will kick in and it will be a much slicker operation at Kour.
Maybe we'll get to see that day or maybe not.
Basically it's sh*t or bust. No middle ground
That's all I have to say on the matter for the moment...
This is what I understand operationally has happened. When Anthony was appointed the mining operation was in disarray. Their biggest problem was the reliability of the equipment particularly excavators. They were down to less than 50% availability due to lack of maintenance and spare parts. 85% is industry standard, The old contractors were given the boot and the new ones employed. The new contractors are the biggest in West Africa and have the largest fleet and most robust supply chains due to the scale of their operation. Currently availability is above 85% but this is recent so will not necessarily be reflected fully in this quarters ASIC. In addition there is a bunch of workstreams aimed at improvements. Each will be incremental but together added up will be meaningful. For example they are moving to electronic explosives. Before each round analysis is undertaken so the ore body to be mined is moved out as one mass and its integrity maintained rather than being mixed with non ore bodies which would reduce the gold content.
Another reason for the low yield is that they have been mining in the middle of Yan East pit where alluvial flow has mixed in with the main ore body resulting in low yields. They plan to go back to the north side in Q3-Q4 where the gold is "tabular" i.e. not disturbed. Yields are higher which should thus flow through to ASIC.
We shall see - the results will be the proof of the pudding.
I'll come back to you on the financial later. Need to go now...
The AGM lasted 2hrs - I felt personally that I managed to ask all the questions I wanted answering and they were all answered obviously within the rules about information flow.
Was Dan humble? I think frank and honest were the two words that came to me. Now I might regret saying that but that's how he and the other Board members came over.
They did NOT sugar coat the problems and recognise that there is risk to the business. Providing Anthony continues to provide significant operational improvements the risk lies mostly on the liquidity side.
Hi Sotolo
You are right to be concerned. Prices are falling in pretty much all metals plus the situation in SA seems to be going from bad to worse. I've just read about record power outages due to attacks at power plants. But then what are the alternatives:
- other miners in other jurisdictions. Broadly the same problems although metallic and geographical diversification is good
- physical assets. They are going nowhere price wise in a recession and yield nothing
- fixed assets they are now yield 3% plus for USD denominated assets with a maturity of 1+ years. Maybe but capital losses loom if rates go further
- developed country shares. They are certainly in favour and I do have some shares in these economies but so much is valued not on fundamentals but on a wing and prayer that somehow tech will deliver
- cash. Yes you have optionality but not much else
So I am left with the feeling that stocks like this are worth holding on to. They have very low PE which will protect them to an extent. They throw off cash and will continue to pay dividends. They are low cost producers so will eventually reap the rewards when higher priced mines are knocked out. They are managed by tough resourceful people which is an asset worth investing in in any industry in any jurisdiction.
I'm calling Mr Market wrong on this and we'll see whether votes turn into weights (to paraphrase Benjamin Graham )
Ah but a stopped clock is right 1/60th of the time which makes it more accurate than our esteemed interlocuters