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The big trades earlier today were sells by me - I needed some cash for a building project. I still have plenty left!
I suppose it is possible that my sells may have temporarily suppressed the price, in which right now is probably not a bad time for anyone thinking of topping up :)
I think debt is due to paid off some time in 2024 then by 2026 we will have accumulated 200m from the current mine, presumably the worst case scenario is that mining stage 4/5 exploration draws a blank and we can't find a viable acquisition, so the company then closes down and divides the 200m between the shareholders - that would be about 10p per share?
That last RNS mentioned that we are investigating converting the currently unsecured loans to secured loans. Any thoughts on that? Like, if the lenders are happy then why bother? From our POV we'd hope that a secured loan could attract an even lower interest rate, but not sure if that would actually happen again given the current lenders are enjoying higher rates. Another thought would be if there were to be a debt-for-equity swap, would we have to give more or less equity for a given loan depending on whether it was secured or unsecured?
Actually dividends were mentioned as one of the reasons for the capital restructuring last year, so perhaps we could get news on when they might be likely - perhaps in a year or two, although it would depend on whether we have enough surplus cash to fund further mine development and/or possible acquisitions.
I think we can assume repayment of the higher-interest debt is currently priced in, but if the next RNS - presumably due this week or next - hints at any other plans (e.g. unexplored mining areas, acquisitions, dividends), I think we'll see 3-4p very soon. I think it might settle there for a few months though, I imagine we'd see some top-slicing at that level.
low-mid 2s is achievable on a timescale of a few weeks or months, every day we are producing actual gold and paying off the senior debt in the next quarter.
Many are here though for the long haul, maybe 8-10p in 2-3 years. Not to mention talk of dividends. Imagine a share trading at 10p and paying say 5% dividend, but which you bought for 1p...
The share division feels to me like a precautionary strategy at this stage. We know the company can produce gold for the next few years but we need to be thinking 10-20 years ahead, in order to secure that long term future we need to be investigating the unexplored land AND looking at diversifying into new acquisitions, both of which require investment which we might struggle to fund purely from existing gold, given the need to pay off the debt and possibly pay higher taxes. We are hovering around 1p per share which I don't think will stay at that level for long but there is always uncertainty beyond our control, e.g. some weather event impacts production. Now say there is some bite-their-hand-off acquisition opportunity which we need to jump on now or never, but which can only be achieved by a share issue, BUT we are unable to implement because share issues must be made above the share nominal price?
This is all entirely hypothetical speculation obvs, but I don't think it's an implausible scenario, and it would be a shame if there was such an opportunity which we were prevented from taking advantage of, purely because we can't issue new shares below the nominal price.
Be great to hear others thoughts about this (and also about cancelling the Share Premium Account, which I haven't yet formed a view on).
Can the distributable reserves created by cancelling the Share Premium Account be used to pay off the debt sooner? Pay increased taxes if needed? Pay dividends once the debt is paid off?
I wasn't able to attend the presentation but wondered if any questions were asked about longer terms plans for example we know that senior debt will be fully repaid by Q4 this year, after which clearing the mezzanine debt can't be far behind (another year or so?) - so at that point do we expect dividends, or would the (significant!) surplus cash be entirely earmarked for investigating the unexplored mining areas? TBH I think either would be great, but I suppose each would attract a different type of investor.
I'm expecting 6p by xmas 2021, 12p by xmas 2022, and a c.1p dividend per share once the debt is paid off in 2023. The trajectory after that is anyone's guess - there is still a lot of unexplored site.
I suspect these figures aren't enough to excite day-traders, but there are certainly life-changing sums to be made for longer term holders.
If you were a major shareholder also holding all the debt, would you prefer to collect interest payments on the debt, or to have the debt repaid asap (at which point your shareholding would be worth around five times as much)?
My suit seems to have shrunk quite a bit during lockdown, so wil definitely be looking to buy a new one after vaccination.
Do you know if any of the current Directors are allowed to buy though? I seem to remember reading something about this a year or two ago.
... half of that as an annual dividend in 3 years or so.
4p is not unrealistic although personally I'd expect at least some resistance as we approach 3.5p, as there will be some traders got their fingers burnt around that level back in October. But it's obvious now on share tipsters radar, plus I think institutional investors likely to start buying and holding this as a long-term winner. Whatever the value of your current holding is, it's quite possible you could be receiving at least
Once it's debt free, the dividend itself could be over half the current sp!
current mcap of only $43m with 2020 net cash income of $46.5m is crackers!
Total 2020 sales $122m, and total debt now reduced to $122m. Debt will be paid off well ahead of expectations I think!
The major lenders are owed c.$130m, earning 7-15% p.a. interest - say $13m p.a.
The major lenders are now also the major shareholders, owning c. 1.5bn shares. At the current <2p share price those shares are worth <£30m and are not paying any dividends.
It seems to me likely the debt will be paid off in about 3 years, the shareprice should then be around 10p, and we could be paying maybe 1p dividend per share.
At which point the major shareholders will no longer be earning any interest BUT (a) they will have had their $130m capital returned to them, (b) their shares will be worth £150m, and (c) they will be earning c.£15m p.a. in dividends.
Not sure how typical this is but it seems that when the major lenders are also the major shareholders, it reduces possible conflict of interest (as we had when the major lenders were the banks threatening to call in the debt), and significantly reduces risk for all shareholders?
Gold sales $84,162,000 in 2020 FY (9 months)
Mcap £44m
Notwithstanding short-term volatility, this is ultimately only going to go in one direction!