Roundtable Discussion; The Future of Mineral Sands. Watch the video here.
Andrew 4444
MMP are still ramping up production and I doubt Q3 will be able to achieve this level of margin. A proportion of direct cash cost will be fixed.
Empress statement on revenue indicates production until 31 Oct was about 100kg.
The other uncertainty about the achieved margin will be the transparency provided in the RNS.
Statement by Empress "MMP has advised that the Company has earned royalty revenues of $185,800 in respect of the Manica gold mine from commencement of production in July 2022 up to and including October 31, 2022. However, in accordance with IFRS 15 Revenue from Contracts with Customers, this revenue was not recorded in the third quarter financial statements as revenue is recognized when gold is sold to third parties. Empress looks forward to this revenue and additional revenue from gold sales related to production achieved during the remainder of the year being reflected in its year end results."
Narrowing discount in recent weeks seemed to be driven by USD.
Spot fell on Friday seems few buyers but plenty of long term contract action per Quakes.
No idea what's next!
Premium to NAV created by the headwinds and execute KAP option at attractive price?
Statements re $500k - summary I think the CMRS statements isn't correct based on my interp of following RNS from BZT
15 Dec RNS
Under the agreement with Caerus, each party has committed to fund an initial amount of up to US$500,000 during the period of exploration and project appraisal (18 months, with the option for renewal for a further 18 months), with Caerus acting as operator.
11 Nov 2021 RNS
USD 1M exploration budget to be jointly funded
The Parties have committed an initial sum of USD1.0 million towards resource development and to take the Project to feasibility to be funded on a 50:50 basis
and
The JV begins with immediate effect with the parties joint financial contribution being from the commencement of diamond drilling at Troulli on 16 September 2021
There is something odd with derived selling price of gold in oz
Revenue / oz sold
Q2 $642,115 / 465oz = $1,381 oz
Q1 $617,422 / 384oz = $1,607 oz
So the percentage decrease is likely explained by drop in gold spot price but the absolute $ price indicates some commission or fees to sell which I had not considered
I'd view this the same way Andrew.
Pleased they've given helpful visibility of breakdown which of course raises more questions. First for me is what's happening at Boa?
Small admin error in early narrative where they mention total production Oz as 1344 which is alluvials only whereas 1740 is actual total
This was last year sequence:
1. 30 Sep 2021- half year report for Xtract company for the 6 months to 30 June 2021
2. 05 Oct 2021 - Q2 Moz gold results for the quarter ending 30 June
3. 14 Oct 2021 - Q3 Moz gold results for the quarter ending 30 Sept.
It is odd in my opinion that the half year report would be released before the Q2 Manica gold update. Clearly Q2 from Manica is a key input of revenue and stock for the half year report.
However last year the half year report came first....
I see no evidence on NSW Titles Management Systems of any applications to drill new locations on EL5574 so this indicates they have no immediate plans to drill the new anomalies identified in the IP survey.
Also on TMS there is licence renewal application on EL8305 ( I also think this may cover EL8306) submitted on 18 August.
I took a quick look at RNS releases from this time last year and a bit of a surprise for me was the sequence of releases:
1. 30 Sep 2021- half year report for Xtract company for the 6 months to 30 June 2021
2. 05 Oct 2021 - Q2 Moz gold results for the quarter ending 30 June
3. 14 Oct 2021 - Q3 Moz gold results for the quarter ending 30 Sept.
I am wondering if this pattern will be repeated ....
Excellent info thanks. I've also found Andre responsive.
I'm using a trading pot and long term pot here but currently 85% remains long with only 15% trading.
I was using 15% discount to NAV as my buy trigger but that strategy needs reassessing
Thanks for sharing Snooz. Volatility here has surprised me and I expect it to continue and magnify both up and down movements so providing potentially good trading opportunities.
Your NAV tracker is a welcome legacy from your time invested here!
Hi Howezap
Perhaps sale 11 years ago of Mankayan by Bezant may provide a precedent - details below. This was never executed, Philippine government banned mining ! But the intent was 50:50 special divi / investing in existing portfolio.
Btw its a different Eureka mentioned - one in Argentina this time.
Extract of deal...
Potential disposal of Mankayan
Under the option agreement, Bezant is to receive a non-refundable, upfront cash
payment of US$7m with a further cash sum of US$63m payable if Gold Fields
exercises the option to acquire the entire issued capital of Asean (a 100%-owned
subsidiary of Bezant). Asean currently holds a 40% interest in the copper/gold
Mankayan Project, which includes an option to acquire the remaining 60%. The
option with Gold Fields is exercisable at any time until 31 January 2013, after which it
will lapse. Gold Fields’ current option on the nearby Far South-East project increases
the likelihood of the option being exercised.
Funds for Eureka and special dividend
The proceeds are expected to be split proportionally 50/50 between work
programmes for the Eureka project and a special dividend to shareholders. At Eureka
the funds received will allow Bezant to initially focus on delineating a JORC/NI 43-101
compliant resource.
Using August Report
Shares in Treasury 4,636,331 so @£4 = £18.5M @ $1.18 = $21.9M
Cash and other net assets / liabilities =$14.8M
Total = $36.7M
Probably want some cash for working capital so let say $30M giving c600k lbs.
There seems to be a sweet spot to trade over last few weeks in the NAV -20% to NAV -10% but that period may have now passed. I thought quite a few day traders may have got out yesterday p.m. but it was strong into the close and in first few hours this morning.
I think its likely the 2022 option for $100mil will be exercised quite soon based on last year timings.
Obviously will require fund raise only have $15M in cash and equivalents.
I have interpreted previous statements to imply this would likely only be done when at premium to NAV.
Anyone else think this is likely to happen soon and thoughts on placing price likely with reference to NAV at that time ?
The placing announced 26 Oct 2021 was £3.64 and referenced NAV on 25 Oct 2021 at £3.62, share price was about £3.90 - this was to fund exceptional purchases above KAP option.
The placing 16 June 2021 was at £2.50 and referenced NAV of £2.48 share price about £2.60
? 8.1mlb. at US$21.01 /lb. – July 2018
? 350klb. at US$23.30 /lb. – August 2018
? 1.3mlb. at US$25.88 /lb. – May 2019
? 3.5mlb. at US$28.95 /lb. – June 2021
? 2.0mlb. at US$32.23 /lb. – December 2021 Option exercised for 2021
? 950klb. at US$47.58 /lb. – Delivery in Q2 2022 Above and beyond KAP Option
? 2.0mlb. at US$43.25 /lb. – Delivery by Q2 2022 1) Repurchase material previously delivered to Kazatomprom on 22 November 2021
quick update from Empress just now on FB
https://youtu.be/CpHKwa0iAyg?t=480
There was a line of questioning about 3 year versus 5 year versus longer mine life at the AGM.
Positive comments about potential to expand from 3 years is supported by Empress statements in the Youtube clip from 8 mins for 1 min.