Member Info for aprogerson

@JC I think we are in what is known as the 'capitulation' phase where all weak hands give up or are forced out before the professional buyers move in and the price rises. POG is steady in the face of relentless crypto, bond & stock rout with cash facing losses of 10%-16% depending on which version of the CPI/RPI you believe really reflects what is happening.

PGM Juniors are at the riskier end of stocks in a particularly unloved sector we are repeatedly told by the establishment has no real value or utility ... accept for the 'small fact' that HNW individuals, billionaires and central banks are competing to buy it at these super cheap prices driven down by massive quantities of highly leveraged paper gold & silver. Physical metal coins are now trading at huge % premiums assuming you can get it all.

As always DYOR, but please take the time to go through some of my reading list I posted in the last 2 days and decide for yourself. The mine & plant assets that GCAT owns plus the licences over the underground resources have not changed and we are 10 months into their redevelopment and now only 6 months off the 2koz/month production target. GCAT are only consuming some 850oz/month which means they can expand & develop the assets with minimal dilution.

My simple logic is that:
> gold production revenue pays for mine/plant development at modest resource consumption
> we retain 1.2Moz of future gold production safely in the ground & more due from infill & expansion drilling programme. At some point sooner or later POG will rerate as will the value of GCATs reserves & their production free cashflow as it is highly leveraged to POG
> existing plant proven capable of producing 850oz/month and likely 1koz/month at AISC $1,150
> Current Q3 scheduled upgrades will double production to 1.7>2koz/month at lower AISC
> Additional 4x 5kt HL pads being installed will EACH deliver an additional 150oz/month and when all 4 are built will deliver circa 600oz/month and at an even lower AISC due to low OPEX costs compared to main CIL plant

Importantly for me what has been missed by many is that the inclusion of the HL pads skews the original GCAT proposition and metrics to the upside due to lower CAPEX, faster build & lower ongoing OPEX. The real clincher is that it massively increases the amount of minable resources that can be economically mined and processed as it is ideally suited to processing LOWER grade ore at scale albeit at lower % recoveries.

IMHO barring some disaster or forced sale of my shares, I am struggling to see the downside as long as I sit on my hands and resist the urge to sell at these discounted prices ... the £value proposition is unchanged and the execution risks are diminishing as each new project, upgrade, mine drive and drill assay result is reported. The upcoming Kilimapesa MRE should be instructive as should the expected Nyakafuru plans, costs and associated funding announcements.
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@Beholder If it is any consolation my PGM & commodity based PF is down average 45% so if the market goes against you it doesn't matter a great deal about which stocks as they all get slammed. ... who would have guessed GGP would drop to 9.3p today !!

Unfortunately for me most of PF is also Explorer or Developer stage Juniors which have been hit the hardest as they have no cashflow ... probably why I am surprised that GCATs SP has fallen as much as it has so after averaging down I am 'only' 36% down so I suppose I should be (relatively) happy?
Go figure !
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@Beholder Me? I analyse ... take what I know or can realistically infer then project forward based on info or (un)common sense. Happy to give a view but very clear if it is an opinion and why

So realist
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@ID78 Given our discussions on internal 'competition' for funds from cashflow my guess is the 100kt HL pad is way down the pecking order especially as it will require an HUGE amount of ore to keep it fully utilised.

Sequence of Plant upgrades and Ore required:
1) Existing process & tailings plant @15ktpm = 15ktpm ore ....... so Total = 15ktpm
2) 4x 5ktHLpads = +20ktpm ore .................................................... so Total = 20ktpm
3) Upgraded process & tailings plant +15ktpm = 15ktpm ore ..... so Total = 50ktpm
4) New 100kt HL = +100ktpm ........................................................ so Total = 150ktpm
Q1'22 reported 48kt processed in main plant and 5kt in HL or 20ktpm average rate for Mar-22 as HL came online

Ore Production (Q1'22 RNS) = 67,590t overall or 22.5ktpm
Main Plant ore received = 44,846t
> Underground = 18,357t @ 2.64 g/t
> Open Pit = 26,489t @ 2.33g/t
Heap Leach Received = 22,744t
> Underground = 22,744t @1.75g/t

The above figures show that current 22.5ktpm (Q1'22) production is 15% of required 150ktpm at full commercial scale implied by inclusion of 100kt HL.

IMHO much as RM might want 100kt HL pad it is no use without the mine upgrades necessary to keep it fed. Also %recovery is relatively low %yields, so do they reduce throughput to increase yields as they have larger capacity or reprocess depleted HL ore (0.6/0.7g/t remaining) afterwards via partner?
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@ID78 If you look in the prospectus they have a very instructive process flow diagram & plant inventory which implies that the addition Ball Mill and CIL tanks will be added to the EXISTING plant as they are effectively the main 2 substantive 'bottle necks' to be solved so that throughput can go from 15ktpm to 30ktpm.

Of course there maybe other items to be tweaked or upgraded, but these are the big, expensive & complicated ones that will require plant downtime to install, integrate, with power & control then commission, balance and tweak process flows.

The other 'bonus' here is that Kilimapesa plant now consists of several independent systems increasing resilience and decreasing any lost production as and when they have downtime namely:
1) Main processing plant @15ktpm = High grade ore in-feed, screen, crush, grind, gravity and CIL tanks > Tailings plant
2) Tailing processing plant @15ktpm = input from existing historic TSF and process plant
3) Heap Leach @20ktpm = Low grade ore to 4 separate pads with gold recovery & cyanide solution recovery circuits
4) Gold Evolution & Refining = extraction & processing producing dore bars > refiners

My expectation is that GCAT will optimise their plant upgrades so at least (1) or (2) is running at any one time AFTER 4x HL pads are all operational so gold output is always 850oz/month or more (as per prior post calcs)

IMHO the much larger 100kt HL pad mentioned by RM is a later addition 'Brucey Bonus' that will take GCAT to the next level in terms of gold output which can be delivered at much lower CAPEX/OPEX and timeframes once 2koz/month target has been hit as they also know 'Best Fit' efficient operational & process flow info from HL pilot plant.
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@Swampy Yes POG now looking decidedly perky compared to almost everything else. Factor in recent POG plunge and then price rejection when it dropped to $1805 and then $1830 with it now sat on (very) long term support at $1846 ... I would say Gold performance has been steller !

Interestingly for GCAT at $1,850 POG then ...
> NOW (Q1 data) @$1,150 AISC & 850oz/m = $700/oz FCF or $595k/m so with $300k/m exploration leaves $295k/m free to support other developments
> Dec-22 (Forecast) @$1,100 AISC & 2,000oz/m = $750/oz FCF or $1,500k/m so with $300k/m exploration leaves $1,200k/m free to support other developments

We know from recent presentation that Kilmapesa process and tailings plant upgrades are now scheduled for Q3'22 start so assuming the worst then the 850oz/month production will be offline for a few weeks whilst new ball mill, CIL tanks et al are installed and commissioned.

It is worth noting that the 4x 5kt HL pads at 55% recovery and 2.5g/t produce =20,000 x2.5g/t x0.55/31.1 = 885oz/month which essentially replaces the main processing plant for as long as needed avoiding any 'dip' in production, revenue or FCF. However once plant upgrades completed a minimum 1,500oz/month output should be achievable (doubling Q1 FCF) with a rapid ramp-up to over 2koz/month (or 2.5x Q1 FCF) subject to mine output upgrades also being complete.

For balance we are talking 3 months for plant upgrades starting in a few weeks, plus another 3 months for production ramp up as they commission everything and bring new mine output into production ... so 6 months!

Still struggling to see the downside ... and if POG does what we know it should be doing right now then any extra revenue goes straight to FCF.
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We also need to be mindful that Directors have 7 legal duties under Companies Act 2006 legislation including a general fiduciary duty that cross-cuts these https://companieshouse.blog.gov.uk/2019/02/21/7-duties-of-a-company-director/
1) Duty to act within powers
2) Duty to promote the success of the company
3) Duty to exercise independent judgment
4) Duty to exercise reasonable care, skill and diligence
5) Duty to avoid conflicts of interest
6) Duty not to accept benefits from third parties
7) Duty to declare interest in proposed transaction or arrangement

The CFO will be held to a higher standard as he is the Financial specialist
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@brainspark Give it a rest ... please read numerous posts on the subject
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@Bankrupty I try very hard not to take what the CBs tell us they want us to believe about gold and look at their actions which very clearly show consistent activities to devalue & de-monetize gold in the West after the 1971 'temporary' removal of the gold backing from the US Dollar. Gold now essentially 'floats' alongside all other fiat currencies and is priced in US$ like most other commodities, but unlike most other commodities both gold and silver are also money as they are both divisible, fungible, recognisable and a proven store of value.

Gold is now considered a Tier 1 asset by banks under BASELIII rules so its full value can now be used as a bank reserve. Gold and silver coins are considered by most nations as money and when used in coins as Legal Tender as in the UK where they are also both exempt from Capital Gains Tax and gold is exempt from VAT, but Silver has VAT unlike most other nations as UK is one of the very few nations charging VAT on legal tender/money.

There are a swath of knowledgeable CEOs, market commentators & financial industry experts On YouTube including Keith Newmeyer, Rick Rule, Jim Rickards, Ray Dalio, Peter Schiff, Peter Grandich, George Gammon, Robert Kiyosaki, Lyn Alden, Andrew Schectman, Jeremy Grantham, Steve Van-Metre & Danielle DiMartino-Booth to name but a few plus UK centric commentators/experts such as Andrew McGuire, Alasdair MacLeod, Neil McCoy-Ward and Maneco64.
AIMHO & DYOR
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@bankrupty Yes I know the US off-balance sheet and Federal debts/promises dwarf the 'public' $30.5T debt so 130% GDP/Debt ratio is 'somewhat' understated, but I've no idea what those figures are having seen several estimates and I try very hard not to guess especially on a public BB.
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@alreadyinuse GUN MCap is £2.6m with £1m+ cash in the bank trading at circa 50% NAV.

Yes the drop in SP is very, very frustrating, but that is NOT dilution it means that GUN shares are screamingly cheap unless you think that gold and commodity prices are going down further and staying there. I am expecting GUN to make a decent sized purchase as there are a lot of bargains available at silly prices particularly in the Junior mining space that still need money to explore and/or develop good assets.
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LOL just checked my own figures and US debt is now $30.5T as per official US Debt clock https://www.usdebtclock.org/

@bankrupty Yes now the FED has hiked 0.75% and both gold and silver have stabilised and the US stock market did not move much as it was widely trailed and already priced in.

What is interesting is that US GDP 2021 was $23T with tax take $4.05T & debt of circa $30T and a debt/GDP ratio of approx. 130% so the FED needs to inflate the debt away or they are bust. However to tackle real inflation of 16%+ (ShadowStats) vs CPLie of 8.6% they would need to raise interest rates ABOVE the real inflation as Paul Volker did in the 1980s by 4% over the inflation or 20%+ in reality today. At 5% interest rates on $30T debt the annual interest payable would be $1.5T so approx double what it is now or 37% of the US annual tax raised in 2021 ... as the US current account deficit was $822B in 2021 so would rise steeply and the $30T debt load would rise even faster so the necessary 20% interest rate is a pipe dream.

The FED have only one 'good' option which is further financial repression where real inflation is some 15% above interest rates which reduces the the real value of the debt by half in less than 5 years whilst the debt remains the same in nominal US$ it gooses the stock market with low nominal interest rates and increases GDP in nominal terms so halving the debt/GDP ratio whilst destroying the purchasing power of the dollar by 50% in 4.5 years.

Gold has now proven its 5,000 year pedigree as a reliable store of wealth despite price suppression using paper gold ... which is why CBs are all trying to buy more Gold and/or like Turkey trying to convince their population to hand over their gold to the government. A revaluation much higher in gold and/or commodities seems highly likely sooner rather than later so CBs can prop up their balance sheets to remain solvent.

GCATs Gold in the ground will be worth more as this plays out so buying the new projects for $5-6/oz looks like an unbelievable bargain into a likely strongly rising POG as this plays out. It will be interesting to see how many new oz get added to the MRE compared to explorations pend to see what the cost/new ounce works out at.

I could be imagining all this of course so please check my figures and DYOR.
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Full ASX RNS for Pacific Nickel looks good @ https://cdn-api.markitdigital.com/apiman-gateway/ASX/asx-research/1.0/file/2924-02531787-2A1379244?access_token=83ff96335c2d45a094df02a206a39ff4

Looks like Glencore will both fund Pacific Nickel's CAPEX +contingency and tie them into a 4-6 year deal = great news for all involved. Should see a nice bump in PN SP as the downside risk melts away and they have a very willing customer especially now that Nickel via Russia is a No No
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@ID78 POG is up in all fiat currencies except the dollar so it is doing it 'wealth preservation' job very well unlike 'digital gold' which has followed the stock market down and 'paper gold' which is some 200-500 to 1 leveraged to every physical ounce ... not sure they are all going to get delivery when SHTF.

At least GCAT has lots of cheap gold in the ground, we know where it is, actively looking for more and upscaling our production to get more out faster at lower OPEX over the next few months.
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@Swampy Looks like $1,805 POG has now been tested and rejected 3 times over the last 6 weeks, but I am expecting a gold 'Capitulation' and maybe test long term uptrend support @$1,780 when this market gets really, really ugly. Just looking at some of the losses across US stocks (20-80%), bonds (25-35%), housing (20% and counting) & Crypto (80-99%) plus cash losing 10%+ with inflation then Gold getting a modest YTD 2% lift looks positively attractive by comparison.

The FED needs to RAISE interest rates fast to tackle inflation (without going bust itself) and REDUCE rates to stop a recession as all these bubbles are bursting ... tough choice! Gold is currently doing its job which is wealth preservation in adversity.

POG 'typically' bounces on CB tightening into a recession which seems to be the FEDs chosen route to tackling inflation. However, we already have a European hot war, a worldwide economic sanctions & commodities war, recession, labour & goods shortages plus a 70s style fuel price shock in US & Europe with massive worldwide inflation already bankrupting several sovereign nations. The FED has historically low interest rates that might, just might get to 2.5% which won't touch 16.8% 'corrected' US CPI inflation, but add in planned QT then we will have a proper stock market crash that might do the trick but very likely to break other stuff like jobs, bankruptcies and repossessions in the process.

Ref: (June 10) CONSUMER PRICE INDEX (CPI)– May 2022 year-to-year CPI-U inflation hit a 41-year high of 8.6% with the ShadowStats Alternate “Corrected” CPI at a new 75-year high of 16.8% (Bureau of Labor Statistics - BLS, ShadowStats.com).

CBs need to be careful what they wish for and POG will react when the FED ditches tightening and restarts QE or whatever they are going to call it this time! POG will know and PGM producers will do well followed shortly thereafter by Developers and Explorers ... low MCap Juniors with good revenues, proven resources and/or growth prospects will do very, very well thankyou. Good job GCAT seems to hit all those criterion
AIMHO & DYOR
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@Peggy "AA will turn up here when they feel like it, people are deluded if they think they are going to turn up with numerous drill rigs and start some major drilling project. I am sure they will turn up at some point and have a look."

Yes clearly, AAL will be in no rush after 18 months of DD plus a year of waiting whilst the legal challenges were cleared before they signed a $88.5m deal including $14.5m cash to ARC for an eventual 70:30 JV on our licences.

IMHO future diminishing copper supply vs. huge demand projections imply an epic supply crunch sooner rather than later so AAL will be VERY focused on finding that 'missing copper' & getting their money back ASAP.
Happy to wait
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@Hargreaves Okay, just concerned we were going down a funding/placing discussion 'rabbit-hole' again. My main observation with GCAT is that they are doing things "backwards" as unlike other Explorers they already have a mine and a modest revenue stream but need to improve mine output, exploration, plant throughput & efficiency plus MRE & Associated LoM.

Given GCAT now have a working mine with low and dropping AISC plus rapidly improving on all above fronts the current £11.8m MCap looks anomalous given a number of pure explorers with no of the above are worth more ... go figure!

Conservative Free Cashflow Actual vs. forecasts:
> Assuming POG $1,850 +AISC $1,150 (RM figure) +Q1=850oz/mth +Dec-22=2koz/mth +MCap=£11.8m
> Assume EXCLUDE expected AISC efficiencies from larger HL %contribution & fixed costs spread over more ounces
(1) £Cashflow/month in Q1 (actual) = 0.85koz x($1,850 -$1,150) x0.81 = £482k/m (£5.8m/yr) so implied P/E=2.03
> Equates to £239k FCF after $300k exploration
(2) £Cashflow/ month from Dec-22 = 2koz x($1,850 -$1,150) x0.81 = £1,134k/m (£13.6m/yr) so implied P/E=0.87
> Equates to £891k FCF after $300k exploration
Note: RM stated that exploration costs running at $300k/month or £243k currently being paid from FCF

Commentary:
Free cashflow is a very healthy £239k/month in Q1 AFTER $300k stated exploration/month especially for a Junior Hybrid Producer/Explorer/Developer with MCap @£11.8m. POG is currently being hit hard in a difficult market, but does well into tightening and recession especially as investment in gold & gold miners is globally circa 0.5% versus historic mean circa 3%. We can all see CBs repatriating their gold and competing to buy more says all you need to know.

Apologies Suggins I misread your post in response to Hargreaves
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@suggins Not sure where you are getting your information from as not seen anyone saying any of the things you are now positing:

Are you saying:-
- that this work to the main plant is now not necessary to meet the target = presentation says scheduled for Q3'22
- that the cost can be met from cash flow = £2m raised in Feb-22 & Cashflow already stated as being used for balance
- that the target is being reduced or = 2koz/month by Dec-22 reiterated on every call, RNS or presentation ... you decide
- the decision to raise funds is not going to happen anytime soon but will be soon enough to allow for the works it funds to be completed by year end ? = already answered this above. Any funding for new mine at Nyakafuru is separate

IMHO you seem to be bringing up 'fears' not based on anything I've read ... please correct me
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