Member Info for aprogerson

@JP You missed my main point which is ONLY using production for comparison then GCAT is 10% to 30% undervalued on current 10koz/annum production so is the MINIMUM. Sorry I did not spell it out more clearly but we are violently agreeing.
ATB APR

@Suggins I never said my comparison was perfect as I have taken a very simplistic view. The main 'issue' with GCAT is no one is sure whether to value it as an Explorer, Developer or a producer? ....

Kilimapesa, Kenya = Active producing circa 10koz/annum underground mine with 671koz resource at 2.4g/t gold subject to extensive refurbishment, modernisation/expansion of mine and processing plant BUT low confidence resources currently being drilled for infill/expansion to drive revised JORC and increase LOM.

Nyakafuru, Tanzania = Development stage project ready for open pit mine build with 659koz resource at 1.67g/t gold after 186km drilling plus Nyakafuru Reefs further 400koz at 3.56g/t subject to new JORC application & no current drill programme. No CAPEX yet raised to build this mine

Simba, Tanzania = Exploration stages project ready for open pit mine build with 320koz resource at 1.4g/t gold & no current drill programme. No CAPEX yet raised to build this mine but is 40km from Nyakafuru project so ore is truckable

IMHO at £15m MCap and a 10koz/annum production at Kilimapesa it looks like GCAT is currently valued at 10% to 30% under fair value compared to Shanta and AAZ with Tanzanian projects thrown in for free. HUM is a comparable with very high AISC so market has heavily discounted it, but once sorted I expect it to rerate so comparable to Shanta once again.

GCAT is doing all the right things in the right order focusing its capital on Kilimapesa to drive up resources, efficiency, plant throughput and gold production whilst driving down OPEX costs.
ATB APR

Valuation by comparison is a recognised method of valuation https://www.academia.edu/38597786/Valuation_of_Metals_and_Mining_Companies
GCAT now MCap=£14m +Prodn=10koz +MCap/Prodn=£1.4m +Resources=660koz & Grade=2.1g/t
GCAT Dec-22 MCap=£14m +Prodn=24koz +MCap/Prodn=£0.58m +Resources=1Moz & Grade=2.1g/t ... using todays MCap and forecast production & resources assuming no resource growth

& comparable Producers ...
AAZ MCap=£113m +Prodn=65koz +MCap/Prodn=£1.74m +Resources=TBCkoz & Grade=TBCg/t
Shanta MCap=£125m +Prodn=70koz +MCap/Prodn=£1.78m +Resources=1.5Moz & Grade=6.1g/t
HUM MCap=£70m +Prodn=90koz +MCap/Prodn=£0.78m +Resources=5Moz & Grade=3g/t

& comparable Explorers
Cora MCap=£23m +Prodn=N/A +MCap/Prodn=N/A +Resources=809koz & Grade=1.15g/t
Pasofino MCap=£23m +Prodn=N/A +MCap/Prodn=N/A +Resources=2Moz & Grade=1.58g/t

Commentary:
I have tried to use MCap/Production ratio to be able to compare producers based on their MCap and production only. This is fairly crude as it ignores AISC.

Production: GCAT is probably 10% to 35% undervalued assuming Dec-21 production annualised to 10koz/annum by comparing GCAT now to both Shanta and AAZ, but when GCAT hits 24koz/year it is probably 250% undervalued using this metric. HUM is an outlier as it has HUGE resources but very high AISC and lots of debt as it is currently building a new mine.

Developer/Exploration: If you ignore production then compared to Cora or Pasofino then GCAT is 30% to 45% undervalued.

Summary - I'm sure we could bring in other Producers, Developers and Explorers for comparison but on current resources or production GCAT is probably at least 30% undervalued and this undervaluation will grow rapidly as production output rises into Dec-22. Add in GCAT low AISC and the undervaluation gap will grow much larger as profitability would be much higher for GCAT.
ATB APR

@PP I think any revised JORC for Kilimapesa will actually be a large upgrade in terms of both size as cut-off grade is reduced from current 1 g/t to something more like 0.6g/t which at $2k POG and upgraded plant is now probably economic PLUS the infill and expansion drilling which will increase both overall size and confidence levels of resources. The extended LOM given much higher production levels is very important so a revised JORC will be unparalleled good news
ATB APR

@Bebeto Unfortunately I have to disagree ... GCAT is a producer and without the momentum it has then it would struggle to grow and raise the funds it needed. Now it has and is aggressively deploying those funds it is all about maintaining confidence which IS pinned on achieving the 6-month accelerated plan which in turn is what the extra £1m raised in Feb-22 was for so we hit 24koz/annum by Dec-22 as reiterated by last BoD comms.

Once GCAT hits 24koz/annum steady state it should then be able to go for debt plus free-cashflow as funding to develop 2x Tanzanian projects including a new process plant. GCATs low cash cost of production should also translate into a low AISC but that is currently obscured by BoD pushing any/all FCF towards hitting 24koz production target.

I think I've said before that GCAT IMHO is a rare beast that is really an Explorer/Developer with a small mine attached that pays for the growth rather than the BoD continually diluting investors to grow. Curiously I also view both AAZ and HUM through that lens even though their MCap is much higher than GCATs right now.
ATB APR

@RedRoy Yes you can follow the process flowsheets but there is a MUCH easier way to think of these 3 processes and that revolves entirely around grade. Once you have your head around this then you can see exactly why GCAT split the current plant, added a ball mill, added CIL, elusion and HL capacity which is all about upping throughput, efficiency and balance/resilience especially as GCAT have their own elusion plant so they sell Dore bars rather than concentrate.

Processing
1) Main plant = Input ROM ore > Ball Mill > centrifuge > Grind > CIL plant > Gold & waste to HL and/or Tailings
2) Heap Leach = Input low grade ROM ore & CIL waste + cyanide > reprocess > gold & waste to Tailings
3) Tailings plant reprocessing from prior plant processing to extract more gold from main plant waste

Read through recent RNSs and you'll see all areas have been or are in process of being refurbished, upgraded and/or introduced in order to dramatically increase both throughput to over 2koz/month Gold output across the 3 process areas hence why some activities look like a duplication, but as ore may travel through one or more of the above to get out optimum %gold that can be economically extracted given everything has an OPEX so there is a balance to be struck at any given POG. I strongly suspect GCAT have reserved the ability to add further parallel processing plant/stages at a later date to increase throughput given they will have massively increased FCF at 24koz/annum to fund the extra CAPEX required.

What GCAT have NOT talked about YET is the current mine plan and pit shell cut-off grades as I suspect that this had not been given much thought under Goldplat's 'management' particularly as the above plant upgrades are of little use if they cannot manage the ore in the ground, number of stopes and/or grades of ore being mined at any one time to match to above plant process.
Hopefully that helps rather than confuses
ATB APR

Succinct summary of holding and status plus some nice quotes on inflation outlook and holding commodities
NAV = £6m
Cash= £1m
MCap = £4m
Gun trading at 50% discount to NAV & 75% discount to NAV+Cash ... it official !
ATB APR

@RP Don't worry I don't like Mondays either
ATB APR

@PP I think the market will have looked at the recent POG and thought ...

POG is going down & back off miners because ...
> Double-Top in POG chart
> Very strong dollar DXY and weakening Yen and Euro
> It is a barbarous relic and pays no interest

POG is rising & load up on miners because ...
> Gold and Silver is money. CB tell you it is not and yet they are buying & repatriating it like crazy
> Paper gold & Silver massively under-prices metal with paper to metal ratio well over 1,000:1
> physical Gold & Silver is scarce & coins are at historic high premium to 'official' metals prices
> PPI is 20-40%+ & CPI Inflation is 7-9% and heading up quickly ... see any recent stats from any CB
> RPI using 1980s calculation is 15-20% and heading up ... see Shadowstats
> Interest rates should be 1-2% above inflation to bring it down and CBs will be bust at 3%+
> Real interest rates are deeply negative ... CB %interest rate minus %inflation = real %interest rate
> Bonds are guaranteed to be losing money after inflation
> less than 0.5% of investments are in PGMs & PGM miners whilst historic average is 2.5%+
> last 3 gold bull runs started after CB started tightening as inflation took off ... opps
> PGM miners are dirt cheap and still widely reviled despite (almost) ATH in metals prices
... and my favourite = it has no counter-party risk whilst the miners are leveraged to the metals price
ATB APR

@Seisnav Thanks very useful and worth pointing out that nearby Sentinel mine exists on grades around 0.5% Copper in case anyone thought that what they have found to date may not be economic ... the key will be demonstrating continuity of grade and at what depth by further expansion and infill drilling led by the Major.
ATB APR

@SofG Would love to know who the seller is but regardless they are being soaked up by buyers and SP has now broken its downtrend from last Aug-2021 RTO/launch and testing 1.025p resistance

The recent Double-Bottom and lengthy consolidation as new investors come onboard is going to create a very firm price floor ahead of Q1 2022 Operational Update due in next week or so
ATB APR

Rincon SP broke out this morning S0.17c to A$0.21c before settling up 9% at A$0.187c after last weeks resumption of drilling at Hasties.
ATB APR

We have been trading in the 0.875p to 1.025p range on the weekly chart for the last 6-7 weeks. Following the recent 'Double-bottom' at 0.875p I expect trading to tighten up between 0.9p and 1.025p before GCAT moves through resistance at 1.025p on receipt of Q1 2022 Operational report which given very positive HL pad news should be very positive for the SP.
ATB APR

@Appletree As I have also previously pointed out the shares in issue numbers don't seem to add up, but I have always thought I was just missing something.

... and agreed a TVR would be very useful to clear this up as it directly affects the MCap calculation = TVR x SP.
ATB APR

WOW ... so a 5kt/month HL pad just completed its cycle in 14 days rather than 60 days as expected. If repeatable doesn't this just quadruple their production throughput ? RNS @22-Mar-22 states "The first 5,000tpm pad for the heap leach operation has been completed, loaded with ore and is being commissioned. This first heap leach pad will act as a 'pilot plant', with the full heap leach plant operation to be expanded up to a capacity of 20,000tpm."

This implies a total of 4x HL pads when fully built to give 20kt/month with 'capacity' of 5kt/month per HL pad AND they have a 5kt 'lift' then this implies a 30-day cycle not 60 day as per todays RNS !

Commentary:
Perhaps I'm misunderstanding what these 2x RNSs are saying about the HL pad/s, but for me a 5kt lift on a 5kt/month capacity pad implies a 30-day rather than 60 day cycle or GCAT are confusing throughput with physical HL capacity. Either way IF the cycle time is 14 days rather than 60 days then throughput has either doubled or quadrupled depending on how you interpret what the RNSs actually mean when using the 'capacity' term.
ATB APR

... also don't forget investment is gold is at historic low of 0.5% of global investments in gold and gold miners versus 5% historic average implying lots of upside with mean reversion and/or higher gold price

Don't underestimate the impact of Russia's 5k Rouble per gram of gold fix equating to 155.5k Roubles per Ounce of gold. This was a 3-month deal but Russia has removed fix, but has firmed Rouble to 0.013USD implying $2,021/ounce, also creating lots of arbitrage from gold to Russian oil which is hovering up gold and will drive it higher.
ATB APR

I am hoping that the big seller has now finished going into tax year-end and the bulk of the churn is now over
ATB APR

My expectation is that the Copper will not be touched until a reasonable JV offer is made or GWMOs SP is much higher due the the amount of expensive deep drilling likely required to prove it up to an economic size ... unless of course copper decides it is going to 'do a Nickel'.
Until then we have our multi-licence gold/silver tailings processing & drill programme getting underway.
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@CM Thanks for the response and appreciate your forthrightness especially as I am not on Twitter or TG.
ATB APR