Member Info for aprogerson

Just checking my daily and weekly POG charts drawn from high early Aug-20 and early Jan-21 and now sat at or just below this 'breakpoint' @$1,855 to $1,865 with POG just touching $1,855 overnight.

I think everyone will be watching $1,860 which is the figure that gets referred to most ... if POG closes and holds above $1,860 then things might get exciting very quickly!
ATB APR

@TornadoTony Just checking my daily and weekly POG charts drawn from high early Aug-20 and early Jan-21 and now sat at or just below this 'breakpoint' @$1,855 to $1,865 with POG just touching $1,855 overnight.

I think everyone will be watching $1,860 which is the figure that gets referred to most ... if POG closes and holds above $1,860 then things might get exciting very quickly!
ATB APR

@Bushy Well said, that is EXACTLY why I am invested for BOTH Kouroussa and Dugbe coming onstream over the next 2 years or so. If you take a quick look at Resolute Mining (RSG) sat at £340m MCap and produces 340koz with similar AISC guidance and geography albeit producing from Syama, Mali and Mako, Senegal. HUM has one producing asset in Mali at 100/110Koz production, but only £70m MCap.

Simply RSG trades at 4.8x HUMs MCap yet only produces 3x gold despite RSG having substantial debts and HUM virtually none. If HUM can sort its AISC 'problem' and was valued 'on par' to its peer group RSG then a valuation north of £115m or at least 60% higher looks achievable everything else being equal at current gold price.

Bang for buck HUM looks a far better deal over the short to medium term especially once you factor in the relative debt position of HUM's $4.6m relative to RSG's $223m at end Mar-2021. RSG is struggling to raise cash since Bibiani sale fell through whilst HUM has no such problem as debt will be repaid by end Jun-2021.

I put my money where my mouth is when I reinvested in HUM recently (it was RSG vs. HUM) ... if only Mr Market would appreciate the difference more in HUM's favour !
ATB APR

It looks like DXY dropped and reversed up through neckline resistance around @90.6 on CPI news last week. DXY has reversed back down again and currently sat below neckline resistance @90.3. If my daily chart is correct this looks like a 'bear flag' reversal in an ongoing dollar down-trend from 6-Jan-21 @89.1 indicating further dollar weakness may be on the cards with my target of @87.3 last seen Nov-2014.

IMHO having (1) Dollar weakness +(2) artificially low interest rates and (3) rising inflation will drive real interest further into negative territory weakening both bonds and growth (Tech) stocks. Under those circumstances it seems inevitable that gold and silver will benefit given the backdrop of increasing physical metal demand vs, massive paper short positions especially in silver.

I really like the fact that AAZ produces gold, silver and copper with large exploration upside especially in copper. I do hope AAZ can produce a decent update on the state of its newly returned licence areas particularly the existing 120koz/annum Zod 8Moz gold/silver mine in Soutely.

We could do with some proper no ifs or buts good news!
ATB APR

I'm now to the point where I just want a deal done as long as it includes ARCM retaining Kalaba plant and associated copper/cobalt ore body so we can generate FCF and fund our own exploration whether it be Zaco/Zamsort and/or Botswana.
Our Zambian licences are so big there must be enough room for us all to profit handsomely from this.
ATB APR

Follow-on post also from 8-May exploring why SC is delayed by 2 months and implications for addition of Cobalt recovery in Kalaba plant .... Hint, IMHO it is all about the process flowsheet being developed and impact on FCF is profound !
All assumptions used are taken from RNSs and recent ICs
---
"Interestingly it seems that the size of the intended plant has not changed since Dec-20 RNS, but very tellingly the Scoping Study was expected in 2 months from IC @15-Feb implying mid Apr-21, but update now expected a further 2 months later. I strongly suspect they are now accounting for recovery of the substantial Cobalt in the Kalaba/CE ore as mentioned on IC @5-May-21. By my calculation a possible 900t of Cobalt sounds trifling but at $45k/t it adds a whopping +75% uplift to the £37.5m copper FCF taking it up to £61m FCF overall when included ... that is some by-product credit, but is notoriously tricky to extract as it is a finely-tuned multi-stage process from what I've read up on so far!

Valuation wise I'm postulating that up to 2x the current £71m MCap could be supported by the 1Mt/annum Kalaba copper/cobalt production plant at todays metals prices and info gleaned/assumed. My numbers suggest Kalaba would generate £61.5m FCF probably from H2-22 as the ore throughput & process flowsheets will take some time both ramp up and tweak. Interesting IC @15-Feb-21 said that CE ore is soil & clay due to weathering so is more an 'earth moving' than mining exercise implying easier to build mine and process ore keeping both CAPEX & OPEX modest as it is also relatively shallow so I am expecting an open pit operation with a low strip ratio when Stage 2 of the SS is issued. https://investingnews.com/daily/resource-investing/base-metals-investing/copper-investing/strip-ratio-western-copper-gold-nemaska-lithium/

Clearly the above absolutely no account of anything else that we do so is a starting point, but if ARC can get to production quickly into a rising copper/cobalt price and use this FCF to fund further exploration avoiding dilution then they have a very rosy future ahead of them as they have the means to self-fund and/or JV as equal partners as they can pay their way."

If all the above comes to pass then the $10m CAPEX cost becomes a trivial 2-3 months at full 3kt/day throughput. I would then expect them to add a parallel processing plant once they have the flowsheet optimised and at least double the throughput which is another reason I think the Scoping Study is taking longer as they want to build in expansion space in such a way as it can be 'bolted on' rather than have to redesign/move existing to accommodate it. This way Plant A can continue at 100% whilst Plant B is added and commissioned.
AIMHO & ATB APR

Sorry useless post editor said I had 5 characters left and still truncated the post!
ATB APR

@Kully as per my 8-May post below I get 1Mt ore/year =7.7Kt Cu and 900t Co for £61.5m FCF @£10k Cu & £45k Co
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Given latest IC @ 6-May-21 plus latest $10k/t copper & $45k/t Cobalt pricing my initial 17-Feb-21 post deserves an update:
From 13-Dec-20 RNS plus Investor Conference 15-Feb & 6-May-21 on Kalaba/CE Scoping Study:

Scoping Study Assumptions:
Production: start planned early 2022 & cashflow positive 'TopCo' in 2022
Copper Price: $6,500/t stated in Dec-20 RNS
CAPEX: RNS states $5-$10m whilst latest IC stated $10m CAPEX & funded via Offtake or Asset-backed loan
Plant Size: RNS states 3kt/day ore processed or 1Mt pa & IC @May-21 stated 1Mt ore throughput pa so no change

Finances @$6.5k/t Copper: $45-50m revenue & $25m Free Cashflow (FCF) stated on IC @Feb-21
= Implied metal produced = $50m revenue / $6,500 = 7,700t/annum metal from 1Mt ore = 0.77% Copper effective
= Implied production costs = $50m revenue - $25m FCF = $25m sum OPEX for 1Mt ore processed

Implied Finances @$10k/t Copper:
Assumed $10k/t Cu & 7.7Kt metal from 1Mt ore processed with $25m OPEX includes any CAPEX loan repayments
> FCF = (7,700t x $10k/t) = $77m revenue - $25m OPEX = $52m or £37.5m FCF per annum

*New* Brucey Bonus = Cobalt stated on IC @May-21 @0.1% grade of Kalaba/CE ore
Assumed 90% recovery as per several papers, but highly dependent on local metallurgy & flowsheet used
Implied metal recovery = 1Mt x0.1% x90% = 900t/year
Implied Finances @$45k/t = 900t x$45k/t = $40.5m or £29m FCF as cost assumed picked up in plant OPEX above

Commentary:
It seems that CAPEX is now forecast near top-end of initial Dec-20 estimates @$10m and Scoping Study taking considerably longer to complete than envisaged even back on IC @Feb-21 of 2 months max. as now expected end of June-21. IC @Feb-21 stated significant works testing gravity, flotation, magnetic and leach flowsheet elements on a number of bulk samples was underway. Latest IC @May-21 stated 0.1% Cobalt in CE ore being used at Kalaba plant which at current price of $45k/t makes an enormous difference to the plant economics, but adds significant extra flowsheet complexities and doubtless to plant CAPEX and possibly OPEX costs due to add processing costs.

ARCM Valuation:
One valuation method is FCF multiples and using Junior African gold producers (PAF, HUM, RDG, SG et al) gives a range of 2x to 3.5x. So using a modest 2.5x multiple the Copper only FCF of £32.5m = MCap £81.3m, but if Cobalt credits also included Combined FCF rises to £61.5m so implied MCap = £153m. Value of other licences, exploration and/or JVs NOT accounted for in these figures !

This is looking more and more like a "Goldilocks scenario" where ARCM can scale up production and/or exploration and/or JV as it goes for one or more licence/project areas and be internally funded from its own FCF. I would then expect minimal or no shareholder dilution and a rapidly growing SP and MCap going forward over the next 12-24 months as this un

It's good as it confirms that what is a very illiquid asset will be converted into a liquid asset in a quoted entity in the foreseeable future as set out in the original agreed term sheet. If GUN wishes to sell they can ... or not.
All good
ATB APR

Nice one @Brucey "Didn't he do well"
Fingers crossed for a timely confirmation RNS
ATB APR

Is it me or is it 'love a troll' day? Almost every BB I read they are out in force as FTSE takes a hit and most shares are red
Beggars belief ... I just have no idea what motivates these people ?!
ATB APR

@Bushy the graph from @Bonker says it all really. Everything gets slammed as traders try to cover margins et al so they sell assets where they can to do so including gold (cash). Once the panic settles investors reposition including a higher gold/gold equity allocation & given the US CPI figures that seems more likely than not now !
ATB APR

CNBC https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html

"Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008"
> The Consumer Price Index rise for April from a year earlier was the sharpest since September 2008.
> Economists surveyed by Dow Jones had been looking for an increase of 3.6%.
> One big reason for the acceleration was base effects – at this time a year ago, the economy was hit with the worst of the Covid pandemic and inflation was unusually low.
> Federal Reserve officials see the current rise as temporary and not likely to influence policy.

Interesting target for April was 0.2% and printed 0.8% ... but everything is okay, move along and nothing to see here
ATB APR

CNBC https://www.cnbc.com/2021/05/12/consumer-price-index-april-2021.html

"Inflation speeds up in April as consumer prices leap 4.2%, fastest since 2008"
> The Consumer Price Index rise for April from a year earlier was the sharpest since September 2008.
> Economists surveyed by Dow Jones had been looking for an increase of 3.6%.
> One big reason for the acceleration was base effects – at this time a year ago, the economy was hit with the worst of the Covid pandemic and inflation was unusually low.
> Federal Reserve officials see the current rise as temporary and not likely to influence policy.

Interesting target for April was 0.2% and printed 0.8% ... but everything is okay, move along and nothing to see here
ATB APR

@Bonker What time is the US CPI announcement due?

@Lukey If GWMO SP was 2p then that would imply £73m MCap which from my 'Comparisons' post yesterday would put us on par with ARCM. This is not impossible by year end, but IMHO would require:
> completion of current & follow-on drill programmes with full assay results
> outstanding confirmed long, high-grade intersects on one preferably 2 targets
> Updated Copper JORC or at least confirmed route to one given good drill results
> Confirmation of an interested 3rd party with deep pockets for Copper JV
ATB APR

@lukey thankyou that is what I have been saying for ages which is why the results were never reported.
It was all about the ABILITY to produce not the grade as I pointed out in several posts along with a rough example of what the dore bar size and grade would have been given what we knew.
ATB APR

Someone is keen as 0.265p paid at open
Anyway on my weekly chart the key price is 0.245p as that breaks resistance from what was support from Jul-2020 and also breaks up above resistance from what was support from Jan-21 @0.3p high. A close above 0.245p is positive and provides good support from a technical chart perspective.
AIMHO APR

@Alyhels Exploration companies acquire prospective licences and raise funds so that they can (hopefully) add shareholder value by finding stuff at a reasonable cost that can be sold at a higher price later.

Exploration is a 'wash & repeat' process as below:
(1) Acquire prospective licence/s, keep in 'good order' & raise funds to explore = Tick
(2) geophysics & soil sampling to narrow down where best to drill = Tick
(3) Drill, baby drill = Olympic Trafalgar target 6x holes drilled & onto next (confirmed in todays RNS)
(4) Send of drill core/shards to lab to assay = Underway
(5) Report drill results to shareholders = Awaited over next 2-6 weeks dependent on lab
(6) model soil sample, geophysics & drill results for more drilling and/or build high confidence mineralisation model to confirm JORC compliant resource estimate
(7) wash & repeat steps 1 to 6 as required

Really not sure what your problem is, but this is what Explorers like GWMO do and guess what ... they ARE doing it ! Many on this BB have tried to explain details you have queried and also that it is high risk high reward stuff. Exploration investing is certainly not for the faint hearted ... but it is what it is.
AIMHO & ATB APR

Nicely put @Chisler ... no trumpet necessary
ATB APR