The latest Investing Matters Podcast episode featuring financial educator and author Jared Dillian has been released. Listen here.
The next RNS could say, "we've mined the grades/tonnage as per mine plan and are we're now good for the next quarter at least", or "there's no gold, we're calling in the administrators"
living on a knife edge is no fun.....
1/5th of my SIPPS are in this. Short to med term I guess I'm not too bothered that the SP is now a fair bit below my £1.07 average as I'm planning to top up regularly if it stays below £1. Longer term it would be nice to see £1.20+ again
I'm sure most here are already aware of this, but incase not -
https://www.reuters.com/world/africa/nigeria-commission-dangote-refinery-crude-supply-concern-2023-05-22/
Yes, I just happened to notice the RNS, which was late, at a couple of minutes past 8. I thought the market may view it as a positive that the deal was still very much still alive, so topped up at a quid with some loose change sitting in the account. 7% up today so happy days!
"the ability for scotgold to continue as a going concern is entirely dependent on the quantity and grade of ore that is produced ''
Most miners, even juniors, are mining on a significantly larger scale, accessing multiple faces simultaneously. If 1 or 2 from 10 faces, stopes or whatever provide disappointing results it's not usually the end of the world. Most miners will also have sufficient working capital so are not existing "hand to mouth". Therefore the worst they are likely to declare after a bad patch is a bottom end of guidance or below guidance result, disappointing but no real drama. I think it's obvious that Scotgold is in a very different place so does not have such luxuries.
SP is down 20% over the past month. I certainly don't think the company is now worth 20% less because they had some production issues in Q1 and the Bilboes oxide project is not turning a profit. None of this will be relevant when Bilboes is in full production and the company is churning out 200,000 oz +
Opportunity for me to top up....
Considering what they've achieved in the past six months - closing the Bilboes deal, acquiring Motapa...plus the increase in POG, I'm surprised the SP has not performed better.
Still, I'm planning to hold, and increase my holdings in the dips. This will surely re-rate as Bilboes goes online and their total annual production ramps up from 80,000 to >200,000 oz. A fair while to wait maybe, I don't think a timeline has been put on Bilboes yet but I'm sure it will be announced fairly soon as I think they're due to complete the feasibility study anytime now?
Ball park I think they need to produce about 10,000 OZ/year to break even at current POG
That's only 42% of their target production rate of 23,500 OZ. Surely it cannot be that hard to achieve 50% of target and make this a viable business at this gold price?
I do hope so, but let's see. I never count chickens anymore.......
So often I look at my portfolio and think...this one can really only go up.... this one should be a 2 bagger within 12 months etc etc, only to see an overall loss!
With Hum it was usually rain at Yanfoliia that used to put a dampener on things and push the AISC above the POG!
Kouroussa has only just entered the commissioning phase so still some way to go yet, but so far so good....
I first invested here almost exactly 2 years ago at around 23p, after I thought we'd already reached the floor and were on the up, LOL.
Bailed out a year later at 13p, nursing about a £25K loss if my memory serves me well.
Went back in quite heavily with 1/2 million shares at about 8p in August 22, only to see it drop again, to the 5's...oh bugger I thought!
I've taken some profits on the way back up, but now at almost 20p I have more than reversed my precious losses.
There must be less eventful way to make money on the stock market!
I think the point, from the extract from RNS below, is that if grade or quantity of ore mined/processed/sold drops much below what's factored into the mine plan they may be unable to continue as a going concern.
"For the period ended 31 December 2022 the Group recorded a loss of $9.5 million (2021: $5.6 million) and had a working capital deficiency of $4.8 million (2021: $13.0 million). The Group recorded net operating cash outflows of $0.1 million for the financial period (2022: $1.7 million). The cash position of the Company as at 31 March 2023 was £8k.
These conditions indicate a material uncertainty that may cast significant doubt over the ability of the consolidated entity to continue as a going concern and therefore its ability to realise its assets and discharge its liabilities in the normal course of business.
The ability of the consolidated entity to continue as a going concern over the long term will remain dependent on the quantity and grade of ore mined and processed being within a reasonable tolerance of the forecast quantity and grade and adherence to the planned product shipment schedule."