Member Info for BPat890

Hope you dumped CCZ earlier, down 18% today

I think once the cash position shoots up to £25m post JV settlement the market will wake up to the opportunity here.

£45m valuation is bananas!!

Nice summary VanVan and exactly why I've placed a couple of buy orders today around 4p so we'll see if they are filled later this week or next. Nothing wrong with a bit of coordinated buying between fellow holders. If anyone else is thinking of adding at around these levels make your voice be heard.

It won't have much of an effect on support if gold falls through $1700/oz and continues to sink but I believe we are about to see a reversal with US yields topping out and USD nowhere left to go but down as soon as $1.9 trillion stimulus passes

* the central theme of Powell, bond yields and unemployment

Reading that for lunch Dark Knight cheers

To follow on with the central theme of Powell, bond yields and

Jobless Claims and Powell to set the tone

The increasing unease about the path of interest rates will ensure a sharp focus on Federal Chairman Jerome Powell’s speech at 12:05 PM ET, his last scheduled appearance before the Fed’s top brass enters its usual pre-meeting quiet period.

None of the Federal Open Markets Committee’s most influential members have signalled any real concern about bond yields so far in their public comments, focusing rather on the underlying weakness in the labor market.

That is likely to be on show again at 8:30 AM ET, when the week’s jobless claims are released. Analysts expect a modest increase in initial claims to 750,000. U.S. durable goods orders data for February are out at the same time, while the Challenger Job Cuts survey for February is due an hour earlier.

Keep shouting from the rooftops

Fresnillo's net debt was $97.4 million as at 31 Dec 2020 down from $463.4 million as of Dec 2019

Likely will be sat in net cash by end of March.

Aren't holders (old and new) slightly concerned by the need to raise money on the market with gold trading north of $1800 last quarter but currently $1725 now? Maybe I missed something but operations struggling in current pricing environment will probably continue to struggle if gold's downtrend continues. I gather SRB are debt free or soon to be so it begs the question why did they raise funds at a discounted price?

Smart move at these levels. Blackrock following you in is a bonus ;)

This price screams the old English proverb: Never look a gift horse in the mouth. Don't question why, just buy.

Elsewhere in the industrial world Japan’s economy is supported by a government debt-to-GDP ratio that hovers around 250 per cent and long-term real rates of less than minus 1 per cent. Europe has seen a reduction in the ratio of government debt to GDP in recent years but like Japan has received extraordinary stimulus from sub minus 1 per cent real interest rates and increases in the flow of private sector credit. Even with this stimulus Europe and Japan have struggled to achieve 2 per cent inflation.

What we are seeing is the achievement of fairly ordinary growth with extraordinary policy and financial conditions. Something similar took place in the years before the Great Recession.

Whether this is sustainable depends on several factors, not least whether private sector demand will autonomously increase as the financial crisis recedes so growth can be maintained with less unorthodox policy and exuberant financial conditions. Perhaps it can, but it is more likely that a combination of rising inequality, slow labour force and productivity growth, and greater competition from developing countries will keep private sector demand subdued.

There is also a question over whether the current policy mix and financial conditions can be maintained indefinitely. This is doubtful for fiscal policy especially in the US. Monetary policies involving low or negative real interest rates may be sustainable over the long term but they are likely to encourage financial risk, unsound lending and asset bubbles with potentially serious implications for medium-term stability.

The greatest concern remains over whether the next downturn can be handled. Traditionally the response to recession in the industrial world has been fiscal expansion and a 500 basis point cut in interest rates. But the fiscal cannon has already been fired in much of the industrial world leaving policymakers short on ammunition.

So secular stagnation as an issue remains very much alive. Current palliatives are appropriate but unlikely to be long-term solutions. The industrial world can hope that investment demands increase and saving needs decline. But policymakers must turn their attention to demand as well as supply issues going forward.

https://www.ft.com/content/aa76e2a8-4ef2-11e8-9471-a083af05aea7

The threat of secular stagnation has not gone away

Unemployment in the US is below 4 per cent and growth in the economy is accelerating. By recent standards growth in Europe and Japan is also strong. In these circumstances many believe the idea of secular stagnation can be written off.

Certainly if the phenomenon is defined as the fatalistic view that the economies of the industrialised world are condemned to suffer permanent stagnation with high unemployment, then we are obviously not in a moment of secular stagnation.

However, this is not what Alvin Hansen intended when he coined the phrase, nor what I had in mind when I sought to revive the concept in 2013. Rather the idea of secular stagnation is that the private economy — unless stimulated by extraordinary public actions especially monetary and fiscal policies and, or, unsustainable private sector borrowing — will be prone to sluggish growth caused by insufficient demand.

On this interpretation, the past few years have confirmed the hypothesis.

In the US the Congressional Budget Office forecast, which is comfortably in the mainstream, calls for annual growth of 2.5 per cent over the next three years with growth of 3.3 per cent during 2018. But what is necessary to support this growth? As far as fiscal policy is concerned, the CBO projects growth in actual budget deficits of more than 1 per cent of gross domestic product in 2017-2019, with substantial further increases over time and the most rapid increase in the debt-to-GDP ratio during peak business cycle times than has ever been seen in peacetime.

In terms of monetary policy, indexed bond markets imply that real interest rates will be kept well below 1 per cent for the next 30 years. Meanwhile the economy has been supported by a stock market that has returned 22 per cent in 2017 and an average of 16 per cent over the past five years. This while private sector debt has grown relative to GDP.

If budget deficits had been at normal levels and not growing relative to the economy, real long-term interest rates had been steady in their customary range above 2 per cent and an extra $10tn in wealth had not been created by abnormal stock market returns, it is hard to believe that the US economy would be growing much at all. And it is almost inconceivable that it would be near its 2 per cent inflation target.

* we should hold 30% across GDP and Mayflower prior to the placing, the Board hold another 30%

https://static1.squarespace.com/static/5f4faf276217c27eb3470ca9/t/6033c8eab139980fcf1bfdf4/1614006509877/Caracal+Gold+February+2021.pdf

It's not clear at this stage but the key points are
- It looks almost certainly like GDP's holding company GMR will receive shares at a discounted price in Mayflower
- Mayflower will 'reverse-list' (into Caracal) and seek to raise $4m from the market to further develop Kilimapesa
- The capital raise will likely be at a premium to the value both GDP and Mayflower have already invested, which is at least $450k since the revival plan was enacted (between the two companies)
- As the project is already producing and ramping up with 200 employees as of last month I believe Caracal will list with a market value of around £6-8 million and we should hold a 40-50% stake prior to the placing.
- With a capital raise of roughly $4 million (roughly £3 mil) Caracal Gold will probably be valued at £10m and our holding via Mayflower diluted to 30-35%
- The reason this works so well for GDP holders is Caracal Gold's intention to place shares (possibly with PrimaryBid) upon listing and this will be at a premium to what GMR agreed should be the subscription price for the $1.5m worth of Mayflower shares.

https://www.miningweekly.com/article/london-listing-on-way-as-mining-company-strives-to-become-green-gold-producer-in-kenya-2021-02-15/rep_id:3650

Amazing KEFI has held up this well considering drop in gold and the missing financing. Has there been an announcement delaying first production to beyond 2022 yet?

39p to buy now and a fair few shares have already been taken at that price today. Could we breach 40p level today?

Pan African Resources’ (PAF) interim results to end-December 2020 were reported in the context of already known production and were well within the range indicated by its JSE paragraph 3.4(b) announcement of 8 February.

EPS and HEPS almost doubled in the period to 2.11c/share, albeit this included an (effectively) exceptional loss from the last of PAF’s hedge programme, which if excluded would have increased EPS and HEPS to (we estimate) 2.46c/share (see Exhibit 2).

Moreover, this result was achieved despite a 21.7 percentage point increase in the effective tax rate as a result of a material deferred tax charge for the first time, which if excluded would have increased normalised HEPS still further, to 2.93c/share.

Assuming a similar performance in H221 would imply a normalised P/E ratio for PAF of just 5.7x in FY21, well below the average of its peers (see Exhibit 6).

Underground grades back to where they belong

Particularly notable within the detail of the results were the head grade mined from underground operations at Barberton, which we estimate to have been 11.25g/t (cf the 8.79g/t that we estimated in H220 – a 28.0% increase) and the head grade recorded at the BTRP and Elikhulu, which were also both above our expectations, albeit these were partially offset by early teething problems at the Evander 8 Shaft Pillar project (eg a ventilation shaft lining fracture), which have now been rectified. Subject to the unexpected therefore and given that it produced 98.4koz in H121, we regard it as extremely unlikely that PAF will fail to achieve its FY21 production target of 190koz for the current year (see Exhibit 1).

Valuation: 38.41–43.43c (27.62–31.23p) per share

Since our last major note on PAF, the rand has appreciated by 12.4% relative to the US dollar, from ZAR16.5113/US$ to ZAR14.4578/US$, which has contributed to an albeit lesser 5.7% reduction in our valuation of the company to 38.19c (27.46p) based on its four currently producing assets plus Egoli. To this must then be added the value of c 19.2m underground Witwatersrand ounces, which we estimate could lie anywhere in the range of 0.22–5.24c per share, plus PAF's other assets to take the total to 38.41–43.43c/share. As an alternative means of valuation, if PAF’s historical average price to normalised EPS ratio of 9.1x in the period FY10–20 is applied to our FY21 and FY22 forecasts, then it implies a share price of 27.6p in FY21 followed by 35.4p in FY22. On the basis of its FY20 dividend and our forecast FY21e dividend, it is among the top 20 yielding precious metals companies globally. In the meantime, investors can buy the shares on a resource multiple of only US$13.86/oz and a reserve multiple of only US$47.79/oz.

https://www.edisongroup.com/publication/record-interim-profitability/28966

Take a chill pill man, whatever someone said, it's not worth getting so wound up over.

It is odd timing to announce this mistake now, I wonder how long they have known.. The share buy back coming in the same week, it seems rather coincidental although as Battersea mentioned the price of gold is having an effect too. We produce some silver too though I think so that should be cushioning the basket price. Hope we start to receive more positive news, in the lead up to quarterly results. Probably going to be poor in comparison to the average quarterly production last year but still very profitable.

With the rising copper price aren't the company fairly sheltered from the recent weakness in the gold price? I think copper must account for 20-25% of revenues, silver is probably around 10%. As aprogerson posted below the costs per gold equivalent ounce are very low.

Hoping we see another feeder pit brought online later this year and a push towards 100.koz production as we just seem to be standing still.

The final results read well! The beginnings of a new dividend paying era for Shanta, the amount is secondary as that will increase in time. Profits up despite those pesky hedges through all of 2020. Well no more, we should be making more money this year even if gold falls back 10% from here.

I'd like to know more about timescale of when production will increase from current 80,000 ounce levels, presumably once West Kenya has been commissioned. Or is there another project being brought forward sooner?

Supply-constrained rhodium to potentially see more upside after all-time high

What's happening? Rhodium base prices have surged above $25,000/oz for the first time. The precious metal has been on multiyear bull run, rising forty-fold since mid Aug 2016 when it stood at $625/oz.

The latest rally was caused by supply shortages from South Africa, which accounts for around 80% of global rhodium mine supply; an existing deficit; and strong buying from China and Europe due to stricter auto emissions regulation.

Nearly 80% of demand for rhodium comes from the global automotive industry, for catalytic converters to control emissions of greenhouse gases and pollutants.

What's next? Rhodium is a by-product of platinum group metal mining, and there is talk of projects in the sector that have been abandoned or cancelled, such as Stillwater-Sibanye's K4 project, coming back into play.

However, market sources say mining restarts and new projects can take years to reach full production. Given the volatility of rhodium prices, analyst have suggested the increase in prices to continue in 2021.

https://www.spglobal.com/platts/en/market-insights/blogs/metals/030121-ct-rhodium-price-spike-styrene-polystyrene-ethanol-crude-oil

I'd have thought commodity inflation as a result of demand supply pressures will remain constant because of China and any price shocks will be bought up. I can't get my head around the size of these market pressures but if the economy is generally rebounding and the global economy comes roaring back I agree it should be good for all metals. I like BMN's outfit in S. Africa but vanadium hasn't jumped much in the past year. Soon fingers crossed! :)