Member Info for Daisan

Visitor, I doubt that there is an issue here. The last report indicated that they have ROM inventory of 190k tonnes which should give them a solid base to build H2 production. But I doubt whether H2 will match H1's production figures given the company's guidance.

Visitor, Agreed re: the hedging. Gold bugs in particular will mark down a company that has a hedging programme. Indeed, the HUI index is composed solely of unhedged gold companies. But in my opinion people have got the wrong end of the stick regarding hedging. The real downside of hedging is not missing out on the additional revenue should gold rise (after all, the hedge is essentially an insurance premium so you accept the cost for the security) but rather the fact that companies in the past have hedged too much and have then suffered production shortfalls. This has meant that they have had to buy in the open market to satisfy the counter party at a time when they don't have the cash. Some companies have got this so wrong that they have gone bust. In Shanta's case there has historically been a valid reason for hedging, namely to ensure that the debt can be supported and I believe that the debt covenants have required it. However, there will come a point when the debt burden is such that they will no longer feel the need/requirement for a hedge.

NMH19, SHG has not historically had the volatility to execute short term trades although that doesn't mean it won't at some point. Given its market cap. it is unlikely to behave in the fashion of most of the dogs on AIM. The reserves here are significant but they have only scratched the surface I believe. There is great potential for increasing the resources massively here to an extent where a major should be interested or, if not, to increase the production significantly whilst ensuring that the 7+ years mine life remains. They are piloting production at Singida from Q1 2017, which even in pilot is going to add 10k oz. But Singida has a resource in itself of 858k oz and could easily support a 50k oz per year operation. The cash costs are very low so even a slump in gold prices will not destroy cash generation (SHG hedges as well). But look at the AISC - in the $600-700 range makes this one of the lowest I know of. They are constructing their own power plant (with the money to do it) which will further reduce cash costs/AISC. Historically debt has been the concern whilst they are trying to significantly enhance the operation. But the cash on hand was $30m as at the end of June and they are generating cash at a substantial rate - $14m last quarter despite the fact that there was $7m capital expenditure. This has meant that net debt has reduced greatly whilst still ensuring that they have the capital to continue to improve the operation. All in all SHG looks like it is going to go from strength to strength in the coming months/years with production, resources, reserves, cash generation all improving and the likelihood of debt decreasing quickly. Any downsides? Well, they are paying a high interest rate for their debt, which is annoying, they are developing new operations which always carry a risk and they operate in a region which is not Australia/Canada/etc. so there is always an element of sovereign risk. But currently the opportunities look far greater than the risks and this should be worth a lot more than the current market capitalisation.

Illunga is beginning to shape up pretty nicely. A four fold increase in resources with the deposit remaining open at depth and along strike. Increasing grade at what was already pretty high grade. To put that into context, this could now support an operation that is producing an additional 20k oz per year and I suspect that the resource is going to grow considerably from here. Shanta is looking like a major deposit.

Zanthrus, It is a rare person on these bulletin boards that admits they are wrong so kudos for that. Yes, the production looks to be off a bit but as mentioned by HiroshimaTwinkie, this is dore. Even so it is low so it will be interesting to see the reason for this and whether it impacts the whole quarter. That said, even at these levels AAZ will be cash generative given the current gold price and if they achieve their target production it will be seriously cash generative.

Seems to have stabilised after bouncing strongly off 1300. I was suspecting a bit more of a correction given the fact that it fell through important technical support. Assuming the price does stabilise at this level then the outlook for SHG still looks very bright.

The share price is strongly linked to the gold price. As a result of the perceived threat of the Federal Reserve raising interest rates which has increased the value of the dollar, the gold price has softened lately. Ergo, the share price has drifted down. AAZ have hedged their production so should not be greatly affected by a weak gold price in the near term. However, I suspect that most investors on AIM are not sophisticated enough to understand that so the share price will continue to drift if gold continues to weaken.

Indeed. The article looks like it was one of those computer generated garbage reports and it seems to have got completely the wrong end of the stick!

Code 1s are a myth. If you search on Google there will be all sorts of explanations you will find so I decided to do a little bit of research myself and look for RNSs subsequent to 'code 1' signals. I found no correlation on a number of companies between the signal and the release of an RNS.

David, True, it is cash and cash equivalents but virtually all those cash equivalents are in POLY which is pretty liquid. And as pointed out, 26.7m euros is £23m. In your own immortal words 'Dear me'.

No it isn't David. It was 26.7m euros as at the last report.

I noticed this from ASA's recent production report but forgot to report it: "Average realised fine diamonds sale price was up by 155% for Q1 FY2017 at US$ 55.90/ct, compared with 21.95/ct in Q4 FY2016" Whilst the quality of the stones is low, it is indicative of a pick up in prices in the last quarter at the lower end at least which should be reflected in the prices received for tailings stones. Diamond prices are a bit of a lottery but I can't believe that only lower quality stones have experienced such an uplift.

By the looks of things he picked up Trans Hex for little more than cash on the balance sheet. The assets, such as they are, were picked up for peanuts. I say 'such as they are' as the primary assets seem to be performing pretty poorly, hence the low value attributed to them.

No, not doubled. It was 'only' 71% higher! And cash costs have more than halved. Nothing we didn't know already but great to see it in black and white. Great results and I expect them to beat their production forecasts. The stockpile of $18m of ore should ensure consistent production going forward. Just a great, consistent performance and should be valued much higher.

NMG has the potential to be a large scale, bulk tonnage operation. The costs per ounce will be high but in a rising gold price environment it has the potential to provide a highly leveraged play which provides the best potential returns. However, high risk as well should the gold price not reach the levels I anticipate. I can see that AAZ rising sharply would put off investment. However, it remains one of the most compelling valuations on the market with a great deal of exploration upside as well. Agreed around the AISC. I have no idea why this is not published, although when I started investing in gold miners nobody published the AISC. The cash costs, however, are indicative of a robust model made even better by the devaluation and, as you say, this is resulting in debt being paid down rapidly. I believe that the exploration potential of both AAZ and SHG is excellent with the potential for 5m+ oz at both. SHG is the lower risk option owing to its incredibly low cash costs/AISC which makes it very cash generative even at much lower gold prices. ASA also looks interesting although it is a much less reliable producer and, hence, is likely to remain at a discount to its peers.

NMG is a bit of a mixed bag. On the one hand the asset it has looks promising but the manner in which they have stated they will exploit it is dubious (forget the resource definition and go for production) and they have now done a u-turn on this. These sort of changes make you question the capability of the leadership team. I have a few NMG but if they are going to go a more traditional path now, they will need a lot more money. They are a bit of a punt but not in the same investment class as the likes of SHG or AAZ.

I thought it was $1335 Deepsurvey1! I seem to recall it went through that and the trap door didn't open last time.

Yep. SHG has been hardest hit. So, either it is the worst affected by a fall in the gold price (it isn't) or the recent rise has been built on speculators (apparently). Which is somewhat disappointing.

So, all of the gains here for the last couple of weeks are wiped out in 10 minutes over something that has very little immediate impact. And from what I can see SHG is one of the worst impacted despite the fact that it is one of least affected!

And now we have some sellers on the back of the US jobs report. I suppose that it wouldn't cause them to pause by mentioning that SHG hedges a fair proportion of its production.