Member Info for Daisan

Visitor, I fully expect gold to rise rapidly over the next 2-5 years and this will be translated into cash generation here. They are already generating cash before capex and interest at an annual rate equivalent to their market capitalisation which is far too cheap even at current gold price levels. Their hedging programme will result in a lag for a while but the higher prices will translate into further cash generation. I genuinely believe that this is materially undervalued now and that continued gold strength will only make that undervaluation starker. Perhaps my 'months' was too optimistic but I expect to see this many multiples higher than this at the height of the gold bull. And substantially higher than 2012's levels.

Looks like we may be getting ready to break out. Highest price for over a year. No reason this shouldn't beat the highs in 2012 over the coming months if the gold price continues its strength and production is maintained. Looking forward to the ride. Although judging by the board lately, it may be a lonely one!

So everyone agreed and happy! :-)

Eyeguy, I did say that you had it about right! A small punt seems reasonable.

8.88p paid.

EyeGuy, You are right that you don't hit a commercial find on the first couple of drills. That only comes about through an extensive campaign and modelling. However, it is quite common to hit reasonable grades on the first drills if there is a body to be found. I have seen many explorers hit decent grades and this encourages further drilling. If your first set of drilling hits not very much then there will be question marks over further drilling and investors will wonder whether it is worth funding another round. However, to be fair this is likely to be narrow vein stuff which is much more difficult. Anyway, back to the current situation. CON have hit something which is better than nothing. As such, it is worth holding to see whether they come up with better results from the next set of results. Probably not worth chasing higher though as the results were not sufficient for that. It sounds like you have it about right - a small amount invested as the likelihood is that this will not amount to much from this round of drilling but any significant find will send this sharply higher.

Strong currently as a result of the reaction to'the FOMC meeting (interestingly the initial reaction was sharply down). So now we have had a month's production at a gold price $60+/oz higher than achieved last quarter which equates to about an additional $300k to the bottom line without considering copper or silver. Keep this up and the quarter's results will be over $1m better than last quarter.

An interesting day tomorrow. Gold looking strong on the back of the FOMC.

Deepsurvey1, Having invested in gold miners for quite some time, I have followed a lot of these sites. They vary from the slightly mad to the downright insane. I put King world news towards the 'insane' side! It's a good read, as is zero hedge where everything is a conspiracy theory. As long as you go in with a very jaundiced eye they can be quite enlightening, however. Don't get me wrong, I believe that gold is likely to rise substantially over the coming years and I also believe that there is a good case for a sharp pull back, perhaps even to test the year lows. But you have to be somewhat sceptical of the media that follows gold as it attracts both ardent supporters and detractors!

Well, the Chairman is hardly going to say 'Damn, rubbish grades. That's the end of that then. Let's pack up and go guys' is he?

They are indeed too narrow and too low grade for a commercial find. By a long way. However, at this stage in drilling they are looking for signs of mineralisation and they have found some, albeit very weak. Too early to say whether this will lead to anything bigger although you would have hoped for better intercepts than these.

And yet there are clearly people who support the company despite all of the potential pitfalls and despite the fact that, when compared to other gold miners on AIM who produce a similar amount with similar resources, the enterprise value here is not that compelling. I have no doubt that, if they get their act together without giving the family silver away, the company will be very profitable in a rising gold environment. But so will other companies without the challenges that this presents and at a far lower market capitalisation.

Well, there you go. The $5m has been raised but at 5p per share. To be honest, I think that they got away lightly - the shareholders were probably in a position to screw much more out of this, especially since the last placing in March was at 2.9p. I was expecting a figure closer to this to be honest. It will be interesting to see if this is the end of the story, however, because the $5m resolved the immediate need but may just have succeeded in kicking the can down the road temporarily. All focus on operations now to see whether they have to go back for more. Still difficult to make an investment case in this as opposed to some other goldies.

Price movement is not representative of the trades and the stated price is due to a UT going through. Price could move just as dramatically the other way but would be just as unreal! Company remains stupidly undervalued but the obvious things that will move the share price - production, asset sale - do not look like happening so we have stasis. Share price unable to climb without news but doesn't fall as people can see a juicy return at some point. When that point is......

Over the last few months gold has been both positively and negatively correlated to the dollar. The run up at the start of the year was broadly correlated to the strengthening Yen. I have followed a technical analyst who has been calling for a drop in gold to $1000ish based on a strengthening dollar based on sound technical analysis and he has so far been wrong. He may be right at some point but currently it doesn't feel like that. Come on Deepsurvey1. Point us to some of these reports!

Deepsurvey1, I don't disagree that a pull back would be healthy for gold. But you keep saying 'consensus' and 'most technical reports' and yet I have not seen the 'finish below $1335 today' reports despite the fact that I do follow technical analysts on gold. And if the market is in consensus then that generally means the opposite is going to happen. The COT report has been at unsustainable levels for months, despite which gold has not dropped back. This may be due to 'one off' effects such as Brexit but these 'one off' events keep happening! The bullish percentage level for US gold stocks indicates overbought (in fact 100%) but the last time this was the case the miners went sideways. I shorted gold miners a few months ago based on this sort of data but stopped out because the miners kept on rising. The problem with stepping out of shares in a gold bull market is that you quite often end up buying back in considerably higher. Timing gold bulls is horribly difficult. Personally, I would have a core group of shares that are held irrespective and just allocate a proportion of your portfolio to trading.

Deepsurvey1, I have to say you sound a bit schizophrenic! This prediction could only be some form of technical analysis but I have not seen that kind of prediction around. Can you point to where you have seen this? There are good reasons for a gold (and especially US gold miners where the bullish percent is currently around 100%) pull back. It sounds a bit Elliott wave-ish. I followed an Elliott wave expert for a while and they tried to predict the movement of gold and S&P 500 each day. I calculated that they were right less than half the time i.e. they would have done better if they had randomly picked the direction each day.

I can't quite believe the market reaction to be honest. OK, it could be worse - we could actually be down. But what is going to move the share price? Will the market only take notice when we have more cash than market capitalisation? At current rates this is likely to be the case this time next year in which case you get a producing gold mining generating the company's market cap every year for nothing! I can only think of a couple of other gold mining companies that get anywhere near this in terms of value and this is the lowest cost producer of the lot of them. Very confused by the current share price. It should be twice or three times this now let alone considering what will happen in the next months/years.

And extremely good it is too! Highlights for me are $13m cash generated, $30m cash and net debt of $44m despite the high capex. Oh, and the extremely low cash costs which means that this performance when combined with the forward selling is pretty much guaranteed for the next 6 months provided they hit their production targets. These have been reiterated and currently I expect them to beat them. Amazing value here! Very predictable but the market clearly likes to be shown the obvious again and again. Valued at 1xfuture cash generation.

Indeed it is. A great company, one of the few that the UK has produced recently. Quietly dominant in its field - one that is growing and growing. Company brilliantly positioned. It would be a big shame to see this go owing to the pound's weakness. Opportunistic purchase.