Member Info for Daisan

norrab1, My point was that cash generation is the most important aspect when debt is considered to be the most significant factor holding the company back, as has been perceived to be the case here. I am happy to balance the argument (although that would be almost unique in these bulletin boards where balance is not often encouraged!) by acknowledging the net loss in 2015, which I assume you are referring to. If you look at the figures for 2015, rather than high operating expenses, you will note that there was a one off amortisation charge of $21m which drove the company into loss. Without that it would have been (marginally profitable). I prefer to look at cash generation and EBITDA as these give an indication of the current performance of the business. The latter was flat despite the lower gold prices and is set to rise significantly this year with the rise in gold as does the cash generation. Barring any further one off costs, the company should be profitable this year and we should see the debt begin to reduce.

Actually, just listened to TW at Share Prophets bearcast about MTL and I have to agree with his viewpoint on this. He is very gloomy and has asked his contributor to update the positive piece written the other day. TW's viewpoint is that MTL have a very weak position as regards the funding and that the 'major shareholders' who are being asked to stump up the $5m can drive a very hard bargain indeed. If that is the case, and I confess that I don't know who these shareholders are, then there is likely to be considerable dilution.

Tend to agree that the funding will be sorted but don't think that this offers as compelling value as several other goldies on the market. Having said that, I expect all gold miners to perform well in the next few years. Good luck with your investment.

The latest news isn't great though, is it? They can't come to an agreement to reschedule their loan repayments. No agreement yet on emergency funding and production delays (normal for start up operations) resulting in revenue not coming in. A perfect storm of problems. Add to that the market capitalisation is not exactly a give away - for example, both AAZ and SHG, more mature operations, offer similar resources and production profiles with less debt at much lower market capitalisations - and there is heightened country risk, it is hard to see that this is an open and shut case as regards investing.

This is why KDR should not be a target for the typical AIM investor. Timescales on this are extremely uncertain. It could be years before there is any return and even that is not guaranteed! Fully expect this to go back to sleep for another couple of years.

Cash generation is exceptionally important for any company but for a miner that needs to continue to explore and develop resources as well as service debt, it is essential. Hence, a company that can generate cash at a high rate should be valued highly. So consider SHG. In 2015 it generated cash of $35m. In Q1 2016 it generated $12m. I expect Q2 to be at least as good as Q1 and cash generation for the year to be more than $50m. To put that into context, SHG could be on not much more than 1x cash generation for 2016. This is ridiculous. The focus on SHG has been its debt. To think that a company generating so much cash cannot support its debt is incorrect. The fact that they are kicking off Singida is indicative that they are confident that the cash they are generating is sufficient for development and debt maintenance. In fact, with the rising gold price being reflected in the unhedged portion of production and future hedges being at higher levels, the debt levels should begin to reduce significantly over the next year, with that reduction directly translating into market capitalisation. The management have made a couple of faux pas in the last few months with the director share purchase debacle and the unexpected placement (which AIM investors hate more than anything else) but this should not detract from the significant investment opportunity here. Even if the gold price retraces to recent lows, SHG should be generating high levels of cash owing to its hedging programme and its class leading cash costs and AISC. SHG has got to be one of the most (if not THE most) undervalued gold miners on AIM. I don't usually put ratings on my posts but this has to be a strong buy.

Jollyspeculator, I would never claim to be an industry expert but I have been investing in miners (particularly gold miners) for many years and you do get an appreciation of the BS from realty after a while. I base most of my investing decisions on research which is effective for operational mine, less so for explorers. For SHG, the current operating assets are great but Singida looks exceptional. This is a 845k oz high grade open pit in a very low cost area. They haven't even drilled very deeply on this and it is open at depth. This could be very high grade and very big. In fact, as Dibs suggests, this could well get to the point where it is big enough for a major to make a bid (most AIM miners do not have a resource anywhere big enough for that). We are not there yet, though, and the pilot is a good way to start the process in a very controlled but cash generative way.

20% of their holding. It would be interesting to understand the reasons, whether company specific (difficult to see that much has changed, although it has risen somewhat) or market in general (which would imply a softening of their view of the immediate future of the PMs?). And is that the end of their selling? Worth keeping an eye on as they do have 7% of the company.

I believe that they have only just scratched the surface of Singida's potential. Quite literally! This has the potential to be a very significant deposit, way beyond the currently defined resource. Agreed that this development is being driven by improving confidence within the company, with the capital costs coming from cash flow. An exciting time for SHG, one not fully appreciated by the market.

Bizarre price movement today. Why sell when q2 results should be as good as AAZ? And with cash costs and AISC so low here, even if gold drops substantially they will still generate loads of cash.

Good figures from AAZ indicate what is happening in the gold miners. No reason why this can't follow suit.

Yep. All good. I had mistakenly believed from the q1 report that there was some gold that was produced but not sold in q1 but I realise that I had read this incorrectly. Debt reduced by another $7m in the quarter. If this becomes a regular thing (no reason why not with the current gold price) then there should be a steady transfer of enterprise value from debt to market capitalisation.

I'm going for quarterly production slightly weaker than 20k ounces as I expect Q3 and Q4 to be the strongest quarters with > 20k. But I think sales will come in at about 18k ounces with the average price being about $1260/ounce. Given the current cash costs with the copper/silver credits having a significant impact, they should be generating cash of at least $9m from that so I can see debt repayment being significant excluding any investment decisions they make. So, cash generation at a rate of $36m/year should see the debt decreasing substantially over the next few quarters should the gold price be sustained (short term it is looking a bit toppish but long term the arguments for gold price increasing are compelling). This then becomes a virtuous cycle of cash generation, debt reduction and profit increase. Not bad considering the market cap.

Well, it looks like Opera did the right thing and canned the deal. Presumably they realised how ridiculous it was even if they said it wasn't strategically aligned (OK, the two are compatible I suppose as, strategically, they probably want to make money). Opera's reputation, such as it was, looks to be in tatters. Their best option would appear to be to wind up, return cash to their investors and sheepishly drift off into obscurity! One thing has come out of it. If ever I want to flog some over priced assets, Ryanno12 looks like a potential buyer! Just kidding Ryanno12. But you have definitely dodged a bullet on this one.

I know that it will be suggested by some that this is an opportunity and clearing the decks before breakthrough news but it looks like the company is in disarray. If you look at things in a cold light this is a heavily discounted placement for a small amount to keep the lights on. They can talk of 'acquisitions' but they have been for some time and there is yet to anything substantial. Board changes, change of advisor. A bit of a mess. Of course, the fans of MTR will just invest because MTR are involved irrespective of the news.

The calculation would be great but I should point out that the article refers to 'reserves' and we do not have 7.04m oz of those. However, I think their calculation is simplistic and relates to more advanced projects. We do have 'resources' which are not valued as highly. Indeed, for the last few years inferred resources have been given practically zero value. and the good news is that 'inferred' resources only make up less than 15% of the total and value is given to 'indicated' and, more particularly, 'measured' resources. Of sightly more concern, they indicate that typical premiums for purchases are running at 42%. For CGH that would amount to about 12p which I would be extremely disappointed by. Whilst my preference is for a takeover (as the company can't be trusted to return funds), if a takeover was for that amount I would prefer that they sold the asset and pressure put on them by shareholders to distribute the money rather than sit on it and waste it.

Baron is highly respected and his thoughts are followed by many. Whilst his thoughts are unlikely to move a company if it has truly abysmal fundamentals, I think that it is certainly possible that he can create interest enough to move the price in the smaller companies that he discusses, such as ASA, unlike the larger ones, such as RRS and FRES.

Q2 update should be positive for a gold miner in a rising gold price environment. Who would have thought? You would certainly hope so. "One would hope they've been more successful than their previous hedges". Not sure what constitutes a successful or unsuccessful hedge as the movement of the underlying commodity is unpredictable. Hedging is undertaken as part of a risk management strategy. As such, I would suggest that SHG's hedging has successfully managed their risk and will continue to do so until such time as the cash flow in the business is such that they can make a massive dent in the debt (very soon). At that point the enterprise value will shift from debt to market capitalisation at the same time this will be re-rated as having moved from a high risk to a low risk producer.

Had to get that big sell out of the way by the looks of things. Presumably somebody has given up waiting for the price to rise and has taken the first opportunity to sell up. At the wrong time I suspect but who knows?

Is the market suddenly realising how significant a discount to current assets this is? POLY at 1130 now to add to the value. Will this rise be sustained or will it go back to sleep?