Member Info for Daisan

Pablo2, Yes, I am aware that they are looking into reducing the capex and that is worthy of the effort. But some of those items will be difficult to reduce, meaning they would have to do very well on the rest of them to get to 25%. 25% would be excellent but the capex would still be comparatively high which would still mean they would need a big hike in the gold price to make it attractive. Just for clarity, I am in the camp of those who feel that there will be a BIG hike in gold prices. I am unconvinced that the current uplift is the real deal - it feels like speculators to me on the back of a weak dollar. I expect the dollar to bounce in the short term and PMs to decline as a result. In the medium to long term, however, I do expect PMs to rise substantially. At that point this will jump to multiples of the current price.

One of the things that has been bothering me about CGH is the lack of real movement as a result of the gold price increase this year. It has moved a little but not anywhere near as much as some. I think the answer is in the DFS. The NPV is surprisingly low for such a big asset and the IRR is borderline but looking more closely at the study indicates the reason why. The capex is very high and this is skewing both. With that capex $1250 gold is not reason enough to move CGH. It needs more like $1600+ (maybe even $1750) at which point the IRR should better attract the investment required. Usually you look for IRRs of 25%+ as being very attractive. So, they do have an alternative to doing nothing and that is to try and reduce the capex substantially. Not really sure how they can do that with some of the infrastructure costs but there you go.

Asap!

ArielArrow, I take it you are a long term holder? I know the feeling. Although I am not a holder here (but it is on my watch list!) I have gone through the same processes in the past. I think the best thing for CGH to do is.... precisely nothing. They have a great asset (it really is excellent) and it would be best served just sitting on it until the gold bull market really takes off. If it has a NPV of $350m @ $1250/oz, just imagine what the value is at $1500/$1800/$2000 plus. The thing they need to do is stop burning cash and wait for the inevitable bid. It will come. At some point. I just don't know when but I suspect in a somewhat shorter time frame than my retirement.

The trading was odd yesterday. There was a large amount of reported buying and yet the share hardly budged after the initial movement. Suggestive of a big trade in the background. As to why they would want to get out, who knows? It may be that they needed cash for another reason and this had been tied up for years. But it must have been a significant amount and possibly still going on now. There are a few candidates that could be selling that volume. You just don't want it to be the directors otherwise that really is a sell signal! I can't believe that it is. A suspicious man would suspect it was orchestrated and that is indeed possible. However, I suspect that it is just one of those situations where an action has been made to take advantage of the situation. I may be being naive on this.

It was bounced around on Twitter yesterday. Doc Holiday bought some as did a few others and the chatter increased markedly for a while. It looked like the movement upwards attracted either a single large or multiple small sellers. Not uncommon when a share has been in the doldrums for quite a while.

I loved the way he presented the RNS to you as 'very good' and sold on opening! Classy.

Ha! 7:47 - very good update. 8:35 - sold out first thing. Must have been an interesting 13 minutes

China started a morning gold fix today. It will be interesting to see how it affects the gold price going forwards. I wonder whether that is the reason for the lift this morning even though it was fixed at $1233/oz.

Hmm. Slightly below market hopes I think and some of the investments have probably clouded the underlying cash generation. Good to see that production rates are being maintained and they are on target to meet the guidance for the year. Gold is supportive currently so it will be interesting to see where we end up.

You beat me to it! Just saw it on Kitco and was about to post. A fair assessment I think.

Market looking forward to the update? I suspect that it will be good but whether it surprises to the extent that STI has done resulting in a similar rise, I suspect not. But it should at least hold its own - I don't expect a 'sell on news' situation here. At the risk of stating the obvious, production, debt and cash situation are the ones to watch. Really looking forward to this one. Let's hope the price of gold doesn't plummet over the next few days!

Starting to look like the Head and Shoulders top that has been forming may well complete. If it breaks the neckline at about $1215 ish then it will likely fall quickly to $1120-30 ish. If it rises above $1280 then the pattern will be invalidated and the price can move further ahead. COTs and dollar support still weighing against gold and it hasn't been strong today despite the USD/JPY rate weakening (over the past few weeks gold has traded in a very similar pattern to this trade). Other bearish factors are the fact that silver has outperformed gold recently (this usually occurs near tops) and that the GDX (gold miners) is currently underperforming gold (usually miners will perform ahead of gold except in the latter stages of an upleg. All in all the short to medium term outlook for gold seems to be turning bearish but I am still very bullish about the long term direction. As to how this affects AAZ is anybody's guess! The mcap is so low that the market doesn't really believe the story currently. The way in which the share price has stabilized today suggests an element of support in the 5.5-6.0p range which is reassuring.

By my calculation they should have sufficient cash (plus a little more) to cover the $25m convertible as of the end of March. They already had $19m as at the end of December. So debt servicing/reduction is not a problem currently. Funding $53m from cash flows in the same time frame would be problematic unless gold continues to ramp up (definitely possible). However, the time frame is not quite the same and not all of this development cost would be front loaded. As a result, I expect them to be able to progress with the development without an issue. It may be that debt will have to be taken on during the process but if that is to progress the business then I have no issue with this. Key points for me: 1. Can they service the debt? Definitely 2. Can they repay debt? Yes 3. Can they continue to develop the production capability? Yes 4. Are they in a good position to benefit from an increasing gold price? Yes Difficult for me to see the negatives on this one providing the gold price remains supportive and, given the relatively low AISC, I suspect that it would take a serious and sustained correction for this not to be the case. All in all, an excellent long term investment.

Further to this and in the interests of détente, I withdraw my suggestion that Timeless is part of a 'pump and dump' gang. Obviously the bit about the bedsit was a joke but I apologise for that one as well!

I have just received a private message from you. As I am not a premium member here, I'm afraid I cannot read it (to my knowledge). However, it did make me think about our 'situation'. You clearly don't appreciate the thoughts I post on companies and I don't appreciate your thoughts. However, we have allowed this to become personal and this was certainly never my intention. As such, I want to call a truce on this. We are both investing to make money and we clearly both use these boards to assist in that process. It also happens that we both invest in the same sector so will inevitably bump into each other. If you wish to send me your message I have an email account daisanngl@yahoo.com that you can email to. I have taken you off filter and will try not to get offended by any posts you have written concerning me since the filter has been on. I will not post on KGLD again. Clearly I do not rate the investment case here, especially since the last RNS but others may think differently and it is obviously up to them whether they invest.

I forgot to mention dave2478 that there is a pernicious poster on here that I have had filtered for some time - certainly has made my time on these boards a lot less negative! He posts under Timeless and I have suspected for some time that he is part of one of these gangs that pumps and dumps small cap shares that he can have the most impact on. The reason I posted below about 'High Net Worth Individuals' is because he goes around arrogantly proclaiming that he is one. I confess I have an image for him of a little man sitting at a keyboard all the day in his bedsit.

I suspect that there will be selling into strength as a lot of people piled in on the rise and will be looking to get out as it goes up. Net asset value is interesting. It is the value put on an asset they have a 23% stake in. This produced poor results in the last RNS so not clear that these would be sold for that amount but it is what it is. Acquire Fintech? With what? They have very little cash left and it is in basically survival mode. And what do they know about Fintech? They cannot advance anything with what they currently have and the nominal value is 7p so they can't raise currently either. I am sure others on this board will tell a different story and it is only fair that they should present that but for me a finely balanced argument was torn apart by the last RNS which was, well, pretty bad. (Not badly worded just bad)

I suspect that it is just Timeless buying up the available stock. 'High Net Worth Individuals' can do that you know. Not sure who he will sell it to ultimately though. He will find out the downside to small illiquid companies soon enough I am sure (the last dip should have been a warning). After the last terrible RNS I would have thought that holders would take the opportunity to sell into the strength provided here and leave Timeless to play with his toy crying 'Fintech' as often as possible. Not sure why you are still here to be honest Dibs. I would have thought the likes of SHG were a far better bet.

It wasn't great but there were some positives and I actually feel reasonably confident that they will deliver on their targets for the rest of the year. Unfortunately gold appears to be turning at this point which may reduce revenues and remove a support to the share price. However, I expect them to survive the next few months and I am becoming increasingly bullish about gold in the medium to long term. Short term I think that there is a reasonable chance gold is going to get beaten down. USD seems to be kicking off its key support area and the COT report is still horrendous. Two head winds that gold and gold miners are going to find difficult to ignore although the latter they have resisted for some time. I don't subscribe to the theory that this is an 'impulse' move currently but we are really at the cusp of things now. Should be 'fun' over the next few months and years.