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I suspect the MMs might mark-up the opening price a pence or two; maybe 25p-26p. I could then see 30p quite achievable with some bid speculation interest. 40p looks a bit of a stretch on day 1, although Condor is not exactly a liquid share so I wouldn't totally rule it out. As for the offer I'm still going for the larger amount in cash vs. paper, thus 40p plus c.10p or paper value. The latter being 'sold' to us on the basis that MTI will finally realise the true worth of the resource.

We are all still guessing, although expectations are lower than they were in the past. Years ago was hoping for 120p. I now think that 60-65p would be a good outcome with 50p-55p more likely (cash and shares).

I'll start a new thread to discuss the offer. Speculation tonight vs. (hopefully) what's actually on the table tomorrow.

As stated already, prior to getting the RNS I'm speculating circa 40p cash plus shares. Let the discussion begin...

RNS support starts at 21.30 on Sunday nights. It's still possible something is released today, especially if the Panel are applying pressure.

OK, so I'm taking a look at MTI as I type but first impressions are positive. I start with the cash flow statement for 2023 - £74.5m net cash generated, most of which is used to pay off debt. In 2024 it seems to me that they may have paid everything off if they generate cash at the same rate and have a chunky wad available by the end of this month. They'll also be good for another whacking big loan having proven cash generation capabilities. Balance sheet net assets at the end of 2023 £134m suggesting that the current marcap is undervaluing its true worth (ref: cash generation capability). If its current mine does have only a few years to go then all those mining assets will need to be redeployed to a solid new prospect - CNR fits the bill. Then there is the proven mine development expertise... The tie-up makes sense to both companies in my view, which brings me to the question of valuation.

I reckon the Sky News valuation is utter nonesense. Putting these two entities together makes something far greater than the sum of the two parts. I'm taking a wild guess here but I reckon something like 40p on the table in cash plus shares. The shares in the combo is where the real value could be. That £1bn NPV figure could well be achievable with a partner/owner with the cash and development expertise.

All wild off the cuff speculation with a smattering of read and type thoughts to get the ball rolling.

The SAG mill option does pose a bit of an either/or. It is just another asset so there is no reason to see it any differently to anything else. It cost us $6.5m, so anything we get should not be a million miles away from that.

A bidder for the who company might prefer cash vs. an unneeded asset; indeed, it may be a condition of any sale to liquidate anything not deemed useful as part of any sale process. A balance sheet with a good wedge of cash often appeals more than assets more illiquid, especially if it represents duplicated resource.

On the other hand, it may be a method of raising funds to keep the company going another year or two. This seems a less likely option to me. I also highly doubt it would be used for something like buying own shares, or paying a special dividend, given the circumstances.

My overall sense, optimistically, is that we are finally in the endgame scenario, two years after starting the process. At least I hope so.

Meanwhile we have a book value of about 22.5p/share, a market value of 18.5p, and an overall asset value somewhere in the 50p - 65p area; at least that's what I still think. Although something around the twice book value point (c.45p) would also not be a complete surprise.

Game on (I hope...)

I'm just wondering if JM is upping the price as gold continues its trend towards $3000. I can't believe he is still asking what he was probably asking two years ago. If so, could it be putting buyers off? Who knows, but you can't rule it out.

Six months ago I was thinking 45p - 55p, but since then we have hiked from $2300 to $2700, virtually all of which would flow straight through to the bottom line. Thus 45p - 55p now looks ridiculously low; even 60 - 65p (my thoughts two years ago when gold was at $1800) now seems fatuous. Trying to calculate it via a whole bunch of very reasonable assumptions and you clear well above 100p. The problem is that no one believes it. Too many remain fixated on a share price \ marcap multiples lower than the project quite obviously justifies.

Condor will sell, and at a good price, but there doesn't seem to be enough investors who are prepared to wait a bit longer, especially when there are dozens of other opportunities which could turn a profit on shorter timeframes. If I ask any investor who is bailing the question why, I'm pretty sure frustration with the time it's taking will be right there at the top of the list. The project remains a superb opportunity but ultra patience is needed if you want to cash in.

One day we'll wake up to an RNS that announces a sale, and at a price many of us still think is unattainable.

Hang tight.

Only a month away now.

I sort of expect something to be said on Nov 22nd if nothing emerges beforehand.

We'll see.

Meanwhile, for any newbies, last month's Crux Investors vid is worth a watch. It's a month old but still feels close to where we still are:

https://www.youtube.com/watch?v=8MUkxGJBuB8

It's the numbers used that stops me moving on...

$2748 / £2116 as I type.

It's getting ever closer although there is a short term over-bought opinion on both metals.

$3000 early next year is still not out of the question.

A lot of buys today hardly moving the dial. Either the mm has a lot on his hands or games are afoot. A lurch upwards again feels close.

A few months ago all the commentary was about gold heading for $2700. Well that's now in the rear view. The gold world seems to have moved on to $3000. It would be nice to think that the PoG will be reflected in the final sale price.

I'm still thinking 50p, though with PoG still on an upward trajectory, surely we are in the 60 - 70p, or more area? Crunching numbers likely justifies an even higher number. Alas, in the real world I still have to think 50 -55p is a win.

I'm using the RNS as the baseline for the start of the sale process.

22 November 2022

Condor Gold Provides a Strategy Update and Appoints Advisor to Sell the Assets

Condor Gold (AIM: CNR; TSX: COG) announces that following a robust and economically attractive Bankable Feasibility Study also known as a Feasibility Study on the La India open pit it has appointed Hannam and Partners to seek a buyer for the assets of the Company.

I'm pretty patient.... but two years?

Please tell me it won't be another year.

As an aside, should the current Labour government enter into talks to surrender the FIs to Argentina, can anyone advise how they would ensure that Argentina would not exploit the Island's oil reserves? My understanding is that the whole purpose of Argentina's claim is to get its hands on the FIs oil reserves. Without oil production (to Argentinians) the Islands are just a windswept territory, with a population hostile to a country that has a history of invading them. Why would they be interested in them.

Handing them over would make Milliband look like an even bigger muppet than he is already perceived to be, especially given the current anti-oil culture. I do wonder how we would make... well anything... without oil.

I also see any discussion about FI being handed over to Argentina as an outright betrayal of the people who died during the war. Lammy doesn't give a toss about our shared history; he doesn't even think the terrorist threat is more important than climate change theory. The whole bunch are without doubt lunatics.

This government seems more about what it can get away with doing things to people, rather than for people. Every day brings another ‘bung’ scandal, anti-pensioner or pensioner action, or a basic act of policy lunacy. I’m already of the view that it’s the worst government since WW2, possibly ever.

Notwithstanding the incompetence of the current Labour government, I doubt even they would stoop to surrendering to spurious Argentine claims. Nonetheless, I do think that even a vague threat will stall the sp progress. The real threat is Milliband insanity, and how coercive he might be in bullying FI policy. I’m staying put, but will keep a closer eye on things over the next few months.

The Tories fell apart in its final days. Then again it took over a decade to reach that point. This Labour shower has taken a matter of weeks to prove itself to be callous, corrupt, crony focused and generally incompetent.

I had become a little gloomy about the sale outcome, dropping from 60 - 65p to 45 - 50p range. However, if gold does reach $3000 this year I can't see JM settling for anything like that. Even 65p will look like a pretty tawdry outcome.

The U.S. has added over $6 trillion to it's national debt this year. These are jaw-dropping amounts and likely account for the run up in gold as much as central bank buying. If the bond vigilantes wake-up from their multi-decade slumber it could be curtains for the USD, irrespective of there being no obvious global reserve currency on the horizon (the EUR just doesn't hack it, nor does the Yuan). In that instance we could see gold fly past $3000 to, well, anywhere.... I'm not predicting this but the risks are increasing each day. Whoever is US president next year has an almighty task on their hands. A Harris presidency in particular will likely lead more borrowing, printing and an inflationary environment. She4 seems to have even less between the ears than Trump, and that's saying something. I just don't see anything bad for gold in the medium\long term future. Short term, anything can happen, but it won't last.

The real question is one of whether to go for bullion\ETFs, or load up on the miners, most of whom are still bouncing around the bottom.

I've moved most of my Condor holdings into an ISA over the past few years but I still have enough in a general equity account to cause some CGT concern if Condor finally comes in. It more than irritates to think that after a dozen or more years of risk taking the government flies in and steals an enormous chunk for basically doing nothing. A big hike in CGT and the chances of me taking an similar risks drops to zero. Even under the Tories the drop in CGT allowances were unwarranted. And it's not as if asset base costs are inflation indexed like they used to be. Anyway, enough of this Sunday evening soapbox stuff. We are mid-September, which for me signifies the start of things getting going again.

I had expected $2700 this year, but many of the articles I'm reading suggest that it might get close to that number as soon as December. Frustrating as it might be to see little obvious progress on the sale, the delay might even be doing us a favour. A bit controversial I know, but I'm choosing a glass is half full perspective.

It will happen when it does. Though I would like to think it will be before Rachel Theeves accelerates our economic death spiral through raising CGT and IHT. In the meantime, celebrate the new government's achievements with Angela:

https://shorturl.at/QqlpI

Https://www.zerohedge.com/markets/endgame-interest-us-debt-surpasses-1-trillion-first-time-ever-exploding-august-budget

Gold’s run is just starting.

I'm aware that some people think there could be another $200 in this by the end of the year. I've seen these forecasts before so I'm sitting on the fence. Nonetheless, with so little retail\media interest, and with many central banks still buying, I wouldn't rule it out.

As for Condor I'm not expecting anything to happen during the summer. I won't start thinking 'it might just be round the corner' until October.

We all know that Condor is unlikely to go into production. However, a suggestion that we are reconsidering it as a viable option (i.e. perhaps revisiting the project finance case) might well be the encouragement needed to break the current stand-off. Who knows, with gold seemingly on a roll there may even be more appetite than back in 2022.

Calibre have had other fish to fry over the past couple of years, and may well have been stalling on Condor as it digests acquisitions. Keeping Condor sweet by asking for more info on a periodic basis could be delaying tactic. In other words look interested by asking for more data, while really intending to run the clock. To be honest, notwithstanding my own frustration, JM may well have been doing us all a favour by sitting on his hands. As ever, time will tell.

I can't see much happening in July or August. I think we've got to get over the holiday season before we can expect Calibre, or others, to make a move.

Looks like it might close at $2420 tonight. I've listened to several podcasts in recent weeks suggesting another 10% in it this year (i.e. $2650). With GBP looking strong(ish) at the moment (both USD and Euro weakening - France a basket case ATM) it's not having the effect it might have last year. Nonetheless, the trend looks good, especially given we are in the summer months.

I've come to the conclusion that the reason we haven't closed is basically because our buyers wants our NPV at 10% - 15% of its value. In other words they think they have the upper hand and want to steal it. Meanwhile JM is likely fronting negotiations and will have none of it. It's a Nicaraguan stand-off. Both sides likely want a deal but they both have price points which each are reluctant to move on. An advancing gold price will strengthen JM's hand and will probably get us closer to JM's price than our vendor's efforts to reduce it.

As for the price outcome. Notwithstanding PoG and the number of 'fairly' interested parties I can't now see it much more than doubling i.e. 45p - 50p. It's a climbdown from expectations 18 months ago (60 - 65p) but that's currently where my head is. Whatever the strengths of the business sale case, we will only get what the buyer ultimately wants to pay. To get 100 - 150p we have to go DIY, and CNR hasn't had an appetite for that for at least the last couple of years.

23p is a market maker's price driven by very short term trading factors. It's pretty useless as an indicator of the ultimate outcome, though in my mind is still a pretty good entry point.

There's little value in getting frustrated at how long it's taking. That's about as useful as effing at the weather when it rains, and you need to mow the lawn - I tried that today and it didn't help ...