Member Info for dictumdedicto

It's getting to that time of year folks so I'll start the ball rolling.

At the moment the SP is within the 'worst case' scenario I shared with you a week or two ago. It's dropped into the 20s, albeit at the upper level. I suspect that in the absence of project finance being resolved we will hover in the 30p +-5p range for quite a while. If the BFS comes through in early spring I'm of the view that it will kick start a steady rise. An initial leap followed by a fallback, and then a slow but steady rise towards the end of the 2022. H2 2023 is still what I'm pinning hopes on for first gold given that a toll deal looks like it's not really on the agenda; certainly not at the moment.

If H2 2023 is a realistic possibility (i.e. BFS comes in on time and project finance arranged not too long afterwards. Assumes discussions already underway on that one) then I honestly belive that we could see a move from around 30p at the end of 2021 to around 100p by the end of 2022 (caveats already noted).

So...... 100p on December 31st 2022.

Of course a BFS also start some tangible bid interest. I doubt the board would take much less that 100p and would suggest 125p or thereabouts. Gold looks like it could go up in 2022 so 200p+ for a producing miner would not in my view be unrealistic two years from now. The question is, would the board take a lower offer to exit early or wait another year or so for an even better payday?

Let the debate begin...

Have a good Christmas and New Year.

ddd

Agree with the sentiments, though on the plus side we are a lot further ahead than we were then. I'm optimistic that the SP will hold up until the BFS but I'm not too sure whether the wider market will understand the significance of it. Each time we get to a milestone it's been met with only mild interest. I'm just not sure if investors 'get' Condor. We might even find that it's not the BFS that triggers a re-rate but an actual bidder appearing on the scene.

I've got three scenarios in my head at the moment until March 2022:

Worst case:
Share price languishes in the 30s, occasionally even dropping back into the 20s before slowly drifting back up. In other words range bound around the last placement price.
Mid case:
Share price trickles back up to the 50 - 60p level, but even confirmation of a BFS does nothing more than cement it in a 60p or so range.
Best case:
Investors finally start to see the multi-bagger potential of Condor. The share price initially drifts up to the 40s, perhaps 50s by January. As we get closer to the BFS date the market suddenly springs into action towards the end of February and we see it move into the 60s, 70s and 80s. The release of the BFS at the end of March triggers another jump into the 90s and the SP settles around 100p, pending some solid news on a bid.

If we don't see anything happen on the bid front during the year, in all cases the SP drifts down somewhat for a time. That is, until expectations shift from bid activity back to production. As investors look towards production there is a further loss of interest until first gold is only two or three months away. In other words an active H1 2022 and a drift downwards in H2 2022 and H1 2023 ( around a year).

Excitement has been built around doing a toll deal but perhaps we should be thinking about bid activity to help spur on the SP. That aspect has hardly been talked about in the last couple of years. Maybe it's time again.

Yes, I would say so.

Most of what he has written I've seen before, and is pretty well known already to people reading this board. It was gratifying to see him admit to getting his Jan 21 share predictions wrong but he's not budging on future expectations. My sense is that he thinks that investors will make a lot of money in Condor in the not too distant future. They just need to stay the course.

What I did find interesting was a chart he had included of the 'Gold Supply Cliff'. Starting around 2026 production looks like its forecast to rapidly drop from circa 45m ounces to under 5m ounces by 2040. I think this is right. The only thing that could make it wrong is something really dramatic happening on the price of gold in the next few years. And I mean REALLY dramatic. The price will go up pretty noticeably anyway, with demand outstripping supply, but to get miners to produce at very low grades it would need to increase even higher than that.

So, what will this mean for CNR? Well, the late 20s are still a few years away but the majors and mid-caps need to replenish reserves. As the writer has pointed out, Condor, with 5m ounces, will look a pretty tasty morsel to them before long. At the moment everything still points to production in late 2023 but the reality is the gold miners bid game is likely to be back on in 2022. Everything I'm reading and listening to seems to be pointing at 2022 being better for gold that 2021. A good run in price in the first few months could well bring the tyre kickers back out.

I topped up at 35p so missed the recent bottom. Still, as I've learned in 30+ years of investing, only the very lucky buy or sell at tops and bottoms, most people who claim such are bull..itters.

The general gist is that he expects the BFS to be a done deal by next March, at which point the company is effectively de-risked. From his perch the SP should slowly gravitate towards his range over the next few months. My own take is that there is still nervousness around, driven by perspectives of political risk in NIC. If people can get over that then perhaps there is a fair chance of a three digit SP somewhat sooner than many think.

Whatever your perspective, shorter term SP increase or longer term rise, now is not really the time to sell. It's more of a buy than a sell, and a buy still lower than the last two placements.

First paragraph from a newsletter doing the rounds today.

'In January 2021, I featured Condor Gold (ISIN GB00B8225591) as the best junior gold mine that I know of. In terms of project execution, the past eleven months have confirmed just that – Condor Gold has progressed almost exactly as planned. The share price, however, has gone down considerably. When my report came out, the stock was trading at 46.5 pence, compared to 28.5 pence currently.'

And a valuation comment:

'3. The stock starting to move up as these prospects become more widely known. The stock is currently trading at less than 1.5% of the value of its gold in the ground (and less if reserves are increased), compared to an acquirer typically paying 3% to 10% of that value. A potential acquirer would likely be paying between 130 and 200 pence per share, and I had anticipated a gradual move of the stock price towards this price level.'

My current expectation is H2 2023 but then again two or three years ago I thought Q4 2021 looked good. Alas, Condor's orphan period is lasting far longer than expected a few years ago.

Agreed.

It's the usual low volumes of selling, again driven by boredom. Looks like one or two are dipping the toe in hoping that a bounce is due but it wouldn't surprise me to drop another penny or two before lifting again.

The last placing funded us for quite a while so I'm not too sure why people have chosen now to bail out, unless it is indeed the yawn factor. All the other stuff is pretty well known, local politics etc. Gold and silver performance has not helped. I would have pinned that on crypto but performance in that world has not exactly been stellar recently.

In a few weeks time we'll be able to say 'next year we will be in production'. Now doesn't that sound better than '2023'......?

If it drops below the placing price it won't look like a discount. It will look like a premium. Short term price movements are pretty meaningless in this situation.

When the money starts getting deployed on steps that are pretty obviously designed to deliver production, sentiment will soon change. Back in the early years of investment I did get wrapped up in day to day price movements but once I figured out that I was a value investor and not a price trend follower/trader, I backed off. Quite frankly my eye is on the big prize not a 5p fluctuation. I know I'll have to wait longer and I know there will be (trader and company) driven bumps in the road.

The time to get concerned is if the nature of the project finance deal threatens longer term shareholder value, or if local politics threaten production. At the moment I don't see either of them as an issue, but I 'm still keeping a watchful eye.

Forget today's price drop. Another month (or less) and the chances are we are back over 40p, especially if we get a reassuring RNS announcing good progress.

It always baffles me when you see a fund raising provoke responses like 'dilution', or similar sentiments. The fact that Condor has been able to raise the money is a vote of confidence in its future, not a cause for panic or misery. Anyone who has been in Condor for any length of time knows that this is a long haul. We need funds both to keep the company going and provide investment. I see the money raised as an investment in its future, enabling more steps on the way to producing gold. Without it we don't have a company. A company not generating income is dead without this sort of finance from time to time. As for this particular raise it's as much about raising the 'big one', the project finance required for building a producing mine. I would rather we get on with this than hang around any longer than necessary.

Personally, I couldn't give a toss if the SP drops to the placing price. It's not unusual and typically gets forgotten about after a few weeks as focus shifts back onto value creation rather than short term market movements. I'm also realistic. Without a toll deal I don't think we will see gold revenue until the latter half of 2023. Which brings me back to today. Does a price of 35p or so today matter when a multi-bagger in 2023 is in the works.

Speaking as a dozen year veteran investor in this another couple is but a blink in the eye (alright, a bit of exaggeration there....)

Anyone with a mid-term view will see the opportunity to acquire shares at a placing price as a buying opportunity.

Yep. I made my first foray into Condor on October 7th 2009. Twelve years I've been riding this one. It got to the 'might as well see it through' stage about five years ago, but I must admit I did think that we would be there by 2021. I don't think MC thought that we would still be two years away from cash flow at this stage either. All I can say is that building a mine is hard, even in a stable country, and Nic has not exactly been the most stable of locations in past years.

But we are where we are. Gold does look within sight and the things that the company is able to manage seem to be being managed. It's the stuff out of their control which could upset the plan. I just hope we don't get a revolution or some major political turmoil. Everyone there seems to want a profitable mining operation but the uncertainty of political change seems to create uncertainty and delay.

Whatever, I'll drop in for a look at Christmas. Maybe we'll have some more tangible progress by then. It would be nice to think in January 2022 that we will have first gold 'next year'. 'Next year' sounds a lot closer than some four digit date in the future.

ddd

It's really not worth following Condor on a day to day basis so I'll only drop in about once every two or three months. The timelines are still slow.

From the way MC is representing things it looks like the mine will be completed "...within six months of the finance being in place". This of course raises the question of how long that is likely to take and what dependencies there still are in terms of pulling together the project finance raising documentation.

Using October 2021 as a starting point would it be reasonable to assume another 9 months for financing and then another 15 - 18 months for engineering. If financing is June 2022 and mine construction is 15 - 18 months later, then we might just see first gold by Christmas 2023, Q1 2024 if timelines are at the longer end.

Anybody agree with this or do some think int will be later 2024 before we see first gold?

ddd

MM
Good to see you drop in. I’m also a pretty infrequent poster these days but still keep an eye on the FI. In the early days things moved very quickly but the last ten years has seen limited progress. It’s reboot time.

I have not entirely given up. Indeed, I even added a handful yesterday. For me it’s big picture time. The majors are under enormous pressure to divert exploration capital into alternative energy projects. Many are already on this path and this is already reflected in far fewer discoveries. Most of the analysis I’ve seen suggests that the most money in oil will be made as we come to the end of the oil age which I still think is a thirty year project. With fewer new discoveries we are left with developing what is already proven, and there isn’t that much. I still think the RKH dog will have it’s day, with the only real question being whether it’s with the current BoD and shareholders. As global oil supplies get tighter the money will come. It’s just how it will come is the worry.

I’ve written off my 17 year ride as a loss but I can’t help but cling on to what I have on the admittedly small chance that our reputationally weak board will pull a rabbit out of the hat. RKH is now a hobby rather than an investment which does help. I no longer waste energy on being frustrated.

ddd

I re-listened to this today.

https://www.youtube.com/watch?app=desktop&v=zh2LUCm1-GQ

Looks like an aggressive timeline for him would be to reach "first pour" in Nov/Dec 2022 (scroll to the 2hr point). Realistically, I would guess at another six months or so beyond that; maybe two years from now. 2024 looks a bit too pessimistic for me. Uncertainty is always there but so is the will to do it.

I don't sense that toll mill discussions are live at the moment but 'the door remains open'. MC still sees it as desirable (within the constraints of what the local roads can handle!).

The residual land purchase looks like a bit of a non-issue. It's all about price and I think Condor has the better hand on that one.

Last week's article has a nice synopsis. If this is a likely outcome (i.e. no last minute relaxation of BASEL 3 re: PM derivative trading), then the rest of 2021 could see some interesting price movement....

'Basel 3 is on course to regulate the LBMA out of existence. And with it will go all the associated arbitrage business and position-taking on Comex, because most bullion bank trading desks will cease to exist. The only supply to buy-side speculators of gold and silver contracts will be producer hedging.

In recent months there has been some limited commentary concerning the introduction of Basel 3 regulations and the implications for precious metals trading. These new regulations are scheduled to be introduced for European banks at the end of June — only seven weeks’ time — and in the UK from 1 January next, affecting all LBMA member banks.

This article explains the new regulations and concludes that the recent joint LBMA/WGC consultation paper addressed to the British regulator is unlikely to save London’s unallocated gold trading market. And because Basel 3 regulations are scheduled to be introduced into the UK at the year-end all banks in the London gold market can be expected to wind down their exposure well ahead of the deadline.

The unallocated forward settlement market will effectively be shut down. Hedging into Comex futures from this source will also cease. As it is unwound, the withdrawal of synthetic supply has enormous implications for future precious metals prices by transferring pricing power to physical markets, now dominated by China.'

https://www.goldmoney.com/research/goldmoney-insights/the-end-of-the-lbma-is-nigh

I don't know enough about the opaque trading environment that is the LBM but if you read their submission (referenced at the bottom of the May 20th article) then you will clearly see the new regs have put the fear of God up them.

I've read some of it and it amuses me how the LBM promotes the 'gold as a currency' (vs. commodity asset).

Times are a changin....

ddd

Weekend reading.

Interesting perspective on changes to the derivative trading regulations which also affects gold/sliver:

https://www.goldmoney.com/research/goldmoney-insights/the-end-of-paper-gold-and-silver-markets

ddd

Gold catching a bid after a dovish FED position.

This will be a good test on the degree to which Condor is now influenced by changes in the PoG. It could still be too early at this stage although no doubt we will find out on Thursday.

Chris,

You need to give it some time for the word to get out. To get the price moving we need new investors in and they need to 'discover' Condor first. The Canadians understand the miners better than we do but are spoiled for choice. They need the time to check Condor out and believe that it's not another mirage. I'm also of the view that a slower but steadier move upwards over the next 12 months will help a more sustainable price. Sudden jumps of 30 - 40% are typically prone to sudden sell-offs and we don't want that.

Could be interesting today. I've not seen the CNR news on the First Majestic news release page
https://www.firstmajestic.com/investors/news-releases/
It might not be big or relevant enough for them to warrant a release but if it does I can't see anything but good coming out of it. It might well put CNR on the radar of some who haven't taken notice. Generally speaking the Canadians like a 'show me' vs. 'tell me' approach so maybe we will see another uplift before the day is out.

As of today movements in the PoG becomes a bit more of an influence on CNR's price. It won't be a dominant force until we actually start producing gold but it will be more important than it was last Friday.

Gold has taken a knock recently on the back of yield movements on US debt and (allegedly) bitcoin attractiveness. However, the $2 - $3 trillion of 'stimmy' now starting to hit the system will likely provoke price inflation which should restore gold as a place to be. It may not look like it now (at $1730) but I still don't think $2300 gold is an impossibility this year. Market moods change so quickly these days.

If CNR is at 50p at a $1730 PoG it's hard not to see the price doubling or more with an aggressive production programme and a tailwind of gold picking up steam again. Whether $2300 is achievable is moot but even a return to $2000 would put a rocket behind the CNR price.

Could it go the other way and the PoG fall? You can never rule it out in a volatile market but with the banks recapitalised after the crisis ten years ago it's hard to see where the money goes other than into creating inflationary pressures. And that's not to mention all the money created by the BoE, ECB, Japan etc.

Fantastic news today and probably released at just the right time. A bit of profit taking is to be expected but anyone with a view of more than a month or two is going to do very well over the next twelve months.