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Weekend discussion.

It looks like there may be some volatility ahead unless the FED makes a move. The SLR (Standard liquidity or leverage) ratio was relaxed last year and allowed the big US banks to exclude treasuries from the calculation. This lasts until March 31st unless the FED ignore pressure from the Dems many of whom don't seem to understand what its all about. The markets have been nervy for days now about the long end of the yield curve which has been going up as 10 year and longer holders sell. As yields go up gold and silver has gone down (the classic inverse action of US yields and the metals). This could well get worse if the FED doesn't extend the relief as US banks will be forced into a fire sale of treasury assets to increase the cash/asset SLR ratio. The longer the FED waits the more the market will panic. It could become quite chaotic towards the end of March.

Meanwhile, if the FED doesn't manage the long end yields the US government will likely get into a debt/interest repayment bind. Everything suggests the FED should take action. As for the Dems they seem to want the FED to monetise something like 2 trillion to fund Biden's giveaway. The whole thing suggests trouble ahead, and maybe not that far ahead.

So what's it got to do with Condor? Condor is good for hundreds of $USD so need need to worry just yet but there will be a sentiment impact in the short term based on the direction of gold. Of course if the FED acts the whole thing could go into reverse with yields dropping and PoG increasing. Politics of course interferes with everything. I find it frustrating that sentiment can be so influenced by a central bank thousands of miles away but that's the world we live in. On the upside if progress on the site is seen to progress quickly it might just allay those extraneous influences.

Discuss.......

As has been alluded to already my view is that both bases are being covered, the production route and the trade sale option.

One thing I have learned about the junior sector is that 5m proven ounces is a magic number. The larger mid-caps and majors tend not to be interested in acquisitions smaller than this. By jacking it up to 5m it will indeed be in the shop window, and appear a very tasty morsel indeed for a producer who needs to boost reserves with a quality purchase. We know people have kicked the tyres over the past few years. Perhaps for the big ones it was a case of 'we'll be back when you're at 5m'.

Meanwhile, going down the production route simply makes it a lot easier for an acquirer. Sure, they will have to pay more but that's certainly not a problem for us. As for today's news, it's not quite as big as saying 'A deposit on a mill has been put down...' but the production intent is pretty clearly there. For years now the market has been saying 'show me; don't tell me'. The intent is clearly there but it's probably the case that the market wants to see the money committed to a mill. I'm assuming that the perceived delay is probably down to cutting the best deal vs. overpaying to get something in place quickly.

As I've mentioned before, I'm always pragmatic about the dilution argument. When a placing is good or bad is entirely dependent on what the money is used for. 'Working capital' is usually a disappointment but 'investing in..' (a hard income producing asset) I tend to look on somewhat less grudgingly. If another placing gets us to generating income sooner rather than later then so be it.

And yes, I did notice the JM investment and its timing. The company was not in any immediate need for it which leads me to believe that he may well want to get the money in at a low price while he can. As an insider he may not get the opportunity as easily (closed periods etc.) before the price really starts to lift off.

I've must say I'm struggling to find anything awry with Tester's analysis. It looks on the button to me.

With cash in the bank the toll milling option looks less likely. I reckon a deposit on an acquired mill is pretty close. Also, my sense is that Calibre would have signed up by now if they actually wanted to do it. Perhaps, as Tester implies, they were hoping Condor would run out of cash and could put in a 'steal it' type bid. It looks like they reckoned without the enthusiasm that's around to fund the company. If they don't get their fingers out the opportunity to make their own assets work harder will soon be lost.

The residual land aspect is a non issue for me. It's going to happen one way or another and isn't presently stopping progress anywhere else.

I can't really add anything to Tester's list. There's no point me repeating the points. However, what I will say is that the cash raised at 42p is a small price to pay given the multiples in value it will create when deployed on creating a producing entity. Personally, I tend to see placements in pure explorers as dilution but when cash is deployed on creating hard assets (mills etc.) I see it as investment. It's basically swapping one asset (cash) for another (land and buildings), the latter of which can create a sustainable return. There is a big difference between this and a speculative explorer paying salaries to dig holes in the ground which may, or may not, pay off.

Everything I'm seeing suggests Condor is on the brink of something good. I fully expect the difference between Jan 2022 and Jan 2021 to be far more impressive than benchmarking Jan 2021 with Jan 2020.

There will be ups and downs on the way it's clear from today's price action that some people are starting to notice. As we all know, tiny buys and sells appear to have dramatic effects on the share price. Today the buys have it but there will be days of profit taking as well.

The Pan American announcement was the big one:
https://www.prnewswire.com/news-releases/pan-american-silver-announces-succession-plan--ross-beaty-to-retire-as-board-chair-at-the-2021-annual-general-meeting-gillian-winckler-is-chair-designate-301220756.html
Contrary to what many may think, the fact that he has left so much in Condor suggests confidence, especially in a retirement situation. After all, no matter the fact that CNR is close to production it is still a speculative stock.

I think it is all to do with RB's retirement plan.

He seems to be selling a number of assets recently.

USD is up which is obviously putting downward pressure on gold. It's up because of the bullish sentiment on the U.S. economic recovery prospects (6% - 8% touted). The headlines are what the algos are reacting to but the reality is that by the end of the year 'Inflation' will be in the headlines, either already manifesting itself or just around the corner. I do think we will see a robust recovery but I also think that consumer inflation will be more than noticeable. In the meantime I would not be surprised to see gold testing the low $1700s before bouncing back up.

As for Condor we know that the all in costs are way, way below the current price of gold. So long as we don't see it dropping to the $1000 level I don't think there is much to be concerned about.

In the meantime we just have to sit tight a while longer. The price will continue to jump up and down by 5p or 10p because, as we all know, the real free float is small and tiny volumes translate into big moves. Just imagine what would happen if the $GME crowd moved in with a big bunch of call options. No short squeeze but you could see the gamma equivalent. I'm kind of surprised that it doesn't happen more often to AIM type stocks.

Agreed. I've had £1.25 to £1.50 on my radar for quite some time. However, the reality is that if, as, and when the SP hits £1.50 I doubt MC will be enthused about a trade sale. It will just be a starting point for another doubling in price as the prospects of a ramp-up in production becomes a reality rather than a talking point. 'Don't tell me; show me' became the mantra in this business well over ten years ago.

The short term moves just demonstrate how so few shares being traded can change the price. Let's face it, there are only a few tens of thousands of shares that are being bought and sold at the moment, at best a few hundred thousand. Even a minor shortage or surplus is having a dramatic effect on price. At the moment CNR is still one for the speculators but give it another year or eighteen months and it might even appear on the institutions radar. One thing is for sure, when production does attract that kind of interest they won't be buying it at 60p.

ddd

Herewith is the driver for a higher gold price:
https://www.marketwatch.com/investing/index/DXY
I did think $2300 was on the radar this year. I now think $2500 is reachable.
Of more interest is gold in GBP, currently at £1430.
https://goldprice.org/spot-gold.html
BTC looks like a classic bubble formation when you look at it on an annual basis. It will blow off just like gold did ten years ago. Not one for me at the moment, although I would admit that central banks don't have much influence in that space. My guess is that they will be happy to see a bubble in BTC pop.

ddd

Quicklink:

https://www.condorgold.com/investors/presentations/master-investor-conference-4th-december-2020

If this is indeed on the button I think it's fair to say it would be price moving news and thus require an RNS. The fact that we haven't had one suggests that nothing has been signed just yet. However, could it be that these trucks were carrying materials to 'test' process? Wouldn't both parties want to run some trials before committing? All guesswork of course but I do recall some testing taking place years ago with the Arian Silver toll deal.

Good sign though that we are getting pretty close to resolving both the land sale and initial processing arrangements.

ddd

2022 of course. A bit too fast!

I suggest everyone read and take on board the implications of this:

https://www.zerohedge.com/markets/heres-how-central-banks-will-finally-unleash-inflation-shenzhen-case-study

As the summary states '.....which while the biggest economic and financial story of the year by far, has been successfully drowned in the noise surrounding covid and the US presidential election.'

This is coming, and fast.

ddd

I think some people are trading it as a rumour until the land sale\toll deal is confirmed via RNS. I'm thinking December before we get anything solid but still hoping for an early Xmas present.

As for gold, it looks like another test around $1800 has just taken place. This could be a big moment for the short term view. Will it drop another $50, below $1800 support, or does it mark a bounce-back? As Condor moves into producing something the gold price obviously becomes a lot more relevant.

I'm having issues with HL today and can't get through to them . Anyone else use them?

It still looks OK.

https://www.nhc.noaa.gov/gtwo.php?basin=atlc&fdays=2

ddd

It could be in the news but should miss us:

https://www.zerohedge.com/s3/files/inline-images/2020-11-16_12-12-48.png?itok=iuqK8Pxm

ddd

Oops forgot:

'Summer is Coming'

ddd

Indeed. This is what everyone has been waiting for:

"....The decision has been taken to accelerate the Project, by-passing a Feasibility level design, which is typically required for bank lending and go directly to a TSF Final level of design, which will, subject to funding, allow the fast tracking of the Project to future operational status".

ddd

With the US debt potentially reaching $30 trillion by the end of 2021 (honestly, the next presidency is likely to be a poisoned chalice), the pressure on the USD and US interest rates will be considerable. Many are now speculating on US inflation and I tend t think it's coming.

A chartist's view:

https://hubertmoolman.wordpress.com/2020/10/22/gold-and-crypto-is-this-how-charts-look-before-a-monetary-collapse/

I can't really think of a better context for Condor to start production.

Here's a catchphrase for you...

"Summer is coming"

ddd

I'll keep with this thread.

Warrants

I have a more sanguine view of the warrant situation. On a short term trading basis it does seem to matter as the market price drifts back to the warrant price. Medium and longer term, it's less so as Condor nears production. We also need to remember the context. There have been various tranches issued at different strike prices:

2,372,915 warrants at exercise price of 31p. Expiry date 7 February 2021
3,240,421 warrants at exercise price 25p. Expiry date 15 July 2022
8,639,330 warrants at exercise price 40p. Expiry date 28 May 2023

So 40p is not the lowest price. We have to assume that the deals done were driven by the availability of funding at the time, the incentives needed for investors to part with it, and of course the market price. Overall the warrants add up to circa 14.25m which would represent another £5m or so in the bank if exercised. Shares in issue are circa 118m so the warrants would add another 12% or so, albeit it also represents potential cash in the bank. The 11.85m stock options are also at different strike prices with the 3.7m 2020 version at 42p. Not exactly in the money at the moment but it remains an incentive to move the market price northwards. All of which will be lost in the rounding if we can move towards meaningful production in a matter of months. Sure, some will take the short term money and run but the prize is still there to be had. It's the price we have to pay to get it, unpalatable though it may be to people who feel the need to watch the price on a minute by minute basis.

Will Condor sell?

It has to be an option although I'm dubious about whether the board will sell at anything below 125p. £100m would be a real try-on although it would not surprise me to see RIO or Calibre have a go. If I throw in the warrants and options my 125p would probably be more like £180m. Even at that price I would not feel particularly rewarded for over ten years of investment loyalty. I doubt MC\JM would think much different.

News

I thought we might get something around now, although I'm not seeing any white smoke from the chimney. Perhaps November. It would make sense for MC to close and deals while on site, assuming he manages to negotiate his way through this Covid world. Has anyone got a clear idea what his current location is? As mentioned before, being on the other side of the Pond is not a prerequisite for progress, but it would certainly be an opportunity to sign off anything that needed signing off while on site.