focusIR May 2024 Investor Webinar: Blue Whale, Kavango, Taseko Mines & CQS Natural Resources. Catch up with the webinar here.
Hi all,
Thank you for the great discussion on here and for sharing your NAV calculations!
I feel things are looking great here. I'm going to state the bloody obvious that the 32% discount to NAV means roughly 43% upside. For simplicity's sake let's say 40%. Let's say the bull case is wrong and uranium does nothing for the next 4 years and Mr. Liebenberg decides he's had enough and goes growing strawberries in Kent. When they close the shop and sell the uranium for $2.82 per share you'll get 40% more than what you pay now. For example, you invest £10k tomorrow, in 4 years after being wrong about the bull case you get back £14k! That's compounded annual return of 8.7%, let's say 9%. Warren Buffett won't be too disappointed with those kind of returns!
This is margin of safety, value investing. Heads I win, tails I don't lose. And if it's heads and we're right and in 4 years uranium has moved higher, than we're making bags of money.
Nice jump today. Glad I topped up on Wednesday. Still incredibly undervalued though.
I read some interesting comments elsewhere that it could be beneficial for both Resolute and Teranga Gold to merge, thus unlocking lots of value since their assets are in close proximity in West Africa. In turn that should boost the share price. I like the sound of that. A less appealing but likely alternative is that a bigger fish just comes and takes us over. I mean this thing is as cheap as chips.
We've already seen a similar deal this year with Endeavour Mining spending C$1b on Semafo . $1b Canadian is about 1.07 Australian. Our market cap is A$1.17. Okay, that probably puts Endeavour out of the picture. But someone else might come along. Perhaps Centamin? They are a single mine company and diversifying would make sense. B2Gold is another potential buyer. However, so far in this bull market premiums have been small. So I'd prefer something like a merger with Teranga to unlock value rather than a takeover.
Hi Tony, regarding a pull back here I'm watching the price of silver. It seems unable to break through key resistance of $18.50. It got there few times and went straight down. If we get a weekly close over 18.50 or even better 19 that would be very bullish and I'll be buying. The path to 21 bucks silver should be clear and a quick move.
However, for now that isn't what's happening. Silver seems range-bound and I fear there's quite a bit of risk to the downside as well. So sitting on the sidelines atm. If FRES drops to 740 I'll top up as I've said previously but also won't throw the kitchen sink at it.
I took some profits today at 8 quid. I bought heavily on the 8th at 737. Still have most of those and not touching my core position here. Bit as I've said many times on this board, this is a zig zag share and needs to be traded a little bit.
I'm having a de ja vu of what we went through in March. Everything is selling off, including PM stocks due to margin calls. It was a total bloodbath today on Wall Street. The metals themselves held quite well. We'll see what happens with FRES tomorrow.
The fun bit? The Robinhood traders having their heads handed to them. These guys thought they are smarter than Buffett and Icahn:
https://markets.businessinsider.com/news/stocks/robinhood-traders-betting-stocks-against-veteran-investors-winning-buffett-icahn-2020-6-1029289894
Get the popcorn ready!
Pappy with Shell you can sleep like a puppy! Your money here is as safe as houses.
If it drops to 7 quid, I'll definitely be buying hand over fist. I've had only a small position here recently due to it underperforming. I made quite a nice return on other investments but there are very few PM plays that haven't run yet and this is one of them. It's a good company even though it's disappointed a bit. So I'm going to make this a big position again and hope to profit 'bigly'!
Regarding exploration projects we also own I think 26% of Manas Resources and have a person on their board. They have 3 exploration projects in Cote d’Ivoire. That one has a $13m market cap.
We also own 15% of Mako Gold also in Cote d’Ivoire, which is even smaller in terms of market cap - about $8m. Not to be confused with the Mako mine in Senegal.
There's also Oklo Resources where we own 8%. This one is much bigger - $127m market cap but also explorer in Mali.
Finally Loncor Resources, $68m market cap. They have some JVs with Barrick in the DRC.
None of these are in Resolute's corporate presentation at all which I find a bit surprising, especially Orca gold which is progressing nicely, I like that one. I can't say much about the 4 explorers, as I don't know much about geology. But it's good to have a pipeline of projects like these. If they turn out to be promising we already have a foothold in the companies and could try to take them over.
I almost topped up today and instead bought something else. Hopefully, this doesn't go much higher tomorrow on the news and I can pick up some more shares. I have some dry powder at the ready. My timing here has been far from perfect so I might as well follow the lead of the CEO haha
Nice, looking forward to this. Gold has pulled back a bit today and most gold stocks have sold off. Perhaps a chance to top up tomorrow.
Going back to my mini essay on our projects, the news just came out that we have participated with $1.2m in Orca Gold's recent private placement. The same amount as the Lundins with Zebra Holdings and Investments S.à.r.l.. Ross Beaty added about half a milion. So Resolute is maintaining its percentage of the ownership, or perhaps increasing it slightly. I haven't done the math.
I agree, the pipeline has been shrinking and they should try and fix that. Apparently Orca Gold are also open to a JV so it doesn't have to be a full takeover, perhaps increasing our stake and giving them some money to develop the mine. I'm sure someone with deep pockets like Ross Beaty could also add a couple of dollars to the kitty!
On another note, I've done some more digging (excuse the pun) on Bibiani and I haven't been too impressed. It seems to be one of those old projects that has been recycled and has changed hands multiple times. Apparently Resolute didn't acquire it per se but got it as collateral from the Noble Mining bankruptcy in 2013. If I'm not mistaken the FS was done in 2016 and environmental permit was received in 2018 with plans for "operational readiness to commence in FY2019":
https://www.asx.com.au/asxpdf/20180713/pdf/43whc1fw56x61c.pdf
Obviously the difficulties at Syama last year didn't help but I wonder if this project is so great and has AISC of $700-800 why has it changed hands so many times and it's not producing yet after 7 years of ownership? Why does Resolute need to place it "under strategic review" to use their own words? It should be a no brainer with capex of $75m and AISC of 1000 bucks below the price of gold. I feel something is not quite right there with this project and they might indeed be looking to get rid of it. The fact that it's barely mentioned in the corporate presentation is also in support of that.
I've only been a shareholder in the last 1 year or so and don't know the full history. It'd be interesting to hear other thoughts on this.
Monkshood, congrats on being in the blue. I didn't average down enough and I'll need us to go up a bit more before I break even. We're close to the LSE Listing price right now which is a nice achievement but I feel also that without the shorts Resolute has a lot of catching up to do compared to peers.
Regarding our own projects a quick look at the corporate presentation shows a lot of info about Tabakoroni and Syama and very little about Bibiani other than it's under strategic review. Considering that all the infrastructure is in place at Syama it probably makes sense to go for Tabakoroni. Hard to tell how that would shape up, as the PFS has just been initiated. We'd know more when that's complete. So I could definitely see them going forward with Tabakoroni first and keeping Bibiani for later. Not sure why they would sell it though, as they would need to replace it somehow in the future. Unless they get an amazing offer that would make little sense to me.
I've read some speculation that Resolute could go for Orca Gold in Sudan. Its share price has gone nowhere in the last 5 years so it's potentially cheap. I haven't done too much research on that but Ross Beaty is involved (10% ownership) so it should be a decent project. They have a FS on the project but the initial capes is much larger than the market cap so financing the project on their own might be tricky. I believe we already hold 15% of the shares so there is clearly some interest there from Resolute.
Going to Sudan will add some jurisdiction diversification but Sudan is obviously not a very stable place. All in all I don't think it'd make sense to get rid of Bibiani and go for Orca Gold. The projects have similar resource size and AISC but Bibiani has an initial capex of only $75m compared to US$328M for Orca plus costs of the acquisition.
I was looking at the ANTO price chart today and was a bit shocked to find out that we are at the prices from December 2019 at £8.60.
The 5 year high is 1100, the 5 year low is 350. That's 28% upside from here and 59% downside. Perhaps I'm wrong but considering the current economic situation I feel we should be closer to the bottom than to the top. I'm thinking of taking some profits tomorrow. I still have my core position but I'm a bit uncomfortable at these levels.
Yes, spot on pipedreamer. BHP has really followed the main indexes. Actually, I was looking at the BHP price chart today and was a bit shocked to find out that we are at the prices from October 2019 at £16.
The 5 year high is 2000, the 5 year low is 615. That's 25% upside from here and 62% downside. Perhaps I'm wrong but considering the current economic situation I feel we should be closer to the bottom that to the top. So I took some profits today. I still have my core position but I'm a bit uncomfortable at these levels.
Having held this one for over 2 years since it was back at 1200-1300 I share some of the frustration expressed on this board. This has massively underperformed. Personally, I'm comparing it more to Pan American due to the similar size. PAAS has done much, much better!
A quick look at the 1 year and the 3 year charts is all you need to know. I'm up about 80% on my PAAS position. This is the kind of returns I was hoping to see from FRES once the PM prices start moving!
With lots of mines still closed in Mexico I'm not feeling too optimistic about our H1 results. We'll have to wait for H2 but we said that last year. My hope here is that at some point the price of silver has to catch up with gold and this will be Fresnillo's time to shine. So hopefully, we won't have to wait for Juanicipio to go to commercial production to get a good return on our investment.
Hi VV,
Well done on keeping the Barrick shares! I wish I had done the same. I didn't keep mine and split the money between Equinox gold which has done great and few others that haven't done so well like Gold Resource Corp.
I've been invested in Resolute since August 2019. At the time I thought I'm investing during a pullback in an undervalued company. My thinking was similar to what you described. Also they have had low dilution historically, low GA costs, all things I like to see.
Looking at the chart my timing was very poor and I'm still quite a bit underwater here. However, I'm still holding as I think this should re-price to at least the previous highs. I sold my Roxgold shares recently as it wasn't performing just to see it almost double! I think something similar might happen with this under-performer in my portfolio and I don't want to miss out again. The fundamentals are good and we just need a bit of patience. Even if the company doesn't execute as well as we have hoped the rising gold price should bring us some profits.