Given your bearishness on the management, may I ask what the investment case is in your view? I know you said you recently sold half, which implies you still hold half, correct? Is it fair to say you rate the asset, but not the management?
Production, not construction. No further details presented though, as far as I know.
It's possible - 18-24 months was pencilled in for construction, and we may be closer than we realise to being ready to start.
Inclined to take with a pinch of salt though, at least until some of the details are filled in. Financing being the chief one of course.
Let's be honest, a toll deal became significantly less likely once the deal between B2 and Calibre was announced. I think B2 would have been up for it, if they hadn't sold the mines. With Calibre, who knows.
Inclined to agree with RR's general point - that we shouldn't get too worked up over ifs, buts and maybes. No real need to drag MC over the coals either though - we all know that while he'd like a toll deal, that there's no guarantee of getting one, and he has never promised he can get one either. We're (mostly) grown ups here - we know the risks.
We know that the project is moving forward - the recent fund raise wasn't just to pay salaries - the bulk was for land purchase and also for infrastructure designs.
Some time ago, there was mention of raising finance through forward-selling gold production. Aguila and RR - you both seem knowledgeable about the industry - is this not a thing any more? Must it be a combination of debt and equity to raise funds, or are there other options?
At some point next year, everything should be tied up and ready for construction. What then? Well that's the $120M question. The one thing we can't afford to do is stand still. Aguila's plan seems to make a lot of sense, though if I'm perfectly honest, I'm a little disheartened by the idea of waiting a further 3-4 years for full (120,000oz+) production, but that may be the cost of not getting diluted to hell and back.
I'd imagine a 30-40k oz plant would be quicker to build, as well as being cheaper. Cherry-picking ore would hopefully mean our current $690 AISC would be significantly reduced. Condor would (should anyway) start to be valued on a P/E ratio basis, which on my fag-packet numbers, get us to at least a quid, even with dilution. The debt could be paid off pretty easily and then we'd be building up funds pretty quickly to go towards further drilling and/or for the big plant to come. Plus, (probably) no more dilution ever! Wouldn't that be nice! Add Nicaragua Milling Company into the mix, and it still looks pretty tasty to me, even if a toll deal doesn't materialise.
Respect your views RR - you seem to know what you're talking about, however a few responses...
- I don't know why B2 sold their mines, could have been any number of reasons, but seems strange that B2 were happy to offload them if there was significant value just about to be unlocked.
- Prior Calibre shareholders have been massively diluted to raise the funds for the purchase.
- MC did mention 24 months to production in the last presentation. I'd love for him to expand on that a little, since we don't yet have a concrete date for construction start.
- Toll mining deal is still just speculation, agreed, but we don't need or want a "premium" from Calibre, just a fair deal.
- Not sure what you mean by "the way MC operates". Perhaps you mean a touch too much speculation? Anything else?
- What new info are you unhappy with? Toll mining? Small-scale production? None of that seems too dreadful to me?
- Our MCap. is low, for various reasons. That on it's own makes fundraising tough. As mentioned Calibre had massive dilution to get to where they are now. Bluestone Resources's MCap is nearly 3 times ours (if I've done my sums right). It's not all about the management.
- Ross Beaty has plenty to keep him busy. His prescence here is a plus for sure, but I'm not suprised if he's got bigger fish to fry. I don't think you can read too much into that.
With excess capacity at the mill, La Libertad could provide a toll processing option as part of a staged development for La India to generate cash flow to and accumulate the capital the company requires to build a full mining and processing operation without exposing shareholders to significant dilution.
"A problem for us is the US$12 valuation per ounce in the ground. How are we going to generate cash flow with less dilution for our shareholders?" he said.
Child thinks the company could use contract mining and truck 4 grams per tonne material to La Libertad and produce 35,000-40,000oz with very little capital expenditure. La India hosts resources of 2.32 million ounces grading 4g/t.
"We can truck material to La Libertad for less than 1g/t. La Libertad currently processes material grading about 1.2g/t so this could be a win-win and transition Condor to being a producer," said Child.
Another option could be to start with a 1,000 tonnes per day plant to produce 40,000-45,000oz/y and later expand to about 150,000oz/y.
Having been granted a permit in 2018 to build and operate a mine at La India, Condor's work plan is focused on further de-risking the project by buying surface rights and fully engineering key components of the build such as the tailings storage facility and water management system.
The company is also permitting two feeder pits to raise La India's potential production profile above the 2,800tpd, 80,000oz/y pre-feasibility study base case to a six-digit production figure.
"With this, we will have one million ounces of resources permitted, which means we could produce 120,000oz/y for seven years," he said.
Shares in Condor Gold re trading at C45c, valuing the company at $43 million.
There are some conditions on exercising both the options and the warrants. For the options - "no options can be exercised within 12 months of the Grant Date, only up to 50% of the said options can be exercised in the following 12 months and, thereafter, 100% of the said options can be exercisable". For the warrants at 25p - "50% of the Warrants shall be subject to an accelerated exercise period if the closing mid-market price of the ordinary shares on AIM is more than £0.30 for 10 consecutive trading days". See RNSs on the 15th July and 8th July respectively for options and warrants. Note there are also further options all at higher prices than today and further warrants at 31p and 65p. See this page for further details: http://www.condorgold.com/investors/share-info
Any and all cash raised should be used, IMHO, for getting us closer to production. Anything else is a distraction at this point.
So what? Buys are better than sells. JM didn't cause this rise by himself you know. We're mainly just re-rating back to where we were before the big II disposals (which had nothing to do with the company by the way). The company page at http://www.condorgold.com/investors/share-info lists the outstanding warrants, so yes we know. Whether they 'flood' the market rather depends on whether they are instantly sold. I think JM will hold onto his for a start.
Director buys aren't good? New one on me. So what if the warrants are exercised? Any believer in the company would hope that the share price rises to exceed the majority of the outstanding warrants strike price before they expire. So effectively therefore also assumes that the warrants will be exercised at some point and so assumes that the dilution is inevitable. What does it matter if it's sooner or later? The share price goes up, the company gets a bit more cash, major holders get a few more shares. Everyone's happy.
That is correct, yes. And yes, it is fair to consider this a risk. Construction was anticipated to start in or around February next year, however this has been delayed, in large part due to delays in acquiring the land. There is no new ETA for construction to commence. The latest fund raise was to provide funds to complete the land acquisition.
This RNS has just about all the relevant info: https://www.lse.co.uk/rns/CNR/condor-gold-plc-permitting-update-on-la-india-project-nicaragua--61y49jmkr7y4vpv.html
Those are the facts. Up to you to judge how concerned you should be. I am not overly worried at this point. Latin America bureaucracies don't always move as fast as one would like, and historically in this part of the world, there can be legal issues around land ownership to sort out before purchase. The government is clearly supportive and so is most of the local community. So it's down to negotiations with individual landowners, possibly quite a few of them. Some of them will want to drive a hard bargain and a few may not want to sell at all. The government could probably move things along if it felt it needed to - no doubt there are mechanisms in place, as there are in this country, to encourage or force the situation if needs be, so that large infrastructure projects are not blocked by one local hold-out. So I don't see the whole project being blocked, but it will take an undefined period of time to complete the negotiations.
NDA was with B2Gold. We obviously don't know what was discussed, but B2 have sold their Nic mines to Calibre. Therefore surely any discussions regarding a toll agreement or buying B2's equipment are now over. So MC's avoidence of the subject is not really a bad sign - we must already assume that there's nothing further to talk about. Outside chance that B2 sold their poor-performing mines to bring in a brand-new, high-grade, exploration opportunity, so theoretically takeover discussions could be ongoing, but can't see what else we'd have to talk to them about. Not sure if MC's avoidence of the subject is particularly rude either. Frankly, I think MC made a mistake mentioning it in the first place, and may regret doing so - it was an off-the-cuff comment, never mentioned in an RNS. These things probably go on all the time, but there's not much to say unless something is actually agreed. No mention of discussions with Calibre, so best to assume nothing's happening, until it's official. As far as anyone knows, we're still working towards full mine finance and construction. Any upside beyond that should be considered to be a nice suprise.
Looks like Calibre has the main listing on TSX (https://www.bloomberg.com/quote/CXB:CN), which is still suspended and also an OTC listing (https://www.bloomberg.com/quote/CXBMF:US). I don't know much about OTC markets, except that they are trades done directly between the seller and the buyer, without an exchange to mediate. I imagine that would imply sporadic liquidity and more volatile prices than you would see on an exchange.
Where are you looking? I thought they were suspended at 58 cents until October. If they are trading again, I can only assume that the market, rightly or wrongly, believes that the dilution isn't worth the assets they acquired.
I think this level is simply seen by the market as a good risk-reward level. The price has been 17-19p for months, indicating that buying and selling pressure is roughly equally matched. Every time it looks like the price could fall to new lows, a few buys is sufficient to pick it back up again. So I agree, this seem like a good point at which to enter or top-up, despite the (justifiable) frustrations of LTHs.
nero has posted a chart indicating (and I'll try to choose my words carefully here, to avoid unnecessary controversy) some correlation between the gold price and that of Condor. IIRC, the chart he posted did quite clearly show that the correlation was broken when the IIs started selling, bringing us down to these levels, from mid-30s or whatever it was. So, yes I would agree that we really ought to have a leg up at some point due to the gold price rise up to this point, never mind if it goes higher, as it probably will if/when the Fed start cutting rates.
That said, it may tale a catalyst of some sort to kick-start that rise. Though buys and sells are balancing out at the moment, we are at historically low levels, indicating that the market has rather lost interest in our story. A gold price rise may not be, indeed, has not been, sufficient on it's own. A toll mining deal, or any other positive announcement however, may see an outsize reaction as the market not only digests the company news, but also includes a re-rate due to the gold price at the same time. BWTFDIK! DYOR and all that.