Member Info for ElectricLion

I know this whole thread is really just a bit of fun, but... I doubt he has a specific target in mind - the "multi-bagger winner" was just an off-the-cuff comment - encouraging, but let's not read too much into it. I don't really think big, successful investers think in terms of the number of bags they would like.

What he will want however is fair value. So what would he consider to be fair value? He seems to be willing to wait as long as it takes and we know he's bullish on gold (though I did notice he seems to have shifted his $2500/oz target to the end of next year rather than the end of this!).

So what's the end-game here? There's a clear plan to get up to 170k oz production. At JM's $2500/oz target, that's around £160m net profit. A fairly conservative P/E ratio would be 10, which implies a MCap of £1.6bn. Let's say 200m shares in issues at that point, gives £8 a share.

That's just on a P/E ratio basis, to say nothing of the value of our future resource, which will surely grow, perhaps dramatically (if MC says 5m, then I believe that's virtually nailed on, and considerably more is possible).

While plenty here now have already confessed there'll be gone by £2 (might be an idea to set an alert for £1.95 and beat the rush! ;-D), there should be some more bags to come even from that point.

If MC/JM sell before we get that far, it would surely have to be for a price that takes that future possible valuation into account, discounted of course for the remaining time and risk to get there.

I think the argument goes that GGPs MRE is just the beginning, and that not only will it increase significantly, but that other assets in GGPs portfolio will be just as large, and that they will own 100% of those. Even if that is true however, it will take time to prove it, so today's SP has got way ahead of itself in my view.

That said, they have a large PI following that you could describe politely as "loyal", so the SP may continue to defy gravity for a while.

GGP's SP this year has been a phenomenon which will be hard for any company to follow, including GGP itself. Keeping the interest going over the next leg will be the challenge for them, as we know all too well from our time in the wilderness.

As far as Condor goes, it's really a different beast entirely. 100% owned and heading into production, but without the PI mania behind it (yet). It seems something close to inevitable that multi-bags await, if you stick around for a year or two, but trying to work out how many, based on some read-across from GGP, doesn't seem possible or useful to me personally.

I don't think it hurts to be nice to newbies! As the SP rises, old stale LTHs and traders will exit, and we'll need new blood to sustain the rise. A few new faces freshen up the place as well - it can get a bit boring with just the same old regulars repeating the same old things! (And I say that as one of the boring old regulars myself!)

https://www.youtube.com/watch?v=1ei3W9fz0MQ

Only half-way through, but he's basically describing Condor...

Most of the buy-side liquidity has been soaked up over the last week or two. You know in a tug-of-war, where both sides "take-the-strain" before "pulling"? It's like that. There's not much slack in the rope at present. Any significant additional buying pressure will send the SP up very fast because there just aren't the shares available at this price. The price will have to rise to find sellers. Elise may sell at 60p, perhaps mb too lol - there's always sellers/traders, but I doubt that'll be enough to satiate the buy-side demand when the big RNSs start to arrive, maybe this month, maybe next, but surely not much later than that.

Indeed. You asked for risks, so I gave you risks, but I wouldn't be here if I didn't believe that the potential rewards (massively) outweigh the risks. We're expecting a few RNs which will basically be firing the starting gun on construction, perhaps before the end of the year, but there's not as lot of time left to hit that (somewhat self-imposed) deadline. When those RNSs arrive, with 100% land purchased, a concrete production plan, maybe more finance info, maybe toll mining deal, there could easily be 100% gain here in a short time. Long term, I've done calculations of what the gain could be once in production, and £4 a share is quite easily justifiable, under the right conditions. If gold goes stratospheric, then the sky's the limit. All to play for. You gotta be in it to win it. I wouldn't want to be out over the weekend, etc! Oh, and DYOR of course!

Sorry forgot... gold price could also crash. It would have to go well down into 3 figures for us not to be making profit, as we will be low-cost production (and most of the rest of the industry would be suffering or bust before we would), but it's worth mentioning.

What else? A concern that has been raised in the past is that the government could nationalise the mining industry, which would obviously be disasterous. This was tried in Nicaragua in the 1980s I think, and it was a disaster. Without the expertise needed to run the mines, either at ground level or at management level, production crashed. I think that this is very unlikely, and made more so rather than less so due to the fact that they tried it before but screwed it up. Gold mining is a very important part of the economy and the country would be screwed if they screwed it up a second time.

Against all these larger political risks is the fact that Rio Tinto now has a presence in the country. They teamed up with Calibre, maybe a year or so ago? A major like that will have done plenty of their own due diligence before entering into a new jurisdiction. We haven't seen much of their influence yet, but I'm certain they will have a long-term plan for thier presence in the country, and I personally wouldn't be suprised if the ended up buying up most of thre gold exploration and production in the country (over say 5-10 years - majors think long-term).

No, I don't think the land is a risk any more. At the beginning of the year, then yes, but now we have 93% officially and possibly more like 98% unofficially, if you believe the rumours on ADVFN. We already have all the land for the plant itself and other important areas, so construction shouldn't be delayed. We can apply to a court for a 'compulsary purchase order' if the current owners won't sell.

In terms of risks the leading one is probably excessive dilution, at least as far as the market is concerned I think. Figures on mine construction haven't been officially updated since the PFS in 2014, which estimated $110m. In thw hypothetical worst case scenario, that number could be higher 6 years later, and if it all had to be raised by new shares, then that's a lot of new shares! However the CEO Mark Child seems to hate dilution as much as we do (he is a significant shareholder himself) and his statements and actions all point towards minimisng dilution. Multiple option in this area. Perhaps a small plant to start off with. Perhaps a second-hand one. Either way, debt or other arrangements are likely to provide the bulk of the finance, so I'm not worried by the dilution aspect, although some more clarity in this area will be welcome (and shouln't be too far off).

Other less likely risks are social and political. A few years ago there was political unrest in Nicaragua, a few hundred people were killed (numbers vary depending on who you believe). Not a good situation, but it was reined in by the current administration before it became a full-fledged conflict. There are elections in late 2021, it's possible trouble could spring up around then, though personally I think previous events shocked the country enough that no-one will want to risk the consequences again. Even if there was trouble of this nature, while it may affect logistics, CNR is well-away from the major cities where most of the trouble was last time, so provided it stops short of all-out war, it shouldn't be a deal-breaker for us (though tragic for the country of course).

Independantly but around the same time, there was local opposition to the mine. A variety of factors in play here, but the proposal to move the village of La India was a major factor here. It's all been worked around now, but local opposition to any project can be very difficult to handle. But we survived that challenging period and all recent indications are that the majority of the locals are now happy to let the mine go ahead.

From what I've seen, most GGP investers are quite happy just to stick with GGP! As you say, comparisons have been discussed and GGP is really not very much like CNR in any case, but with CNR at £53m vs. GGP at £1,239m, I know where I'd rather be!

https://masterinvestor.co.uk/equities/johns-mining-journal-condor-alba-and-empire-metals/

"...a toll processing deal has been agreed in principle..."

https://twitter.com/Northst18363337/status/1331260124967694337

I'm not a technical analyst myself, but this seems as good a call as any. I've been expecting a decent pullback for a few months now (before going back up, hopefully to new all-time highs), and none so far has been strong enough to make you think "this is the one". I think this might be the one. Maybe $1750 area, then back up?

Indeed. As CNR moves through the mine development lifecycle, old investors will be replaced by new. Risk-averse PIs and IIs will begin to replace stale LTHs and PIs with ants in their pants. There's value here up to at least £4 a share at the current gold price. 100% of the land bought, a concrete production plan and finance arranged will bring new investors that won't touch us at present.

Whatever you or I may think mb, the fact is MC's in charge. He's being pretty clear about his goals for the company so whatever your beef is with me, if you have a beef with MC or the direction this company is likely going in, then I'd think hard about your investment here, same as with any investment. He's not going to change his approach for me or you. The only person who might be able to change his mind is JM, but he seems content with the current course. As things stand, with the information we have right now, we're staying 100% independant and going into production. That's the plan, for better or worse. I'm happy with that plan, so I'm staying. If you're not, maybe you shouldn't?

We're not saying the same thing.

First of all, it's probably not land completion in the way of a toll deal. Toll ore will probably be from the feeder pits, not the main La India pit.

PR has been a point of contention for a while, but equally I have no interest in MC constantly throwing out fluff to keep fidgity here-today-gone-tomorrow PIs happy. Evidently niether does he, and I can respect that, even if I disagree from time to time.

We probably won't be farming-out anything to anyone if we don't have to, which we don't. Better long-term value to be had be keeping it all for ourselves.

MC's playing the long game, always has done. I doubt he, or us, thought it would be *this* long, but the course is set and we just need to wait for the destination to appear on the horizon.

I think we could 10-bag too, though for different reasons. We are really not very similar to GGP, apart from owning some gold. There are just too many differences to make a reasonable comparison.

The main thing GGP had/has which we haven't, and may never have, is that X-factor which captures the imagination of your average starry-eyed PI and causes half of AIM to jump in and then boast that they've got everything they own in the share and that's the way they like it!

However, my spreadsheet tells me that $2000/oz gold, $700/oz AISC and 120k oz production gives £82m profit *after* tax. If we speculate that we'll end up with 200m shares in total (very hard to say, but we know MC hates dilution as much as we do), then a P/E ratio of 10 gets us to over £4 a share. 170k oz and 7 P/E ratio gets you somewhere similar, and if gold really does go nuts, then the sky's the limit.

It will take time and of course there are risks, but make no mistake, one way or another, there's the potential for a lot of money to be made here.

http://www.condorgold.com/investors/share-info

If you have less than 3%, you don't have to say.

The government will want the tax from production more than a few jobs. If no mine is built at La India, there would still be some jobs - blasting, transporting the ore, etc. Who's to say Calibre/whoever wouldn't build a mine eventually. There's only so much ore you can truck. The government could make building a mine a condition of the sale/permits. Lots of options. Personally, I'm leaning towards saying there'll be no buyout anyway.

It's up to any buyer to put forward an offer that MC/JM would go for. That would be multiples of the current price, which most buyers would struggle to justify to their own shareholders, even if if the deal was fair for the assets they'd get in return.

That fair value price is also increasing with every study we do that de-risks the project, every acre of land we buy and every day that we get closer to production.

Or they could try a hostile takeover, but I don't see that happening. MC and JM own enough shares to make it an uphill struggle to get enough votes for the sale to go through.

I very much doubt that MC is actively seeking out buyers at this time. Everything we've heard recently says that the focus is on production. If a buyer comes to us with a fair offer then I'm sure he'll consider it, but the ball's in their court.

I think the plan for a while has been to start with the highest grades we can get our hands on, to improve cashflow early on, leading to more cash in the bank for exploration, increasing production, paying off debt, etc. That does imply lower AISCs early on, and then rising as time goes by (unless we find new high-grade deposits, which I think we will). I don't think I've seen numbers put on it, but under 600 $/oz to start doesn't sound unreasonable.

Condor will have lower costs than most, so higher profit than most other producers for a given number of production ozs.