Member Info for ElectricLion

Inspired by RothRock, so would be particularly interested in your view RR.

Ross Beaty holds a chunk of Condor. Lukas Lundin holds a chunk of Calibre. They both have impressive resumes and are clearly best mates.

See here: https://stratum-international.com/interviews-with-mining-greats-ross-beaty/
and here: https://www.mining.com/web/lukas-on-lundin/
and here: http://www.canadianminingjournal.com/news/philanthropy-ross-beaty-lukas-lundin-give-b-c-museum-of-mining-3-72-million/

Ross Beaty is building a gold company (Equinox Gold) out of aquisitions and mergers. So is Calibre. Will they cooperate or compete? Either could be good for us. Let's assume they cooperate.

Condor gets bought or is merged with Calibre. Calibre gets bought or is merged with Equinox Gold.

Upside for us? I wouldn't want to speculate as I'd get labelled a shamless ramper! Suffice to say, I'd probably stick with it until RB sold up.

Thoughts, opinions, criticisms?

Calibre clearly thought the deal was worth making, and I don't doubt their judgement, however I think you need to compare apples-to-apples before judging CNR too harshly in comparison.

For one thing, any prior Calibre shareholders have been massively diluted. I think their issued shares is now 5 times what it was? For another, a $/oz valuation, or a oz/annum production absolutely has to be qualified with the AISC. 120k oz per annum at $700/oz AISC makes more money than 200k oz per annum at $1000/oz AISC, assuming a $1400/oz gold price.

B2 haven't shown much interest in Nicaragua for a while. High AISC, labour issues and depeleting mines, plus the political challenges. Not sure Mali is a better jurisdiction, but at least they're maing money there. Not suprised they wanted out of Nic. There is just the very faintest chance that they got rid of their old, high AISC mines to swap in a brand-new , low-AISC exploration outfit, but that's a very long shot.

I concur that I hope B2 haven't been stringing us along. MC will be spitting feathers if that's the case. JM and RB won't be thrilled either. Hopefully we will hear something, soon, about what our future may entail. I think we're all getting the feeling that we're getting to the sharp end of this now, but with so much fog still swirling, it's understandable that nerves are fraying.

I was thinking the same when I saw that, but then they're getting all the mine equipment chucked in as well, and then the AISC is significantly higher than ours, so overall I'm not sure you can read too much into that either way.

It's in the presentation I linked. Page 3, bottom right.

https://calibremining.com/site/assets/files/3960/calibre-mining-july-2019-acquisition-presentation.pdf

Interesting. So you think CNR will be bought (or perhaps merged with?) Calibre? Or at any rate some combination of Calibre management/Lukus Lundin? RB of course has his own vehicle in Equinox Gold. Wonder if/how that would play into that scenario? Of course, however much sense you think it makes, a price would still need to be agreed upon, and as you imply it would seem tough to reconcile what MC (and all of us as investors of course) would like and what Calibre (or whoever) might be willing to pay. That's the main reason why I was and still am cool on the idea of a full takeover, I just don't see anyone offering us a price that we would like. One final thought - no-one is a mine-builder, until they build their first mine. I don't think MC is incapable of building a mine. We do however need some idea of timescales/direction/finance as soon as possible, or the market will continue to punish that uncertainty.

Yes, very impressive. Not sure what your point is though? No offense intended.

Good spot. Well that puts the cat among the pigeons, doesn't it. Clearly a significant deal. Doesn't seem positive for us I gotta say. No more toll deal with B2, no more buying their old equipment. We may be able to negotiate with Calibre or we may not. They're clearly a player now. Substantial dilution for them though. 42.8M total shares listed on their site. An additional 167M "subscription receipts" (whatever they are) issued in this RNS. Wonder if MC will comment on what this means for CNR any time soon...

https://www.youtube.com/watch?v=JGlP-8Kl3hE

My gut feeling is that the agreement, whatever it is, has already been struck, however is conditional on permits for the feeder pits. There may well be a flurry of RNSs once the permits arrive.

RB has multiple stakes in various projects. I'd imagine his strategy is rather similar with all of them. Identifying quality assets with good management, and holding for the long-term.

With respect, JM and RB have already held for many times longer than you have, so I'd say they have already held for the long term. Having done so, I can't see why they would sell up now (at least, not for peanuts), when we are so close (relatively speaking) to production.

I would expect majority debt financing, topped up with toll-mining revenue or equity. You will note I steered clear of an SP prediction - as you say that does very much depend on number of shares at that point and that is probably the biggest unknown. MC will be wanting to keep new equity to a minimum, of that I'm sure - he's in the same boat as we are to some extent. I'm hoping for no more than 100M shares total, so £6 a share for £600M MCap, but we will have to wait and see on that one.

There have been a range of estimates for constuction funds, I think $130M for the 120k oz plant was the last I heard, though presumably that could be cut, possibly in half, if we were able to buy B2's second-hand equipment. That'll be quite easily repaid from a few years profits.

Regarding Seingred's producers - I'd be genuinely interested in hearing more about those. The oz's per year is not that relevant - how much money are they making? (ie. What are their costs?) It would be very helpful to my spreadsheet calculations if I were able to plug in some realistic P/E ratios for producing miners.

Your second scenario I belive is the most likely. Come to think of it, I'm not sure what other option you might mean, other than takeover or production? The only way a sale will happen IMO is if someone offers a fair price for the asset at this stage of development. Given my fag-packet example below, I would think that would be in excess of £1 per share.

It might be helpful to you to check out some of Aguila's posts. He/She seems particularly well informed, and I belived mentioned $150-200M as an estimate for a fair takeover valuation. That seems to me to be as good a range as any. http://www.lse.co.uk/member-info.asp?nick=Aguila

RB got rich by being more interested in the full value of the assets, rather than looking for any particular percentage return. He's also a very patient man. Far more patient than the vast majority of PIs on here. Unless Nicaragua becomes the next Somalia, one day, Condor will be a near-as-dammit 200k oz a year producer. One day the gold price *could* be 1500$/oz or more. That'll be $160M+ profit, every single year, for 25 years, if there's 5M oz all together. What P/E ratio might be appropriate for a company like that? No idea TBH. 5 would be criminally undervalued under most circumstances. That's a £600M+ MCap. As always, that's not a prediction, and things could go wrong, and it'll take time and money to get there. But when it comes to RB's intentions? He's looking for the big prize, not a piddling percentage return, and he'll wait.

That Environmental and Social Report is worth a look. The phrase 'no stone left unturned' springs to mind. That, along with the Geological Review on Cacao posted a few pages back, makes you realise just how much the company is doing, even though on the outside it may look like not much is happening.

It also makes you appreciate that while MC is the only guy we ever see, there's a whole team behind him, doing all this absolutely essential, though unglamourous, work to build the foundations the company needs to succeed. When this share eventually gets the recognition it deserves, it will be due in no small part to the professionalism and the attention to detail of all of those who work for the company.

... it would be most appreciated if you could keep your playground vendettas to the IRR board. Constructive comments always welcome here. Bickering, not so much.

http://www.lse.co.uk/member-info.asp?nick=frenchie38
http://www.lse.co.uk/member-info.asp?nick=tester123

I forget the actual wording, but I believe that holdings notifications only need to be made once the seller has finished. Until that RNS lands, none of us can say for sure who it is.

If the IFC have changed their whole funding strategy then it would make sense for it to be them. (Any source for that WG?) If that is the case, then it is not specifically related to Condor (though I am getting tired of our bad luck!) and I guess IFC might be selling down other investments as well?

There have been 4, I think, 280k trades, 3x 500k trades and several 150-125k trades. Hard to be sure that they are all the same seller (or for that matter, that they are all sells, given how poor the reporting is), but it seem likely that 3-4M shares have already been disposed of. The biggest shareholders don't have much more than that (I think it's a safe bet that neither MC, JM or RB are selling), so it's likely that whoever it is, they must be nearly done.

I'm pleasantly surprised by how well the SP has held up given the selling pressure. All the shares being dumped on the market are being soaked up, without the SP tanking too much further. Another indication that the market sees value at these levels, and so a bottom here or here-abouts seems very likely.

City Financial's holdings were transferred to Garraway Capital Management when they went into administration. Garraway then disposed of the stock shortly after. See RNS on the 11th April. So they are already completely out.

https://www.kitco.com/commentaries/2019-06-07/Gold-Complex-Poised-to-Break-Out-Led-by-Three-White-Soldiers.html

Hi guys! Always nice to have a few new faces around, the board can get a bit stale with the same old duffers (myself included) posting the same old things!

The share price has been hit recently due to political unrest in Nicaragua last year and an II going bust and selling off all it's holdings. Prior to that the share suffered in the same malaise that has affected all gold stocks.

I'd never say that the SP can't go lower, but it seems to have found a floor here for the time being. It would take another II selling up to drop it to anything like 9p IMO. If you were to buy in now, you would already have an average that most LTHs would kill for! Asking for 9p might be considered a little greedy! lol

The chief concern at the moment is around financing for the mine construction. There is understandably concern that this will involve crippling dilution, however many other options are available including debt, forward selling gold production or toll mining (more below).

The CEO Mark Child (MC) holds 5.5% and takes a fairly modest salary for his position. Ross Beaty and Jim Mellon, both big names in the industry, hold substantial chunks.

In the relatively short-term, an NDA has been signed with B2Gold - the biggest producer in Nicaragua. The outcome of those talks is yet to be announced.

MC would like a toll deal, whereby our gold ore is trucked to B2's plants for processing, thus bringing forward cash-flow and making the company far less dependent on raising equity to fund the company.

Other arrangements are possible too, including buying B2's old mine equipment (dramatically reducing CapEx for our own mine build) or a JV or full buyout.

Longer term, construction is planned to start some time before February next year and will take approximately 18 months. Production will likely start at around 120,000 oz per year from the main open pit, rising to 160,000 oz with underground mining in addition. I would think 200,000oz per year would be the target in due course.

I'm sure you can run the numbers yourself but 120,000oz per year gives about $70m a year clear profit vs. current MCap of $18M. Critically, funding still needs to be arranged of course and you may not want to wait until full production, but still a pretty good bet at current levels I would say.

Good luck, whatever you decide.

Smells like that's been generated by a machine. Utterly awful, and yet (unintentionally) pretty damn funny too!

I'm amazed Yahoo is still around. They're been an absolute car-crash of a company for over a decade.

CF, the discussion with B2 and the special resolution are not the same thing. (Ignore mb, with respect, he doesn't know what he's talking about).

The discussion with B2, we know essentially nothing about, due to the signed NDA. We know MC wants a toll mining deal. A number of other possibilities are possible, up to and including a full takeover.

The special resolution on the other hand will be voted on in the AGM on the 16th and will allow the company to issue 100M new shares in the company (up from 50M).

I doubt whether the share price is being kept low deliberately, if that's even possible. I don't believe in conspiracy theories, as a rule. There's a lot of uncertainty around at the moment, and there are legitimate concerns over how the mine will be funded if we do go it alone. You only have to look at this board to see that some PIs are a bit twitchy, to say the least, and there's still rather too much uncertainty for a new II to buy in I would have thought. Personally, I think this is a cracking opportunity, but until the fog clears and we can see the future a little more clearly, I expect the SP to stay somewhat muted.