Member Info for ElectricLion

Gold price in USD/oz: (input).
AISC in USD/oz: (input).
Production in thousand oz's: (input).
Gross profit in USD: (Gold price - AISC) * Production / 1000.
Tax in %: 30.
Tax in million USD: Gross profit * Tax in % / 100.
Net profit in million USD: Gross profit - tax.
Number of shares in circulation in millions: (input).
EPS in USD: Net profit / number of shares.
Anticipated P/E ratio: (input).
Resulting share price in USD: EPS * P/E ratio.
USD to GBP exchange rate: 0.720773.
Resulting share price in GBP: share price in USD * USD to GBP.
Resulting MCap in million GBP: number of shares * share price in GBP.

Again: just because it's maths, doesn't mean I intend it to be a precise prediction. I find it to be a useful tool though to sketch out what future scenarios may look like. As with any mathematical model, the resulting calculations are only as accurate as the numbers you put into it

(cont)

first quarters production reports come out. It's not likely to double though is it (which would still give us profit, at today's gold price), and I can see it actually decreasing, certainly in the first couple of years, as MC has already been pretty clear in his intention to high-grade the first production ozs to bring forward cash-flow - a theme he talks about often.

Long story short, my model is not intended to be a penny-accurate, time-line-precise crystal ball. It can't predict the future, but it suffices to inform me that a £100m MCap for a company making £50-65m profit a year is unduely pessimistic.

A couple of upsides not considered in my model that could counter one or two imperfections in the prediction. First off, I belive we won't be paying tax for a while as we can write-off investments to date off against profits. My model takes off 30% corporation tax that I don't think would be payable for the first year or so.

And then perhaps most significantly, any valuation against what wil be our peer group of companies fail to take into account the possibility that the entire sector could be undervalued (I think it is - CNR is not my only goldie). In that case, you are comparing against *other undervalued companies*. Like you, I think Calibre is in a pretty good spot, and I would even consider investing, except for the fact that I'm already exposed to a junior miner operating in Nicaragua, and two does not feel like good risk management! But, according to Google, Calibre already have a 532m CAD MCap - about 305m GBP. So if Calibre are cheap at £305m, what does that imply for Condor?

A negative P/E means not making a profit. How can that be? Paying off debt, plus capital expenditure? If so, it's still investment into the company at the end of the day. That's the sort of thing Amazon did for years and it didn't harm them, though I appreciate it renders a P/E-based valuation tricky to say the least, as it did for Amazon.

Google tells me Calibre have a 532m CAD MCap - about 305m GBP. We could be as big, or bigger.

P/E ratio is typically quoted as TTM (trailing twelve months), yes. It's simply harder to find/calculate forward P/E ratios, as you usually have to do the legwork of predicting the future yourself, as it's hard to find someone to stick their neck out to do it for you! It can be done though, it's just a little more speculative. If any company looks to have a dramatically different year ahead than behind, then it actually makes more sense really to use a forward P/E ratio. We're all ultimately interested in future performance after all, not past performance! Worst case scenario, if the market is feeling sceptical, which I accept may be the case here, you may need to wait 12 months for those cashflows to actually materialise in the bank account before the market will give value to them. Still at that point, we'll have earned 50-odd million quid, all being well, being half the MCap if the company is still sitting on a £100M MCap!

My view is being debt-free for a company, as for an individual, is a nice goal, but not the be-all-and-end-all. Used wisely, debt acts as an enabler and a leveraging force. For example, not only could I not afford to buy my house outright, I'm also making house-price inflation on the whole house, even though I don't technically own all of it. Same with CNR's mine. Many wealthy individuals and plenty of businesses use debt to be able to do more things than they could before, or to leverage their wealth effectively. Warren Buffett bought insurance companies to be able to access their large pool of funds needed for future payouts, in order to invest with those funds. Not quite the same thing, but you get my drift.

Earnings per share (EPS) is calculated as a company's profit divided by the outstanding shares of its common stock. One can attempt to calculate the profit of a full years production, based on the gold price, AISC, oz mined, minus tax and covert to GBP. Then divide by however many shares you think will be in circulation at that point. Like you, I've gone with a round-figure 200m shares. If you're interested in my precise methodology, I can follow up this post with one with the full details. I'm sure you'll pick holes in it, but then if it can't stand up to scrutiny, then perhaps it should be criticised!

Agree AISC could vary, but probably only by a little bit. I'm just going off the $700/oz figure essentially from the PFS. A new PFS and potentially BFS would give you, me and the rest of the market a bit more confidence in those numbers, but we'll only really know once the fir

Correction £3 at 117k oz and 7 P/E ratio should be £2.48 - looked at the dollar valuation not GBP previously! Doh! Everything else accurate, I think.

What a lot of whinging. Always happens when the share price is down. It's a bit of an emotional reaction TBH, for most, and that includes some who like to think of themselves as "realistic".

£100m MCap for around 50p SP (at around 200m shares, which I agree is probably the ballpark) is a P/E ratio of around 1.8, at 94k oz (approx production before upgraded sag mill motor, at gold price of $1800/oz) and 1.4 at 117k oz (approx production after upgrading SAG mill motor). Suffice to say, even for a single asset company in a frontier jurisdiction, that is a rather undemanding valuation! A more "realistic" P/E ratio might be, let's say 7, which get's you £2 a share at 94k oz and £3+ at 117k oz. And that's at around current gold price.

If you think otherwise 'cos you've found a producer that you think is similarly beaten-down, then look at how much profit they're actually making. Production oz don't count for anything if AISC is high. Also, check Life Of Mine (LOM) - if there's only a couple years ore left then naturally the market will mark them down for that. That's not an issue with CNR of course. 5m oz (c'mon - we all know it's there, just needs proving up) will last 25 years at 200k oz a year!

If you can actually find me a producer trading at a P/E ratio of 1.8 or less (and with half-decent remaining LOM) then I'll be buying on Monday, 'cos that's one hell of a good deal!

Can't help except to say that it's fine on Interactive Invester. You sure you've got the London-listed THX, not the Canadian one? THX has only been listed in London a short time, so maybe HL just haven't got around to adding it to their system yet?

Mali though. If Nicaragua makes you nervous...

Seems to me you don't have a plan. No offence intended.

For myself, I'm holding for buyout or production (unless something really bad happens (on the ground, rather than SP-wise)), so I'm not that fussed over what the SP does in the meantime. On the plus side, I can continue to buy at (what I consider to be) depressed prices. OTOH, a lower SP is not helpful when it somes to fund-raisings. But either way, doesn't really affect my goals or timeframe here. That doesn't make me right or wrong, it's just my strategy, and having that strategy allows me to sleep at night.

If you're a trader, then you actively want volatility - lows and highs. A steady SP is not that much good to you. But either way, it helps to have a plan, or you just spend every day second-guessing yourself, and that's no fun.

Every non-producer in the mining sector has an eventual need to raise funds. That's part and parcel of investing in these kind of companies, so better make your peace with it, or else never buy such companies in the first place.

The chart over the last year shows 50p+ has been reached more times than 42p-. Does that prove anything? No of course not, but CNR is an illiquid stock - small numbers of trades in either direction can have an out-size impact on the SP. The market doesn't really need a good reason to take it up to 50p and beyond, or down further for that matter.

MC is not looking for a swift exit, of that I'm fairly confident. He's looking to finish the job - ie. take CNR into production. What JM does is up to him, but from external appearances, he seems happy to let MC get on with it.

PO? Should I know that acronym?

Regardless, we get your message. See you in the low thirties then. No need to post again until then.

Gold price moving up today, FWIW.

Why bother saying anything when you have nothing to say? Does it make you feel better?

Tester worries that the election could trigger a re-run of the 2018 protests, and I can understand why, however personally I don't think that will be the case. I think the election will be a damp squib. Famous last words perhaps, but the result is already a foregone conclusion. Most of the serious opposition has been hounded out of the country or arrested on trumped-up charges. Needless to say, that's deplorable, but it means that the election result will not be close or contentious, just rubber-stamping the existing administration. The last protests sprang up, seemingly from no-where (at least as far as we're concerned), over social security reforms (cuts), not an election.

The options were exercised and then sold. Nothing really odd about that. If it was any of the directors, they'd probably have to say, so one of the other employees I guess.

It seems to me that if there is to be any trouble, it may be *before* the elections. The election can only have one result if all the opposition are locked up, and so the result will not be a suprise to anyone. On the other hand these arrests themselves could trigger something over the next few days and weeks. I think they won't personally. Ortega will squash any significant protest quickly and probably brutally. He won't want to let things get out of hand like last time. Sad times for the country and it's people, but I don't see much chance of significant unrest like in 2018.

Don't you think that if it was as simple as meeting in the middle, then it would have happened by now? We've already done deals for 96% of the land. That shows we're clearly capable of making a deal, so why not this last 4%?

The issue is not that we're offering low and they want high. The issue is we are offering high and they want even more. I suspect they don't really want to sell at all, hence they've set the price so high as to make a deal impossible. That is well within their rights by the way - it's their land right now, they can ask what they like for it, or for that matter, say we won't sell for any price.

So what next? Are we dead in the water? Is every development anywhere in the world completely shafted if 4% decide they don't want to go? No. That's exactly why CPOs exist - they serve a purpose to allow projects such as this to go ahead. It's not a failure to have to resort to one. It was always likely that the last few percent may need an extra push. TBH, I'm suprised it's only 4%.

It would be best for all concerned if an amicable deal could be made. But if it can't and if the miners are unwilling to negotiate, then there is no alternative. If it creates some bad press, then well, that's just the cost of doing business. The government aren't going to take the mine off of us because we can't make a deal for 4% of the land. Rather they will take the land off the miners and give it to us. I'm sure the miners will be compensated more than fairly. But at the end of the day, you can't give everybody what they want all of the time.

Sounds like she might have had a real chance. I guess Ortega thought so too. :-(

Not specifically - all this high-level economic stuff tends to go right over my head! However MC has had a whole career in finance (and a long time to think about the best way to raise construction funds). I think he will be able to get the best deal that can be got. Will we be happy with it? Who knows, but would anyone else in the same circumstances have been able to do better? Probably not.

Whatever shareholders may or may not think, I don't see MC leaving unless:
- He and JM fall out
- The company is bought
- We are well into production

He's put too much into this project to want to leave it half-done IMO.

If the real reason the SP isn't higher is that the market does not have faith in the management team (debatable), then that will resolve itself in time (albeit another couple of years yet). Once production is in full swing, the market won't be able to ignore the piles of cash we'll be generating.

Kate Harcourt advises on social aspects I think, which is quite relevent and valuable I would say. Not sure whether she still works for the IFC as well. No idea about the others. The only thing I'd say in their defense is that not everyone with an important role to play will be particularly visible. There's a lot of boring, yet essential, stuff that happens mostly behind the scenes in any company, and you often only realise it's there at all if it doesn't work and something goes wrong!

Nonsense. Options are issued annually around the time of the AGM. Happens every year. Very predictable. The strike price on these is pretty good - probably a pre-defined formula based on VWAP. MC doesn't seem to actually exercise many options as far as I can tell, and old ones expire at give-or-take the same rate as new ones are issued. So relax.

That's what I originally thought frenchie, but the RNS seems to state otherwise?

"total share options outstanding will represent 11.5% of the 134,824,179 ordinary shares in issue."

Not 11.5% of 150-odd million.