Member Info for Genghis15

ISA

I am unable to access the ARC note now, I think I must have had a free to read link b4, fortunately I dowloaded a copy. The link is here if you can access it. On debt, it says :
"Thor met the cUS$100m cost of Segilola’s construction and associated costs through a combination of equity raises undertaken across 2019 and 2020 (corner-stoned by the AFC) and US$81.5m of debt and gold stream facilities broken down as follows:
? US54m AFC senior debt facility: a five-year senior credit facility (secured against Segilola) carrying an interest rate of LIBOR plus 9%, with a repayment moratorium for 21 months post financial close. AFC was issued with 33.3m new shares in Thor on financial close of the facility, which added to its previous participation in equity financings sees it Thor’s largest shareholder with 17%.
? US$21m AFC gold stream prepayment: a gold stream applicable to 10.3% of annual gold production from Segilola up to a maximum 2.25x money return on the US$21m prepayment (US$47.25m). Gold under the stream will be sold at a 70% discount to the prevailing spot market price.
? US$6.5m Norinco EPC funding: Norinco International of China, with whom Thor signed a US$67.5m lump-sum turnkey EPC contract to build Segilola, agreed to finance US$6.5m of the contract through a five-year facility that carries an annual interest rate of 8% and has a repayment moratorium for 21 months on the principal. The facility has shared security with the senior lender."

Hazbeen
Not a trader myself (at least, not usually) but I look at fundamentals, and there is nothing more fundamental than CASH.

The last reference to cash was on 24 March Interims, which said "As of 30 November 2021, the Company held £2,419,266 (2020: £1,145,301). The Company is fully funded to bring the Lubu Coking Coal Project into production by the end of Q1 2022."

Note end Q1.
Further, on 21 March, the co stated "With production imminent, the Company is now in a position to negotiate coking coal offtake contracts at spot prices and leverage the recent increase in the coking coal price. Discussions are underway with several interested parties and the Company will provide an update as appropriate.The Company believes there is a good possibility any contracts entered into for offtake, either for coking coal or coke, will provide some form of funding, be it prepayment against first production or some other form, which can be utilised in the roll out of its development plan for the manufacture of coke."

So, the co is "in negotiations" foe offtakers ; as part of that it is seeking upfront payments to finance the coking plant. That puts offtakers in a pretty strong position ; we know Zim customers aren't keen on financing a competitor.

So, export? Possible, yes, but again, the co has the begging bowl out .

Look, in a project like this offtake should be nailed down b4 production starts. Stockpiling is fine...IF you have cash. If you don't, you are incurring all the costs of production but no revenues.

How long does that £2.4M last? we don't know. How much was spent in capx, how much is left to keep the lights on and keep production moving? We don't know.

mb an offtake deal will land tomorrow. And mb not. If one doesn't land soon, .....well, go figure.

All, of course, imho, and dyor.

ISA Inv
FCF cetainly looks rosy, tho of course there are significant debt / royalty obligations to pay out of that.

The ARC note had c. C$30m net of those costs, which is still pretty impressive ...and that was at $1780 gold.

boltok
clearly you must be added to the filter list. I'm ot interested in trading insults.. Fwiw, I am still out ; so you can call me a deramper, now, I guess. Bt it's a v interesting stock, so I am keeping a close eye.

"Offtake is going to be no probs." Gotta source for that? I'm not so sure. "producing $1.5 million per month" It's producing coal. Absolutely f all cash with no offtakers. Surely if offtake was in place, we would have been told.

I know I''ll get flak 4 saying this out loud, but does no one think there might be a whiff of a sneaky, and sligtly leaky, placing about this morning's move? Just wonering, hopefuly wide of the mark.... as noted by others, it IS AIM, sharp moves happen, Anyway Mr X/ Doc still confident.

Mr ?
@MlSTER__X
·
45m
#CGO getting hammered here and for no real reason, 7.25p will see much higher levels soon.

Funny old game isn't it

This is the puzzle. Something is not right here.

Either AM is dumb even with his own money, or ...what? Is something else, something else afoot?

Just answering the Q in the OP.

If you knew all about this old news, why get so upset about it? It's out there and all investors deserve to kno about it.

It doesn't mean CGO isn't going to be a good investment, it may well be, which is why I am still here and watching closely. But imv it does mean that words alone should be treated with caution , as with any investment.

Recent words have been particularly encouraging wrt possible alternative offtakers if the Zim buyers strike continues. If that materialises, I have no doubt the SP could double almost instantly. But atm they are only words. Just as are my posts.
Dyor and make your own calls. But insulting those posting alternative views serves nobody's interests.

Evidence, you say?
As I said b4, there is no proven wrongdoing there, but it is not an enviable part of a cv. Imv it is just cause to treat words with caution until facts are certain.

https://biznakenya.com/carl-esprey/
https://www.fnlondon.com/articles/tim-whyte-carl-linderum-carl-esprey-investigation-cleared-20131206

https://uk.finance.yahoo.com/news/china-europe-rail-routes-become-000000855.html
Hmm.

If empty containers are a problem transiting Russia, copper....?? Still, as above, there seem to be ready alternatives.

Reg
I traded in and out a couple of times , both times intending to be LT but getting cold feet. and both times, fortunately, at a profit. So no sour grapes from m. As I said b4, if I'm wrong, fine. Great upside here if it delivers.

Company analysis is about facts, not emotion. railing at me changes nothing, Que sera, etc. Good luck with your investment.
I will be keeping a close eye here, but for now other fish are frying.

It may seem to some that I am deramping by not taking at face value the assertions of offtaker interest and funding, that I might be miffed at my unanswered email, or simply being unjustifiably -ve on the Co statements.

However, unbridled trust in a CEO's words is never a good investment strategy, and a couple of past incidents , while not suggesting wrongdoing, do not exactly serve to enhance such trust.

https://biznakenya.com/carl-esprey/
https://www.fnlondon.com/articles/tim-whyte-carl-linderum-carl-esprey-investigation-cleared-20131206

I stress that no wrongdoing is alleged by me ; but I'm glad i don't have these on my cv.
Caveat emptor, my old law teacher would say.

Just toupdate. my email elicited no response from the co, not even an acknowledgement.
I note the rdecent RNS, which imv, despite a very positive tone, doesn't really change the risk/reward here.

Let's see if the recent SP rise holds and continues, or falls back.

Haz
You could be right.

Reg
The only BS I'm talking is what the co has said. OC, you should make your own call, but don't lt your position influence your judgement.
Yes, it's possible tho co has something up its sleve and all will be well, but I'm not comfortable risking my cash on it.

I'm not here to get into arguments, only information. If I miss out, fine, i hope your investment works out.

Reg
You are hearng what you want to ear. Listen to what was actually said, take off the rose tinted specs, and think.

parkeg

Not at all.

I am highlighting the apparent need for finance. Loans, convos, equity, and other opreions may all be on the table. BUT.....given this is a small cap in a relatively frontier location, non equity finance might be costly enough for equity to be the optimal route. We don't know, that's the point. Uncertainty.

I have emailed the company, but doubt they can provide more clarity without an RNS.

penstock

The recent podcast in which CA said those offtakers were now NOT buying CGO coal, bcos doing so was enabling CGO to build a coke plant which would compete with their own. So sales to finance those ovens will not happen, which is why he said coal will be stockpiled until, potentially, end 2022.

penstock

on the face of it you seem to be better informed than I about the regional market, and i am only here to learn, so interesting points. But....if these companies are ready and willing buyers, why has CGO said it will need to stockpile?

Sentinel
If its so easy to sell, why has the co said it will be stockpiled?

To sell to those not part of the apparent Chinese buyers strike needs inmfrastructure and capacity. To a port, or to RSA users. If that were feasible and cost effective, why would the company say it is stockpiling?

Hazben
Can't recall the figure, but whatever it is the plan was to finance it from sales that are not now happening. What's filling the funding gap, is the clear and obvious question ; the answer atm appears to be hot air.
I plan to email the co direct shortly, but do not anticipate a satisfactory answer ; tho you never know, I suppose.

In the euphoria over the coal price, and pushed by Doc/Mr X, nobody mentioning the elephant in the room ; buyers.

The last interview indicated a buyers strike in Zim, with the Chinese customers not wanting to cut their own throats buying CGO coal to finance a coking plant to cut theior own market share. Wsh plant not ready till Q2. Coal stockpiled until then, anf likely till coke plant ready end 2022.
So, how will the coke plant be funded? Is there a feasible, low cost, export route available Q2 for the coal, in the absence of Zim buyers?

These are the questions that need answering. The world price, or supply/demand balance, is somewhat academic until we have answers to these questions, imv.

"determined to get a partner " LoL, how many times did you go out saying that on a Fri night?

It takes 2 to tango, and cash is king. Anyone with ready cash has many projects to choose from, and it will be at their discretion not CGO's. It may happen, but it may not. And that's the critical issue ; if coal production is stockpiled, where does the cash come from 4 the coke ovens?