Member Info for goldgnome

I would tend to be a bit more lenient on the new CEO, who has been in the saddle for a bit more than 12 months. Generally the first 12 months of a CEO's tenure is spent for a large company, entails learning the state of the mines/operations/asset base/management, then taking out the garbage (can be management, staff, non performing assets, never to perform assets/liabilities), restructuring, sometimes refinancing, refocussing, ...and setting sale.

This is why the LOM discussions are very important next month, as the new CEO should reveal more detail on how he sees the asset base now after his first 12 months, and how he intends to monetarise the asset base in the LOM

The RESOURCE to RESERVE conversion, is simplisitically a function of gold price, costs, and certainty of the geological and geo met and geotech model. The evidence suggests that the last CEO's did not have their finger on the pulse (being polite), or were not across the detail. The evidence of the last 12 months suggest the new CEO has cleaned the RESOURCE RESERVE table and is across the detail.

What is going to be important is the big and detailed picture coming up to be revealed in the LOM meeting and accompanying notes. I will be watching along the lines of my previous notes, and also any explanations as to why there have been down grades/ or even upgrades, and of course the exploration story in the LOM.

I wont comment much on the privileged few who scurry within the walls of the biggest tax haven in the world ("the City"), but what a privileged life, which is hopefully coming to an end, whereby they will have to compete on a level playing field. They will find it is differentout there.

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the Gnome

Its been a long and hopeless history of foreign intervention in Afghanistan, and without tryiing to be provacative, seems to reach at least back to the British and the Opium Wars with a kick off in 1839 (w eshould not mentionthe British East India Company) ...., topped up by Blair's (what was wrong with this guy?, Iraq, Iran, Libya..yawn) stupidity in 2006 and deployment of British troops
https://www.theguardian.com/uk/2006/jan/04/military.afghanistan
... I do have to worry about the endless rhetoric of sovereignty, versus the actions of continual invasion and occupation ..etc

An embarassment of stupidity and conflicts of interest,

I feel for the women of Afghanistan, for the ordinary people of Afghanistan who deserve so much better than the endless foreign f/ups

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the gnome

Its interesting with the LOM, in terms of what you go after in as to Resources and Reserves. To a degree, it imaybe a poor decision to portion significant money into discovering 30-50 years of mine life, as opposed to optimising the present and near future cash flow, maintaining EBITDA margins etc. Its a balancing act, often overlooked. I recall one high grade mine in Western Australia that only ever had 2-3 years mine life, but had so over 50 years! Another I worked on, had a mine life of 2 years when I started, then a life of 8 years after another 3 years had elapsed, and is still mining and discovering gold 37 years on!

Gold mineralised systems on the scale of Sukari, can go on and on, and typically do, but how much money do you put into defining mining reserves 10-15 years out into the future using money of today? And of course the other aspect is what happens to the POG and the cost structures over this tim period. The history of mining over the last 30 years have shown than on average the EBITDA margins have increased, so Gold Mining has become a better business, and hence more attractive investment propositions. See what Kees thinks about that statement?

Its a call that they may allude to, in the LOM discussions. If they don't I will ask the questions.

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the Gnome

I have no problems with Andrew M, and in fact love his presentations. There is a lot of detail, that he divulges, that is very interesting and pertinent to short term trading. To perhaps state the obvious, I am more into longer term thinking and positioning.
He brings into the picture a very fundamental question. If the powers that be (including my beloved economists), believe in the power of the markets, then they should have put top priority into making sure each and every market is a fair, level, fully informed, market place. Proper functioning of the market place is fundamental to design, and of course it is not ... almost by design! I appreciate its an outrageous idea.
If it is so dysfunctional (by design), just who benefits, and is the benefit fair and reasonable. So Andrew brings into view the contrived and invisible hand, and it is not a fair and reasonable market. So why don't we scrub it ina dn do something a lot better?

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the Gnome

OK putting in drives from the open pit ha been done a lot. Look forward to the LOM study

good luck to us all...

the gnome
People frightened to sneeze less we go into lockdown for a few years!

I think Andrew is right, but his timing maybe not right. The consistent loss of purchasing power of cash, over decades, has and is only going to get worse. The endless printing of money, creating assett bubbles in just about any asset (but cash), is breathtaking. The "new" move by the Fed to talk up a "new target" of lower (Quality?) unemployment is a distraction from their real business, and does nothing but further undermine the veracity and real-world rigour of their approach, and breeds continued mistrust and lack of any basis for respecting the gentlemen. They have to develop a far more convincing narrative and then rigorously follow with actions, to deliver outcomes that do not involve equity and housing bubbles galore

In Australia the RBA (our Central Bank), is now busy lowering their predictions (Modelling!?) on growth, by more than 50% (woops, sorry), but still do not have the key variables realistcally modelled. Our Universities are berefit of International students which has come as a shock and invalidated their sloppy business model, the hospitality industry is begging for help, and I just returned from a concert by a wonderful pianist, who was overjoyed to have an audience, although they all wore masks, and sat 1.5 meters from each other.
Our Prime Minister says people should be able to travel interstate to see loved ones at Christmas, as he continues to pressure state and territory leaders to stick to the national plan to start reopening the economy once key vaccination targets are reached. His pressure todate has produced pathetically little, and given we are now the "Un-United States of Australia", hard to see nation building, cohesion, national GDP growth or anything like this happening anytime soon.

Interesting to look at the 30 year gold price graph and it has been a steady trend up, with a large spike at about 2012, when the money printing ran (more?) riot. But really the money printing is still the biggest game in town. The 30 year gold graph has remarkable resemblance to the 30 year US Government Debt, and with Biden now doing trillions (I think in his wisdom dispensed with the small stuff, billions) with some weird and wonderful policies (and we won't mention Afghanistan)

So yes we can buy equity assets, and houses, and land, but somehow the pollies come running and tinker with all of this, and the walls come tumbling down.

So leaves the old reliable , that, ... yes goes up and down, but long term more up than down, So its all in the timing, but if your view is longish, rather than a quick one nighter

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the gnome

To perhaps state the obvious, Sukari is not a single mine. It is a mining operation with several mines, and in each, several working faces. Great to have these optionalities in the mining operaiton, and this is what the Mine Manager/General Manager and CEO have to work up/develop,juggle, balance risk, mix Geomet zones etc...

Yes it seems they are positioning themselves very well for what is going to be a very interesting LOM presentsation in Sept, - next month!

The Pit dimensions will come from consideration of the conversion of Resources to Reserve study, and under the Resource and Reserve upgrade. All v interesting stuff.

I have not seen enough detail to know about block cave options for underground, they seem to be focussed on reporting higher grades, of commercial grade-thickness intervals suitable for narrow (although are thick!) veing mining, but there maybe other ways to mine, in what could have been an extensively brittly fractured intrusive?

I would like to see the expenditure expenditure profile for the LOM, and exploration targets along the profile.

Also, like to be very clear on what the LOM radius of operation is, from an exploration point of view, and like to see some description of the targets and their respective rankings within this on a map.

Should be very positive I suspect, The bad linen has been aired.

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the Gnome

I am expecting a very well thought through presentation,

The category to watch for me is the Inferred Resource, and I would like several things to happen on this front.

1. CEY adds to the Inferred Resource
2. CEY adds to exploration discoveries in the and proximal to the mine lease.

Who has the ground
1. directly south of Sukari
2. NW of Sukari (Atud)

Noted: 79k m of open drilling and 49k m of underground driling, but no resource / reserve upgrade so I assume this is coming fairly soon.

Pleased with the way they are reporting hole intercepts, but would like these to be flagged as those inside the known resource shell, and those outside in future. Ditto for the confusing and amateurish dgm on slide 21 of most recent publication. Again are the shown intercepts in or out of the resource shell? I should not be left guessing. Like to see a clear presentation of what they see as the upside of the business beyond 12+ years into the future. Simply where is the next 1 million ounces, where is the next 5 million ounce position.

Whatever happened to the 3d seismic survey of the permit, much waffled on about by Pardey ?

Any business running in recovery mode with EBITDA margins of 50% is a great business! I could tell you quite a few companies not running close to this. (Harmony Gold, Equinox, AngloGold). Companies that are in this range are Centerra, Newmont, Barrick, B2Gold) ... so in good company, and undervalued as a business.

At a guess the large companies which need to grow would love to acquire a gold miner with Tier 1 asset that operates at 50% EBITDA margin, low p/e with 10+ year mine life, and exploration upside and infrastructure...

Go gold and CEY

the Gnome.
https://www.statista.com/statistics/208725/net-profit-margin-of-the-top-mining-companies/

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the gnome

The share price should follow the gold price...it it had any sense.

My comments are tongue in cheek and a parody of the stupidity being exhibited endlessly by the mass media (hysteria) machines. Really they have been, and remain, the most worrying global pandemic!

Edward Bernays would be restless in his grave at what is going on. Edward's (for the unitiiated) best-known campaigns include (not limited to!!!) a 1929 effort to promote female smoking by branding extra thin cigarettes as (extra sexy) feminist "Torches of Freedom", and his work for the United Fruit Company in the 1950s, connected with the CIA-orchestrated overthrow of the democratically elected Guatemalan government in 1954 (we dont want to go there! as its a long story)

Go gold !

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the gnome

The Reserve Bank has discovered its projections are overly optimisitic and worng (surprise?), and the realty being painted is very pessimisitic, and will be revealed in the next 3-6 months. Especially if you are in Tourism, Hospitalities and Universities (but they already have been "optimised" for the new economy), ... and now the Iron Ore and Copper price is tanking. AU$ diving.... on the race to the bottom.

Western Australia’s mining giants are facing allegations they have covered up sexual assaults and harassment by failing to adhere to reporting obligations under workplace safety laws...another "shock" to the resource industry, after the blowing up of sacred sites! and the increasing impossibilities of getting clearances to do any work (exploration, site development, expansions) on the surface in Australia. Drugs/gun running could be next? Higher EBITDA margins, and no ground distrubance...LOL

The HYPE is never ending: Latitude CEO Ahmed Fahour is confident Australia will hit its vaccination targets and is preparing (hinted strongly?!!) for a wave of “revenge spending” in Sydney in the run-up to Christmas as consumers finally can enjoy the things they have been deprived of during lockdown. .. debt?..reality please? ...HYPE of course ...because earlier this month he paid $200 million for a tiny start-up called Symple, deterred neither by its dubious spelling nor its mere $5 million in revenue...away we go...ho ho...OPM's.

A little more than a year ago, epidemiologist Tony Blakely was one of the loudest scientific voices supporting Premier Daniel Andrews’ bitterly contested campaign to eliminate COVID-19 in Victoria (after his initial distasters which he failed to take responsibility for, and thats another story of course, he could not remember? think 8 second attention spand, 5 second memory?).
Professor Tony Blakely, previously a supporter of aggressive elimination, says a more moderate approach could lead to better health outcomes (gulp) On Monday, with police pepper spray from a weekend anti-lockdown protest in Melbourne lingering in the city’s consciousness, the Melbourne University professor took the daring step of suggesting what amounts to Victorian heresy: the time may have come to stop battling COVID-19. Probably has worked out that as a tax payer he (or descendants) is going to have to pay for it LOL..for the next 100 years?

Bitcoin topped $US50,000 on Monday for the first time since mid-May as the spread of the delta variant of COVID-19 forces central banks to push back timetables for tightening liquidity taps. Liquidity, there is that word again.

And gold? My medicine has taken hold...

Could I boldly suggest that it will go higher, and much higher?

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the Gnome

I think this is an issue of principle for b2gold. The loud rumour seems to be the Minister of Mines has been lining his and his pals pockets ... so to speak.

Corruption is the major issue in Mali, it is endemic, and from this all else flows. One of the reasons the coup in 2012 happened was because of the lack of any money coming into places like Timbuktu, for community schools, hospitals, and preservation of their heritage. Where did the money go....to bank accounts in one of the Treasure Islands wouldn't be a bad guess

The many dimensions of Mali’s current crisis (pleural) are connected. Rule of law issues, conflicts over land tenure, organized crime and jihadist expansion are all interconnected issues rather than separate challenges that have hit the country separately. Corruption is at the heart of the problems of mistrust that allowed these issues to spiral out of control.
Dont blame Islam, and the unemployed mercenaries who seized the opportunity to grab the great cash flow business in the trade of drug running and human trafficking, and then didnt want to give a cut to the corrupt government.

https://www.u4.no/publications/mali-overview-of-corruption-and-anti-corruption-2020

https://foreignpolicy.com/2020/08/19/a-coup-wont-end-malis-corruption-and-insecurity/

https://www.one.org/international/blog/panama-paper-reveals-africa-losing-billions-to-corruption-and-bribery/

Sad? if instead of wasting us$1b per year (!) on peace keeping, invested the us$1b in schools, infrastructure, job creation...
"The total approved
budget for the 2020-2021 peacekeeping year is $6.58
billion. Operations with the highest annual budgets are
MINUSMA (Mali), at $1.18 billion; "
https://fas.org/sgp/crs/row/IF10597.pdf
..............................................................................................................then Mali would be a better place.

good luck to b2gold

the gnoem

It can take a long time to negotiate a JV and/or exploitation agreement. I can recall one of the Exploration JV's related to an advanced project (but too small, hence needed exploration to add the ounces) I was involved took 5 years to negotiate and sign off. It did not stop the exploration going on and being funded! Bit like some shareholder agreements as well.!

The CEO will have to get the artisinal miners out prospecting again, in Burkina, they might even have to do some exploration themselves. The trouble with exploration is that unless done very well, it does not feed the company with sufficent growth, hence to grow = MandA.

The trouble with MandA, is that everyone is trying to do it now, and there are few good prospects on offer. So any good prospect will sell at a good premium in this market. The dogs are the ones to beware of, and their are plenty of them around. BUt it goes that the Business Development team in charge of MandA get their bonuses for doing deals, so deals must be done, and dogs get bought at a premium. A dog may look good for a year or 2 before the problems start to surface.
What problems? ... The geomet did not recognise the alteration zoning in the orebody, the geotech was not done properly, the resources did not convert to reserves (etc)

It never ceases to amuse me how many things get done poorly in the industry, even by companies who should know a lot better. The Rio debacle in Mongolia is a case. Oyu Tolgoi is the flagship greenfield (opper-gold) project of what is supposed to be one of the world’s pre-eminent resources companies. The extent of the mine development incompetence laid bare is almost inconceivable. It is so professionally embarrassing and the attempt at cover up...?

The investigative report into the project debacle has landed, and it completely blows out of the water Rio Tinto’s disclosure to the London and Australian stock exchanges of July 16, 2019 (!!), that OT’s expansion was running late and over budget because of “unexpected and challenging geotechnical issues.” Group executive Stephen McIntosh (since retired) even said “the ground conditions are more challenging than expected and we are having to review our mine plan and consider a number of options”.

To the contrary, “these off-footprint isolated ground condition ‘surprises’ are not considered significant contributors to the overall design, schedule and cost variances”, the report by Independent Consulting Group finds. “This is confirmed by the lack of specific schedule or cost analysis of these changes that would be expected if their impacts caused major variances.”

“Very few of the senior management in either the owner (Rio Tinto) or… mine builders [Worley] had experience in developing large caving projects nor of working in Mongolia, the two most critical aspects of this project.” Relevant expertise – who needs it?

Remember, it was explicitly for Jean-Sébastien Jacques supposedly impeccable stewardship of Oyu Tolgoi as Rio Tinto’s head of copper that Jacques was plucked from relative obscurity in 2016 by chairman Jan du Plessis to be the company’s chief executive.

Jacques successor Simon Thompson let Jacques waltz away from this slow-burning international scandal – to say nothing of the smoking ruins of Juukan Gorge! – with long-term performance shares worth $57 million.

Jabs!? think health stocks, health ETF's.

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the gnome.

Its a great game and interesting "investainment" ....
https://www.youtube.com/watch?v=PyLibYAMDcM

a little before my time, but the intro says a lot,
https://www.youtube.com/watch?v=ptxxq5PUHEk

wheres the next hit brudda? LOL

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the gnome

Indeed Jep

Many of the "new breed investors" were not long out of nappies when that happened! which is an important dimension of what is happening in the markets,

the other being they have only ever watched the get rich super quick on twatter or twitter, which is generally very short in keeping with their attention spans. ... LOL

Funny old world eh?

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the gnome

Bewidlering behaviour on the markets, including the ASX!? The herd is running in many directions, and all at one time.
Valuations have nothing to do with reality, but something else. What?

The meme-stock fever gripping US sharemarkets has reached the ASX as retail traders swarm towards popular companies reported (and rorted ) on social media, message boards and budget trading apps.

The young investors who are part of this new wave prefer to conduct research on Reddit, Facebook, TikTok and Twitter, and speculate on stocks they expect to rise, without any reference to fundamentals.

The result is befuddled valuations across the market where online forums and social trading determine valuations far more than estimates of future cash flows.

The meme-stock asset class’ new frontrunner is South Australian minerals explorer turned deep-tech quantum computing hopeful Archer Materials. It climbed 21 per cent on Monday to a record $2.88 on a valuation of $655 million!!! p/e ratio was what?

Under its chairman and significant shareholder Greg English, Archer has sold its mineral tenements to focus on developing a quantum computer chip capable of working in mobile devices at room temperature, but for now, has no product, with the potential technology in development (at best, being researched maybe another way of describing it???)

APPEAL: Materials are the tangible physical basis of all technology. We’re developing and integrating materials to address complex global challenges in quantum technology, human health, and reliable energy...

THE BUSINESS? Archer is an Australian ASX listed company developing innovative deep tech for commercialisation in the multibillion-dollar global industries of quantum technology, human health, and reliable energy...NO HYPE HERE?

NEXT ...Utilising Tier 1 tech development infrastructure and facilities, R&D, people and IP, to support pre-market development....THERE IS THAT WORD AGAIN TIER 1, AND NOW ITS INFRASTRUCTURE ... and "PRE-MARKET DEVELOPMENT"

THE EXEC CHAIRMAN ON $675K PA TOTAL REMUNERATION

just amazing to see how the market works. .... do something boring like make money, mining gold, paying dividends to shareholders ... no, thats yesterdays stuff...LOL

how will it end?

good luck for those in the casino...make sure you know the new rules before you play, or have a longer time frame than 8 seconds ...

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the gnome...

https://www.youtube.com/watch?v=c13O6Amn1lQ

Interesting thoughts and observations

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the gnome

Sorry,

I should have added I don't think the market is not that smart

Have a great weekend all, masks on, and go for it like there is no tomorrow!!!

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the gnome