Long time holder here but infrequent poster...
I'm surprised to read in the RNS that construction of the plant can begin before formal permitting to operate it.
Anybody know how long things take in Nevada to get permitted? I've read that America is slower than Australia to permit and I'm invested in one project in Aus that have been waiting about a year for administrative clearance to even begin physical work.
The implication from GWMO seems to be that we expect to be operating soon, but countless studies show that most projects run behind schedule and over budget and so I'm wondering if we may be left waiting on red-tape?
@yayay - there was a time ministers were trusted to go more than a week without screwing up something - now you can't give them time to actually do or say anything at all for fear it will prove embarrassing.
@GlenFidrich - there are times that the people active in the precious metals sector start to feel a little too predictable as if you've been around them for too long. ;)
I wonder how long it may be before the tinfoil hat wearing conspi******s among the gold bug community start describing the jobs data as "suspiciously convenient" ... suggesting that at some point down the line when it won't matter a discrete apology may be offered by the US govt. should they "discover" they made a mistake in how they previously calculated their data?
@yayay - a small part of my own "attachment" to SGZ is emotional rather than logical and relates to our family's Scottish roots and connection to the area around Inveraray.
If you've been out of SGZ for a while I'd wait and see how they handle the latest need for funding before deciding how to jump back in. We've just had a little crazy run up on the back of news coverage on the BBC but the price is falling back again so it may be wise to wait ... but waiting and SGZ are fairly synonymous with one another.
For better or worse I'm still with Scotgold as "on paper" the prospects still look good - but if ever there is a company that you could grow old waiting for then that is it.
In my case the one I am referring to is Pure - I could have stuck it out with shares still listed on the TSX when removed from London, and sod's law says it may yet make a comeback in some new form, but I just didn't see it worth waiting around to fight for the crumbs that may eventually be fed to small shareholders after what could be protracted arrangements to re-pay debts.
@yayay - my own "horror story" in terms of being too patient with a junior explorer was one I felt was comparatively safe having already done all the difficult work.
Their license was in a mining friendly jurisdiction and in the midst of many other big mines. They made the big million plus ounce gold discovery at high grade and were open along strike to the potential of several million more ounces. On the basis of this they secured the financial backing of some of the big names in the business so as to start building their mine and processing plant. Then external factors beyond their control delayed progress to the extent that when they should have been generating revenue to re-pay loans they were still spending money building. Their lenders were very generous in re-negotiating terms to offer them more money, but then the gold price fell at the point they first started extracting ... To cut a long story short things reached a point where they couldn't service their excessive debts, and with overdue interest owed more than the assets were worth. Consequently they had their lenders pull the rug out from under them.
The administrators came in and announced they were de-listing the company crashing the share price... I got out at more than a 95% loss. Silly thing is the mine was already built, all the gold was still there and without such huge debts to repay would be very profitable for new owner... Indeed there were rumours that their lenders had deliberately kept loaning more cash to push things over the edge as a kind of "underhand hostile take over" and means of acquiring an asset that wasn't for sale.
I should have seen the signs and got out earlier but everything pointed to a very profitable mine supported by very understanding financial backers. The only saving grace was that I never put more in to a junior explorer than I can afford to lose so taking the hit wasn't so hard, but galling to think at one point I was up more than 50%.
Hey ho we all live and learn!
apologies max, that was a typo, I did mean we applied for our mining permit in spring 2022 so I'll hold my hand up to that being a mistake on my behalf.
Just as it is fun to see how Max likes to have the last word and will endlessly defend his potion I'll point out that; of the the nine categories in the link to mining permits just provided, four have no defined timeline implying they are variable or open ended, the five that do list specific times only set targets for the majority of cases not absolute limits for every case, where the longest target mentioned is " 95days for high risk applications".
It was Spring 2020 we first applied for our mining permits, so which of the categories do folk here think are having the dominant effect on our wait... the ones with a stated target, or those that are listed as variable without any specified target?
Max, must you insist on calling any statement you dislike or which doesn't support your own promotional agenda a lie?
For your benefit here is the article from 2020 quoting the Australian prime minister's comments referencing 21 month permitting times. The relevant quote is in the first three paragraphs, whilst the rest of the article is quite interesting even if no longer bang up to date.
https://www.mining.com/australia-approves-one-touch-approvals-for-projects/
@max -
To repeat what I said " whilst we haven't a clue at this stage what it might cost us to mine our silver at EH some of the big primary silver miners with high grade ore have costs approaching $10/oz."
I then backed that up with a recent statistic from the silver institute when you accused me of making up numbers.
With regard to your comment that "HH's 21-month licence application process is nonsense" I was merely quoting the Australian prime Minister who, in 2020 simplified legislation hoping to reduce delays in permitting new mines, stating that the changes "should allow companies to start construction about 21 months after they first apply for approval".
At no point have I stated that I know how long the process currently takes, only that a target of 21months was set in 2020 and that in mid 2022 further measures were put in place by western Australian Authorities to to tackle a "substantial backlog following a significant increase in applications".
If you don't want to factor such comments from the authorities UFO are dealing with in to your own expectations as you feel they have no value that is your prerogative.
@max11 - I mentioned EH in response to your own comments about the cost of mining silver.
You state I am making making up numbers; the following is a direct quote from the silver institute's own report from late 2022, some of the most recent industry wide data available.
"Average AISC for primary silver mines in H1.22 fell by 10% y/y to $9.72/oz"
sure if you look to select data to support a specific conclusion, rather than draw the conclusion that best fits most of the evidence, you may find the odd producer whose costs may have exceeded $30/oz. However, as it was about a decade ago the last time the silver price sustained a price above $30/0z, such numbers can hardly be said to represent mines with a profitable future ahead of them.
"Even at $100/t, the margins are higher than selling silver at $50/oz!"
I'd be curious to know what numbers/data you are basing that claim on?
We've disagreed before about what our total AISC or C3 costs for Han**** might be and could only agree on the fact we haven't yet been given any definite data. However even if we ignore all the "additional" costs that might take us over $70/t to perhaps more than $90/t and just use the estimate of $60/t FOB, an ore price of $100/t would give approx. 66% ROI.
In contrast whilst we haven't a clue at this stage what it might cost us to mine our silver at EH some of the big primary silver miners with high grade ore have costs approaching $10/oz and the industry average (whilst much harder to define because of the way smaller and secondary producers report data) is still estimated to be not much above $20/oz. So at $50/oz the majority of silver miners would be making in excess of 100% ROI
To make less profit on silver at $50/oz you'd need to be spending more than $30/oz mining that silver which most in the silver industry probably aren't.
@ Max 111 the resource at Hanc*ck was confirmed in Autumn 2021 not 2012, though it could be argued that Alien are referencing not when the resource was confirmed at Hanc*ck, but that it meets the latest JORC standards which came into effect in 2013 but are referred to by some as 2012 standards as that was presumably when they were drafted and agreed upon.
@normbeef, - I assume the mention of a "2012 JORC confirmed resource" is simply another example of Alien's poor proof reading and their inability to spot mistakes in their own documentation.
I truly hope they pay more attention to the numbers in any contract we make with AA.
Much to the chagrin and anguish of this bulletin board's cheerleaders, I've been saying since the end of 2020 that I though it would take a bare minimum of two years to start producing iron ore. For much of that time I've been saying that we may have to wait until late in to 2023 for physical work to start and that it may be 2024 before we see any meaningful profit from Hanc*ck.
I've also been highlighting how unreliable industry forecasts are and that I don't expect my own predictions to be any more reliable than anyone else's. As such I'm not sure how I feel about Alien amending it's own forecasts such that they now more closely align with my own.
I suspect I should be pleased? However, given the potential this industry always has to throw up unexpected problems such that almost all mine development projects come in behind schedule and over budget, I'm half thinking it might be prudent to revise my own expectations beyond the schedule just put out by Alien.
After all the Australian government's plans in 2020 were to reduce permitting delays such that their administrative changes "should allow companies to start construction about 21 months after they first apply for approval". They were still experiencing a "substantial backlog following a significant increase in applications" in summer 2022. We applied for approval in Spring 2022 so even if we assume that target of 21months is met, might that push license approval in to early 2024?
At the end of the day it is all just educated guess work and doesn't change my investment thesis of holding and not judging UFO's performance until 2025, but it's always wise to prepare for the worst whilst hoping for the best...
I know I am more cautious and patient than most here but...
less than six months just noise and volatility to ignore.
6mth to a year, short term.
up to 5years - medium term and the bare minimum I give a junior explorer to show progress.
5+years nudging towards long term but in this industry I think long term needs to be defined in decades.
@Damo - would be nice to have that many shares but alas far from it. Being self employed in the creative arts is more of a lifestyle choice than a wealth generating exercise - almost to the point you need to have previously acquired some independent wealth so as to afford to be poor.
As I've said before if (when?) UFO takes off many here will probably do much better than me out of it in absolute terms. Some as a consequence of just being much richer than me to start with and having more beer money to throw at speculative punts, others through being much bolder (reckless?) and risking far more of their wealth on a speculative punt. That said I've a sufficiently low average that in terms of percentage gains I may be in a minority here that are showing good profits even at today's prices.
As I've said before, I joined this bulletin board after UFO's crazy price spike in 2020 hoping that I might learn a little about what prompted such irrational behaviour. Open web-based groups inevitably attract a few with very extreme views, from the seemingly paranoid believing that even the most inconsequential comments are deliberate lies intended to further some nefarious goal, to the over-excitable who seem to believe even their own polemic propaganda. Milder forms of the above commonly show themselves in the insecurities prevalent among those seeking communal affirmation of their current investment choices over impartial exploration of all possible outcomes.
Whilst I have seen no evidence to suggest that the dominant opinions voiced on LSE are representative of the beliefs or actions of the silent majority who move share prices, I still believe that Alien's long term potential outweighs its risks. However, as what I believe is irrelevant to the markets, as best as I am able, I try to calmly acknowledge all future uncertainties including possible outcomes and timescales that contradict my own hopes for UFO. I'll say no more about some people's overly emotional behaviour other than that the junior exploration sector seems a curious place to speculate for impatient people fearful of uncertainty and downside risk.
With respect to our share price, I'd previously expressed the hope that positive expectation might have allowed us to recapture some of 2020's price spike in the later part of 2021, but that if news flow didn't satisfy high expectations then our share price would be falling by that Christmas. Since then I've been predicting a prolonged period of price stagnation, something which in turn might set up another crazy move with the potential to again over-value us before the end of 2024.
Whilst I am a little disappointed, I am neither surprised nor worried that we are still continuing to shed 2020's gains as the administrative cogs do turn slowly. We seem trapped in a catch 22 situation where our price is currently struggling because people are holding off buying until the price moves dramatically upwards. However, it is not without precedent for folk to only get excited and rush to invest after something has become over-valued rather than when it is under-valued.
The position I built before 2020's price spike remains profitable for me, and I remain hopeful about UFO's future. However, for the time being I'll continue to keep my shares in the bottom drawer neither selling nor adding to my position. I've stated several times before that I feel we may have to wait until Spring2023 for first signs of a gradual change in sentiment and that 2025 has always been my first date for judging UFO's success. I've also stated that I don't expect my own predictions to be any more reliable than other people's which is why I'm happy to just hold and don't try to trade the volatility or time the market.
@normbeef - don't forget that the $65/t costs you are using is an estimate of our future FOB, we've not been given any estimate of future C3 or AISC costs yet.
We can only guess at such things by making comparisons to other similar producers. Fenix is the company most here compare us to and I don't know how similar our own costs will be to theirs in terms of overseas shipping, finance costs/royalties, director salaries, legal and administrative and all the other extra costs that such business incur. However for reference Fenix quote total costs about 70% above their FOB costs, that is to say their last financial report quoted FOB costs of US$62/t with additional costs of US$43/t taking their total costs to US$105/t.
We were also told to expect our first 12months of production to be a ramp up year in which we may only produce about half of final target volumes.
If you cautiously factor the above in to your calculation it's not difficult to end up with first year profits below £10m and a share price well below 1p on first going in to production. Plus facts don't directly move share prices, they are merely one of many things affecting investor sentiment, which is what ultimately moves prices, where at this stage it is all just speculation about future unknowns as a lot may change between now and first ore coming out of the ground
Remain patient, hope for the best but always prepare for the worst.