Member Info for HarChris

Probably just a natural floor given the JV risk/reward from here. Some people seem to think a share price just continues falling until news but there’s a limit to how low it can go before those on the sidelines come off the sidelines, and with ARCM it seems about 1p / £14.5m.

This is how I see it:

Through H2 GRL must not run out of cash, that is absolutely essential. Priority numero uno. Total group costs in 2024 were $750k per month with many one-off costs but to highlight the opportunity here I’m going to use a highly conservative figure 20% above, so $900k for group break even per month.

For that to be reached at today’s $3350/oz all GRL needs to produce is 270 troy ounces per month. Yes really, just 270 ounces. But whilst it’s crucial they don’t run out of money it’s also very important they deliver enough extra gold beyond break even to pay down AIMSL, so the risks are twofold :

(i) the gold price - we cannot be certain it remains as high as it is / goes higher.

(ii) production - the more the better. Sure there’s almost no chance production will fall below the above 270 ounces per month mentioned but if (i) , the gold price, falls then break even production figure rises and more needs to be produced to make a dent in the gold loan.

Keep an eye on the gold price first and foremost, at this level there is a hell of a lot of margin for error. If it starts retracing considerably that margin for error shrinks.

Actually more like August going by $5.6m up to May then $1.2m revs a month assuming 370 troy ounces.

Yes I explained that. They have $4m loss to cover but they will, revenue for five months in 2025 is higher than all of last year so they’ll have covered the $4m ‘hole’ after a couple more gold pours, around late July. Then it’s five months of cash generation, hopefully with boosted production output.

You’re right, break even isn’t enough. But a (realistic) worst case is only being able to pay down some of the gold loan and having to renegotiate with AIMSL like they’ve done countless times before or find a new lender or raise. As a worst case scenario (barring literal sudden shut down or something left field which is always possible) I can live with that.

Best case scenario is pit 1 finally delivering the grades, enough cash generation to completely deal with gold loan and the funds to add that second dry plant and get drilling out the resource further.

As for being in a deep hole why do posters on here keep saying that??? I’m one of the lucky ones, almost all my buys are sub 1p and my average isn’t far off the current market price. I could still lose 100% like everyone else but I’m one gold pour away from being well in profit. Don’t worry about me :)

'I do want this to succeed please don’t get me wrong .. but $4m of losses to cover with increased shift costs plus paying off 400 ounces of gold loan per month … this is in dire straights and I for one am sick of the lies / incompetence to listen to guys like you saying it’s all good .. the jam is coming through .'

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Those losses are historical. $4.9m revs in 2024 vs $7m operational costs / $9m total group costs. Agreed.

2025 revenue running through to May is already ~$5.6m, simple continuation of that with gold now at $3340/oz gives you $14.5m revs. That covers all $9m group costs (some will have gone up through inflation but many were one-off financing costs) and is enough to pay of much of the gold loan. Sure some renegotiation would be needed but it's a far, far healthier position they'll be in.

And if, finally! , production increases revenue will be far higher than $14.5m and the balance sheet will be transformed.

What part of that don't you agree with? 2025 is light and day from 2024 even without being anywhere near guidance.

Absolutely no one is denying that, nobody is despite your exasperated repeating of it as if we're not listening.

Management has been really poor here. The question for the rest of us is 'are they able to learn from their errors going forward, are they able to slowly achieve the potential they long talked of all the whilst being supported by the best gold environment one could ask for?'

If it turns out to be the case this is a company valued at £4.9m that will soon be highly profitable with a 600k ounce resource that may well be drilled out to 1m ounces.

If your number one concern as an investor is the quality of the management team rather than the assets, the commodity environment etc then this won't be for you. Horses for courses.

Only a small holding of mine which i've added to this morning - I feel a lot more comfortable waiting on news of the LOI crystallising into a formal offer with copper and the rest of the metals associated with the project being so bullish - it increases the chance of a deal materialising without doubt.

Reminder again as copper 1% off ATH:

PFS - 'The economic analysis of the base case scenario for the Project uses metal prices of $4.45/lb for copper, $2,325/oz for gold and $27.25/oz for silver, being the approximate spot prices as of 15 April 2024.

Today's copper price now 20% higher at $5.15/lb , gold price more than 40% higher at $3350/oz and silver price 35% higher at $37/oz.

Take another of Myles' top stocks, Mkango. At the start of the year it had bags of potential but was cash-strapped and everyone focused on their inevitable placing instead of the obvious potential - they got that placing away at 8p and never looked back and today less than six months later they've just hit 30p, almost quadrupling post-placing.

I expect we're at that point with Avacta.

Perhaps there aren’t enough STS patients on drug currently in 1b to make such a claim about all three, so the both relates to the two indications they are able to get early data from…

I doubt that's the case, I suspect they are still selling the 9.4m shares they were issued in late April. They didn't seem to start selling immediately and it takes around 10X the volume to fully offload and there's been ~95m volume since. Probably the last of their shares.

Exactly Paul, exactly why I'm personally taking on more risk.

Yes it would appear that they should be pouring more gold than they are, yes it's frustrating that the management are impossible to pin down to properly question but they are still stating achievement of their ~815 troy ounce target and due to the litany of missed targets prior probably means that they actually think closer to the 1219 troy ounces Kenny has quoted is possible.

They have been more than washing their face with 370 ounces per month. Yes they should be doing better by now but I continue to point out that if they achieve their target this next quarter they will be so ridiculously profitable that this multibags many times over. It's not a ramp, I'm not claiming it will definitely happen, it obviously might not happen, they might actually go backwards and the whole business will fail but so little improving is needed to transform the outlook here that I see extremely favourable risk/reward.

GL to holders and those who can debate without getting personal!

I know at this moment it seems irrelevant but it won't take much to turn sentiment here and with copper now just 1% off the all time high from earlier this year things could get very interesting very quickly.

True but considering most AIM companies fail his record is very good.

That's sweet of you Hermanus to come on here and vouch for me, it certainly felt like I was fighting the current when THX fell to 14p last winter.

Firstly Corrumpo my average is now 0.78p after considerable averaging down so i've far from lost my money. I obviously don't know which way it will ultimately go but my take is that yesterday's full year report was a total misread. We now know that $7m covers all the cost of sales and administrative expensive - wages, director salaries etc . They only posted $4.9m revs so a big fat loss but we all knew how bad a year 2024 was against a much lower gold price.

This year, if GRL totally fails to up production from this 370 troy ounce level they will post ~$14.5m revs at this gold price (370 x 3050 x 5) + (370 x 3350 x 7), that means whatever the one-off costs are on top they will definitely make a whopping profit even at such lowly production, gold price being equal. If they manage to average much closer to the target through the last seven months, as they are mining from pit 1, revenue will be $20m give or take a few $m and profit easily exceeds market cap.

These are facts, quite unlike the totally made up claims you're throwing out about corruption, theft etc

For once can’t you just admit that you’re wrong instead of getting personal?

You asked for the evidence thinking that there was only the conversion shares and you got caught out. Show some humility and we can move on.

Says the guy that claims management are stealing gold without a single scrap of evidence! So rich!

And once again you're completely wrong. AIMSL reached 25.7% after some interest was converted into shares in March. On 25th June (Holdings in Company rns) it was announced that AIMSL had purchased shares on the open market to take their holding to 26.3%.

Egg on face there.

Well if you think that you obviously believe he knows what he's doing... and seeing as he's talking so positively right now about arcm you must think he's bought back in so at least there's value on offer right now, following your logic through.

Yes it’s a holding of his but that’s because he believes in the value to be had, if he didn’t he’d take his loss and walk away.

It’s just one individual but he’s a great small cap stock picker.

I used Grok to get more accurate info:

AngloGold Ashanti, formed by the merger of Ashanti Goldfields Corporation and AngloGold in 2004, ceased operations at the Homase Mine in Ghana primarily due to a significant drop in gold prices. The mine, initially developed by Ashanti Goldfields in 2002–2003, produced 52,500 ounces of gold at an average grade of 2.5 g/t. However, when gold prices fell to around USD 275 per ounce, the operation became uneconomical, leading to its abandonment.

Additionally, the broader context of AngloGold Ashanti’s operations in Ghana shows a strategic shift. By 2014, the company faced challenges at its nearby Obuasi mine, including mounting losses and infrastructure issues, which led to it being placed on care and maintenance in 2017. This suggests a pattern of reevaluating unprofitable or challenging assets. The Homase Mine, being a smaller operation compared to Obuasi, likely faced similar economic pressures, prompting AngloGold Ashanti to prioritize other projects.

GoldStone Resources later acquired and restarted the Homase Mine in 2010, achieving its first commercial gold pour in 2021, indicating that the mine’s closure by AngloGold Ashanti was not due to depleted resources but rather economic and strategic decisions.

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It's undeniable that there's substantial value here in such a gold environment.