Member Info for HarChris

Done for if VR doesn't 'succeed' within three years? EXR are debt free and growing revenue year on year. And are fully cashed up for at least 9-12 months from here. They aren't failing within three years as a business.

To make life changing fortunes perhaps, yeah, but they merely need to continue to grow revenues modestly over the next 12 months to reach profitability and see a very substantial rerate from today's levels.

Https://www.reuters.com/markets/commodities/china-bans-exports-gallium-germanium-antimony-us-2024-12-03/

Remember this? https://www.lse.co.uk/rns/ECR/exceptional-antimony-results-at-bailieston-75m5gy7caiurfkq.html

Well it’s now or never re delivery, otherwise they will be pulled into administration on the 1st Jan for failing to meet the loan payment due as one of the CLN matures at the end of this month.

It’s ~£1m due. Would expect them to find a solution but certainly no guarantee.

$375m revenue run rate by late 2025? Keep dreaming.

A 100% uplift is certainly a start.

I partially agree but they aren't totally unconnected. To direct further funds to Segilola to extend mine life beyond 2027 at least supports the view that they see a long future in Nigeria. I imagine they would hold off if we were about to get bad news re the committee report / the management expected problems further in the future.

I mean, why not just focus on Douta if that was the case?

That's not how it works UserSteve.

5.5p is the price the buyer was willing to pay to take shares and provide (another) lifeline to Argo. If Argo was fairly valued before then there there is value at current market price like you say but the reality is that this is simply cash to limp on for a little bit longer.

I'd look at it another way. Do you think Argo's business is worth 14X the cash position given actual net debt position is substantial? Most of this cash will likely go towards working capital needs and costs of relocation/sale of Helios i.e not value accretive.

It’s also worth noting the positive signal from today’s news - who else thinks it’s unlikely that the federal government are making life tough for Thx behind the scenes given that the drilling campaign at Segilola is now being expanded?

Segun appears to be happy with long term operations in Nigeria.

‘£14m BTC'ish’

Actually Argo now holds a whopping 2 whole bitcoin so BTC holdings valued at $190k, not £14m.

For a proper rerate maybe but it really won’t take much to kickstart a significant rally from this 0.55p level.

As long as the TU shows that cash flow positivity is reachable with current cash then I’d expect it to be enough to get SP at least back over a penny.

Condor Gold is a great comparator - their project in Nicaragua is relatively similar in scale to Douta but because they don't have the ability to adequately raise the necessary capital they have had the assets 'up for sale' for a while now.

At current prices mcap is now £58m vs THX's £110m - Considering THX is raking in cash in the meantime whilst Condor survives from placing to placing it's hard to argue that a valuation of 50% of THX is fair. Arguably THX could sell Douta for something close to the current mcap and just go ahead and generated the $300m+ FCF from Segilola + additional FCF from mine extension. They won't, because there's more value in developing Douta themselves, but it highlights the valuation disconnect here.

And no, Nicaragua is not a safer jurisdiction than Nigeria. This from a recent Proactive article: 'However, there is a challenge: The United States has imposed sanctions on Nicaragua due to concerns over human rights abuses, corruption, and the erosion of democratic institutions under President Daniel Ortega's government. This has been a discount factor for some investors and might impact potential buyers' interest.'

Still appears to be worth upwards of £60m to the interested buyer.

Yeah by the end of this year the senior debt facility will be cleared and cash will be ~$27.5m. There is then (to my memory) three years left of LOM production at ~85k oz per year, the first two of which are also exempt from standard corp tax.

As a good chunk of the remaining LOM is already dug up and just needs processing we’re looking at $300m fcf from that alone before we talk mine extension (which Segun has implied is a given) and before we take Douta Npv into account, a project that could, if needs be, be funded internally.

Put the state issues to bed with clear federal government support and this is a $430m business not a $130m business.

I’m expecting a higher LOM aisc but we’ll still be talking probably $700m+ npv and god knows how much FCF, certainly well beyond a $B assuming current prices.

Whilst like Pacifico said well most likely see a 50/50 equity/cash split to find the fact that THX could come close to funding it entirely in cash if they threw every penny generated over the next year at it is unprecedented for a $135m mcap miner.

Such a big rerate due here soon.

Well as holders let's both be boosted by the market confidence here as buying continues and the SP heads north.

For the uninitiated we have a plethora of important news due capable of rerating the share price, all being well. Further drilling results at Segilola due 'end of this month' ie tomorrow though chances are that lands next week, there's the committee report any day and then the Douta PFS is also due this quarter (none of us would be surprised if it creeps into Jan.

Following all this we'll get Q4 results which will, almost certainly, be THX's most successful quarter in its history with a net profit of between $30m and $35m to push the year close to $100m in net profit.

And then talk of dividends will ramp up as Segun has recently signposted H1 2025 for distribution of cash back to shareholders.

Seeing as THX will likely be sitting on $70m cash at the end of Q2 2025 even after a dividend payout is it possible that THX will crack on with construction of Douta before the full financing package is finalised? I assumed that generating as much cash as they are would allow them to begin construction even earlier, in H2 2025.

Would imagine the tax loss sale is needed to be funded to production at BM

Forget the term 'worst case scenario' then because every company has a worst case scenario that would wipe out shareholders.

It appears that what is currently being contested and looked into by the federal government is the tax liability of $1.9m. That's it. Of course further down the road something worse could be demanded but likely by that time THX will have generated more cash than the current mcap and will be transitioning to a much larger mine in Senegal. So longer term Nigeria is less of a risk than it would be today.

We all know the jurisdiction risk but boy is it baked in now. As I previously pointed out Centamin, for example, will post profit this year of only just over twice THX yet they are about to be taken over for $2.5B.

A lot could go wrong and still THX would look cheap at $260m, let alone $130m.

Whilst we wait for the PFS it's worth noting a couple of things.

Thor managed to raise funding for Segilola during a gold price depression with a projected NPV of just $138m vs the $87m capex needed to build it.

When it comes to Douta we know Thor were pushing on with the PFS even with gold sub $2000/oz which suggests reasonable margins even from that base case. Looking at the grades a conservative guess for what the LOM aisc will be is ~$1350/oz, so perhaps 95 oz per year for 15 years.

We're likely looking at cash flow over the initial mine life pushing on $2B with a NPV multiples of Segilola... and we are likely to see the majority of the funding covered from internal cash generation alone.

When the PFS lands in approximately one month it's going to make an almighty splash given this market backdrop and with the ease and speed in which THX can sort the funding and get cracking with construction.

It IS the realistic worst case scenario for now, the $1.9m tax claim is what the federal government is looking into. There is absolutely nothing to suggest they are taking the environmental claims seriously.

Of course the true worst case scenario for any firm is total wipeout from events like civil war and executives held captive, operations obliterated by natural disasters/fires etc but the risk is too low to be given airtime. Same with these environmental claims it would seem that totally contradict the awards and praise heaped on Segilola over the past few years.

And no I don't agree that the current price proves it, the share price is up 18% YTD so the market isn't expecting terrible news out of this report. Arguably just as frustrating is how long we've waited for substantial Segilola drilling news and Douta PFS, both news events the market is crying out for. Possibly the former is being held back til the committee report is released and the latter is finally about to land, either next month or (it would seem) early Jan latest.

We get a really interesting article that highlights all the positive contribution Thor is having in the state as well as their connections to important ministers and you refuse to acknowledge that this is clearly great news in the context of what's going on.

I’m sure that sort of article will calm the nerves of those most worried about state interference. Certainly put me more at ease.

POG back on the up again today.