Member Info for HarChris

We’ll have to agree to disagree.

It’s very clear to me that Segun doesn’t see this as a material long term issue so not something to bring up each and every time he is interviewed, especially at a mining conference.

It’ll be settled soon, hopefully next week.

It would be unnecessarily risky to throw every penny of cash at Douta and develop it debt free - what happens if there are teething problems during construction? Or at the early stages of production?

Douta will be producing 100k oz for over a decade to come likely alongside three years production at Segilola and at a lower debt starting point than following Segilola’s construction.

This is a midcap in the making.

The company doesn’t need to remain completely debt free. The brokers are forecasting over $150m cash by the end of next year so there’s more than enough cash to initiate a dividend of say $10m in H1 and fund Douta majority cash/ a smaller chunk of debt.

Alastair's family were supposedly very wealthy and were potentially willing to prop the company up in return for a board place. Can't say how true that was but just what I heard and it does look like with hindsight that daddy put down a couple of loans in Alastair's name and in return the son got an executive role in a FTSE company (can't be bad for cv)

We all know Shishir would have fully explained the reason for the resignation if it was wholly positive.

Adw, this is a short interview at a mining conference and a chance for Segun to promote the company and the investment case - of course he isn't going to talk about a short term issue that has no bearing on the long term investment case such as the possible $2m tax liability. The time to address it was at the IMC last week and he did, right at the start.

As for dividends/buybacks this will depend on what's going on with the share price next year. If somehow THX was still trading at a ridiculous level like 19p with say $80m in the bank next year then buybacks (and removing the shares from float) would have the biggest impact of all. Followed by dividends.

If, as is more likely, the share price has reached a much more rational level like 35-40p then there are better uses for the cash - a small dividend would be appropriate with the rest of the cash funding Douta and Ivory Coast development.

Every cent lost since the US election result has now been made up. Q4 shaping up beautifully

One last thing to consider.

The fall from 19p to 15.5p occurred over just two trading days following news out of Osun state. It took less than 4m shares worth of volume to wipeout nearly 20% of value i.e just £600k of selling.

Segun has confirmed that buybacks are an option next year if the share price is still grossly undervalued. Brokers are forecasting a cash position of ~$65m by the end of March and ~$96m by the end of June.

In other words if the market hasn't corrected itself naturally there will be enormous firepower for the management to make damn well sure itself using just 1 or 2% of the March cash position to buy the shares themselves.

Basically state issues being well there's not a chance in hell the mcap stays at $130m with $100m+ profit per year being generated.

Let's break it down with a hypothetical scenario.

A backer/shareholders step in and Argo raises £20m at 7.5p. This adds 267m shares to the total bringing total share count to around 900m. Let's imagine Argo somehow gets £5m for their secondhand immersion adjusted rigs and a further £5m is put aside to manage the shift out of Helios and move to Canada data centre + working capital. Really then what you have is £15m to invest in HPC infrastructure set against $40m group debt and at @7.5p the market cap is now £67.5m. Or back at 10p, £90m.

How is that valuation justified?

If you'd like an even starker comparison to show how irrational the current valuation is then take into account the fact that the five year high on the TSX was $0.41 in May 2021, 40% higher than today, two months before Thor had even poured a single ounce of gold in an untried and untested country, Nigeria and with $50m of senior debt to pay back. Crazy!

Those buying in May 2021 are hugely down despite the company executing successfully against mine plan and against the best gold backdrop anyone could have asked for.

So what does solid progress in FY2025 mean? Progress on the year as a whole or progress re Q4 which saw positive cash flow for the first time?

£6.1m revs in 2024 and growth of ~50%. So what should we be hoping for, 35% growth ie revs of over £8m? That should see ABDX achieve group profitability for the first time...

In late July 2023 THX hit an all time high of 23.5p a share. I find it interesting to compare the company then vs today with the shares at 16.5p, down 30%.

Gold $1920 vs today's $2640.

Total liabilities $129m vs $105m today (assets are higher today, too)

Net profit ~$7m in q2 vs $19m per quarter though 2024.

That alone shows a light and day difference but when you factor in ~$35m profit this quarter it's far starker. One could argue that the share price got away from itself a bit in July 2023 to reach that ATH but even if something more like 19p was fair value then today it has to be many times that considering (i) debt risk eliminated, (ii) liabilities vastly reduced and accelerating this quarter, (iii) profit has doubled and trebled and some (net profit went on to be $10.8m in 2023, this year $90m+ expected), (iv) MLE and Douta PFS imminent which cements the long term investment case vs in the medium term July 2023

My posts may seem rampy but it's difficult to stress just how transformational the past 16 months has been since the ATH with absolutely none of it reflected in the current valuation. Yes caveat is Nigerian state issues but back in July 2023 investors knew that jurisdiction risk and were still paying well above 20p per share for a company with multitudes higher risk than today.

A line under the sand drawn re state issues with clear Federal government support, more positive Segilola drill results, a PFS at Douta with robust economics and gold remaining at this level and there's every chance the SP rallies hard to 35p-40p by Christmas.

I don’t get why you would invest in Argo rather than just start your own HPC company? If you bought Argo at 10p today (or invested at that price) you are paying £64m for a company with essentially no assets (besides what you can get for immersion tweaked second hand rigs and a small data centre) and taking on $40m debt.

Why not just spend $40m on your own facility and HPC infrastructure?

Genuinely don’t get why this is still £55m and not £5.5m tops.

Cash burn has probably reduced slightly due to the BTC rise but realistically we’re looking at $1.5m cash as of today and $0.5m cash by the end of the year. And next difficulty adjustment looks insane.

This q3 just confirmed what we already knew, Argo will be entering administration in the months ahead unless by some miracle they find willing participants for a placing.

The Nigerian jurisdiction and the short mine life at Segilola have always been the two reasons for THXs relative undervaluation re peers but we get news on both fronts this quarter and if positive on both fronts (strong backing from Federal government and MLE + positive Douta economics) it's hard to argue against a $400m mcap, let alone double where we are today.

I think the risk/reward is highly favourable given the drive by this Nigerian government to increase foreign investment in sectors other than oil and from all positive soundings up to this point re MLE and Douta upgraded resource. It's also truthful to point out that, at least at this stage, the amount being contested is barely half a weeks FCF.

Those that agree will start buying now and others more cautious will join in (if all positive) at 20p+

I’ll have a stab for fun

£5m tax loss deal - rally to 0.9p over a number of trading days £3m tax loss deal - high of 0.65p

No deal - fall and next placing at 0.25p

Another fab video on LinkedIn from ceo that really emphasised the close collaboration that’s going on with Meta:

https://www.linkedin.com/posts/davidwhelan1980_education-artificialintelligence-xr-activity-7264618845296803840-RjIA?utm_medium=ios_app&utm_source=social_share_video

At an average of ~$1000/oz (includes stockpile that only needs processing) which at an average gold price over the period of $2500/oz gives you $525m. And this is from a starting point of no debt.

The much more realistic scenario is those profits going back to shareholders via dividends as well as financing Douta meaning fast forward a few years and THX are a 90k ounces producer for 15+ years in Senegal, with still a few years left at Segilola and with progress made towards producing in ivory Coast too.

All that for sub $150m right now.

Nothing particularly new from last week's interview but a good job of highlighting just how undervalued Thx is right now.

Even in the most extreme scenario of failing to find another ounce from any project (totally unrealistic) there is still 350k+ ounces including the known satellite finds that could be produced at an average of

‘ Net profit 2023 $10.9m, 2024E $66.3m, 2025E $83.1m’

The above is way too conservative. Already at $57.5m net profit through first nine months of this year and Q4 is almost certain to outstrip all others so actually net profit this year will be $85m+ and all being equal will easily exceed $100m next year.

Hopefully your ramping won't go unchecked.

Of course fundamentals matter here when Argo are in a financial crisis and have to raise to stay in business over the coming months.