Member Info for HarChris

Following the q&a last week as well as a personal response to me from Segun Lawson it is confirmed that Thx have a tax holiday right through to the end of 2026. This is a big deal.

OakBloke has edited his article to account for this: https://theoakbloke.substack.com/p/thx-thor-3q24-results?utm_source=share&utm_medium=android&r=yqi60&triedRedirect=true

It seems ridiculous that they can’t buy shares because they are ‘inside’ but they can give themselves millions of options at a low price - what’s the difference really?

Depends what results show on Wednesday - if cash raise is imminent they’ll be no rally prior to that whatever bitcoin does next.

Forward PE even lower than 1.6 from this point forward - Q4 is likely to see close to $40m net profit ie about 1.1 forward PE.

Cash cow which will be seen from q4 update onwards.

My summary:

Segun confident re Osun state dispute but respects decision the fact finding committee comes to. Report already submitted so will be with us soon, the figure being contested is just over $1.9m.

Halfway through Q4 and guidance reiterated. We can therefore do the maths (25k ounces at $1400+ margin = $$$)

Q3 was a difficult quarter but mitigations in place to prevent such impact being repeated.

Very busy period ahead. Expect results from Segilola drilling campaign this month (ie next two weeks) and Douta's upgraded resource and PFS this quarter (ie within six weeks). Improved balance sheet means more cash directed at other projects too including low cost lithium exploration at various targets.

Brilliant Q&A - Board is in discussion re dividend policy. Should expect cash returned to shareholders via dividends in H1 2025 or buybacks.

Great answers re 2025/2026 outlook. Believes aisc can be kept under $1000/oz in both years and also confirmed that tax holiday officially granted until the end of 2026. With additional ounces from this year to be made up in 25/26 the potential numbers to be posted at this sort of gold price is astronomical.

Majority of capex already sunk at Segilola such as plant upgrades - this is why finding additional ounces is so significant. Exploration costs next year only consuming a fraction of cash generated ($12m budgeted currently across all geographies).

Still early days but expect to build Douta mine without any dilution.

Re life left at Segilola Segun said an absolute minimum of 315k ounces to be mined over 3.5 years with a good portion of that being super low cost mining at end of life as the stockpile is processed and sold i.e FCF many times current mcap at worst case scenario. Realistically there's no chance of that being the case. Wouldn't give a number for most optimistic case but sounds like it's safe to add a couple of hundred more ounces to that figure, conservatively, and potential for much more.

Very comfortable with my holding.

The high AISC is partly related to the Orion royalty that is funding the next tin expansion. Royalty rate is currently 5.13% and all being well with the expansion that starts soon and should be completely by April and that royalty falls considerably.

Throw in the cost benefits that should be seen from scaling and AISC will reduce to between $20k and $25k.

Once lithium is properly integrated that aisc falls much further, at least in theory.

It came from Segun, thx ceo, not one of us on here.

It’s at least reasonable to take that sum seriously rather than your advice to totally ignore it.

There's an online meeting about to start to discuss Q3 financial results followed by a Q&A - it can be found here for those interested: https://www.investormeetcompany.com/

These results are crucial for whether or not there’s a trade left in this share - if cash is shown to be on a knife edge as of Sept 30th then we’ll see a heavy sell. And if that is the case they’ll probably try to get the placing away before the 20th November.

I’m sure Segun himself has stated five years previously and each of the brokers appear to assume it (but could well be wrong to).

I’ll ask the question at the IMC today

Great article and as always a really enjoyable read but he’s made the mistake of thinking Thor merely have a three year tax holiday but it’s definitely five. Seeing as he comes to the conclusion that Thx is seriously undervalued whilst thinking tax will come in at $27m next year, it won’t.

I’ve linked the pfs where it states the tax holiday is five years but there’s numerous documents that confirm it:

https://thorexpl.com/news/thor-explorations-announces-robust-results-of-independent-preliminary-feasibility-study-and-maiden-probable-mineral-reserve-at/

Does anyone have a link for the presentation tomorrow?

Either all this pumping on twitter from mgmt leads to a sizeable tax loss sale and full steam ahead or it’s used to get a placing away - if it ends up the latter trust will be lost long term so it absolutely has to be the first.

I’m backing the former so bought a few more.

Cash costs are higher than vanadium selling price… BMN aren’t even seeing any gross profit right now and it gets worse with only Vametco. Factor in all the other costs of running the business and interest on debt and you’ll realise why the money is out the door as soon as it enters.

One other thing:

Just got hold of the Hannam broker note and they have updated their forecasts and predicting a monumental Q4 that see net profit for this year hit $100m with a cash figure of $34.2m (i.e the vast majority of profit crystalising into cash).

They also forecast cash to be at $158.2m by the end of next year.

I believe management have previously quoted $45m as the level in which payables would be considered current, so probably modest amounts of cash directed that way this Q4and then the following quarter.

Yes money’s coming in but it’s almost certainly going out faster.

To be fair though they are hanging on and it wouldn’t be the end of the world if they raised £1m at say 5p in December to avoid administration- that’s only 20m more shares.

Today’s update is positive no doubt about it.

'If Q4 goes according to plan, then another USD 30 million in debt could be repaid and we would be almost debt-free in 2025.'

It's worth distinguishing between debt and liabilities. The only true debt THX now has is the remaining $4.7m of the senior debt facility which is being paid down this month, it's only that that could have seen THX dragged into administration / forced to raise if payments weren't to be met. Accounts payable will be paid down gradually as well as the other current liabilities so I imagine cash accumulation starts now, not in 2025. There shouldn't be any surprises in q4 as there's been no issues signposted so we should be looking at ending 2024 with something like $20m cash.

It's also worth stressing that the 'lost' production in 2024 is merely deferred, it's still there to be dug up, processed and sold + the inventory position is growing. If everything had gone to plan it would have been sold in Q1 at ~$2000/oz or in Q2 at $2350/oz etc but now there's every chance it'll all be sold 10, 20, maybe even 30% higher through the rest of the year and 2025.

Great post by the way Schmidt, THX really is a cash cow now capable of producing annual FCF close to the current market cap - that will be clear in black and white in the next financial update.

I largely agree with DReal today, if you’re holding still at this point today’s update does offer a glimmer of hope.

I wouldn’t assume that TGR is flooded with institutional equity offers that they are choosing to turn down though… most likely there isn’t much appetite even for a placing as all placing holders would be doing would be allowing the to keep the lights on with their funds covering the next cln payment.

Equity will likely come but only if it’s alongside a much larger debt package. On its own there’s no investment case.

Loudspeaker is right, taxes begin in 2027.