Member Info for HarChris

I’m sure there will be questions posed to Segun re dividends / buybacks on Thursday at the IMC.

The year through to September has been about paying off the senior debt facility, completing the maintenance early in 2024, managing the operational issues, completing the Douta PFS and drilling campaign at Segilola and keeping the accounts payable position under control but it’s now that we should see a massive step change going forward.

Q4 is looking like dwarfing all previous quarters but a portion of the cash will be needed for the final debt repayment and I assume $5m-$10m will go towards reducing accounts payable. But we could still see the cash position rise by $15m-$20m given the numbers expected to be posted (25k ounces, POG $2600+).

With no senior debt payments in 2025 cash accumulation will balloon and the argument for initiating a dividend (or buyback if sp is still so low) will grow.

A bit more patience and we should all see healthy returns barring a crash in POG which seems unlikely given the global outlook.

I think a company with no debt bar a small working capital deficit that is about to post close to $100m net profit in 2024 and could easily better that for the next two years and has another bigger project close to being construction ready is highly undervalued at $125m mcap.

I think Nigerian jurisdiction risk is real but it’s always been real and for now it appears the main claim the federal government is taking seriously is the tax claim which could lead to a $2m payout max.

I have reasons to be optimistic in my investment with a slightly longer term view.

Why on earth would Galaxy rethink their decision? Just so Argo share price can pump a bit?!

Even if POG retraces all the way to $2000/oz for example THX are still far better positioned long term than they were a year ago because they'll have already generated close to $100m through 2024, a transformational amount that will see them at the end of the year with no debt, an increased cash figure and a much more modest accounts payable position - all the whilst completing the Segilola drill campaign and Douta PFS. That's a huge derisking.

So even IF (and it's a big if) POG slides right back to $2000/oz fundamentally they are world's apart from a year ago when the share price was also 15p. And if it stays around $2500/oz then fundamentally speaking they are light years apart and if like you say it could it goes to $3000/oz they are ... I'm out of adjectives.

The state claims/intervention are a far bigger risk than the POG at this stage and at current valuation.

It’s hard to get one’s head around the valuation here - sub £4m for a VR software business working hand in hand with $Trillion Meta as they focus on driving the education element of their Meta Quest headsets forward.

How does this not get taken out for petty cash or say £25m?

Yesterday's results weren't that good relatively speaking but they were well signposted due to the fly-rock incident and weather disruptions. Net profit was 'down' quarter on quarter from $27.5m to $17.5m but that just goes to show how good 2024 has been.

Q4 now carries over much of the lost production from Q3 and at substantial all time high gold price so we're likely to end up seeing $35m+ net profit from this quarter alone (although still a bit early to say with POG losing some shine).

A line drawn under the state claims, followed by solid Segilola drill results, the Douta PFS and then those Q4 financials next year and as long as gold is $2400/oz or higher we'll see Thor >30p

I think we all know that fundamentally speaking Thor is undervalued whether we’re talking $2750/oz gold, $2550/oz or even $2350/oz but it would really help if POG remains this high now so we can see the cash position really balloon through 2025.

Yep Clsk, no doubt there was one last spike in Argo if it wasn’t for the terrible timing of that news - I bet Chippas would have held off as long as possible but once Galaxy had released the news he had no choice.

Thanks for the reply, looks a very good entry at this stage.

A couple of questions:

(i) when BRES says it’s fully funded is that from the strategic investor at 5p? Is it secured for sure at that price?

(ii) how do current graphite prices compare to those used in the PFS? Would the weighted average selling price be anywhere close to $1370/t now?

That’s why I said before that having a Nigerian ceo and successful Nigerian businessmen on the board is a massive advantage, what with Nigeria being seen as a corrupt country - who’s to say these influential individuals aren’t close to those in the federal government than lowly state officials?

The Resolute mining exec from Australia likely has no sway in Mali.

Couple of other points...

The forward contract (hedge in all but name) has increased to $2222 so essentially one quarter of gold sold over the next six months will be at $2222/oz and the rest (likely) much higher. So for for Q4 including the hedge we should be looking at close to $2600/oz and could still average that for the quarter (25000 x $1700 aisc margin?)

Also we should remember that the inventory figure of $90m values gold at cost... yet the actual selling price is 30% up this year. This means we'll see even bigger rise in assets on the balance sheet when the bullion, dore and gold in circuit etc is crystallized in cash.

Take a look here: https://thorexpl.com/investors/financials/

Striking how much healthier the balance sheet is before we include the step change that's happening right now in Q4 and beyond (POG being well). Since the start of the year total assets are up, total liabilities down ~40% giving net assets of $167m (vs $125m mcap). A swing to net cash for the first time which will increase substantially as debt repayments come to an end and also accounts payable being worked down gradually.

It is no exaggeration to say that Q4 will far exceed Q3. There was the fly-rock incident + 'severe weather disruptions' but now with guidance reiterated half way through the quarter we can fully expect close to 25k ounces produced/poured in Q4. At a record gold price we could easily see over $40m ebitda and $30m net profit - a PE close to 1.

The next financial update will cause a splash.

Considering q4 is going to far outdo q3 on both gold price and gold sold things really are shaping up well.

News due ‘imminently’ on multiple fronts!

'On the 29th of November 2023 BMN RNS'd a raise at 3p - at the time the SP was 2.5p, so back then they raised at a premium. Of course, this time could be different.'

This is true but the actual chain of events went as follows:

(i) May 2023 - proposed CLN refinancing of $4.5m at 6p and new $13.5m CLN convertible at 8p.

(ii) Sept 2023 - Investment by SPR, $12.5m equity at same price as Orion

(iii) Nov 2023 - subscription price halved from 6p to 3p matched by SPR, CLN conversion price halved to 4p.

One could argue that it'll never be over but that's the case for companies mining all over Africa, you're always having to hope that governments see sense and act somewhat fairly (true also in the West but to a lesser extent).

I hope we all at least agree when THX finally releases an update to the market that the matter is closed for now, no matter what bluster continues from the odd state representative in the future.

I've stated my reason previously but I will one more time.

We have come to learn that the Osun state is brazen and hyperbolic in the way it broadcasts news. It is therefore reasonable to look at what they claim and expect the summary to be the very best case for them. They state, via a tweet and then supporting commentary, that they will get the handful of shares they were arguing about and that there will be an investigation into the 3.25B Naira claim, something that Thor management has said previously they are more than happy to happen as they have fulfilled all their legal obligations.

On the bigger claims that's where the confidence from the state spokesmen appears to end. There's some bluster about a $B not being enough to achieve rehabilitation of the environment but they have dropped the talk of their larger monetary figure.

Taking the above into account and looking at the language used by the government spokesmen previously (essentially slapping the state down) and also the effort to encourage FDI in the first place through incentives such as the five year tax holiday I do think it's reasonable to assume that, at least for now, the 5m share certificate and some compromise on the 3.25B Naira is the most likely outcome.

And with the share price stabilising and tentatively rising it's possible the market is sensing that too.

Price action much healthier today - a few decent sized buys including a 100k purchase and now some buys over 15p.

Slowly but surely confidence returning here as POG pops back over $2700/oz?

Well the preliminary report has been made and already been reported on with the Osun state claiming a big win despite it only amounting to 5m shares and ‘opening an investigation’ into the 3B Naira apparently owed which amounts to a max of $2m.

It sounds like that will be the worst case scenario, if anything, and so we can rest easy if that’s the case.

I’m more concerned about operations and the gold price going forward than the government - the government is offering incentives to attract FDI, not disincentives to push it away.