Member Info for HarChris

Sadly we're at the stage of the downturn where everyone on the sidelines stays on the sidelines until funding is secured, having been burnt too many times over the past six months. Even when logic points to a strong and healthy negotiating position often the actual outcome turns out much worse than anyone anticipated.

Not saying that'll happen here but it explains the depressing reaction to every rns.

Not having a future defining dispute with the DHSC around their neck, perhaps?

The big error was being so timid with the amount raised. You're sitting on a £720m market cap at 200p and offering a steep discount to the market - they'd have pulled off £70m if they'd looked for it i'm sure, rather than the paltry £28m.

Others including MSTR went big and bold at the time and fully leveraged their inflated share prices which set them up for the years ahead.

Nah they're covered for one very clear reason, the rns that came on the 16th February:

Statement re Share Price

The Board of Argo, the leading cryptocurrency miner based in the UK (LSE: ARB), notes the recent rise in the Company's share price and sees no fundamental reason for the move, nor is it aware of any material developments beyond those previously notified to the market.

If you get that statement, then a week later directors start selling then you know for certain they consider the share price overvalued and hence will be looking to raise if they can get one away. I mean, that's good management...

No Gallmat it's nothing to do with 'stomaching' dilution, it's about doing what's best for shareholders.

TGR haven't shied away from dilution, they have raised £28m through the issuing of 50m shares since IPO. What they aren't keen on doing (and neither are most shareholders) is issuing 50m more shares now for the paltry sum of £2.5m @5p.

So unsurprisingly they are looking at alternative funding arrangements (/waiting on VAT rebate) whilst the share price is so beaten up.

There is obviously a positive correlation between local and international prices but the degree of that relationship changes over time and tbf, it's never been that tight.

As for the issuing of shares... well, most likely highlights just how tight the current cash resources are. If they end up forced to raise this will get ugly.

Disappointingly the strong and rising international prices aren't having much of an effect on local prices for DKL.

So with that side of the business remaining solidly (but unexcitingly) profitable we wait another month for progress on the cashew front. Zzzzz

'Interesting timing on the Orion shares TR1 also.why wait until a week before the funding payments (hopefully) are concluded to TR1 it?'

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The most likely reason is just that they waited to see what happened with the end of February options - if any of SPR, BEE or Kamran had taken up their 3p options Orion would have had less than 5% ownership and they'd have been no need to file a TR1 (Cayman Island based so 5% threshold to file).

SRBs five year high of 119p came in late 2020 so worth looking at AISC margin for 2020 and 2021.

2020 - $353 , 31200 ounces production

2021 - $347, 33850 ounces production

Now assuming $2100 ave gold price for this year and $1475 AISC we get:

2024 - $625, 39000 ounces

That's a huge step up from the figures posted in 2020/2021 when SRB share price was at its highs and would generate more than double the EBITDA.

And fast forward eighteen months and the target it more than 60000 ounces at sub $1400 aisc, possibly a doubling again in ebitda - the undervaluation is stark.

Not quite accurate. So we have this from the full year results last June:

'On 14 February 2023, the Group entered into hedging contracts with an international bank whereby it acquired sell options over monthly quantities of gold over the period March 2023 to February 2024 totalling 10,215 ounces of gold at a price of US$1,800.'

There's been no update on this so either a new hedging contract is being put in place now (at $2050 ish, perhaps?) or management are happy enough with the balance sheet and outlook to not reintroduce this.

In other words you buy at IPO at a valuation of £130m, you see THX enter production, gold continue to trend higher from ~$1800 to today's $2180 all time high, healthy profit and cash generation in every full year of production, balance sheet cleaned up with a clear line of sight to becoming debt free (end of 2024?) and net cash positive in the very near term and what valuation are you now looking at? £85m!

June 2021 THX listed on AIM at 21.5p per share / £130m mcap. THX was still an explorer at this point but were six weeks away from first gold pour at Segilola. They would end 2021 positively on track and with $65.6m net debt.

Progress since has been excellent. The gold environment has been supportive and profits have been posted in both 2022 (the first full year of production ) and 2023 (to be confirmed in audited accounts Apr/May).

2024 is now shaping up to be a blockbuster year, with net debt heading towards net cash (in Q2?) and record levels of profits and net cash inflows entering the business...

Current share price and market cap? 13.2p / £85m - ~35% lower than at IPO.

The updates themselves were not so bad, the problem is the market has long lost trust in anything Shishir says. So by the full year results April/May let's see how many of the below have happened. If the answer is most and it's not a case of quantity over quality then the share price will be many multiples of the current 5p.

(i) CFO appointed

(ii) two new NEDs giving a total of six board members (inc. CFO)

(iii) $2m received from Madagascan government

(iv) Working capital facility agreed

(v) Production at or close to 1500tpm with clear and low cost path to 2000+tpm.

Plaza I didn’t mention current assets (working capital and inventory) as it likely cancels out the ~£2m debt.

A lot of work to get this back to a credible valuation but in terms of pain I suspect 5p is the bottom.

Despite the governance issues and disappointing operational progress of late this is a company that has raised £29m equity and invested that into Madagascar and the Mozambique acquisition that can now be bought at a valuation of just £6m. To put it into context the VAT Rebate owed to TGR is 25% of the current mcap.

Whilst it's no consolation to us holders this is going to look mighty cheap once the dust settles on recent events.

People move on after 8 years in a role.. And especially after the merger with YG i'm sure there's going to be a lot of shifting about over the next 12 months to create the dynamic they are after.

At 10-15p it was at least as much wider market related as operational - the current share price is weighted heavily towards the latter.

It does appear to be heading that way but if you look at this recent tweet from Larry you'll see that 25% of the current job openings are for Primer Design

https://twitter.com/Larry64450205/status/1765733721343180987

Well whatever Segun and the board decide to do with the copious amounts of cash flowing into the business we can be fairly sure it’ll be to the advantage of shareholders, what with them holding 80m shares between them.

If recent events and the subsequent price action doesn't wake Shishir up to his own weaknesses then nothing will. There's a reason the share price hasn't fallen any further and that's because it's already at a daft valuation, an mcap of £6.5m against NET assets of £30.1m. If they hadn't acquired almost all the previous funds via equity at a much higher valuation we'd be at 2p now.

This sell off is the result of maximum distrust in the management so I really hope Shishir/Puruvi are reading these posts and able to take them on board rather than take them to heart.