Member Info for HarChris

Hexam, what I'm most interested in now is not 'if' they do a placing but actually 'how much' they are able to raise.

I still think when push comes to shove the next placing is going to be a truly difficult one to sell. What Argo has on the assets side is machines that could at most be sold for, what, around $25m and debt many times that... how on earth do they therefore raise money at say a valuation of £120m mcap / 22p???

Think you got the wrong person Pedro? I’ve been heavily invested in SRB from 25p with no plans to top splice for a while. Similarly I’m heavily invested in SHG too and rather disappointed by recent events however still think there's more twists and turns to come here.

All I might have said to you is try not to cross ramp too much…the SRB share price will look after itself.

'Fair play for those that are still holding. however, don't be "surprised" if an offering (dilution) is announced in the coming days....'

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Whilst it's inevitable and will be being worked behind the scenes management would be premature to push it through right now and stem a potentially far higher rise. In the end of the day they need significant cash for anything other than purely twelve months of survival so they really would be best to give this room to keep rising instead of cutting the rise dead in its tracks.

Yes, they have a legal obligation to put a higher formal offer to shareholders.

A question for the more knowledgeable on here... putting WK aside for now how much would it cost to replicate Shanta's? How much would it roughly cost to build a 105K ounce operation with assets in place to increase cheaply to ~140k ounces and how many years would it take before that project was generating free cash flow?

Incredible. I’ve had 30-35p as the max (in my mind) for a while now yet 30p could be reached with just $40k Bitcoin.

Very much wrong, clearly smashing that if Bitcoin goes to ATHs

A counter offer?

Obviously they won’t actually hedge that amount but if the hedging from March 2023 to Feb 2024 is anything to go by I’d imagine we’ll see 10000+ ounces hedged between $2000 and $2050.

With two other goldies having hedged at/above $2000/oz now we can start to see just how much the odds of outsized returns here is rising. We've also been informed that production guidance for 2024 is going to be higher than this year's so for an eye opening exercise let's imagine, (i) production for 2024 is 38500 ounces and (ii) all of it is hedged at $2000 through 2024. This would give ~$15m net profit / cash inflow all things being equal next year.

2023 year end cash position will be ~$18m so SRB would end 2024 with ~$33m cash / $28m net cash.

We don't even need to add all the extra ounces from Coringa that'll likely be added from that point or the vastly increased margin that scale with bring to get to a net cash position close to today's market cap...

Thanks. I would have thought slightly higher what with the now increasing pace of bitcoin difficulty? And I'm seeing a further 7.5% rise expected at the next adjustment?

Anyway not the most cheeriest chat on christmas eve - hope you all have a great holiday!

Yeah I'm essentially talking about the price Argo would be seeing its cash position rise rather than drain given that there is no growth / capex plans currently being enacted and also that there's no (virtually) no bitcoin in treasury or assets to sell...

With current difficulty at what price do you roughly have as group break even for Argo at this time?

I’m talking a positive cash inflow for the group Hexam, not positive from a cash cost basis. I was thinking they might be close to the former now I.e essentially profitable at a group level although difficulty is rising fast.

CD, it depends on how the move to $150k occurred. Most likely they’d be twice as many shares in issue so if you think for example Argo would do 5 times from here we’re probably talking £1b mcap (5 times share price and twice as many shares).

$10.5m revs a month and a small profit from that plus the entire mining fleet close to needing to be replaced shouldn’t give you anything close to £1B / $1.26B. And even then I’d argue it wasn’t worth the risk of losing it all.

Just friendly debate, I hope it happens for you !

Your post pretty much sums up the lack of an investment case here.

Going with your bullish case of BTC hitting a peak of $150k Argo should do okay, although it will still come at a heavy price in terms of dilution. However just buying bitcoin today instead would mean you've still almost quadrupled your money.

Now what about a base case where there's minimal initial reaction to the halving before eventually peaking out at $100k? Given this case Argo is almost certainly bankrupt or bought out for pennies whilst those holding bitcoin will still have more than doubled your money.

The only chance of relatively painless survival for Argo comes with an incredibly positive rise in bitcoin itself and for a few other things to go their way -not impossible certainly but for that reason I'm struggling to see how the risk/reward of buying Argo at £100m mcap is preferable to buying BTC at $43k?

'If they are running at a loss with bitcoin at $44k , how the hell did they not go bankrupt when it was at $20K for so long?'

They survived 2023 due to starting with a solid cash position ($20m) thanks to selling Helios, new machines and renegotiating some of their debt, they had BTC to sell and there was a placing in July. Also when BTC was around the $20k mark difficulty was about 25% lower so actually the difference in revenues isn't quite as stark as it would seem on the surface.

Management have done a stellar job and I would guess they are probably at around cash flow break even right now but they have no cash to expand so inevitably difficulty increases will once again leave them with a negative cash outflow and that's before we even get to the halving.

Well 'technically' they can get to £1 because irrationality takes over with this share but boy would that be the mother of all disconnects. I mean from a fundamental analysis perspective 19p/ over £100m mcap is madness as it is. We know they are loss making, have net liabilities and will see a 50% reduction in revenue in April. Not to mention that their machines have a very short lifespan too (equivalent to a traditional miner having a LOM of just three years).

I've seen £5m mcap companies with far strong fundamentals than Argo and yet I could still see Argo, albeit briefly, reach the 30p I mentioned a few months back because that's the nature of this share.

If you want an idea of how fuc*** up this you only have to look at the hedging being undertaken by other goldies - take HUM for example, it appears they've got their gold hedged and collared for 2024 meaning they will see $2000/oz at a minimum and up to ~$2130.

If the new buyers choose to go that route for 2024 they can lock in an essentially guaranteed ~$210m turnover with EBITDA around $90m, with the potential of slightly higher at the upper value of $2130/oz... You can not then argue that fair value for the company, bearing in mind they will also be sitting on a net cash position now, is $180m. There is just no rational argument for that valuation.

I think it's easy to feel doom and gloom here when looking at TGR in isolation or comparing the share price sluggishness to main market large cap indices but I can't help but conclude that TGR management have done an amazing job in light of the less than stellar operational progress and the challenging backdrop.

Look across the small cap space and what you'll see is very tough decisions being made in order to make it through this part of the commodity cycle, in some cases humongous dilution, in others asset sales to clean up the balance sheet and guarantee survival until things turn for the better.

How about TGR then? They started 2023 with 101.4m shares in issue and are ending it with 114.8m, an increase of just 13%... almost all of that was already known at the start of the year as it was the issuing of shares to Battery Minerals for the acquistion of Suni Resources and its Mozambique projects. As for debt TGR have ended the year with largely the same debt burden as they started it, virtually nothing and have managed that without the selling of key strategic assets.

In what's been such a challenging year it's hard for me to conclude that this is anything but positive, managing the precarious state they found themselves in at times cash-wise and coming out of it with negligible dilution (1% increase other than the already known Suni Resources acquisition).

The share price only tells a portion of the story here and the rest tells us that the upside potential has not in any way been limited this year, in fact it's exactly the same as it was at the start of 2023 with the company well positioned to excel in 2025 when the pressure on graphite prices is expected to peak.

Merry christmas to the regular contributors on here and let's all hope that after surviving 2023 thriving is what we see in 2024!

These unaudited reports are not an issue, TGR have never missed a half year report deadline.

As long as they don't leave it to the very last minute (as in Friday after closing) it's really not a big deal. I suspect we'll get it pre market open either Thursday or Friday, more importantly let's hope there's some good news in there!

With FAR's market cap now so low if Balasausqandiq ever does reach production I would imagine we'll be talking 4.83B shares in issue rather than 483m - not quite so lucrative now.

Amazing shift in sentiment across the space when in reality $44k at current difficulty is still not all that supportive, especially with halving fast approaching.

And yet there's far, far more upside to come if BTC can go on to reach all time highs in the coming months.