The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
There's just not a lot to say at the moment... The mine seems to be operating at expectation, if not better, and we're somewhat at the mercy of the gold price although it has been excellent on average through 2022 so far... and we're closing in on half the year already. I too believe our next significant milestone is Segilola extension and hopefully we get news soon. It would be nice to see an institution involve themselves and take an interest but let's see. I am sure Segun is working very hard to make things happen in the background!
That's a good comparative - thank you! Will have a look at their track record (assume operating a while with since they have no debt), mine life and future prospects.
And that's not unfair, of course. We agree it is underrated but the perception that it will just sort itself out is historically misplaced. I am a big believer that as things like P/E, cash position, etc. start putting THX on the radar; we'll get organic growth. However, I would have expected news of funding to move things on, news of construction to move things on, news of start-up, news of hitting targets, etc. I am saying; perhaps we shouldn't rely on the market as it has been held back so far. Why is that? I think we agree it is behaving somewhat 'uniquely' in the space. It is the first of a kind Nigerian gold mining operation, after all. Interested in others' views here. Is it because it has been hard for retail to buy shares as not all platforms offer them? Institutions wanted to see a year or two of production first? Because there is (often misplaced) distrust of projects/business in Nigeria? Is there 'an issue' that is causing the 'unexpected' SP behaviour so far that will continue for time to come, despite improving corporate metrics? If so - it's that I am suggesting is tackled, met head on, etc.
Show me another miner whose SP behaves like this across the major milestones (financing, construction, production, etc). Look at the ramping for the likes of GGP and GCAT, all over these boards. It's not behaving normally - it's not taking care of itself. Bearing in mind the current Segilola mine life; it's a big gamble to just hope the market will notice at some point. Did the SP re-rate and hold when it got financing? Did the SP re-rate and hold when they awarded EPC and broke ground? Did the SP re-rate and hold now production has stabilised (on expectation)? Did the publicity take care of itself?But it's *definitely* going to re-rate when Segilola extension news lands, right? At the moment; the market is very, very clear. Mine performance is completely dissociated from SP. I remain unconcerned about the operation but investors need to know there is a reward to investing and that's by SP growth and dividends. There isn't the interest in the company on the markets. It needs addressing or we will be waiting and hoping that the next full year accounts are 'noticed' by retail (or better, institutions), who struggle to even buy through their brokers because of it being so small cap on AIM. And that's a year of Segilola life gone. I'm happy to disagree with you about marketing but the SP has never, and is showing no evidence of, taking care of itself. In the knowledge debt is being repaid quickly - where are the new entrants? In the knowledge that Segilola is performing well - where are the new entrants? In the knowledge drilling likely shows LoM extension is viable - where are the new entrants? Buy the rumour... but no one does. We need them to. I've been waiting >5yrs.
Toronto was carnage yesterday with ~565k shares traded. I put a long-ish post on CEO.CA just now with my thoughts. I am frustrated but remain unconcerned. The SP is totally disconnected from the company value. The market cap is below the gold produced in a single year. The problem is the market for Thor shares is so small. If you need to sell (and I suspect someone did/does in Toronto) big volume, then you need to take what you can get from a small pool. London market makers will just be mirroring the Toronto action to keep the listings aligned, I guess. We need a real push on marketing here. It's a producing mine, completely de-risked and actually below the post-financing but pre-start-up SP high (almost half). The start-up teething troubles are far behind them, there is a very strong likelihood Segilola life will be extended shortly, there is a lot of gold at Douta, etc. But if there is no interest in the company, if people can't buy through brokers, etc - then all the catalysts in the world won't change things. Marketing, marketing, marketing! Get the story out there. Push the extension news when it comes. However, I do think things will quickly recover once this seller(s?) is cleared but the wide spreads will remain without the market activity.
Some interesting theories out there, even when you're a billionaire:
https://twitter.com/Frank_Giustra/status/1519336979493621760?cxt=HHwWgMCozdu74pUqAAAA
Gold price is an interesting one. If you look at the chart for the last 5 years (when I first invested) gold has been on a great run, thus the Thor reserves have been getting more and more valuable each year. The last 18 months is an ATH period and generally held well, averaging over US$1800/oz. Back when I first invested and did my maths, it was just US$1200-1300/oz and yet the SP was regularly in the $0.2s ($0.28 in Toronto last night, at close), despite going through funding, construction and now production, de-risking and proving the project. Yes, there have been 'events' along the way but when we saw over $0.4 - that indicated we were finally getting the long overdue re-rate. Volume was good, excitement was building towards production, etc. Then, yes, some start-up teething trouble but now... you'd hope to be seeing new ATHs. We may have sold off a bit with the drop in gold the last few days but at US$1860/oz, as I type, the gold price is still spectacular compared to what early investors expected. Guess we may just need a few more quarters of production and perhaps we'll get some institutional interest. SP does seem disconnected to value at the moment though.
Lots going on in those final results - they're doing very well! Just need to drive some volume, get the SP up and ride off into the sunset!
From jh:
"Subsequent to year end, the Company has commenced an initial 7,500 metre Reverse Circulation (“RC”) and diamond
drilling program. The program has been designed to test both near mine and regional drill targets that have been generated
during the period and are within trucking distance of the Segilola Plant. The Company expects to receive its first drilling
results in Q2 2022."
Let's see... I'm sure they know that with the SP in Toronto and the falls on no volume... going quiet and disappearing for 3 months at a time would be madness. It takes no time to report monthly production and allay any market fears in periods of 'quiet'. Thor is still proving their track record and we're only one quarter into (fantastic) 'full' production... when we have years of track record, quarterly will do. For now - news flow will need to be far more regular.
We got a February production update around the first week of March: https://thorexpl.com/news/segilola-gold-project-february-production-update/
A March update as part of the quarterly: https://thorexpl.com/news/segilola-gold-mine-q1-operational-update-21-343-ounces-of-gold-produced/
I'd expect an update on the month of April production maybe around 6th May, or early the next week (bearing in mind this coming Monday is a UK bank holiday).
Nothing goes up in a straight line but the recent pullback after a strong run in Toronto is disappointing. It tends to sink when the volume goes out of it. Need to try and keep momentum. More marketing needed to bring new entrants and interest. But it has been a great start to the year. Q1 has proven the plant and operations and gold is holding over US$1900/oz as I type, so we should get strong April figures next week. I suspect some people are waiting on the Segilola extension drilling news, which is also any day now, hopefully. Gold is now ~$100/oz higher than when THX hit it's peak SP (June '21), pre-revenue/production, in Toronto last year, so I'd really like to see those highs tested after another good quarter of production, summer this year.
Good stuff, nice find! Thanks Troajan! Re-posted on the CEO.CA board, crediting you, hope that's ok.
https://www.youtube.com/watch?v=IQsKqtNK4HM
"Thor Explorations Ltd. (TSXV: THX) - From a junior exploration company to an African gold producer, BTV flies to West Africa to get educated on Nigeria's most advanced gold project and their immense geological potential."
Good volume on both sides of the Atlantic, recently. The CAD$0.345 close in Toronto last night is another YTD high (+50%) and back to where we were end of Oct / start of Nov 2021, when the plant had it's start-up 'difficulties'. Q1'22 production and operations have shown that THX has moved forward leaps and bounds, very much putting any issues in the past and with gold looking to average ~US$1950/oz again in April; Q2 is off to a fantastic start. Very much looking forward to the Segilola extension and Douta exploration updates, which should be with us soon. I would like to see the higher trading volumes maintained and push through the (pre-production) ATH of May 2021. Doing it next month would be a nice ATH anniversary present!
Thanks to @Excelsior from CEO.CA:
http://www.kereport.com/2022/04/13/thor-explorations-q1-production-and-operations-report-and-exploration-update/
Segun Lawson, President and CEO of Thor Explorations $THX $THXPF, joins us for an operations update at the producing Segilola Gold Project mine in #Nigeria, along with an exploration update at this Project, as well as an exploration update at the Douta development project in #Senegal.
We review the Q1 #production at the Segilola mine of 21,343 gold ounces produced, right in the middle of Company guidance, and is seeing throughput beyond the nameplate expectations and higher recovery rates close to 95%, improving on the Q4 numbers around 92%-93%. The average head-grade has also risen from to around 3-4 g/t, and now that the operations team accessing higher grade sections of the ore body. With all-in sustaining costs well under $1000 per ounce, there are fantastic margins, and target Q2 production guidance of 22,000 to 24,000 ounces with full year guidance unchanged at 80,000 to 100,000 ounces of gold.
At Segilola, the 10,000 drill program is well underway with the goal to expand resources and mine life as well as find nearby accretive potential open pit satellite deposits that can feed the mill, with more drilling planned after that at depth in the pit for the potential of higher grade underground mining opportunities down the production pipeline.
Next we moved over to the ongoing aggressive 30,000 meter #exploration at the Douta Project in Senegal, looking to extend the Makosa ore body, successfully connecting it to the Makosa Tail, and expanding it to the north by 1 km, as well as doing further drill testing around the new mineralized discovery at the Mansa target. As the exploration program progresses the goal is to expand the resource to over 1 million ounces, beyond the recent 730,000 ounce Maiden Mineral Resource Estimate for the Makosa Deposit, which was announced November 17th, as well as to conduct and release a Pre Feasibility Study by year end.
Will copy my post from over on CEO.CA: Looking at the production figures again and focusing on the "16,658 ounces of gold and 922 ounces of silver sold" and doing some simple maths: The average price of gold in the quarter was US$1879.32/oz, according to my spreadsheet. Multiply that by the 16,658oz and we get over US$31M in sales (silver is basically negligible at ~US$22k), with around half of that (~US$15M+) potentially being FCF after AISC. That's a big bump on the previously reported US$3.4M [this is in reference to the last reported unrestricted cash]! Ok, there's debt repayment, exploration, etc. to factor in but we also need to remember that a lot of that gold was actually produced recently at more like an average of US$1950/oz. Great metrics and a bright future, with updated extension news to come this quarter!
Well on track, I would say. Wonder how much higher they could get recovery; I guess not much. I think 95% was the figure used in presentations so we're already 'there', but any further upside would be amazing. Still early days for production but it doesn't look like they're having any problems since March prod. figs. were above February (longer month), as expected. It is still very quiet in terms of 'pushing' the story and no real marketing that I can see. Letting the numbers speak for themselves is a perfectly valid strategy, especially in a 'new territory' (for gold mining) like Nigeria, where there is perhaps less appetite for Western investment. Build the track record, do it organically and let investors do their own due diligence, etc. The PE ratios, etc are going to look fantastic, at this rate, come year end 2022. That will float it up to the top of undervalued shares lists. However, with Segilola mine life being relatively short; it would be good to get an idea of how the BOD will return value to shareholders. With Segilola extension to come, Douta and other prospects (e.g. Burkina Faso) this could be an excellent long term bet, with strong potential dividends and growth. A cracking portfolio performer. It can be frustrating not to see new highs but they're into Q2 of production so we have plenty of time to attract the volume from "the bigger beasts", I agree. I would, however, *like* to see the story pushed a little more; the guys must be confident now after such a strong Q1 and if they do want to grow into other territories, I guess they may want to raise cash (debt and/or equity) in the future and the stronger the SP, the better it will be and likely the better any debt rate.
Gold recovery up from 94% in February to 95.1% in March and total gold recovery up for the month, which is great. A little below my aggressive expectation on ounces but metrics continue to improve, which is all we can ask for. Gold rocketing back up towards $1950/oz as I type, so April already looking like a bumper month for sales! The free cash flow (FCF) for Q1/Q2 will be very interesting. What a fantastic turnaround this year. Going from strength to strength.
Looking very happy here: https://twitter.com/segunlawson/status/1512466048200679426