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Right - got you! Ok, so they have drawn down pretty much all of the AFC funds, by the looks of it. Would be interested to read the ARC February note in full (need a premium account) as the opening paragraph seems to mirror my views: "With Segilola’s early teething issues resolved, Thor is looking forward to a bumper first full year of commercial operations – guidance is set at 80-100koz of gold production at an all-in cost of just US$850-950/oz. With gold riding high, this should see Thor generate significant cash flow in its maiden full year as a producer. We estimate 2022 FCF of >C$60m, which would comfortably cover debt obligations whilst also giving flexibility to accelerate discretionary exploration spending..."
Can you post the text of the link (not the whole link, just the word) that LSE has redacted with asterisks, for the ARC note, in a separate post Genghis? We can then put the link together ourselves and have a read. The point remains though, in respect of the 'value' of the underlying assets, etc - the SP looks disconnected. I would like to understand the company strategy for finding SP fair value, which really requires volume, both sides of the Atlantic. Even on Segilola extension news (and I'd expect that to be both soon and positive) the SP won't move fast without some new entrants, which likely needs marketing, etc. Some more broker coverage and research notes would be great. Gold is 50% up from 5yrs ago, when Thor and Segilola were in their genesis, yet we haven't had the significant re-rate (well, there was the short lived high of CAD$0.45) deserving of a project that has gone through all their studies, EPC and now production. This has been de-risked, reserves proven, production proven, etc, etc. I'd like to see this year's uptrend sustained and #THX ultimately reach new highs in the next quarter or two.
The US$81.5M number rings a bell of the debt portion of the US$100M costs I had in my head. When it looks like that could be done, this year, in free cash... the high interest rates don't look bad. Would be interested in a strategy update for that repayment as obviously there needs to be a balance between debt repayment and operational expenditure for prospecting, exploration, extension, etc using the income. With the AISC hopefully dropping (already low but potentially around 20% lower) next year, it's perhaps better to pay the debt back fast, reducing interest, before considering capital projects. Bit of a drop in Toronto tonight but there's no volume, so it's flapping about in the spread. Hopefully #THX put out a smasher of an RNS with strong March figures and grab some attention. Gold continuing to hold over $1925/oz, as i type, so April is off to a great start as well.
Define "significant" though - the debt is very manageable (~US$100M, from memory, may be less as some wasn't drawn down - need to check) and, in theory, could be paid off well within 2yrs at the current free cash run rate. I'd be interested in their strategy for this (i.e. pay down fast, reduce interest?). The royalties only total 3% but they're capped as maximum US$ returns (see below). As you say, when we were looking at gold in the ~US$1800/oz range, a 5-10% increase in gold price makes a real difference i.e. pays the royalties vs expectation say a year ago.
Royalties (correct me if I am wrong):
- Vox Royalty Corp (acquired from Ratel Group Limited) 1.5% of Production up to a maximum of US$3.5 million;
- Tropical Mines Limited ("TML") 1.125% of Production up to a maximum of US$3.0 million; and
- Delano Gold Mining Industries Limited ("Delano") 0.375% of Production up to a maximum of US$1 million.
By any standard valuation metric - it remains very cheap. We need good extension news to force the re-rate as I suspect the mine life at Segilola is currently holding it back. Segilola extension + Douta (and other potential prospects) pushing Thor's prospects into the next decade would be welcome.
Yeah, just shy of 19p - been tracking up nicely, rightly, since the start of the year. Deserves to keep moving up. Every day it's more and more 'proven' and building that track record of solid operations. Still 30% off the high, which was before #THX was even producing (when the gold price was lower) so we have a way to go yet but it's all looking very positive for the company and the SP. I'll be looking forward to March and Q1 results. The picture is very different from Q4'21 and progress has been huge. It's now a proven operation, getting better by the day. Let's get some volume in trading and positive Segilola extension news... Then watch it fly!
So, that's March done! Looks like the average close price for gold (2 data points per day) held well from the below prediction. For the 31 days of March 2022 the price of gold looks to have averaged US$1952.54/oz. If #THX can do ~8000oz and ~US$1000/oz after AISC then that would be an unbelievable month! Looking forward to the production update in the next few days! Imagine doing US$8M in free cash, a month, on a (Toronto) valuation of US$143.7M MCAP valuation. Cash cow - great metrics!
Bit quiet in here of late but I thought I would look at some numbers as we come towards the end of March. February production was 7,082oz in 28 days, or 252.9oz per day. March is 31 day month so we would hope to see the February daily production rate maintained, if not slightly improved, based the plant throughput and gravity circuit increased performance (https://thorexpl.com/news/segilola-gold-project-february-production-update/)... giving us 7,840.7oz for the month (would be great to see >8,000oz). Looking at the gold price chart for the month of March, the average close looks to be ~US$1955.5/oz, multiply the two and we get a March of US$15,332,638 with about half that being cash after AISC. The price in Toronto is currently equivalent to US$0.228/share or US$146.6M MCAP. So, Segilola alone will produce it's whole MCAP in 9-10 months or ~18 months based on free cash. Those are mad metrics. What a cash cow!
Funny you should say that; I was discussing it with a few people, a few months back and they bought Thor mining (or another Thor) by accident as well! Great level to add at. News of mine extension ought to send it flying. Fingers crossed the whole operation stays well-oiled... but there's also no reason to suspect it won't so my confidence here is high.
For sure; I've moaned a few times about comms (improving), PR and marketing. You look at some of the other gold miners on here (GGP, GCAT, etc) who get ramped all over the place but Thor never got a lot of attention. In fact; still very little, despite being a low cost producer, building a very nice track record! I think a lot of it is the 'difficulty' in buying through a lot of the public trading platforms, who don't always offer very small cap AIM companies. But that's improving as well. The more results that are released, the more accounting periods we pass, the better the 'metrics' (like PE, etc) will look and hopefully a larger audience will find it! If Thor can keep that plant running at 94%+ and get the high grade stuff through at this price; the results will speak for themselves... albeit some promotion wouldn't go amiss!
High grade, open mine, low AISC, strong prospects for extension locally and developments elsewhere. IT's a strong add and hold on any dips. The pullbacks seem to follow the gold price, to some extent, which would make sense if we weren't so undervalued vs pre-production rises, when the gold price is a lot lower. I remember being over $0.25 in Toronto years before there was any plant there, perhaps before the EPC contract was signed and then of course there was the $0.45 peak, pre-production. The mine is de-risked, the plant is operating well, gold is remaining above the figure used by Thor in their production/sales estimates; they're knocking it out the park. It usually does well on production news; I don't know how much of a faff it is but perhaps weekly updates on production/sales (if they're working on those intervals) would be good. Even if that is not by RNS (maybe it needs to be as it's material?); perhaps something on the front page of the website or some more regular news in "Notes From The Field", which I don't think has been updated since November last year. Investors and potential investors will want confidence that everything is tip-top in Naij. Would also be good to get some Segilola extension exploration updates. We really ought to be seeing ATH prices here so we still need to try and understand the 'blockage'.
Looking at the February RNS again, over 7k oz is fantastic. If sales are at US$2k/oz gold, that's >US$14M in exactly 4 weeks or ~US$3.5M a week, well above my expectation of $3M/wk, last month. So, it gives us a new target to look for in March. I'd like to see close to 8k oz of gold produced, which would equate to around US$16M for the month. That is absolutely smashing it and perhaps there is incremental improvements, month-on-month to come from the plant and operations yet.
Very frustrating but the recent action has been positive. I'm not quite sure why someone would suddenly decide to sell ~2p (>10%) below the prevailing SP, back to where we have been before, but there you go. As usual; looks a bit fishy to me. But gold is doing well, Thor are doing very well, the plant is operating fantastically and we've got ongoing exploration, whilst being a producing cash cow. This is a holding share, not a trading share, particularly with the usually high spread. Can't help but feel a lot of the sells are late reported buys. Not much point worrying about the day-to-day anymore; the results and RNSs speak for themselves. Most will hold for gold, quite literally.
Great update from Segun as gold motors on to an all time high. If they can keep going with the improvements to design capacity and efficiency; this could very well smash production target and rocket through expected revenue figures. Keep up the hard work #THX.
This is why some updated guidance (once production has been 'proven', over a few months, and if the gold price stays up here) would be good down the road - announce that THX will exceed even the original estimate, before the teething trouble and reduction (Q4 2021), which was only very slightly downgraded anyway, but caused roughly a halving in the SP. If THX were $0.45 in Toronto before the start-up issues (long since resolved, as far as we know), then this is looking like a bargain today. I can see gold going to $2300/oz. On that basis; THX's economics are bonkers good. Would be good to get a February RNS update.
Looks like Adrian will be holding onto his shares. Good to see the faith from The Board. This has a long way to go yet. Gold at $1945 as I type. As Chique has said; the uptick pays for the Segilola drilling and no doubt some Douta exploration as well. Looking forward to the February update, maybe early next week. Let's make some headline news.
Gold appears to have held over US$1850/oz since about 11th February. Monthly production and sales will be very interesting. Could well be a record month for Thor, despite it being a short one. Inflation and invasion supporting a strong gold price at the moment and it looks likely to continue through March. All somewhat meaningless when we're on the brink of war and have other concerns... but it will be setting Thor up nicely for Segilola extended drilling, which is very good for the future. Surprised to the share price pull back a little in Toronto the last week or so and the volume drop off but hopefully another push on with good February results. Get a quarter or two of strong production and sales behind them and I hope a few more 'eyes' will move their way, looking for stocks with good cashflow, low debt and high profit.
Gold has gone over $1960/oz on Russian tensions. I'd rather the world wasn't on the brink of war but I am very much looking forward to the next couple of months of updates on Thor's production at Segilola.
With a 'punchy' RNS headline: "Thor has record month of gold production and sales" ;)
If gold continues on its uptrend, perhaps some updated guidance would send a message (down the road, not today, say after 6 months of good production). News of debt repayment or announcement of dividend would also shake things up (down the road).
I am still looking for it to break $2k but the difference is material to THX and most welcome. Hopefully they're pushing as hard as possible and getting the high grade stuff through the plant. Will be VERY interested to see the February production/sales update. SP deserves a strong move upwards. Wonder if some Institutions or partners might come sniffing round, now it's producing so much cash.
Now doing $3M a week-ish on ~3g/t, which would make the $6M at 1g/t, 6 weeks worth, but that assumes the now excellent recovery... So, divide by 2 again for <50% uptime and recovery etc, which would give ~12 weeks. Just a finger in the wind explanation that comes to mind. With the teething troubles that would make sense and also explain the big drop in SP, maybe? Does show they have really turned things round and are doing very well.