Member Info for iWantThatOne

I don’t think BGO has the ability to grow that much, you’ve caught it too far along in its development. Some simple maths - assume cost base is relatively flat (which it is) - 5% pa increases. And revenue growth is 15%pa - which is current consensus for 2024 over 2023. Then by 2030 revenue is $133m, costs $40.2m, EBITDA $92.8m. If EV/EBITDA remains unchanged compared to forecast 2024 (c9.1, at an sp of 200p) then the sp in 2030 would be c675p. For comparison, 25% pa growth in revenue would see an sp of 1303p. So that’d be 6.5x growth. You’d need 65% pa growth over this period to increase the sp by 40x, which seems highly unrealistic.

Oh J*sus wept, DW, give it a rest. People move on for all sorts of reasons. Maybe he wanted to stay closer to you…sucked in by your incredible negative energy.

Lots of people questioning the amount of debt and saying it’s a lot. Really? For a producer with 200k ozs from Q4 that could repay the debt in 18m, at least nominally? Plus a third asset that could reduce that debt to very low levels if it were sold? I think some people are getting carried away. Remember, $75-90m debt for one mine alone (Yan) was not considered an issue when it started production. Yes we all recognize Q3 is tight, but beyond that, there are no major concerns as far as I’m concerned.

Indeed. Current Enterprise Value is about $192m. Next year’s forecast EBITDA $27.5m. That’s a ratio of 7. Far, far too low for a still-fast growing tech company.

Been thinking about Dugbe. DB is convinced it has tremendous value - he’s repeated a $1bn figure several times. Well it’s not worth that yet - it’d need a lot more exploration to find resources to convert to reserves. So what’s his plan? To sell now would mean missing out on this hidden value, unless there’s a way of getting credit - either now or many years hence - for these expected ounces. So is it possible we’ll see a commitment to much more exploration over several years to maximise potential before seeking a sale? Or would the cost of this exploration not be worth the extra sale value it could generate?

Well done AFC! Another step along the road, which was always going to be a long one. Further evidence that Bond is going about things in the right way, not just selling any old sh*t to claim he’s sold something, as some bashers would prefer.

Kenj, thanks for your thoughts. On the $10m loan, the RNS states that this is subject to the Recapitalisation Plan being agreed and implemented in full. I suspect the prospective lender would need more security than just some of the existing debt being swapped. Therefore, I think all elements - debt-to-equity swap, loan and equity fund-raise - would need be approved at the EGM as a package. Given that, I’d be surprised if the loan is arranged first such that shares can begin trading - I’d have thought the D2E and equity raise would happen swiftly before that. So it’d be a “big bang” resumption.

And that then challenges the notion of some existing lenders accepting a haircut on their loans. I don’t think this would be expected or necessary in a scenario where “everything is approved as a package at the EGM”, because the equity raise pretty much guarantees the company’s survival. So I’m not sure we’ll see any haircut.

In line with expectations on EBITDA, cash and integration synergies. Some exciting large partners. What’s not to like?

H2 at Yan will undoubtedly look a little sticky. It’s all built into the forecasts and guidance but in more detail:

The current 80-90k guidance indicates 15-20 ozs for each of Q3 and Q4. It was back in Q3 2022 when as little as 16,827 ozs were produced. The resulting AISC was $2161. In Q3 2022 production was 20,013 ozs at $1859.

If you assume that the production achieved in both Q3 and Q4 will be the higher of those - 20k each - at the same Q3 AISC then you arrive at c91kozs for the full year at a weighted average AISC of $1472 - in line with guidance of

Not project AISC. $1500 is just the AISC for 2023 due to KE being mined out and having to develop KEUG etc.

Solid RNS. Had been hoping for a faster ramp up at KOR but it’s fine. Just need to deliver at an operational level in H2 ready for FY24, lots to do. Pleased to see a positive decision re Dugbe will be reached in H2 - that’s been hanging over us, we need to get its value recognised. I wonder if the amount of debt the company is carrying will mean developing Dugbe itself would be difficult at this time?

Fair points. However we are told the company has increased its market share in both main divisions, so that speaks to your resiliency point - clearly the market is tough right now. It would be good to get a better handle on industry and company dynamics when results are announced. Still, one cannot really complain about ongoing levels of cash generation.

Indeed, Kenj, but what I’m now confused about is that raising equity at a *low* share price (which “optically” might be more palatable) doesn’t make sense either, if existing shares are split pro-rata. It seems hard to demonstrate to new investors that they are investing at a price that might not immediately go down (though it may not).

“We believe that gold can deal with current economic headwinds of higher-for-longer rates and see the potential for prices to rise to USD 2,100 per ounce by early 2024. Prices may be driven by a peak in US real rates, a weakening US dollar, and robust demand for the metal from investors, central banks and consumers. In the short term, we expect Fed decisions to drive gold prices. “

Lombardodier.com

Actually I’ve realised what I set out is rubbish. There’d be no need for all those steps. A new nominal price of 50p could be created, existing shares would halve in number, then the £100m could be raised at 50p. Exactly the same outcome. Indeed the £100m could just be raised at 25p with exactly the same outcome. It would make more sense if existing shares were written down in some way or not altered as the nominal price changes, but I believe that does happen.

Curious, I totally agree that the mcap will be restored to a sensible place after the recapitalisation, if it happens. When you think the mcap was north of £100m a year ago, and now the debt would have been repaid with £60m in the bank. But the markets are weird at the moment.

Curious, thanks for your calcs but I think the existing shares need be adjusted for the new nominal price. How about:

Company decides on new nominal price - say 5p - and raises equity at the same price. £100m raised to cover all debt and ongoing requirements. That’s 2bn new shares. But the existing 543m shares are the subject of a share split and are turned into 2715m shares at 5p (ie 5x because the new nominal price is 5x lower than current nominal). So now we have 4715m 5p shares in total.

This is too many so a 1:10 consolidation results in 471.5m shares with a nominal 50p price. Existing shareholders retain a decent percentage of the company (>50%). Does this look right?

But here’s a thing. For the new investors not to lose money on day one of trading the market price needs to be 50p. (They now have 200m shares effectively issued at 50p). So that implies an mcap of more than £230m. Really? And, btw, the resulting mcap and proportion of the company held by existing shareholders doesn’t change whatever the new nominal/issue price. Try it. Happy to be corrected in all the above!

This is a good point - the Recapitalisation Plan provides AVO with leverage in sale discussions. If they can say “look - we’ve got commitments to investment of c£100m, which will mean we have zero debt, c£60m of cash and a great proposition” then the sale price will have to reflect that. And would be well north of £100m, I reckon.

Are you sure about the CLN, Kenj? My interpretation of the RNS was that the debt swaps and new equity would all be at the same issue price. Let’s say 5p (I don’t know). So £61m+ equity at 5p would be 1.22bn+ new shares. And 6.4m of CLN would be swapped for equity at 5p less 20%, ie 4p, ie 160m new shares. I’ve ignored consolidation / subdivision here for clarity.

Twogood - so you wouldn’t invest in Tesco or the other big supermarkets, who have net profit margins similar to Totally’s? At the end of the day, if the company is making sufficient cash profits to grow the business and pay a dividend at the appropriate yield then it’s doing ok. EBITDA is what’s most important here. Net income, which is after non-cash items like amortization and depreciation, is not so important. You need to move away from this obsession.

I’m sure this is all seat of the pants stuff with multiple things happening simultaneously, so I’m prepared to give them a pass on this kind of stuff for once. First of all, of course, is getting the bridging finance sorted! Without that we’re stuffed.

I’m hoping one or more of the radiotherapy companies ends up being the / a major investor, because a) for what they can bring to the party and b) because the shares will be stickier than if sold to the wider market. And a full buy-out may give us a better return.