Member Info for nero120

(correction)

- Initial capex requirement of US$381m vs US$160/US$153m.

The GGP PFS states "Total development capital expenditure of A$529 million (US$381 million)" but also "Low upfront capital, Greatland share US$73m", apparently owing to "Greatland's US$ 50m existing debt facility". Not quite sure how that stacks up, plus that's a hell of a lot of capex for an apparently low cost resource that utilises an existing mine!

(cont)

The first thing that needs to be said is that Haveiron is a bigger resource and includes a sizeable copper resource also. Their estimated reserves are 14Mt @ 3.72 g/t Au and 0.54% Cu (4.58 g/t Au Eq) for 1.6Moz Au and 73kt Cu, whereas Condor currently only has an indicated resource of 9.85Mt at 3.6 g/t gold for 1.14Moz gold. We should be getting increased reserve/resource numbers once SRK finish their reports on all of the recent drilling on La India, Mestiza and Cacao, hopefully by the end of the year but definitely for the BFS.

Also being based in Australia which is considered a tier 1 jurisdiction, i.e. low risk, gives them a premium over Nic. However, given that the Australian gov have gone full r***** over covid I'm wondering if that's still a fair assessment. Western govs are beginning to look much more "banana" than the so-called republics these days. The recent elections in Nic (yes I know the election may have been a fix) were more peaceful than the US presidential elections, so what is the real risk premium for investing in Nic, and are markets mis-pricing risk in western countries given growing authoritarian policies, civil unrest, "green" eco politics, etc.

Finally, GGP have a major partner in Newcrest which is a very large string to their bow. I'm sure many would agree that Condor could use such a partner and the capital/expertise they can bring to a project. Could First Majestic be that partner? Or Calibre/Rio? Time will tell.

In conclusion, we have compared a portion of each company's assets and whereas one could say GGP are faily valued (or even over-valued) for what they have, Condor are hugely undervalued given the imminent move to producer status. The economics speak for themselves. I think there is far more upside to be had here, the real question is when will the market realise this? Elections are now out of the way, and the BFS and mine finance are dead ahead. Before then we should also get full reports from the drilling programs, news of 100% land ownership, and possibly toll milling.

After ten years here I'm excited for the next 4 months from a fundamentals perspective, but remain skeptical that the market has any sense left after overdosing on central bank funny money for over a decade. In any case I'd rather be in than out.

So last month Greatland Gold (GGP) released a "Stage 1" PFS that covers ~28% of Haveiron. Now considering GGP have a market cap of £662m vs Condor's £50m I thought it might be interesting to compare the info in their PFS to what was in the recent PEA:

- LOM average All-In Sustaining Cost (AISC) of A$893/oz (US$643/oz)
- Life of Mine (LOM) average annual gold production of 160koz and copper production of 6.9kt
- Stage 1 Study represents only ~28% of the Havieron Mineral Resource
- Total development capital expenditure of A$529 million (US$381 million)
- Internal Rate of Return (IRR) of 27% (real, after tax)
- Payback of 3 years
- South-East Crescent Net Present Value (NPV) of A$706 million (US$508 million)
- Uses Newcrest's existing Telfer milling and support infrastructure to process and treat Havieron ore

Now let's look at Condor's recent PEA which included two scenarios, first scenario 1: 1.4Mtpa PEA Open Pit + Underground Operations:

- Internal Rate of Return (“IRR”) of 54% and a post-tax Net Present Value (“NPV”) of US$418 million,
after deducting upfront capex, at a discount rate of 5% and gold price of US$1,700/oz.
- Average annual production of ~150,000 oz of gold over the initial 9 years of production.
- 1,470,000 oz of gold produced over 12-year Life of Mine (“LOM”).
- Initial capital requirement of US$160 million (including contingency), where the underground
development is funded through cash flow.
- Pay back period 12 months.
- All-in Sustaining Costs of US$958 per oz gold over LOM.
- Robust Base Case presents an IRR of 43% and a post-tax NPV of US$312 million at a discount rate
of 5% and gold price of US$1,550/oz.

And scenario 2: 1.225 Mtpa PEA La India Open Pit + Feeder Pits:

- IRR of 58% and a post-tax NPV of US$302 million, at a discount rate of 5% and gold price of
US$1,700/oz.
- Average annual production of ~120,000 oz of gold over the initial 6 years of production.
- 862,000 oz of gold produced over 9 year Life of Mine (“LOM”).
- Initial capital requirement of US$153 million (including contingency).
- Pay back period 12 months.
- All-in Sustaining Costs of US$813 per oz gold.
- Robust Base Case presents an IRR of 48% and a post-tax NPV of US$236 million at a discount rate
of 5% and gold price of US$1,550/oz.

So if I were to summarise (GGP vs CNR sc.1/sc.2):

- AISC of US$643/oz vs US$813/US$958 (I would have thought opex costs in Australia to be much higher than Nic, e.g. labour costs, so I'm guessing the lower AISC is due to not requiring capex for plant build since they will be using the Telfer plant for processing the ore).
- Initial capex requirement of US$73m vs US$160/US$153m.
- Pay back period of 3 years vs 1 year (both scenarios).
- IRR 27% vs 43%/48%.
- NPV of US$508m vs US$312m/US$236m. Note that GGP assumed a gold price of US$1,750/oz whereas Condor used a more conservative US$1,550/oz.

Rick is always good (though never seems to say anything new once you've seen plenty of interviews with him) but I wasn't really impressed by Darren Hall, thought he sounded very unexcited/uninspiring. At points he sounded like he was reading directly off notes. People complain about MC but I actually think MC has far more charisma than Darren Hall!

Calibre have done well to get where they are now with 150k+ oz production, no debt and $70m in the bank, but with a $500m market cap a lot of the upside looks priced in to me. Condor have a $70m market cap with 100k+ oz production fast approaching, plus a huge 100% owned land package that is mostly unexplored but will geophysics done and exploration targets ready to be drilled. With the election uncertainty now out of the way, the way has been cleared for BFS and financing in a couple of months, then we (and the market) will know the real economics of the project. If toll milling is included which reduces dilution then things will be looking very good. Also, SOLG has a market cap of £587m, GGP has a market cap of £662m, both with no production let alone a resource (to my knowledge). It's difficult to tell what the market will value condor at but £200m for 100k oz production definitely seems low ball to me.

Not at all saying calibre is a bad investment, it isn't, but there is more potential reward here in my opinion. If I was to sell out of condor looking for less risk then I would probably but a major like newmont which is a far safer investment than Calibre with a 3.9% divi and still has plenty of upside in a rising gold price environment.

Happy with my current holding, though I try to top up at bottoms if I have spare funds.

If the board might indulge some comments whilst we are all frustrated. The problem is not MC/Condor (in my opinion fundamentally the company is doing very well), it's the current state of "markets". Compare Condor to pretty much every junior miner and the situation is very similar, share price not reflecting company performance, lots of frustrated investors. Have a read of the SOLG board for example.

Investment capital did start coming back into the sector in 2019 which marked the low point for pretty much all gold equities, following the price of gold, but recently the sector had a major sell off though not quite giving back all the gains since 2019 (Condor included). The main problem is that rates being too low (negative in real terms) fuels cheap credit and speculation crowds out productive investment. We have been in the eye of this monetary hurricane for a while now, though it looks like we are about to hit the wall.

In my opinion, it's going to take inflation to run away (which is already starting, and the BOE were too scared to raise rates before xmas) and real fear before we see money flood back into the sector. This will also wipe out bonds as well as risk assets (traditional equities and especially crypto which no one can deny is the pinnacle of the current speculative mania) and investors will look to commodities and pms to escape the bloodbath. If Condor are producing by that point then I'm sure we will all do very well here. The problem is I don't know when that will happen, or how our share price will respond to any positive news before then. What if we're producing and still have a market cap of £50m? Stranger things have happened.

Then again, if I sold what do I do with the money? Use it as a deposit to buy massively overpriced property and still requiring a huge mortgage, which then risks loss of capital as interest rates increase? Buy stonks or crypto knowing that inflation is going to bust these markets - when do I sell to escape that?

As frustrating as is it to stay put, for me personally, I'm happier sitting here knowing that Condor is a real investment and very cheap rather than buying something overpriced and losing more sleep as a result. I accept that others have different opinions, but if you are going to sell then do think very carefully about what you are going to do with the money...

Sorry EL, I'm partly responsible and for that I apologise.

What I find stunning about all this though, if anyone cares to re-read post 972 I didn't actually call anyone here a half-wit!! What I said was "PM miners are making a boat load of money but they are sold whilst half-wits buy cryptos and Tesla because "to the moon"", obviously "half-wits buy cryptos" is a generalised statement and not the same thing as calling bigdog or whoever a half-wit. It's common knowledge that most people who are buying crypto understand little about the tech underpinning those cryptos (whilst at the same time loudly proclaiming that "the future is crypto"), so when I posted it I didn't think anyone would take it personally. Clearly I hit a nerve.

After bigdog responded though I couldn't resist winding him up ("I'm rich so shut up" - seriously how could I not wind him up after post that!!!) which wasn't big or clever. Apologies (to the honest) board members, I shall head back into my hole for a while!

You boomers and your egos...

Apologies BigDog, why didn't you say so?! What a successfull human being you are! Fantastic! Do you have any more gripping stories of your success you can share with the board? Fantastic!

Simms what do you mean something extra? What do you mean extra besides running the company solidly throughout one of the longest/worst commodities bear markets in history whilst govs and CBs are throwing everything at keeping commodity prices low and risk asset prices high? Extra besides working non-stop throughout lockdowns, travelling to Nic every month to keep the project on track despite the obvious difficulties and disruptions? Bringing the project from nothing to imminently being a highly profitable producer? Yeah but we need "something extra"?!

I don't mean to pick on you Simms but somtimes the entitlement of people staggers me. Obviously I disagree with you. MC is doing exactly what he should be as CEO, and I expect/ask nothing more of him. He does not control the market and has to play the hand he has been given, not the one he would ideally like. People focus on market price far too much and it blinds them from reality since second-order thinking is not common practice. PM miners are making a boat load of money but they are sold whilst half-wits buy cryptos and Tesla because "to the moon". They also think interest rates will never rise because "all powerful governments" will never let it happen, yet history abounds with examples of such hubris being punished in ways people today cannot fathom.

Apologies for the mini-monday morning rant! Ignore the price, focus on what's actually happening. We are sitting on millions of ozs of gold and silver and are mere months away from extracting it. Let's get these elections out of the way and see what MC can get done before the end of the year.

Bought 8500 @ 35.5p. If it's good enough for JM then it's good enough for me. Thank you for the bargain sellers!

Sorry but the west (referring to the western political/corporate classes or "establishment") don't give a flying **** about corruption or human rights, they only care about getting a share of the spoils. From what I can tell, Ortega plays a smart game by opening his country to western business allowing their shareholders to take a share of his country's wealth whilst gaining the flow of capital to develop their assets. He even plays both sides to increase his bargaining power in a much more subtle way than say Turkey's Erdogan, without invoking too much hostility. He is certainly no Latin socialist in the same regard as Maduro who will continue to bear the brunt of US beligerance in the region. Ortega plays the game, and thus I think Nicaragua will avoid any real action from Western nations. If this were not the case, then I do not believe we would have seen Rio Tinto and Calibre invest heavily in the country. Though no doubt, the western media will continue to pour (hypocritical) scorn on the country since they are not fully signed up to the woke world order.

Thanks for posting BigDog, great info. Just shows that so many of the questions we argue/debate on this bb could be resolved by a simple email to MC! In fact thinking about it, I wonder if he was asked about the state of toll mining if he'd be willing to share more info now, I don't know if he's still under NDA?

Year to date performance of various gold funds/equities:

- HUI (NYSE): -25.18%
- ABX (TSX): -24.96%
- AEM (TSX): -27.60%
- BTO (TSX): -40.42%
- CXB (TSX): -45.45%
- HUM (LSE): -48.59%
- GGP (LSE): -43.09%

Year to date performance of CNR: -28.97%

I'm predicting that the share price will track the sector unless there's game changing news (in one direction or the other). Yes, I really am a genius. All this consternation could be applied to any share in the sector, many are down far more than Condor.

I can't recall Seingred calling any of the spikes we've had, seems more like he's a constant down ramper to me and I got so bored of his nonsense that I've blocked him now.

Anyway, what he does (and those like him) is really not rocket science: "Tomorrow will be like today". I imagine he takes the same approach to his crypto "investing" also, buying in only once the herd arrived. But lets examine that attitude a little further. The entire gold equity sector has been in a bear market since 2011 and since then central banks have been printing money to backstop the issuance of more debt which has found it's way into various assets such as certain mainstream stocks such as GOOGL, MSFT, TSLA, etc (further pumped through corporate buy backs funded by debt), global property and of course, cryptos. So the mainstream trade narrative through this entire period is to front run CB printing and buy whatever that money is flowing into, which as we all know, is NOT gold equities!

One of the main reasons why many are still in gold equities at this point is because we DON'T want to be invested in an unsustainable house of cards that will inevitably come crashing down and take all of our savings with it. We are the quintissential contratrians, unable to know when the turn comes but certain that it will. This is a lonely road, and all the way we have to watch those smug, arrogant people calling us stupid for not joining with them and loarding their paper gains in our faces. That's fine with me, I don't want any part of it. Once you give in to that emotion and join them there's no coming back.

But back to condor, this is an illiquid share in an unloved asset class. I don't understand why people act otherwise, especially if they've been holding through a 10 year bear market?! It's going to take the biggest sentiment change in history or major, game changing news to change things here, not a few 10k trades one way or the other. Things have gone too far at this point, central banks have not allowed for a natural recession and the asset class cycle that follows.

Personally, I have no idea what our share price will do, any predictions I made about well run companies and their share prices was thrown out long ago, as fundamentals just don't matter in this market, only trend and liquidity. But, the day all that changes is why we are here, as history dictates any liquidity that's left will flow into assets providing a real return or that preserve wealth, and in that time condor will be worth a lot more than it is now. Condor is well run and is making fantastic progress in challenging times, and is creating something real that has actual value. We are making a bet here, but one based in the real world, not a world created and supported by corrupt bureacrats. We are here because we are investing for that day, not for today's clown world market. So here we sit, waiting patiently.

If none of that resonates then honestly, what the $£%^ are you doing here?!

Regarding the price of gold, contrary to popular opinion gold is not an inflation "hedge" in the traditional sense, as in, it does not track inflation over the short term. The price moves higher in cycles over the long term. So Mellon is right it will go higher but no one knows the exact timescale - ultimately the price moves indirectly to confidence in the financial system. When confidence in central bankers is lost, gold will explode. Until then it probably won't change significantly.

However, condor will be extremely profitable regardless. If gold moves higher its a bonus.

35p earnings per share, let's put that in perspective. The UK's FTSE All-Share P/E ratio reached an all-time high of 34.210 in Sep 2016 and a record low of 7.410 in Mar 2009. So, at 35p EPS that would give a target share price of £2.45 at a P/E of 7 and £11.90 at a P/E of 34.

I'm skeptical about the current market which is driven more by narrative than fundamentals, however *if/when* this production scenario is about to be realised one would hope that even this market would recognise how undervalued Condor is. And if not, one can only imagine the dividends that would be paid out after a couple of years of production after debt is paid off. And that's all assuming Condor doesn't get bought out before then.

The best thing is, none of this is hype or wishful thinking. Once the BFS is released then that will be as close as any projection can get, especially when funding has been announced and debt/dilution can be taken into account. That is the moment I'm waiting for personally, until then we have these elections to get through so let's see how that plays out.

Seingred, repeat after me:

- "No one cares what my average is"
- "No one cares what I bought crypto x for because someone convinced me it was a good idea"
- "I cannot validate myself by trying to impress strangers on a bb"

If you can say those things and accept them then hey I'm happy to take back everything I've said about you and shut up, you have my word.

Indeed EL, every time he posts I also have that thought.

Wow this just won't end will it. Seingred perhaps the reason why I find you so irritating is your constant need for validation, just sad and pathetic. However, if members of the bb like that kind of content then who am I to argue? I guess clowns rule in clown world.

"tokenisation" oh geez please stop.