Member Info for nero120

Seingred, the mention of Cardinal was merely to illustrate that competing bids appear once the first binding offer goes public. It's not the case that a deal is done in the shadows and that's what the assets sell for, that's just the starting offer. One of the issues with Condor's sale I think is that many interested parties think Condor will go under or whatever, and they will get the assets on the cheap. Well, if they then see a binding offer appear for $150m then they will be motivated to bid up to their estimated value of Condor's assets.

Also with respect to Cardinal, their resource though much larger was also much lower grade:

- NPV of $590m, IRR 33.2% (Condor upside case: is $418m and IRR of 54%)

- Capex required for mine build $414m (Condor UC: $160m)

- 1.13 g/t Au (Condor UC: 3.18 g/t)

So who knows. I think we all agree that the assets will get sold, but it's anyone's guess as to how much they'll finally go for.

Remember that when a binding offer is announced publicly it does not prevent other interested parties from submitting their own counter-binding offers, that is how the assets will find their market value, just as what happened with Cardinal a few years ago:

"Condor Gold shareholders should look to the example of Cardinal, a West African gold explorer where a similar situation unfolded. Against the backdrop of a rather lacklustre situation, Cardinal stock was trading at 25 cents in March 2020, when bid interest emerged for its high-quality gold assets. As sometimes happens in such situations, competitive tension between several bidders led to a series of bids – first 45.775 cents, then 60 cents, 66 cents, 70 cents, 90 cents, 100 cents, 105 cents, 107.5 cents, and the deal getting closed at 110 cents (even though someone else then tried to enter the fray with 120 cents). I continue to believe that the Gordian knot at Condor Gold will be cut through before too long because of the large gap between the company's market cap and the intrinsic value of the firm's Nicaraguan gold assets"

The reason MC and JM have rejected low-ball offers (and thus prevented them from proceeding to binding offers) is because:

a.) Publicly, they want a higher binding offer from which future offers will compete with

b.) Just on the off-chance that there will be no other binding offers, they want the only binding offer to be at a level they are willing to accept.

We need that first binding offer to be announced. Once it has, if it is at a level that is below the current market value of the assets then other interested parties will be incentivised to submit offers up to that level before the deal goes through.

Absolutely EL, couldn't agree more.

JHC this board has descended into total lunacy. Some person even said recently "deals are done based on short term movements in the gold price"?! We just had the highest monthly close EVER at $2071 and people here are finding reasons why it shouldn't be any kind of advantage. My god, peeps here really are broken. Just sell out, for the love of gold, sell out.

The entire gold junior market is in the toilet. Let me say that again THE ENTIRE GOLD JUNIOR MARKET IS IN THE TOILET. So yeah, keep attacking Condor management, makes perfect sense. THE GOLD PRICE IS AT ALL TIME HIGHS but western financialised markets only want to buy ETFs, FANG stocks and crypto, they couldn't care less about gold stocks. This is incredulous given everything that has happen over the past 10 years, but it is what it is. Volume is so low it's pointless looking at the share price, there is no price discovery here.

We have a PROVEN resource with an NPV of greater than $500 million at $2,000 gold. It really isn't that complicated. MC and JM are both out there trying to sell the assets for as much as they can get, what's wrong with that?! I get that some people would want them to build but that isn't necessarily a path to easy riches either, many builds overrun and encounter problems, they would rather not take that risk. Maybe in hindsight they should have but who knows, explorers typically prove up a resource and then sell it to a producer to build the mine. Gold stocks should be flying but these are not normal markets, maybe they never will be again as CBs have forever broken them by perverting incentives with their monetary policy.

JM will fund the company until they find a buyer for the assets, at the best price they can get. No one knows what they will be and it's really not worth speculating. Either sit and wait or sell out now like Johnnytaffia.

Capex, yep I shared a chart of the long term gold price on another bb recently:

https://postimg.cc/nCDKzZCW

Some things to note:

- The exponential growth of the money supply

- The gold price tends to lag the money supply growth, then catches up (1973, 1977, 2008) and overshoots sharply before correcting back down

- However in 2019, right when the gold price was about to do the same, money supply growth went vertical and the gold price was slammed multiple times to keep it under $2000 (5500% on the chart scale, yellow line). Gold has attempted to move above this line multiple times over the past few years but each time is hammered back under.

A break out of the gold price above money supply growth this time (as happened in the past) would be an immense rise and would have huge consequences for financial markets - I think that's why it was kept under $2k, and now they're desperately trying to reduce money supply but there's no way they can get it back down to trend without causing a depression and financial crisis, so it looks like the gold price has to shoot up. 2024 could well see that happen.

JT, subtlety not your thing? Ok I'll be a bit more direct - it's called a stalemate. Both parties aren't willing to transact given the other's expectations. Stalemates do not last, but no one knows how long they last for.

Anyways you're out so I guess good luck for the future.

So all in all, my view is this process is incredibly frustrating (trust me I know), but the best thing to do is to stop looking at the daily share price movements and wait for the process to play out. We have our chips placed, the dice are in the air, we are waiting for them to land so see how the game ends.

IMO the problem we have is the gold equity space is currently in the dogs, despite gold being at all time highs - utterly crazy!! That is a sign to me that financial markets are basically broken these days, there is very little liquidity unless you're on a major index so then what value does market cap really have? Compare Condor's chart to other AIM-listed gold juniors such as OMI, RRR, CORA, etc, and they are nearly identical. So whilst we moan about Condor's management these other companies have seen pretty identical stock movement - so is that a reflection of management decisions/sales process/etc or wider market sentiment towards AIM-listed junior gold equities? I would guess the latter.

So what does that mean for us here?

I think it means that Condor's market cap is not a true reflection of the value of the assets, but with management looking to sell the assets, in effect what they are trying to do is to "create a market" for our assets in order to enable price discovery (just like when you're selling property). That means talking to all the interested parties to get an idea of what they're willing to pay. But, no one wants to pay more than they have to, so they say "look at your market cap, it's £26m so we'll offer that plus 10%". To which management say "Are you crazy?! Our NPV is $500m+ at the current gold price!!". To which the interested party responds "then why doesn't your market cap reflect this?", and so on.

I believe that's where we are currently and have been for the past 6 months (post site visits/due diligence/etc). However, I think the advantage that Condor has over the other gold juniors is that the sales process will become it's own market, once the first binding offer goes public. Then it becomes more like an auction, interested parties seeing others bidding don't want to let a good opportunity pass, so they throw in their hat and the price goes higher. No one knows in advance what that final price would be, it's all academic until the bidding starts.

Right now we are waiting for that first real bid, I think JM/MC are reluctant to accept a low binding offer as they may worry that they will give away these valuable assets that they have worked hard to develop on the cheap. Personally, I say trust the market, not the stock market but the "real" market. Start the bidding and let the "auction" occur publicly, then we will find our what the assets are worth, as they will sell for whatever they are worth, no more and no less.

The only other thing I can think of is that JM is convinced that the gold price is set to take off, and is holding back from accepting the first binding offer until 2024 when investment attention may turn back towards gold equities, giving all a big lift. Otherwise, why bother waiting? He has committed to funding the project for as long as necessary and the company is running as lean as possible to minimise opex, so we are not going broke...

simms mc stated in the last interview that they've had a few "low ball" offers that were rejected outright. clearly there is interest in the assets, the trick is to get the maximum offer possible given the current market. now, we have a silly situation where the gold price is at all time highs in most currencies (and very close to ath in the us dollar), but gold equities are dog **** right now, no one is interested and despite a slight (short term) improvement back in 2020/2021, it's been that way since 2012.

condor management need to sell the assets based on nav, not on market cap, which is what they are currently working hard to do. we will see how successful they end up being, but there is no doubt that at $2000/oz, the nav of the company is ridiculously higher than the market cap it's not even funny. this is probably true of most junior gold equities right now, but not many of them are proven up, permitted, construction ready and currently for sale.

my personal view is that they need to make a binding offer public, even if it's lower that they'd hoped. once that is public then the clock starts ticking for any other interested party to make competing bids (of which we know there are a few), and through that process we'll get some price discovery as to what the assets are really worth. i think management are holding out (or trying to encourage) a higher starting binding offer, but i think they'd do better to just let the process play out in public. if the assets are truly worth more then the offers will roll in up to that level.

Did seem like a long shot given Condor were negotiating a toll milling deal with Calibre senior management back in Dec 2021, even got so far as to present them with a formal proposal which obviously was not accepted. No idea why, seemed like a win-win at the time.

Ah well, good news that M&A continues apace in the mining sector.

BenBen given your particular concern, when you emailed MC to ask about this what did he say?

BenBen88 did you not watch Mark's last presentation? He confirmed that permits are not an issue since as far as the gov is concerned, construction has started. Environmental permits will be renewed as and when, not a concern.

Good summary dayster, also:

-no red flags reported regarding the asset from any of the site visit teams doing DD

Simms, I think the deal is a close as it's going to get until one party or the other moves on price. I believe due diligence has been done by various interested parties and no issues have arisen, but that they are currently only willing to put forward a bid that MC/JM are not (currently) willing to accept. So we're currently in a bit of a stalemate.

However, that can change at *any* moment. Either a potential buyer ups their bid to a level MC/JM is comfortable to accept, or MC/JM decide to greenlight the current highest bid. Either way, once the first binding offer is made public that's when interested parties will throw their hat into the ring and we'll discover how much the assets are really worth.

No one knows how much time it will take, we just need to be patient.

Exactly CF, Roxi as I already said he can't just sit on the asset because doing nothing puts him at risk of losing support of the locals and the government, and the asset losing all value.

Https://www.ft.com/content/067206be-0e43-40cb-9712-fb7758355950

And just to add, when Chestertons estate agents are being bought out for "around £100m" despite property sales collapsing yet Condor with $400m+ NPV @ $1700/oz gold price (let alone at $2000!) is lingering at around £25m market cap, it makes you sick to your stomach! You can't blame MC and JM getting frustrated with the lack of higher offers.

The years of ZIRP have completely distorted markets, and it will take time (and a lot of pain) for the ship to right itself. Whatever happens though, gold is a safe bet, and I for one expect that interested parties value Condor's assets much higher than the market suggests. The trick (as Ive said) is for JM and MC to get interested parties to stump up.

Simms, I expect JM has his own time schedule that he will not make known. IMO he will sell as was always the plan, there is no real appetite to become miners here, and accept the ongoing risks that comes with it. I think there is a lot of interest, but the offers so far have been sub par. Can't blame them, if they think they can get away with buying on the cheap then they won't overpay unless they have to. JM is also not stupid, he knows he can't hold the resource indefinitely at risk of losing support of the locals - and the government, and the asset losing all value. He will strike the balance, perhaps he's giving it until all his outstanding warrants/options to be exercised and then they will accept the highest offer. Remember, they can also see the current geopolitical situation and that gold has caught a bid, which *should* at some point soon mean miners also start to see increased investment interest which would work very well in condor's favour.

Once an offer has been made public then the real action should begin, as other interested parties put their cards on the table and make their counter offers. Then and only then will we find out the market value of the assets.

Personally, I think there is zero chance of JM taking the company public. Both him and MC have worked on this company for over a decade, they know the value here but also that it's time to exit. The trick now is to get the best price which they are both incentivised to do, we need to be patient as difficult as that is.

Slippery, no one is thinking of investing in Condor, because no one is thinking of investing in mining. At least, that's according to Larry Fink:

https://www.telegraph.co.uk/business/2023/10/30/investor-disdain-mining-threatening-net-zero-blackrock/

But don't tell anyone here, because they think it's all Condor's management's fault that the share price is so low. Don't get me wrong, no doubt they ultimately are responsible, but if there is zero appetite for investment in the sector then they don't exactly have much of a chance do they?

Let's get that first binding offer agreed and see who else is interested in making a counter offer. No doubt once the deal is signed and sealed the mining sector will suddenly roar back to life for the greatest bull market ever!!

DDD don't lose heart. I suspect that MC and JM could sell the assets now if they were willing to entertain a lower binding offer, and I suspect there would be no shortage of bidders given the quality of the assets and the strength of the gold price, as you point out. There are negotiations ongoing, we just need to get to the point where both parties are willing to deal.

I think JM/MC want a higher initial binding offer, but that once the first bid is made public it will trigger other offers up to the true current market value of the assets (whatever that is, no one really knows for sure). My suspicion is that MC and JM have not greenlit an offer as yet because they don't need to, not because there is no interest. This will not last forever, and the assets will sell. A bit more patience required here.

Meanwhile, markets are collapsing! Hold on to your butts!