The latest Investing Matters Podcast episode featuring Jeremy Skillington, CEO of Poolbeg Pharma has just been released. Listen here.
Whilst I don't disagree that the SP will take substantial upward steps under those circumstances Matador78, there is likely to be a an 18 month period after funding where the SP will likely fall back and plateau whilst the mine and processing plant are actually built .
As for the 188p SP, that optimistic projection requires an operational SOP production facility as well, so whilst it is all possible in today's market it is unlikely to be quite that rapid.
One other point is that if a JV with OCP is announced, and it covers more than just an offtake agreement, it is hard to project what value the market might add in with that extra benefit.
ATB & GLA
@SonofaGun,
Whilst Greg25, needs no one to answer for him, if you look back at his previous postings SonofaGun. you will see that he has long been suggesting that Caracal would actually benefit from a sizable drawdown, non-dilutive debt facility, which could be used to accelerate the company's growth, and indeed repeated pointed that this will be necessary at some stage, and that our CFO Paul Reeves, has done this for his previous employers to excellent effect.
Personally I believe he is completely correct in his assertion, but it is really a question of timing, as to when it will be best to enter into such an arrangement.
Lets face it in October we will likely be looking to fund a commercial drilling programme in Tanzania, and that will probably need cash we don't currently have to do that. But there are two things we definitely don't know, firstly when RM mentioned a figure, was that just uncommitted funds, as any CFO worth their salt would be modelling the income and outgoings months ahead, and secondly, what options has our CFO has already put on the table for the BoD to perhaps commit to once the ink is dry on the Tanzania purchase?
ATB & GLA
One last thing, as Swampmonster says, 'This is a pretty good board. One of the best I have ever been part of'. This is a statement I completely agree with, in fact I would go further and say that even when the people posting here are upset or annoyed about something, they are still mostly happy to be here - go figure.
And if that wasn't enough, the main contributors here (not me), IMO, span a wide range of genuine experience and knowledge, which they are happy to share, and when the inevitable Troll wanders in they are so obvious compared to the general tone and thrust of this BB, that they soon move on to find somewhere that they can goad others into believing what they say and reacting accordingly.
Anyway, I'm sure you have watched enough episodes of 'Aussie gold hunters', to feel comfortable with most of the terminology used here and you've definitely achieved my point number 2, as where else can you buy shares in a producing gold mine for less than a penny a share? Lol ...... And if that isn't enough to convince you, just look at the skillset of our BoD and the Senior Managers and ask yourself if there is any company anywhere, fielding such a strong and diverse team with a combined hundreds of years experience in all aspects of gold mining, then tell me you have not been blessed to buy shares here at today's prices?
So Welcome Quicklearner79, just kick back and watch this one start to unfold like one of those rarely seen goals where the ball passes from the keeper via everyone in the team until it is suddenly in the back of the net at the other end. That's when all those potential investors sitting on the side-lines today will suddenly realise that they should have invested sooner. Let's face it our game changing point is the end of 2022, and here we are just chewing over the Q2 2022 report, but we are already halfway through Q3 2022 so Q4 2022 will be starting in 45 day's time, and as they say, that is when the Magic will seem to happen and the 'ugly ducking' will be no more.
ATB & GLA
@Quicklearner79
I don't normally offer any investment advice, as I also am a novice investor, but as someone who spent the first 30 years of my life living in Tottenham, I do feel for you... So I will share a couple of the pointers that have resonated for me, particularly in respect of Caracal where I have been an LTH (Long Term Holder) using the term loosely as Caracal is only just approaching it's one year anniversary. Lol - But if you check through the RNS's (which I'm sure you have) you can see the growth steps that have taken place, and precisely why we are in the throws of a major expansion in production - which is currently characterised by falls in both ore being mined and indeed gold output, so is it any wonder that the market is confused as to how to value Caracal shares? Anyway from my personal perspective I follow some of the advice from Warren Buffett, mostly two things 1. Don't invest in a company whose business you cannot understand and 2. Only buy shares in a company when they are undervalued. Added to those, with new companies like Caracal there is a number 3. Read the prospectus. This last point is crucial, as I found out when I finally did so 3 months after I started investing here, when the Caracal SP was falling rapidly due to persistent selling. A prospectus is both the worst and the best document to read to get the whole story underpinning the company, but they definitely are not a ripping read, but if you can stay awake and press on, everything is there whether it be good, bad or just plain ugly. You may have noticed that Caracal are having to rewrite their prospectus because 'someone' made a mistake, and missed a small but vital step out when additional shares were issued, unfortunately this 'error' became part of the procedure and was then repeated another 2 or 3 times. I suspect that either Sheila Boit spotted the 'oversight' whilst clearing the path to the upcoming NSE listing, or one of the holders of millions of Caracal shares handed out in lieu of cash payment, suddenly found that they couldn't sell them. Anyway I digress, but I strongly advise at least skimming through most of the current prospectus but reading every word of the competent person's report, which is an independent expert's view of the company and the viability and potential of the assets acquired, which at the time was just Kilimapesa, the mine and the wider exploration license. All fascinating stuff, so when the new prospectus comes along, it will have to include not only the share corrections, but now it will give an independent view of the acquisition of Nyakafuru, and indeed the drilling results for Kilimapesa, and not just the bits that Caracal decide to share. Sorry to ramble on, but if you are really feeling keen there are all the Goldplat annual reports, from purchasing Kilimapesa, to selling it to Caracal, there you can binge read the whole story of what a problem child Kilimapesa has been, but mostly due to under investment.
ATB
Unfortunately very little seems that simple sw10000, after four officials disowned the commission's chairman Wafula Chebukati's results and Odinga's running mate Martha Karua also took to Twitter following the results announcement and said: "It is not over till it is over."
https://edition.cnn.com/2022/08/15/africa/ruto-wins-kenya-presidency-intl/index.html
It looks fairly certain that within the required seven days, a legal challenge will be made and then the courts will have to decide if the result stands, or the election gets to be rerun with just the two main contenders.
Hopefully regardless of what happens, there will not be widespread rioting whilst this drama continues to play out.
ATB & GLA
I think that the most surprising thing is how with the right connections, and strategies it has been possible for so many shares to be accumulated by one person without the SP being elevated in the process. The only time the SP recovered a little, was not on the initial news that a HNW individual was accumulating, but when the MRE upgrade was announced. Certainly Rick Rule's statement about what you should do when you see a share valued at a price that you believe is far too low - 'it's time to get greedy', is being played out unseen, but before our very eyes.
ATB & GLA
@aprogerson.
I definitely need to see the Plant 4 feasibility study from Caracal now, as my analysis of Caracal's June Presentation namely slide 11 "KILIMAPESA PRODUCTION FORECAST" fits the figures, but in no way guarantees that it is correct, but IMO this is the only scenario that fits purely the production and output figures without digging deeper like you and factoring in any gold grade predictions:
Plant 3 and 4 both have run on a two month cycle, so:
Plant 3 use around 120t/a of ore => 6 HL cycles/a x 20Kt = 120Kt/a
Plant 4 has 4 x 20t pads for a Plant total of 80Kt, so => 6 HL cycles/a x 80Kt = 480Kt/a
Hence Plant 3 and 4 together consume (120+480)Kt/a = 600Kt/a
This leaves Plants 1 and 2 with (924-600)Kt/a = 324Kt/a or 27Kt/m of ore (which is comfortably within the 30Kt/m) planned capacity of the Milling/Tailings Plants.
Also from a gold output perspective:
Plant 3 => 120Kt/a producing 2,343ozs of gold so 2343/120 = 19.5255ozs/Kt, say 19.5ozs/Kt
Plant 4 => 480Kt/a producing 9,585ozs of gold so 9585/480 = 19.96875ozs/Kt, say 20ozs/Kt
So Plant 4 is marginally more productive per Kilo tonne than Plant 3.
As I say though, by varying the grades, and efficiencies alone there still appears to be considerable upside potential even with the planned production Plants.
Hopefully we will get more concrete information soon.
ATB & GLA
It's not exactly rocket science here, as in it's amazing short existence Caracal have made some tremendous strides forward, that have seldom been rewarded in line with the underlying value contained within this company - which all the LTH's have recognised by whatever measures they choose.
Personally I'm not in the game of predicting tomorrow's SP, as that is largely a mug's game or requires many orders of magnitude greater knowledge than I possess. Clearly though, if Caracal can turn on a steady stream of good news relating to promised targets and ambitions, the SP will rise sustainably. Whether that occurs tomorrow, next month or early next year matters little to genuine LTH's , so like so many others, I'm here because I am certain it will happen, rather than will it happen tomorrow or the next day.
Of course I would still be deliriously happy to see the up trend take off tomorrow.
ATB & GLA
Thanks aprogerson, I would appretiate that when time permits, as my thinking has gone into a cul-de-sac at the moment, but first hopefully you can enjoy some weekend sunshine and R&R.
ATB
Succinctly put JerseyCrew, the path to success is never a straight line and what seems to be taking an age now will seem incredibly fast when we are looking back. I take your point though mickey1122 we do need to be able to see some tangible success because that is all that will fully turn the tide on the SP and start to realise some of our high expectations. These expectations are built not on hope, but research and analysis - you have said yourself mickey1122, many times what the strengths and opportunities that are present in Caracal. Just keep the faith and there is much to be gained in the near future.
ATB & GLA
@aprogerson.
Thanks once again for all of your thought provoking projections, but what I will be looking forward to is Caracal actually publishing more details on Plants 3 and especially 4, as I must admit I personally am still grappling to come to terms with that single page of projections.
Not that I am unhappy with it or indeed disagree in the slightest with your suggestions that within those projections there is considerable upside potential, as by varying the grades, and efficiencies alone, without production increases, once the Caracal team gets underway.
I've run through the projections using your suggested 2 x 60Kt HL pads for Plant 4 and with a 20Kt plant 3 and the figures fit for both the 'steady state' production in 2045/25 and indeed broadly with the transition period. So I'm content that from the total ore pushed through plants 1,2,3 and 4 things balance, although for me the jury is still out on whether Plant 3 is 4 x 5Kt, 2 x 5Kt + 1 x 10Kt or indeed 3 x 7.5Kt (based on the mention of the 'The heap leach operation consists of permanent HDPE lined pads in 7,500t modules', in the Q1 22 report). currently I favouring the 3 x 7.5kt model just because the ore usage figures are a better fit, as follows:
Plants 1 & 2 => 30Kt/m = 360Kt/a
Plant 3 running on a 3 month cycle => 4 lifts at say 21Kt/cycle = 84Kt/a
Plant 4 running on a 3 month cycle => 4 lifts at 120Kt/cycle = 480Kt/a
so 360+84+480 = 924Kt/a for 2024/2025 steady state, so your suggested size of 120Kt plant 4, running on a 3 month cycle does fit the figures as you know, so no surprises there.
In fact at the moment the only aspect of your calculations that keep jangling in my head is when you take the gold production projections for plants 3 & 4 and actually compare how much gold is produced per Kilo tonne of ore processed.
Plant 3 => 84Kt/a producing 2,343ozs of gold so 2343/84 = 27.89285ozs/Kt say 28ozs/Kt
Plant 4 => 480Kt/a producing 9,585ozs of gold so 9585/480 = 19.96875ozs/Kt say 20ozs/Kt
To say that I am am confused by the difference in output per Kilo tonne is an understatement, as I had if anything expected the larger HL to be slightly more efficient at extracting gold, but perhaps the piece of the jigsaw that is missing is (other than my approach being fundamentally flawed) is that Plant's 3 & 4 will be dealing with different grades of ore, where large amounts of lower grade ore are processed through plant 4 whilst low grade but, higher than plant 4, ore is processed through plant 3.
Personally I'm not too concerned at this stage as without knowing the input grades it is difficult to know if the comparison is fair and I'm sure Caracal would not scale up if the process gets less efficient - hopefully though the much anticipated Q2 report will publish more details to clarify the situation?
ATB & GLA
@predator7, Greg25 and Legalwolf,
With so much going on at Caracal, it's sometimes easy to forget just how much work such a small management team are trying to push through, in such a small amount of time. This quarter has been a particularly busy one, so IMO we should cut the guys a little bit of slack as those RNS's don't write themselves, and certainly I for one want as much detail as possible on everything going on.
Hopefully the news flow will start to appear this week, and they won't makes us hang on until the second week in August.
ATB & GLA
@Swampmonster,
At the risk of sounding Shakespearian, thanks for lending me your ears, Swampmonster, that was my preferred interpretation, but I just can't tune my brain into it hearing it.
Crazy as it sounds, I do actually wonder if they will have to include a corporate legal structure to realise their dreams, just because of the complexity of the tax regimes and national staffing rules for gold mining, in each of the East African countries, So it might actually simplify their operations to localise them in this way, and certainly Robbie is on record for saying that each operation had to be self funding, even though the Kilimapesa piggy bank might have to fill the breach for certain aspects of each new project at least up until a BFS can be produced to allow finance to be arranged. Hopefully we will know more as Tanzania proceeds, fingers crossed.
I was impressed by Riian though, he seemed capable in a way that you could hand him a pick and shovel and point where you wanted the mine dug, or sit him behind a desk to oversee a multinational mining operation. Add in the fact that his farming background gives him a built in ESG perspective tuned into East Africa - which must be unique in itself.
ATB & GLA
Not quite the joyous RNS that I had been anticipating, and certainly one that I was glad to still be sitting up in bed drinking my first coffee, whilst reading it, even though the bedding will need an unplanned visit to the washing machine as a result.
Having been somewhat smug yesterday at managing to find some cash and grabbing a final fistful of shares at what seemed car boot sale prices then, my immediate concern made me rush to see if the SP had gone into freefall at the news, but most importantly it was number of knowledgeable voices on this BB whom had already posted to reassure that, whist this is a significant oversight by Caracal, the actual effect at this time in effectively zero, apart perhaps for the need to produce a new prospectus soon rather than later - So a big thank you from me to everyone that contributed and helped prevent my cardiac arrest.
Curious though that all the 'oversights' or failure to follow correct procedures, took place at a time when the Caracal Board was in a state of flux, now of course, we have a safe pair of hands dealing with the company finances moving forwards, so apart from the reputational damage, Caracal can hopefully put this one rapidly to bed. Personally I'm glad that they have tidied this one up prior to the expected flow of good news, rather than dampening that down by reporting this error after it. No doubt sorting it out has been yet another factor diverting their efforts from reporting the news we are anticipating.
ATB & GLA
@aprogerson,
An interesting chat from Riian, but I am curious if anyone else can understand what he says around 5:38ish in the interview, specifically what does he say after,
'We have to dream of being a full East African gold mining company, I would like to see that that happened'.... 'that we have leased 4 or 5 different East African companies', OR was the last part, 'that we have at least 4 or 5 East African companies'?
I have listened to this part several dozen times, but Riian's accent just keeps sliding by me.
ATB & GLA
Will we just get the Go, No-Go statement on Nyakafuru today, or the the 2nd Quarter's report as well?
I can hardly wait......
ATB & GLA
An excellent point JerseyCrew, as we have grown so used to Caracal evolving at breakneck speed, that sometimes it's easy to forget what a small BoD and Management team Caracal actually have. So allowing Robbie to focus on the bigger picture can now be done without loss of precision on the execution side. Clearly IMO, Riian having set Kilimapesa on track for the next target of 24,000ozs/a, will now closely oversee the project development towards mining license application at Nyakafuru.
Quite what happens if Franck finds, not only high grade gold at Maghor, but lots of it, I don't know, but based on the deft footwork in this regard so far, I'm guessing the team is strong enough now to reshuffle the hand once more.
ATB & GLA
@JerseyCrew & Greg25,
To be fair, Robbie has been consistent on the subject of dilution, and if memory serves me correct has stated that so long many times the value is added by the dilution, then that shouldn't be seen as a bad thing. Also that each of the acquisitions should be able to stand on their own merits, so whilst Kilimapesa is the Caracal 'cash cow', it is not seen by Robbie as the sole long tem source for finance. So acquisitions like Nyakafuru, should be strong enough propositions to be bankable when it comes to raising required development money, either through the finance or equity routes (or both), as the value of Caracal overall will be increased by the process.
Excellent news on the BoD today, I'm Guessing that a seat on the board was the unspoken reward to bring a rare talent like Riian in, and as has already been said, he is actively proving his worth to earn it.
ATB & GLA
@Legalwolf
It's an interesting quandary at the moment, as it's all very well America having a strong Dollar, but if interest rate rises are insufficient to rein in inflation, people will start to realise that a strong dollar does not prevent it's value from being eroded by the ongoing inflation. Then if bond yields cannot protect against those losses either, where are people going to turn to preserve the value of their capital during a bear market?
I personally don't really know, but Many respected commentators are predicting that the Fed will talk tough for one more round of rate rises, but ultimately they will have to back off because the economy will suffer terribly if they try and tame inflation completely. So at that point if inflation hasn't been fully tamed by forcing job losses, and scaring people into buying less, as the only way of controlling the inflation they have is by suppressing demand, the Fed will most likely trigger a full blown recession. Which might work if it tames inflation, and the recession is short lived, but overshoot, as is likely, and inflation could remain and the economy shrink and give rise to stagflation, where the Fed cannot stimulate the economy or increase interest rates - once again where will people turn to preserve their capital?
So much as I like the look of the $5,000 POG prediction, the $2,500 does appear the more likely short term situation - Unless the unholy alliance of Russia, China, India and Iran, the so called BRICs countries, do press ahead with their replacement to the Dollar for international trading? Or even the meltdown of the Eurozone, which is being suggested because of the ECB's unwillingness to raise interest rates due to a possible mountain of hidden bad debts, which have been passed on by various national central banks within Europe to the ECB?
Who actually knows what is truly going to break the status quo to send the POG soaring, or even if we should feel ashamed or virtuous about waiting to benefit from some form of financial Armageddon. IMO I say, show me the money, then I will look in the mirror and see if I can live with myself..... ;o)
ATB & GLA
@RPdard
Actually RPdard I thought that *24000 a Month* had a nice ring to it ;o) - maybe one day down the line.
It's a good point you make that the results drilled so far have only 'mined', the mine, so to speak and whilst providing an excellent increase in certainty, haven't produced a large increase in the overall figure from Kilimapesa Hill so far, but instead have really added significant definition to what was inferred to be there, so those previously undrilled metres to the East and West now look set to add a lot of weight to the Kilimapesa package. As such I do think your point about Robbie not getting out there immediately to reinforce and spell out the RNS information, could well be a positive sign that something extra is just around the corner. Particularly with the unexpected Bombshell of Red Ray reinstatement being thrown in, almost as a 'by the way' type of statement, that definitely needs some extra narrative from Robbie.
We do know though that Batch 3 was enormous in terms of the number or samples sent for Assay, so adding significant ounces of gold is still on the table IMO, so perhaps Robbie's dream of +1.5M JORC for KHD alone is still very much on the table, with the next MRE rerate later in the year?
ATB & GLA