Member Info for ragnarlothbrok

Hey leas, they flagged a list of production issues at the last update but I think January turned out worse than expected meaning production will come in at the lower end of guidance. But the monthly production run rate is higher than what I was expecting at this point even before the introduction of Tweefontein. It sounds like they are targeting 7koz+ without adding any further MF2 modules. I think they have been pretty coy about the throughput impact of adding the MF2 modules and the subsequent impact on costs. They also seem to have a list of production enhancing initiatives with the potential to add additional ounces. I've always thought they were quite conservative with their public longer term guidance and don't think production guidance of 90kozpa is unreasonable when Echo is complete, meaning each MF2 module only needs to add an additional 2koz per annum, although I think consistent feed may be an issue at this level. I think the Liberum forecast recognises this with EBITDA of $25m in 2019 and $32m in 2020. I'm still very positive on this, even forgetting about the 10% dividend yield which is forecast for 2020. Short term blips like Q3 will no doubt happen now and then, but the attraction for me is the experience and skill of management who are always looking for opportunities to maximise operating leverage which will keep costs down and support earnings through the cycle.

I think the fact that they bought in at huge premium to the prevailing price says a lot. And they have a better idea than anyone about the BST product and its value to their clients

Sasa thats a good point and one of the reasons why Russian gold miners always trade at a discount. I'm not really sure about the rules around such a high concentration of ownership so I decided to get out last week to allow time to assess what this all means and have a proper read through the documents. But I'm looking at a new entry point when the dust settles and I get more comfort around the ownership structure. It has a great growth profile which I cant really resist

January implied production of 4.5koz was awful but the recovery is in full swing and very positive news on the ramp up. They didn't mention that 14.5m is a record for revenue with the highest quarterly basket price for several years. They will need to do 20koz in the last quarter (producing at rates of nearly 7koz/mth) just to hit the lower end of the range. They should already have a good idea about April, it sounds like grades recovered by Feb, Echo fully commissioned and they seem confident in hitting their target. If they get that quarterly rate it bodes well for 2019 with a production run rate of 80koz/pa. Lesedi ramp up seems to be on track as well, already exceeding 8kozpa on a run rate basis Cash conversion was outstanding, back to record levels after the release of Q2 working capital. At current prices I'm expecting cash to finish Q4 1-2m above these levels, to nearly 30% of market cap. I expect this to grow by a further $7m to the end of 2019. Costs were very high, but the ZAR has been easing off since Q2 and is so far down 2% QoQ. Perhaps an early indication of flight from EM currencies, combined with much higher output bodes well for Q4 costs and EBITDA in Q4. Overall not the best of quarters but they seem to have fully recovered by the quarter end and management are confident on delivering on their targets.

The only thing I can see is a 1m chunk sold below 7p, executed at around 230pm. Looks like someone was pretty keen to get rid of them. Not much happening with gold and ZAR down so cant see anything price related.

All the details are here: http://www.highlandgold.com/news/press_releases/detail.php?ID=826

So we know that Valunisty produced 31koz but thats pretty much where it stops. Ok so on a cost per resource/reserve it seems reasonable with a processing plant thrown in but without details like AISC and the capacity of the plant its pretty hard to tell if this is a good deal or not. On the plus side the shareholders are unlikely to take on more HGM shares and sell them straight away. Assuming its profitable, and is producing at a $750/oz AISC that is expected in Russia, it should be producing pre tax cash flow of $15m p.a. which will help with funding the rest of the Chukotna expansion. They didn't mention proximity to Kekura so doubt there are any processing synergies from the deal. Hopefully we get more details prior to the EGM. The Chukotka region is being pushed hard by the Russian government as the next big mining region and it is forming a key plank in HGMs growth strategy. Despite its isolation and relatively hostile winter, I think it has relatively good infrastructure, particularly roads and power, and I have seen suggestions that they will be building a nuclear power plant with potential for cheap power over the next couple of years.

I sold out fully today after the strong run on valuation grounds. 2018 looks to a year of investment meaning lower growth in earnings so I will keep an eye on this, but for now looking for the next undervalued tech stock due a rerating

Yeah I agree it was difficult to track down this time around. I suppose we must remember its an AIM listed Russian mining company so anything is possible. If Sharepad is correct we should see the SP marked down to 142p in the morning. .

Dividend is 5.42p per share kenl, Sharepad tells me its going ex dividend on Thursday 26/4/18 and being paid on 25/5 . They call it the second interim dividend rather than the final dividend in their presentation (page 6) which is confusing. At the current SP, POG and rouble this should be yielding 6% in 2018 based on their 20% of OCF policy. http://www.highlandgold.com/upload/iblock/a8f/HGML_FY2017Results.pdf

Not many AIM shares that are at �8 and 10m shares on issue. I would have thought that this would stop for breath like last year but not this time

All good opportunities Eish. I would also add that on an EV/Reserve valuation basis PAF is EASILY the lowest - with an EV of $300m and reserves of 11.2moz this gives you $26/oz. RRS is at nearly 600/oz. PAF is lower than SHG $200/oz, hell even lower than POG ($150/oz). It has more official resources than Randgold; with a resource base of 34moz its second only to Poly of the London listed gold miners in size. So why are we here scraping around at 7p with 2.2bn shares on issue?

No worries rugs Miton wouldn't worry about today's fall, free float is still pretty small and it goes up and down with big swings all the time. I suspect we have an overhang of someone wanting to get rid of shares so will be under short term pressure. Hopefully you're patient and not i it to trade short term. It will take a couple of years to watch the Belong story unfold. The sellers were out from 8am this morning which is why its falling today.

It was a good result but I have come to expect that from HGM. Cash costs are exceptionally low even though this is due to high zinc prices leading to higher gold equivalent production from by products at Novo. But it highlights what an exceptional asset it is. I can't see any special dividends given they already have $200m+ in debt and they have just released the Kekura FS at a capital cost of $220m over two years, most likely to begin construction later this yer. After dividends they will generate around $100m in additional cash over two years so they are probably looking at $100m in additional funding and net debt/EBITDA of 2x. It wouldn't be prudent to pay out additional dividends when they have growth options like Kekura to reinvest funds into.

Haha yes isn't that the way? You will need patience with this one rugs, twice it fell well below NAV but both times swiftly bounced back again. Its ranged between 20 and 60p over the last year, that is some volatility. Getting rid of Elliot isn't a bad thing for the share price, they didn't seem to add anything, especially with a few decent fund managers replacing them. You would have to assume they did some due diligence and liked what they saw which is positive. Institutional demand is rarely negative. I'm surprised Elliot weren't more active given they are activist investors but they have bigger fish to fry with Whitbread, Mcro etc I guess. But not sure where all Elliot's shares went. Miton took 13.1%, Cannacord 11.8, and Hambro 5.1. That makes 30%. Yet Elliot sold 37%. Who has the remaining 7%? That could influence the ST direction of the share price. Miton and Hambro will be around for a few years but Canaccord have flogged the shares to their clients so who knows what they will do with them... Keep on eye on volumes for an indicator, today was pretty measly

That explains it. Eliot is gone. I wonder who picked up the shares...We will soon find out.

Early test work seems positive, indicating an orebody of sufficient size with good recovery potential which is amenable to leaching. Its similar to the current Kounrad process although this material has not been previously mined. I presume the 2018 campaign will be targeting the most prospective areas with infill drilling to further define the orebody. Last indication was a resource of 300kt+ with low construction and operating costs.

Consensus EBITDA (before todays results) for 2018 is $140m, less capex is roughly op cash flow of $125m (�90m). 90m at 30% is �30m dividends, market cap of �570m = 5.2% 90m at 50% is �45m= 7.9% Dividend will be somewhere between 5 and 8%. As debt is paid down I think this will trend towards the upper end, in 2020 and beyond. They like paying dividends and dividends paid since the IPO is one of their key KPIs. I think they will look for further acquisitions in 1-2 years that don't compromise dividend paying ability.

Have a look at the chart. The only other time there was a spike in volume like that was when SD bought a stake from Invesco and Woodford, when Mr Patient Capital managed to get out right at the very bottom

62m shares sold today, out of 170m issued - only 1 shareholder has that many shares. Eliot must have just shifted between funds?