I am assuming we start with the 100k ounze project and mine the easy gold in Mestiza and we know Capex on that is around $100m tops and i think a lot less given this probably excludes land we have already acquired and mill. If that is the case then $25m (£20m) raise so maybe a 30% dilution which is very small when that will drive $100m in first year of mining. Maybe i am wrong but this is at current market cap. If toll or final land purchase can be achieved the market cap could be 50% higher or more and then dilution is even less. Also the raise is for entirely positive events to build the actual mine so on the day we do raise the shareprice will re-rate and i would prefer to be before the raise than after as we are so undervalued on every metric. We will see.
RNS today shows we are sitting on a world class gold base with 3.6m true width at 29 gt gold. That is incredible and you can expect that overtime we will find it elsewhere. Keep up the drilling program and lets head towards the 5m district. So far everything business wise is moving in the right direction.
the wait continues. In the meantime i was reading corn production in China is much improved on last year so potentially helpful to ensure input costs of Ethanol maximise margin.
“Foreign corn production for 2021-’22 is forecast higher when compared to last month, with increases for China and Argentina more than offsetting reductions for Russia and Serbia. China corn production is raised with a boost in yield prospects, based mostly on near to above normal rainfall in the key Northeast provinces of Heilongjiang, Jilin, Inner Mongolia and Liaoning. Argentina corn production is raised based on expectations of higher area.”
Also India is rapaciously expanding E10 and E20
and if our contract with a PR company in India is correct and not something else then surely we should be winning a lot of business in India. Really hope that investigation finds a PR agency on the end of that contract and not something else. Beats me as i cant find a single PR article anywhere on this world for CNEL but we have 2-3 PR related contracts running.
With the world seemingly going in a tailspin with inflation about to go into orbit and Evergrande debacle and all of the worlds instability i still wonder why gold has not performed better.
I think it is great DP responds after every RNS and specifically to concerns raised on this board it seems. As i understand correctly Haverton owns the land for this project and this is outside of the SPC. Normally land can be 1/3rd of the enterprise value of any development so this is potentially a huge amount one day, assuming i am correct. This is key if someone can confirm as DP did not on the call. Secondly that Kiboo have essentially paid £3m to kick this off and that money presumably will all be paid to Eqtec to get started on the next phase or even to pay for some historic costs to reach their £15m target this year. Then Kiboo leads the finance for the project. This is slightly where i am not entirely happy in that Kiboo are very small and while they can probably do a £3m raise how are they going to fund the overall project? Presumably a lot of money will need to be raised and this would ultimately dilute Eqtec in this specific SPV, although we maintain 100% of the land ownership that i undertand we have paid around £8m for. This is not necessarily an issue as i would rather own 20% of a £150m project with dilutin and future income and most of that £150m will be payable to Eqtec over project development. ultimately when the project is sold our land value will be quite substantial along with our diluted stake in the project. I might be wrong but the biggest risk is Kiboo not really being able to raise all the finance to develop the project and leave this in limbo. i am sure the £3m is a no issue but the rest is the question for me as i would be a lot more confident with a bigger backed company that has the financial muscle. This is really what the market is concerned about i suspect as they might sense this project might go sideways waiting on Kiboo to pull it all together and they have little history of that. Hope to be corrected.
I am only listening to what JM said but we have for last 3-4 months been doing all groundworks and clearance and we have power closeby. lead times are the killer potentially and any 3rd party delays but the actual putting together of a mudular system once in country is not very long and a key bit of kit that apparently can have 40 weeks lead time is already sitting ready to be installed. I have seen mine kit installed within a year. We will see back back end of 2022 seems perfectly reasonable and my hope is that we bring in online sooner. key is to crack on and do everything possible now to make sure the actual build is not held up and mitigate all those risks.
One thing i would add is the very reason i invested is i liked the business model and being a turnkey end-to-end solution from investing pre-planning right through to construction and part ownership and where someone else is injecting most of the capital injection that is largely all our revenue as we provide all the tech. By doing this Eqtec is a mile ahead of its competition and why Eqtec has close to £1bn in possible sales pipeline. Eqtec makes it win-win. Best of all keeping a decent stake or ownership in the project once it gets the 10 year insurance in place Eqtec can sell on the plant at market prices. Those Croatian projects and many many others will be sold at a good profit for capital injections into Eqtec and in the meantime we will get significant cashflows from these operations that are eye wateringly good as we get paid to take the waste and then can sell the power. Find me another company where your input costs are paid for? If Eqtec was just a supplier of tech then its just a margin game and less interesting. Eqtec are aiming to not only create a massive new market that never really existed until they offered an end to end solution but they are skimming the cream at every point. Back to Billingham we need to hear from the horses mouth exactly how this deal will operate but if we are left with nearly 50% its almost free carry. I do not know what the market value of Billinghal will be once operational but i would put it at a 6% yield so could be substantial and big energy companies will be strategically buying as they cut back on less CO2 friendly energy products. As i have always said issue is resources only to get these deals done and i have largely been correct that deals have slipped. This is almost expected but Eqtec need to increase their team to close deals.
I think the plans are quite far advanced already in terms of full design and plenty of construction work has already started with regards to clearance, power, roads and delivery of some of the key and long lead kit. Therefore we have already started construction. This will continue so that when we raise the additional finance, perhaps in early 2022 we can continue the construction and potentially have the mine operational in just over 12 months for the 100k plant. i watch quite a few miners and 12 months is often enough time to construct a mine in potentially more trickier situations. With key equipment on site already MC will be wanting to maximise that advantage. I think the reference to 18 months was presumably related to once cashflow is coming in they would have everything ready to increase the production by whatever is the shortest and cheapest scenario to do so. we will see but we are in construction mode today and very shortly we will have all the designs ready to start building and i am sure there is plenty that can be started on.
The 17th is upon us Rustyrat so we can hope CNEL respond with what is required by HKex and get something moving. This was the last week of interviews according to Ivy so we should be due something as we are missing signing off the final results and now the interims and we have over $32m of retained profits for distribution to shareholders so this is crazy that they are not looking to release some of this at some point, even a token $2m would not go amiss to long suffering shareholders and have no impact at all on the company. For a company telling us how much they want to get back to listing on the HKex they certainly seem to be taking their time as we are heading for 6 months of silence. only comfort is underlying business is the same and must be clearly benefiting massively from the rise in Ethanol prices and global shift to E10 but come on CNEL give us shareholders something please, just not the latest Yoga news.
It would be useful to get a sense of how much extra gold we are looking at here when we have is in a 1km strike of 10m that sounds like the La India vein extension. You would think the market would cotton on that this is confirms the large gold reserves we have in our land package and that 5m is not going to be very hard to prove up but just needs more drilling. I think we need to see some real inferred numbers so we can get these added to the pot and do we know when that might be the case?
Normally DP is not after a RNS to give some meat on the bones of a RNS but as far as i can tell he has gone quiet? There is a lot of confusion actually what is agreement with Kiboo. Is Kiboo paying £3m pin money to get into the game and then they need to raise all money etc? As i understand all assets and land is held in Haverton so this new SPV is being created for the project only. Therefore land ownership and everything else stays in Haverton. While it feels like this is a lot to bite off for Kiboo and everyone would prefer a major as their is clearly risk to Kiboo assuming Kiboo inject the £3m i suspect this will be a payment to Eqtec to help us hit out £15m target this year. Really quite hard to unpick if i am all honest so where is DP to explain the exact deal as under certain circumstances it could be a good deal and under others it could be seen as not so good. I think the market has taken latter and personally also a little underwhelmed and lack of clarity so its first black mark for DP so far simply for not making the deal clearer as if he did we could have seen a rise in confidence. We will see.
Great listen. Thanks. I enjoyed his moderate pretense to not be 100% sure on things but that the 100k gold scenario was about a year or so away and 150k more like 18 months. If correct that would be a perfect scenario for investors as we know the smaller production plan is quick and highly profitable and a lot less expensive than the 150k PEA scenario. Therefore a lot easier to fund and considerably less dilutive, maybe 30% at todays market cap so almost a non issue. Its so obvious that Condor need go get some cashflow asap, see its shares balloon 2-3x and then dilute a bit more if necessary at much higher value. Must keep dilution to an absolute minimum or MC will be not seeing his £1.50 bonus anytime soon so we are all aligned. We cant just rely on a rising gold price although everything is in place for some reasonsbly rampant inflation next 12-18 months especially if the government ever bring in full customs and border checks on goods from Europe that they continue to kick that can down the road. They know as soon as they do thats another massive supply issue and prices will jump and plenty of Europeans will simply stop shipping to UK. I have alreadt found its nigh on impossible to find UK furniture companies dhipping to Europe anymore. Its just too much paperwork and no money in it. Total mess. Dont listen to BOE telling you this inflation is transitory as they are desperately trying to lower inflationary expectations but we will have 5%+ inflation by next year and still <1% interest rates leading to real losses for saver but of course great for the government who is drowning in debt and funny how some uncontrolled inflation might bring that down. Anyway everything looking very good and once some nervousness about Nicaraguan politics out of the way, that i think is a little overblown i would like to see some dates being exceeded and hear some action before christmas.
Last edison report in Sept 2020 based on lower gold price and slightly less Capex was an IRR of 26% and very conservative. The report is very valid today apart from that we are far closer to financial close and a new PEA for Hawiah incoming sometime soon. Lets hope October favours the brave.
I said “shareholder return” as opposed to “dividend” but its up to MC and co as to what they do with this. At the end of the day it is considerable value creation for the company which we are all part of so ultimately that value will be expressed either in a takeover, rising share price or dividend. All positive however you slice the cake.
As MC says Condor is drowning in high grade targets. According to RNS
"Cacao represents a dilational opening between two major basement feeder zones (the La India and Andrea Corridors)."
therefore MC perhaps thinks it is higher grade and possibly more concentrated and therefore maximise the additions to the inferred resouces for the 5000m drilling.
Looking back to to the Andrea Vein that comes off Cacao they say the following
"The Andrea Vein compares favourably with veins elsewhere in the La India District. At 2.3 km
strike length the Andrea Vein is a similar size to the India and America-Constancia veins which
produced the majority of the 575,000 oz of gold mined at a grade of 13.4 g/t between 1938 and
Therefore its just gives a lot of confidence to the 5m ounze district, if not 10m if they had the money to drill it. at the end of the day if we can get to 5m ounzes and producing 100-150k ounzes in less than 18 months we would be in a very good place. Would be good to see some strong game changing RNSs over Q4.
I would certainly be happy with the projected 35p a year shareholder return for 7 years. i think MC can considerably reduce the equity component needed to get the ball rolling and start small and grow from cashflow. Gold loans and private equity convertible loans can easily fill a lot of the equity component and if a toll was sorted that would probably solve a considerable component of needing any equity at all as that is the easiest way to secure gold loans. I suspect MC is hot on the trail to minimise equity needs and he has at his disposal at this time of money looking for returns a good option. 54% IRR is literally non existent and that is a very strong sense that lenders will have limited risk, especially now key components of project have arrived. A lot of other parts are going to be built on site and fabricated so a lot faster to put together.
Given the unbelievable wildfires in California last few years you would think California would be really on top of the situation to alleviate the issue. Looking at Eqtec Northfork project its win-win-win. It becomes profitable to collect combustible wood material from the floor to ship to Eqtec plant saving council cost, it helps reduce spread of wildfires by reducing combustible material, and gassification is a clean way to convert waste to energy and reduces C02 and has highest energy conversion when compared to incineration. And obviously very nice Eqtec generates IP revenue, equipment revenue and a stake in the project. California could install 100s of Eqtec waste to energy modules alone. The market size is unbelievably large and hence why the Eqtec sales pipeline is massing to close to £1bn in possible projects. This is just the tip of the ice berg but Eqtec need to ramp up to meet demand to ensure it becomes the global market leader.
The good news could well be starting to roll
Certainly Palumbo anc team, as they said in the H2 results are stacking news for this quarter. So many projects penciled in for financial close so we could be in for a good few months leading up to December. Has been a very quiet last 3 months but lets hope that £15m at 1.5p is being put go best use. i am confident we will get back to 2-3p before the end of the year and not go back. If they can hit a profit it will surely set then up for the blockbuster year next year when so many of the backlog of possible projects might come out of the blocks. Will Cop26 play a part in boosting the sector but surely everything is all pointing in the right direction. Come on Palumbo and team lets close thosd deals and crack on!
I received an update that " The management interviews will be conducted by DLA this week. " so we might be getting closer to some sort of closure but amazed this is still to be done really as it seems almost the first port of call to me. this is progressing very slowly and management continue to say they want this to finish asap but they are hardly showing those actions. you would have thought management could have done this sometime ago but it could just be confirming all matters. We live and sadly in this case learn even when all spider senses were jangling when the BOD simply went quiet from listing on the HK. its utterly bewildering.