Member Info for spike501

SP is just catching up with the increase in price of silver that happens after trading hours yesterday.

"9 years to reach 100,000 Oz seems an awfully long time."

As I say it depends how you read the plan (its in the annual report) - the next 3 years is about the 850000tonnes per year, then it says they invest in capex ramping up to 2,000,000tonnes in the next 6 years. Which could mean in 3 years time they move do 2million for 6 years, or it could mean in 3 years time they start ramping up to 2million which takes 6 years - reality is its probably somewhere in between.

Daisan - fair enough, theoretically with Teren-Sai they could support the productions levels you are talking about, but currently its way beyond anything the company themselves are talking about. The current target at the moment is 100,000oz per year and that is requiring several hundred million dollars of CAPEX and depend who you read their plans and interpret ramping up, it could be up to 9 years away.

Short term the mine has been starved of investment and the company has continued to suffer through poor operational performance, however the money is now there for the first phase of ramping up, so hopefully execution can be successful and a partner with deep pockets brought in to accelerate development.

Figures being thrown about here are getting rather crazy. The initial plan is to get monthly mining production to a stable 40-45,000t per month, this has been slightly exceeded in Q2, but the key goal is to maintain this through deeper operations at higher grades. If they can mine 500,000t over the next 12 months AND successfully process it, at grades somewhere between 2-2.5g per ton that would be a big achievement and would result in 30,000oz in sales.

$36.6million is budget as CAPEX over the next 3 years to get Sekisovskoye production to 850,000t per annum, which is the name plate capacity of the processing plant and should get annual gold sales to somewhere around 45,000oz per year, possibly by mid next year quarterly sales could be 10,000oz plus per year.

Beyond that to get to 100,000oz per year requires an additional $55million CAPEX to expand the existing processing plant to 1million ton per annum and to build another 1million ton per annum plant as well as an additional $300million capex for underground mining and expanded fleet of equipment and is still a number of years out.

Talk of 60,000oz in the next 12 months is fanciful and 200-300k oz goes way beyond what the company is promising over a multi year development horizon.

I'm seriously bullish on this, hopefully next quarter can see 5000oz of gold extracted and moving beyond there - beyond that it would be good to get a large partner on board to accelerate the plans by providing the high levels of capex needed.

Mixed bag - disappointing no progress in sales volume but definite progress on mining side and if they can improve grades and maintain mined amount it’ll look pretty good. However can processing keep up?

I was honestly expecting a much sharper fall this morning, so pleased to see the dropwas not so bad and SP has recovered somewhat.

News is overall positive for the company as is a more efficient use of cash, however from an AIM hot money perspective it is clearly a delay and where as testing could start and complete in fairly short time line, news flow is now some weeks away, which indicates to me there isn't quite so much hot money and when things do get moving it could attract more.

Its good news but no new news, so not surprising no market reaction - Wressle remains on track and the box tick on the additional acquisition is complete.

Well April and May were 60% higher than Q1, taking a slight conservative view for the whole quarter and assuming total amount mined was 50% higher than on the same grade that is 5000oz, if the higher amount mined is due to more underground and grades can have improved 10%, then up to 5500oz, 20% improvement which is certainly feasible at 6000oz which starts to produce some really useful cashflow.

My only slight caution here is that they were targeting 45000tons per month once the additional equipment was delivered in H2-2020, so how sustainable is the 50,000tons they have achieved in both April and May.

"Wish the company would give a Q2 production update but it’s getting late for that now"

A lot of miners don't give their quarterly production updates until around the middle of the next quarter, so i wouldn't consider it overdue until after mid August.

Silver just went bonkers

https://silverprice.org/

"I have a bit of hope that with the big jump in the silver price, they soon say that they can now afford to pay a dividend."

Need to get the mines back into constant operation first, I think the board will be cautious about committing to a dividend until it is reasonably clear there are no further disruptions.

Gold looks to have broken up from 1800, a couple of resistant points along the way, 1818 being key and tested, but 1900 plus looks achievable. This not only supports silver but silver has also broken out both on price and gold/silver ratio, so 21 initially and beyond that 24+ looks achievable - this looks like it can run some more

Well after treading water around $1800 for the past week, gold again looks to be breaking up. A decent Q2 update should push this another substantial leg up

No growth between Q1 and Q2 but I assume that is Covid related with Holland and Barrett and other stores being closed, so online only.

Yep good to see confirmarion that Inmaculada is anticipated to be back at full production so soon.

"If it comes in, we probably won't touch WN B2 but instead pursue discussions with majors for a flip."

Mixster, I struggle to see the majors coming in - which majors are interested in UK onshore, the trend of the last decade has been that the majors are pulling out of UK onshore. For a major this is still a very small field (best case 60million recoverable) to be interesting and UK onshore doesn't help them with their green credentials.

Having said that Ineos is probably a reasonable bet after buying BP upstream assets in the UK.

"I will be shorting this shortly, as it’s presenting itself as a gift."

You'd be a fool to short an AIM stock like this with substantial newsflow - I don't agree with your opinion that this is way above intrinsic value but I can see a certain viewpoint and even if I agreed with it, it'd be insane as AIM stocks can always hit insane valuations once the crowd is here. Its easy to lose your shirt even if fundamentally it looks overvalued.

Claiming you're going to short this either makes you a fool or a liar.

"With the UJO SP @ .22 you can see that the Market has overvalued UJO as Investors have already booked a third of the base case expected value of WN £81.2M or .52 per current share."

Its about a third of the risked value of WN that has been assigned, which isn't excessive and the campaign will shortly be underway to firm up the resource with some high impact as well with West Cadeby - sure if there is an issue with WN, this is overvalued, but if WN is proved up near the volumes that are prognosed, fair value is substantially higher than this.

"Errrr! The SP has done quite well recently. Not sure that Altyn is particularly linked to the price of gold, it could continue to rise but if ALtn don't produce much gold then it's no benefit to investors . Production figures are where the money is...if they can get that up then the market will take notice."

Its obviously somewhat linked to gold, but agreed the main driver here now will be execution and production - generally on these boards I'm cautious and get somewhat impatient with the fantastical ramps, but I'm incredibly bullish here, targeting a multiple increase in share price.

This can be the perfect storm of increasing gold price, increasing amount mined and increasing grades, leading to multiples of historical cashflow, which provides development capital (through cash and further debt options) and then further production increases and with 3.5million reserves there is huge value here.

I've been holding Ariana and think thats a good buy - but thats producing 10k OZ net per year and the mine life is only another 8 years. Yes there are other near development assets and potential for some mine increase, but nothing like here, year market cap is almost the same.

All about the execution now.

"I'm not sure if a Q2 update is coming. Don't they just report the Q2 results in the interim results in Spetember?"

I'm hoping now there is actually substantial progress happening for the first time in years, that they might be a bit sharper with the updates, especially as gold is now the hot sector.