Member Info for Target6p

Electric, I think a lot to be said about sentiment. The market could if it wants to front run expectations. And that’s what we saw. We know that if they do deliver that the SP is higher than it is today, based on various assumptions. So, I suppose, the market wants to bring the returns forward, but at the same time unable to do so for various reasons, not least sentiment. Delivery will be key and as these hurdles are accomplished only then will the multiple rise from 0.22x. Unfortunately, as this is Africa and given past events the only thing that will matter is delivery. But I do expect the SP to have rapid movements as and when these occur. I do agree with most of what you say. And yes, short term sentiment can change on a whim. Will it be higher in the future? I would hope so.

Electric, as you say the market gets these things wrong at times.

Around 1.55p - that is +38% from today. Not to be sneezed at.

That does rely on gold prices being $4,700k per oz year end mind you. But a fair chance that could happen. Gold is in its doldrums months. It starts to perk up from about August onwards.

Otherwise, it will be around1.43p. (Still +27% from here)

Most don’t want to hear that, but that’s how the raw numbers get crunched.

If it exceeds that, then happy days.

12,400,000 just popped up from 11:18am @ 1.13588

Im also hopeful that gold end the year between $4,500 and $5,000. That would be good.

Things will look a bit better.

Elections will be done and dusted (hopefully)

The company would have announced year end results with a substantial update on progress and expectations.

The churn/overhang should be getting near to the end.

People will start looking ahead to near term catalysts.

For me, Q3 and Q4 is where some tangible action should be seen on the ground.

No probs Electric. Agree. ;)

Electric, I am basing this off the DFS. I am not adding anything which is yet to come to fruition. Like anything expected i.e higher production, higher recoveries, higher gold price etc. 86% or 83% or indeed any % is not a fact until the gov spent in line with agreements and even then it’s still likely that we will see some to and fro, I would guess. We will not know this until year end.

And based on current gold price, 140k per year over 7 years, 1,400 breakeven, current share count + 10% more dilution, 100m Saudi, GBP/USD OF 1.35, 15% capex over run, $25m debt at plc level, 83% ownership = an implied price of 0.79p.

Arguably we are trading above today fair value. If we get to FCF then my calculation is 4.74p.

I use an 18% discount in my NPV calc

Then I apply P/NAV multiple of 0.22x to reflect the current stage of the project.

The pattern over a 22-month African build window. Average drawdowns during the construction phase:

3-5 drawdowns of 15-25%, each recovering within 4-8 weeks. Pure noise. Not a signal of anything broken.

1-2 drawdowns of 30%+, lasting 6-12 weeks. About half are noise that recovers fully; half mark the start of something deeper that needs investigating.

1 sustained drawdown of 40-60% defining the orphan trough. This typically straddles the first-pour-to-nameplate window — roughly 6 months either side of first gold. It’s the single biggest drawdown of the cycle and is structurally driven, not catalyst-driven.

30-40% of trading days are red during the orphan period, with the upward drift only re-emerging once nameplate production is confirmed (usually 2-3 quarters after first pour).

Essentially even during construction phase expect the price to rise and fall. Even at ramp up. Realistically everyone here, needs to take a 3/4 year view. If you buy, then you need to hold through the noise. Be prepared to see average drawdowns of at least 16% and at least 62 times over the build period. If you can’t handle that, then this is not for you. Just trying to be blunt.

Any volatility between now and nameplate production is noise unless the project itself has a problem.

Hope that helps.

Showing up as a buy from 10:30 @1.14

13m sell order just appeared from 2:30.

Interestingly the p/NAV at $3,000 gold is 1p

At current price it is 2.16p

The p/NAV multiple that is currently being assigned is 0.11x.

In the short run, the market is a voting machine but in the long run, it is a weighing machine. Tangible progress must now be made for the right side of the scales to tip.

We all know what the ‘potential’ is, but for that to be realised still requires a journey through a large construction phase, upon which timelines can shift along with costs.

Not including the continual risk of security issues.

Most of these risks are contained to a certain degree. Nonetheless, we could be waiting sometime before the SP and investors feel more comfortable.

Anyway, it is starting to look cheaper, compared to its p/NAV.

...dilution, sector weakness, and the absence of near-term catalysts.

Simple.

But the price does look more attractive now to buy.

I am not expecting much to happen until the 2nd half of the year.

We will get a significant company and project update sometime next month, due to year end results.

As per last update, everything is moving along. Until we are told different, then this is the current state of play.

Everything else is just speculation and sentiment, based upon what people see with the share price.

I suspect the SP will remain depressed until we churn out the placing shares, which will require progress on the ground.

Short term will have to grin and bear it and if they get into production in the next 2-3 years, then it could be worth it.

We know the numbers, they look ok from here. But it requires the company to get into production without hindrance and deliver.

Anyway, short term, is what it is, longer term I’m looking for tangible progress, and we should hopefully start to see this in the coming months!

Not much else to say really. If you can take a 3-year view, then hopefully everything works out.

Churn is still there from last placing.

Eventually it should clear.

But in the short term, it will test investors strength and resolve.

I am more interested though in what is happening on the ground, the SP will just ebb and flow on sentiment and general market conditions.

I am hopeful by year end, they have started plant construction and are drawing down on the debt.

I am also hopeful that the SP will be at 2p or above, by year end.

It is delivery now, so we wait to see material progress.

Just look at the 10-year treasury yield. That is the answer for today!

@Equanimity yes, valid concerns, especially around the lender CPs and MAC clauses. What you must look at is what can affect the production of gold at project level. Rather than events in Tigray, it is more events around the Oromia region and stability/security around the proximity of the mine. A lender only really cares about the security of the asset and its ability to repay its debt. Hope that helps.