Surely NMC / Randy would need to be a part of any small scale toll mining deal, yet there has been silence from that corner ever since they put in $2M.. i dont understand it.. I think an announcement just to say - "we are considering this as a short term plan to produce gold revenues" would work wonders for the SP.. JM obviously thinks there is a path to making money here or he wouldnt be upping his stake..
I know they are waiting on permits for the other sites (probably to high grade the production of gold as there is 13-15g/t material that can be open pitted in mestiza etc) which should produce incredibly low costs - (2 tonnes of rock processed per gold ounce is phenomenal) but why cant they just explain that to the market. I dont like all the uncertainty at the moment. :-(
Calibre Mining Provides Partial Fourth Quarter 2019 Guidance: Expects Gold Production of Between 32,000 and 35,000 ounces at All-In Sustaining Costs(2) of Between US$950 and US$980
So they are looking at $500 an oz profit if gold stays at $1500.. roughly 100koz pa or $50M per year - so perhaps they will make back their $100M purchase cost in two years?
Will CNR factor in any of their plans though? They seem to be continuing with a drill program close to LA Libertad for now...
My question remains - how is CNR planning to monetise La India in the near term.. We have had a permit here since last August but nothing seems to be happening..
We also havent even mentioned Randy Martin from NMC - he did not just invest $2M in CNR to sit and wait for the gold price to rise, or to see their %age in the company diluted to oblivion a few months later via a large capex raise.. that investment was done with a purpose, which i think we have yet to understand fully.. i would like to hear what RM has to say on his reasons for this etc.. he must see some possibilities for generating cash from La India in the short term, surely.. ?
One issue that does worry me slightly - just as the locals didnt want resettlement as they saw the possibility of someone "Stealing their mine" - I do wonder what they will think if third party trucking and explosives guys start showing up and trucking ore to another mining operation - makes you wonder if they would attempt to block it etc..
Good post nero, one of your best, thanks for that :-)
I agree with all of that. Avoiding dilution is key for MC and JM etc. Toll refining to raise cash / revenue stream first. 40koz pa preferably. when that happens, couldnt that be used to secure debt by way of future royalty sales etc? Without necessarily issuing $120M of new shares ?
Or another option, given what the p/e ratio of the company would do if CNR started having $10-20M of gold sales a year, the SP would be way north of where we are now. A lot less dilution to raise the money at 90p a share, rather than 30p!
MC has also said building a smaller plant initially may also be a good way to go - so much less Capex to raise (and again less dilution)
There are multiple ways to finance this without crippling dilution - i too think this was the reason for his email regarding calibre
Ah I see! Sorry, didnt notice that at first. Well clearly wrong, unless they know something we dont.
Cant wait to see what happens here when they do start selling it though - via toll refining or some other deal..
With the big news on AIM at the moment the lack of funding for Sirius Bond Sale and the resulting SP collapse, it shows the prudence here of MC trying to keep costs low and minimise dilution with very selective fund raising. Also, the max capex for this project is only $120M on annual revenues of about 120koz x $800 = $96M..
I hope Calibre agree to a toll deal with CNR.. it would be a huge game changer here
saywhatnow? Ive listened to the podcast, dont think he says that anywhere! :-D
He does mention the possibility of placing stock into the TSX and generating some equity that way.. havent heard that for a while, but Stockhouse are canadian/vancouver based so i guess he wanted to give them something relevant locally..
hi frenchie, sent you a PM yesterday.. let me know your thoughts.
I dont think anyone really commented on the situation with Calibre easily raising the $100M for La Libertad and El Limon - thats a good sign that investment in Nicaraguan gold mining is still being backed.. hopefully boding well for CNR whenever it tries to raise cash to build La India etc..
Well I am looking forward to getting an update from MC this week. Its been too quiet for too long. We need an update on how the companies assets are finally going to be monetised - after 10 years here, I dont think thats too much to ask! Whether its a toll deal with Calibre or Randy Martin - I dont care - Condor Gold needs to finally sell some yellow metal.. i'd even be willing to buy a few ounces myself if it would help!
The market needs to see that CNR is on the cusp of becoming a producer!
Slight tick up this afternoon now, so looking better - some good buying happening recently..
How are you doing? Happier with the SP at 28p rather than 18p?! :-)
Do you think there will be an exercise of warrants / options at that recent low price? If so it would be good for cash for drilling etc, but concerning for dilution..
Updated 29th August - not sure if it was posted here as I am a bit behind, been out of the country for a month or so.. nice to see the Director buys from JM and the subsequent SP rise..
Interesting part for me is as follows:
"Calibre continues to advance the requisite documentation required to facilitate the completion of the Transaction, including the previously disclosed concurrent private placement and the completion and dissemination of the management information circular to shareholders. Full details of the Transaction will be included in the Calibre management information circular, which is expected to be mailed to shareholders in September 2019. It is anticipated that the shareholder meeting and Transaction closing will take place towards the middle of October 2019."
Middle of October - So I wouldnt expect a deal to be done with CNR until after this.. for toll milling etc..
Kind of lines up with Jim M's 30 day insider trading dealing as well.. i.e is he buying shares now prior to a deal being announced?
$2000 gold - interesting prediction - I still think we need to see a devaluation in the dollar as its too strong atm, and relative to the gold price, this may well mean a move up to $2000 or above.. That would make juniors like CNR with $700 AISC cash costs and potentially 5M oz of gold very attractive to mid tiers.. or even majors..
Will we hit $1500 today? $1498 currently - surely some profit taking if PoG hits 1500 - £1233 an ounce as well - smashing, glad I was buying some physical coins at £750 :-) one of my better decisions!
Come on MC - it would be a great time to announce a toll agreement for 40k oz per year, just as gold hits a 6 year high.. almost like you had it planned all along ;-)
A recent comment from MC after selling of shares by CFI and IFC.. note the last sentence. I sincerely hope that Mark is correct this time. Jim M paid 20p a share for a large chunk of shares recently.. he obviously sees the value in CNR at that price.. so how much more so at over 10% less than that now..
“The IFC started selling its 5.5M shareholding in January 2019, see announcements, it has gradually sold its entire shareholding in the market, which has suppressed the share price. Furthermore, City Financial went into administration in March 2019 and was a forced seller of a 5% shareholding in Condor in the market. The overhang of shares is now removed; is is encouraging that the market has absorbed selling of over 10% of the Company’s shares.
Both share sells are for reasons specific to the sellers and unrelated to the assets of the Company, which are in excellent shape and never been better.
I suspect the IFC selling marks the low in the share price.”
Ideally, what we need is for the final grant of the Permit to coincide with the start of extraction from those high grade feeder pits via a toll mining agreement.. Then CNR high grades the material it trucks to Calibre / El Libertad etc with the high grades, each tonne of rock is much more valuable and will provide better profits.. hopefully for 40k oz pa..
I would love to know whats happening with the discussions between MC and Calibre...
1000tpd is what CNR would want to be milling - at 4/gt material that would equate to around 40k oz per year. On a profit sharing agreement of say $250-$300 an oz each, that would be $10-12M US a year.
Too big for RMs 200tpd outfit, but the guy has many years practical experience of building mines in Nicaragua. MC doesnt. If MC could raise the capital for a small plant (even 2nd hand) to process 1000tpd initially, that would be $20-24M profit.. Im guessing RM would be the man to get it up and running.. it would pay itself back in a year.. we can but hope..
I understand your concerns, having seen that happen on many occasions before.
But a couple of points here - many private investors are here based on recommendations from Jim Mellon via his various channels. Others are long-standing personal acquaintances of MC.
If JM and MC were to “shaft” private investors by taking the company private on the cheap, there would be a very personal repercussions for them. Plus I don’t think they are the kind of people who would do this.
MC is doing his best to grow the company / prepare it for a takeover. He is doing that with moves to produce cash flow early, permit more pits, get more concessions etc. Unfortunately these things don’t happen overnight. Building a 150-200koz pa gold operation takes time.
My biggest concern here’ is that political events in Nicaragua will overtake CNR, through new elections, public disorder etc,
But two events recently give me a bit of hope - Calibre investing $100M and Randy Martin who know Nicaragua inside out has just invested £2M here. Not something that they would do if they expected Nic to descend into anarchy within 12 months..
you have mail. Also, RB had a clause as part of his initial investment to maintain his holding of the company at 7% in case of further dilution etc - looks like he has exercised that right - but not increased his percentage, like Jim. up to 15%, wow. Talk about putting your money where your mouth is etc..
Toll refining deal would be a catalyst for SP I think, but anyone buying at these levels now is getting an amazing deal, as MC mentioned in the iview.
It sounds as though MC is resolved to taking this to production now, so unless he gets an offer he cant refuse, we are here for another 2 years at least..
A rising gold price over that time would be most welcome.
I think we are now seeing Plan B since B2Gold sold to Calibre. Fast turnaround!
Not happy with the dilution here at 20p a share, very painful. But CNR needs the cash.
More research required today on the new large shareholder.. very interesting..
Slim - you rang? ;-)
RR - I find your posts interesting, nice to hear from you on CNR, you make some good points. I appreciate you spending time to post here.
Everyone needs to remember, Finance is a very strong point for MC, he has lots of experience raising cash - indeed he has been able to fund CNR through a ten year bear market for gold. Im not too worried about finance. Im sure Mark has many options up his sleeve. No one will want to avoid dilution more than him as a large holder himself (unless absolutely necessary and for the absolute benefit longer term for the CNR SP).
Im sure MC will be meeting with Calibre very soon indeed to discuss options /synergies between the two companies. We have a permitted high grade resource not too far away and they have 2 mills that desparately need high grade ore and quick cash flow.. lets get trucking!
I'd say $10M a year cash flow each for CNR and Calibre would suit both parties.. As I have said before, cash flow will allow CNR to be valued on a p/e basis. If that p/e is a very conservative 5 - the SP (with 75M shares in issue) would be a minimum SP of 50p. If Calibre agrees to toll mining deal, i would give it 6 months for the SP to get there. Say end of Q1 next year max.
And 50p is without any value attributed to the remaining resources, extra permits, extra drill results etc. Of course, this is all assuming the political situation doesnt blow up in Nic. Calibre have just invested $100M that says they believe it wont.. its all a gamble..