Ryan Mee, CEO of Fulcrum Metals, reviews FY23 and progress on the Gold Tailings Hub in Canada. Watch the video here.
Another point is that its worth remembering that CNR remains materially undervalued. e.g if you use the gold price with the current resource that CNR has determined, you get a value of 2.4Moz x $1780 = $4.27B. A development stage project is usually valued at between 3 and 8% of this valuation depending on grade, location, permitted, studies completed or not etc. Even at the absolute minimum of 3%, you would have a valuation of$130M or £93M. Approx 70p per share. I would argue that the higher grade and permitted for extraction status of La India means that it should be valued higher than 3%.
So this is still a good buy at 47p, as I think there is easily 40-50% upside minimum just as it stands at the moment! It just needs a catalyst of gold sales, funding, perhaps a cheeky takeover bid etc and you would see this rerate in a heartbeat..!
regards,
T123
ISAP - Yep I agree - I think we could easily see a short term bump to 50-52 on good gold grades which are undoubtedly coming, but I think any rise would be short lived at the moment.. Obviously longer term this is a great price to get into CNR, but until the market hears of the plan to monetise the asset (either toll milling or own production) I just cant see the rise being sustained... and you know it pains me to say that!
regards
T123
One thing I meant to mention about last weeks interview with MC, was that it was conducted by Hannam and Partners.. It would be interesting to see them produce a research note on CNR this year, hope its on the way.
Gold at 1783 this morning - up $100 after the nice bounce off 1680 right enough.. looking like its bottomed for now.. a lot of producing gold miners are looking cheap at these prices!
regards,
T123
Connect1 - yes ideally a 40koz pa Toll Mill deal announced before the election worries kick in around sep/oct! Then sell some off on a spike and come back when hopefully the country is still settled next April/May for a new ISA season..
I just feel that the message is constantly changing here - last month it was "12 months construction period from when all the equipment is in country" then on monday its now - "oh no hang on, going to take a lot longer than that actually as its nicaragua.. - so probably 2023 till first production" I was expecting end of Q2/Q3 2022..
Will come back when its all a bit closer tbh - in the meantime PoG is taking off like a rocket and CNR not moving as they cant make a penny during this period of high gold prices.. despite being permitted for 2 years to do so.. its insane.. Gold price could be 2500 by end of the year and CNR still cant profit from it - the local artisanal miners on the other hand will be raking it in ,drinking CNR provided crystal clear cool water and holding out for their big pay day to buy penthouses in Managua..
Not risking any more here until there is some clarity on both country direction and the construction costs/plans..
regards
T123
I have to say, having listened to the Q+A, it has definitely made me think twice about investing any more here at present. Im happy to keep my holding at current levels, but I want to wait until probably next year after the Nic elections (hopefully passing without incident) until I add anything extra. By that time, a decision should have been made on construction finance, and updated FS study figures released as well. Might even have something defined on Cacao by then too.
Its all taking far too long to make progress towards generating even minimum levels of cashflow. The local miners make more money at La India than CNR do, $4B dollars of gold in the ground and they cant sell any for at least 2-3 years without a toll mill deal.. After 12 years, its not good enough..
There are better places for my investments over the next two years than here I'm afraid, and I think others probably agree after that presentation.. Plus again, I am concerned that gold is heading for a real bull run and producers and near term producers (i.e nearer term than CNR) will benefit more fully.. And better diversification of a portfolio is never a bad thing imho..
regards,
T123
https://calibremining.com/news/calibre-mining-reports-first-quarter-gold-producti-2682/
“ Given Nicaragua’s prolific history of gold production, it’s somewhat surprising how much of the country remains relatively under-explored much beyond the known producing and historic gold mines. During 2020 we took steps to more than double our portfolio of 100% owned mineral properties and concession applications, bringing our total land position to over 2,000 km 2 , exclusive of our Rio Tinto joint venture properties. Currently Calibre has 15 drill rigs in operation and our exploration teams continue to see positive results and excellent opportunities for delineation of new resources and growth.”
Interesting comment! All good PR for Nicaragua, especially when Calibre have Rio Tintos ear..
Regards
T123
I do agree - the company needs much better PR, money spent on website, presentations etc. I understand that we are going to see all of that ramping up markedly this summer though as construction financing approaches.
The best PR with the most effect is done when its the right time for it though - no point too early or people get bored (no point when its too late either of course).. But yes - the website desperately needs a makeover, with timeline and videos of construction area, mill arriving, drill samples with visible gold etc..
My only concern here right now about the success of this project/company is the Nic general elections in November and the countries reaction to that (vis a vis April 2018)
Other than that I have no doubt that MC/JM will deliver a 100,120 then 170koz low cost gold producer with at least 4Moz high grade resources over the next 18-36 months.. Unless the company is sold first of course..
regards,
T123
The only RNS' that will move this now I think are:
toll mill agreement signed or
construction financing agreed or
updated PFS to include mestiza with new IRR figures (cant happen till studies completed / infill drilling on mestiza) or
100% land purchased..
Or the fact that the price of gold starts heading past 2000 again..
Im not even sure investors would see the upside in the good drill assay results on La India infill drilling we are led to believe are coming in next few weeks..
Even if they hit the motherlode on Cacao, from which they expect to upgrade the resources by 1Moz at least, I dont think the market would care..
Market needs to see evidence that this company can sell gold, in whatever shape or form. On the plus side, its nice to see the SP holding steady and not drifting downwards...
regards,
T123
https://calibremining.com/news/rio-tinto-exploration-and-calibre-mining-initiate-2675/
Again - good PR for the country! - Rio Tinto Exploration and Calibre Mining Initiate 2021 Exploration Program Including 5,500 Metre Drilling Campaign Prioritizing Prospective Near-Surface Copper and Copper-Gold Mineralization
regards
T123
Very interesting video interview with Rick Rule - one of the most candid I have seen him give..
https://www.youtube.com/watch?v=vd6ohZsGPIE
regards
T123
Gold over 1745 now - looking more and more like that was a good bounce off 1680 last week right enough..
ISAP - Depends what RB would do on any good news appearing i.e Toll mill deal announced, or JV or good results from Cacao - if he was to reverse his position and take his shares off sale, or move up his sale price to £1 instead of 50p.. the rerate would be pretty immediate tbh.. if not you might see a few days of heavy buying with the price capped at 55p ish until the overhang clears and its BFR time..
Good day for volumes here though - As you know I am more than happy to accumulate at these levels too!
regards
T123
https://www.youtube.com/watch?v=btPJPFnesV4
Gold up to 1725 again now.. looking like a very strong double bottom has been made at 1680..
Condor you are cleared for lift off.... Your pilot for this journey will be Captain Mark Child - please fasten your seatbelts and keep your hands inside the aircraft at all times .. :-D
regards,
T123
ISAP - I think the time is coming when we will all look back on these quiet days fondly.. the herd will arrive all too soon Im afraid.. :-)
Define "close to production" - I would say we are probably 18 months away as the market sees it.. although tbh, I really think we could see a 40koz pa toll deal within 6 months which would immediately change that view.. I keep banging on about it, but you should really check out the PURe gold chart from the time when they announced construction in Aug 2019 until the all time gold high in August 2020 last year.. I think they are starting commercial production during this quarter.. I would expect something very similar to happen with CNR quite soon.. but not before April 6th thankfully.. ;-)
But 12-18 months timeframe in this market is no longer a decent investment / return ratio - investors are now looking for 10,000% in 10 minutes as per the BTC and NCYT crew..
But yes, this is clearly undervalued. Gold needs to hit new all time highs again I think, coupled with some bonanza grade results coming in from Cacao for this to ignite again..
regards
T123
Thanks dor the link Cambells - it’s all good PR for Nicaragua as a good producing nation - hopefully it helps to start attracting some other investment from the mid tier / major producers and generates some M+A activity soon..
Regards
T123
https://www.youtube.com/watch?v=DhlPAj38rHc
Come on gold - get up there my son... they fought the law and the law won... heading back towards 1700 again now.. ooh I could crush a grape..
regards,
T123
nero - i think you usually find when you need to ask those sort of questions that its usually a price fixing cartel thats been in place for centuries- i.e the bullion banks will only buy the refined PM's bars from the refiners at the prevailing spot price on the Comex or LBMA price.. (which they themselves set by dumping paper contracts onto said exchanges to lower the price, shorting etc) so therefore its not possible for the refiners to pay the miners any more than that price to cover their own refining costs etc..
There are also just a set number of refiners worldwide who have the required authorisation/certification to produce the 99.9% pure product into bars etc, so the miners are stuck in the process.. they need to sell their product to someone or the company suffers..
In my mind, what it needs is a global concerted effort from the largest miners / PM producers themselves to refuse to sell Dore at these prices to the refiners.. they would of course then be accused of price collusion, which is exactly what the refiners and bullion banks are engaged in themselves at the moment, but no one ever questions it, as the main buyers of said bullion are each governments own central banks! Its insane.
The other option is for the miners to set up their own refiners to which they will provide the Dore bars and then sell physical bars and coins direct to the public / investment funds like Sprott at their own prices etc but of course they would never get the authorisation/certification to do that as it would sidestep the central banks and they would have to pay the real prices!
regards,
T123
BD,Nero - Are you both watching the famous gold battle of $1680 which might well live long in history? :-) The fighting has been going on for almost the past 24 hours now.. So far Golds troops are holding well.. but waiting for the US to open again.. wonder who the eventual casualties will be..
regards
T123
Cambells - and of course the whole point being that all the spending on the land, studies etc was all included in the initial total CAPEX figure for the PFS of $110M - but that figure will have been drastically reduced in the interim period between 2014 and now, as MC has been spending the money on things like $4M for land etc.. Its why I think a new PFS with updated CAPEX and including the high grades, quick payback of the feeder pits of Mestiza and America will be spectacular for the IRR)
I think the headline will be something like an initial 120koz plant producing $120M cashflow a year (at current gold prices) for about $80M CAPEX.. work out the IRR on that little beauty.. 70% debt and 30% equity means CNR would only need to raise around $24M - so very limited dilution for what it will get them!
regards
T123