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So lets say $1.7bn revenue, and full year profit after tax of what? $1bn, is that too high? With 737 million shares in issue, you would be looking at EPS of around $1.35 or about 95p per share. Assuming they maintain the dividend policy at 50% of EPS, that could well be a 45-50p dividend, or around 6% yield at todays price.. and with a $1bn cash pile already, would they consider adding a special dividend on top as well to return cash to shareholders? Or a share buyback possibly while the SP is so artificially low.. ?
So what am I missing here? why on earth is this share only at 800p today when these kind of results could get announced tomorrow? I mean we already know from the production figures that they are on track.. perhaps they are concerned about the effects of inflation impacting on costs / profits? Its the only thing I can think of.. the mexican peso has been fairly stable against the USD this year as well - so no real impact from FX rates..
regards,
T123
Well if it falls back below 800 again on Friday or Monday then I will be kitchen sinking it and I dont think I am alone.. if people cant see the value of the FRES SP at these levels with PM's at these prices, and with the latest production update on target for 2021, dividend growth etc, then I'm sorry to be rude, but they should just forget all about investing.. this is not one to day trade, its one to buy in an ISA/SIPP and review your position when it has doubled..
regards
T123
Hmm - Whats the significance of the $25.50 level in Silver? I would agree that the FED has just given the green light to PM prices for the rest of this year, combined with rising inflation etc.. should be an excellent H2 for FRES along with other miners..
RIO has announced yet another big special divi today - what a message it would send to the market if FRES was to do the same next week..
regards
T123
Now having a 2nd go at breaking 800 today.. its either going to happen today or tomorrow, so might as well make it today chaps.. ;-)
Does anyone know if the financial results next week will include an updated dividend expectation?
Perhaps a case of Life imitating chArt imitating Life? :-) 745 was the bottom target on the chart - lo and behold, look where it just happened to bottom out last week.. AKA a complete swindle if you ask me.. hope no one sold out at that completely fabricated false level.. it was abundantly clear with PM prices and improving covid situation that FRES was going to make nothing but big profits this year.. should never have reached 745 at all.. ridiculous.. they were all loading up at that level (as a retail investor you couldnt buy for large periods of time while the II's filled their buy orders / started going long )..
regards
T123
Sorry to interject here - just on the profit numbers being forecast - I see a few analysts estimating 90c EPS in 2021 for FRES compared to 45c last year (i.e 100% increase, wow). FRES have a 33%-50% divi profit share commitment (this year it was 50% and with at least a $1Bn cash pile, I cant see them reducing that) then the dividend here could increase from 26c to around 50c per share - at these levels thats a 5% dividend return.. one of the top 10 on the FTSE and outperforming the index itself.. And I know FRES doesnt have a history of special dividends - but if they are throwing out so much cash with silver at these prices ($25 vs $12.40 AISC) then is that a possibility as well? So an even better return..
Surely this has to push back up towards 900 next week if the financials are as good as the production figures (and why wouldnt they be)
Just my 2 cents worth, sorry
regards
T123
https://www.sharesmagazine.co.uk/events/event/shares-investor-evening--webinar-210721
MC presenting for CNR at 6.25pm tonight if you want to listen to the latest presentation and ask any questions..
regards,
T123
I think MC could have sold out on the cheap to B2 or Calibre years ago - with perhaps 18 months to 2 years till production, he is going to persevere in the hopes of minimising dilution and maximising the gain here. If the PoG plays ball and we see $2500-3000 in that timeframe, sentiment will shift hugely towards these projects.. esp with AISC costs of $700..
However, MC has essentially gambled on the fact that the political situation in Nic will remain stable for long enough while he dots the i's and crosses the t's on the construction financing plans.. i sincerely hope he doesnt lose that bet come november..
regards
T123
Its insane - these grades are coming out of what they previously thought of as waste rock.. " LIDC452 returned 60.60 m (54.5 m true width) at 1.98 g/t gold from 4.15 m drill depth" - I mean there are open pit projects in the world whose whole feasible study project economics are based on 1.5g/t-2g/t and Condor are pulling that out of their waste rock!
Just no interest yet in gold juniors, esp in London.. plus I think the market is waiting for a) elections in Nic to pass without trouble (we all hope) and b) financing to be concluded to fund the project capex and give the market an idea of the final scale of dilution before 1st production..
regards,
T123
CF - when you say fundraising? do you mean financing for the plant itself or just for general working capital? I think MC has said they are ok for cash till the end of the year, which might last until the actual project financing takes place after the BFS is released I would assume...
This year has been a real let down for me - I was expecting financing to already have taken place and a construction decision taken before the elections start in November.. thats why I have been a bit down on CNR lately - but if they can get that done early next year and placed onto TSX and announce construction period of 12 months, I think that could be the catalyst for a huge rerate esp if it coincides with a rising gold price and higher inflation etc..
regards
T123
Would be nice if there was a good update to talk about by 21st July.. Again, what I think the market is struggling with (apart from general country uncertainty) is the fact that we still dont have a roadmap to production here after years of permits, extra drilling programs and tech studies.. What I would like to see is a list of steps required to get to production (i dont even want definitive dates - just the steps required and the task owners) laid out as a slide to show what has to be done to get there.. something like:
1) Complete Infill Drilling on Mestiza - Rodeo etc
2) Update PEA with latest economics - SRK
3) Complete Technical Studies, TSF, SWWB etc - Tierra
4) Complete F/S for Mine Design/Capex - Hanlon Engineering
5) Issue BFS - SRK
6) Arrange and announce financing for Capex
7) Tender for and Award EPCM Contract
8) Announce start of construction
etc, etc
I'm really struggling to work out the order / timeline in which all this needs to be completed/announced and I follow the company somewhat closer than most - for II's or retail investors, its become impossible to see the progress being made.. I think MC has it all in his head - but its not getting communicated to the market clearly.. forget about possible toll deals with X and Y, and 1st year of Production will be 100koz in 2023 - just tell the market what needs done and by who in order to actually get there.. At the end of the day, MC is worried about the market punishing him for missing "deadlines" - I think its punishing CNR more for not setting any in the first place..
regards,
T123
Nero - my point is that MKO has an mcap on TSX of $250M for 500tpd plant.. with lots of subsequent interest /volumes from Canadian investors.. CNR is listed on TSX but with absolutely no liquidity and no interest over there.. which is why MC should be placing the equity for the plant financing onto TSX to generate that liquidity / interest!! We are excluding the biggest mining friendly investor base on the planet in US/CAD by not having done that yet (despite paying to be TSX listed)! Its insane..
regards
T123
Sein - I guess the worry for Nicaragua is a scenario where there is no effective opposition alternative to Ortega (because its been systematically dismantled/repressed) so while he may win an election by a landslide, if the country doesnt accept what they see as a rigged election outcome, there could be widespread demonstrations (with more repression) again as per April 2018. And if Ortega was then removed from his position, where does the alternative opposition come from to replace him (and would they be as mining friendly as he is)? the military is also very loyal to him, so I just dont see a coup taking place. All of which means that they could end up in a (very uncivil) civil war situation which would not be good for anyone, much less a company trying to build a gold mining operation.. Or when Ortega wins the election, even if the country just goes along with it to avoid that scenario, the international community may not recognise the legitimacy of the election result, and introduce draconian sanctions (as per Maduro in Venezuela for example).. which again, would not be good for the people or for a company trying to build a mine!
Its a worry right enough..
regards
T123
PDP - I think we both know that this project has the potential to be incredibly lucrative for whoever ends up owning the producing mill.. and if it ever ended up that it didnt go ahead (too much gold in the ground i think for that to be the case) then it wouldnt be for a lack of effort/dedication on MC's part - he has worked 24/7 for 10 years to make this happen - but the best laid plans and all that..
CNR have already had a slew of positive RNS over the past month, and yet the market hasnt reacted.. I think the only catalyst that might work now is the release of the FS with the updated CAPEX figures, updated gold price, revised IRR's etc.
One thing I didnt understand from the presentation, was that MC said they will be releasing an updated PEA in the next month or two? before the final FS study.. Anyone understand why thats being done? i guess the PEA might have some of that info too..
And finally - surely the next catalyst for the SP would be an announcement of financing to build the project.. along with some timescales of when production can be expected to commence etc..
regards,
T123
NML - the $70M (not £70M) capex figure for the plant is a total of debt and equity which we have been told will be 70/30 ratio, so yes there may well be a $20-25M equity placing (into Canada TSX I very much hope) which leaves $50M of debt - which is why CF has rightly said that this could be paid back within 6 months if they choose to do so (of course, hopefully they will choose to use that free cash to fund the project expansion to double the capacity and include underground or cacao ounces instead, in which case you could see a 170k-200koz pa, $150-200M cashflow operation for 20-30 years)..
regards
T123
And I do think the IRR figures based on that in the BFS study will be absolutely spectacular... but Im afraid that at the moment the market simply does not believe that the project is ever going to happen/produce cashflow after "15 years of hurt" (lol).. And if Nicaragua descends into chaos after what appears to be becoming a completely undemocratic election in Nov, then they may well be right.. we have to really hope that Ortega can hold it together long enough for the project to be financed and construction starting to allow the company to produce that cashflow ASAP...
So a peaceful election and a successful project financing round is required before anything will change here I think - and I would reiterate that any equity raised to fund the CAPEX should absolutely be placed onto the TSX to generate liquidity and interest over there..
regards
T123
Would be good if Jim could define "very close to producing".. As I see it, without a toll deal, Condor is least 18 months away from producing gold, assuming a financing in 6 months (after the full FS study is released) and then at least a year of construction.. (I will be interested to see what the FS uses for its average long term gold price.. I was hoping for $1750 but recent events make me wonder if they might conservatively use $1500 instead.. I think thats wrong as inflation is running rampant with every other commodity on earth at the moment, but somehow no one else thinks that will extend to precious metals, its insane)
And before any of that happens, we still have a general election in Nicaragua to negotiate without widespread civil unrest / regime change.. The recent RNS's show that all the high grade gold is very much there and within easy reach of the surface.. but its one thing showing that its there and quite another to be able to extract and consistently produce 100koz+ a year of it..
Im very much still holding here but Im getting more nervous the closer the election looms :-(
regards
T123
Erdles- I agree, this is very interesting and I have never heard MC even mention this as a possibility to date. To add another 300k oz to the open pit resource just from 1700m of geotech drilling would be a huge result. 300koz is probably $300M pre-tax, pre-capex profit after mining costs etc.. Roll on the FS study in a few months time. The economics should be excellent. Very high IRR's, low AISC costs.. Also adds longevity to the mine plan - 300koz @ 100koz per year, is another 3 years of mine life.. Just need Nicaragua to hold things together in Nov elections..
regards,
T123
greygoose - MC also knows that there is no liquidity in Canada and has continued to consistently place shares in London only.. despite the huge interest in gold mining shares in Canada (inc Mako, Calibre and B2Gold etc)
I now think this share is at least 6 months away from any rerate, as even excellent drilling results have stopped buoying the SP - the market just doesnt believe that this company will ever produce gold under MC management after 12 years of drilling and permitting - the BFS (I was told that banks didnt need a BFS to lend to the project by MC himself, yet here we are going ahead with one) with revised IRR's etc will help but the big kick will come when the project is financed and starting construction - that could be 9 months away now.. Im hoping that the placing for the financing of the Plant CAPEX will be done on TSX to provide liquidity / drum up interest from North American investors.. No wonder RB is still selling - at his age, he could have passed on by the time first gold is poured in La India!
Its why I am more interested in actual producers at the moment who are taking advantage of high PM prices right now..
regards,
T123
er.. It was an hour long? Lots and lots of information, but the outcome is the same - come back in 6 months for the BFS results and after the elections. Meanwhile Im moving over to gold and silver producers to take advantage of the rising PM prices.. I will be back and buying more when things are actually starting to happen here... :-(
regards,
T123