Ben Richardson, CEO at SulNOx, confident they can cost-effectively decarbonise commercial shipping. Watch the video here.
Top up time although risky with the metallurgical coal price down to $200/tn
How much further can steel prices fall? They were down over 50% last year and prices haven't recovered despite China reopening and the potential boost to it's construction sector. The price of coal and gas being so low could well be factoring in recession in the second half which is not guaranteed at any rate. The markets cannot agree on the future pace of rate rises nor accurately predict the rate of inflation month to month so it's hard to place any degree of confidence in their longer term forecasts.
Agreed although one point , New Luika annual production guidance was set at "approximately 66,000 - 72,000 oz at an AISC of US$1,200 - 1,300 /oz" which works out to be 51,000 oz Q2-Q4. Even a 93,000 oz year would blow the current share valuation out the water and there is scope for exceeding 100,000 oz if they achieve top-end guidance at NLGM and continue to exceed previous Singida guidance;
"Production guidance for the Singida Gold Mine will be released following the commencement of commercial production, however the current life of mine plan guides for approximately 32,000 oz pa"
In terms of expertise in their respective field we have Attie Roux who was the COO of Endeavour Mining Corporation about 5-6 years ago. He oversaw it's development and growth over a seven-year period. Prior to that he worked for AngloGold Ashanti as a metallurgist for more than 30 years including at some of AngloGold's most successful mines in West Africa, including Siguiri (Guinea), Iduapriem and Obuasi.
Aya Garibou with over 25 years experience in the mining industry, working for AngloGold Ashanti from until 2019 as process plant operator among over leadership roles. I believe he has a 'junior team' working beneath him including mining engineers Aboubacar Bore, Alassane Traoré, Adama Diarra among others.
Aya’s extensive mining industry, local African expertise and leadership skills on site are critical in insuring our ongoing strong health and safety track record are maintained.
While not an engineer Dr Belinda van Lente is a Senior Resource Geologist with about 18 years experience in the mining industry, primarily on Mineral Resources estimation, specialising in archaean and epithermal gold deposits across West Africa.
DusterMan - agreed this has taken the market by surprise. Similar turnaround with Resolute Mining earlier this year, both based in and around the same neck of the woods. Hummingbird were heavily discounted last year and have a long way to go in addressing investor concerns however they have clearly got a grip on the operational side of things. Assuming this continues in the current quarter and uncertainty further wanes, with gold trading approximately $100/oz higher they will be able to cut net debt by around a quarter from it's current level whilst bringing Kouroussa (apologies spelling?) into commission.
In terms of tracking price movement this is one of the more difficult stocks due to so many twists and turns (many of which have damaged sentiment) and this is why there has been a value disconnect for so long. It's not unique to this company either, Shanta Gold (£135m mcap) being in a similar position. FWIW I don't see a sudden doubling of the share price this quarter but assuming further steady production and the new mine completing on time and on budget Hummingbird will likely be trading at or around £100m before the next update.
Retest of gold's 52 week high $2,043.9 this morning. Gold briefly got to $2,043.2 no doubt thanks to reducing US inflation coupled with impending recession and hints from the Fed minutes of rate reversal coming sooner.
booboouberbear good post! There are more pitfalls when it comes to mining ;)
Just to add to the point about liquidity, Shanta have been running approx $7-8m CAPEX at Singida each quarter up until last quarter and now that the major capital costs have disappeared there should be a significant increase in liquidity, particularly in Q3 once ramp up is nearing peak target production.
Articles of interest
https://www.reuters.com/markets/us/us-manufacturing-sector-weakest-nearly-three-years-march-ism-2023-04-03/
https://markets.businessinsider.com/news/stocks/us-economy-outlook-inflation-recession-treasury-banking-crisis-fed-gromen-2023-4
https://www.reuters.com/markets/currencies/dollar-gains-inflation-worries-resurface-after-opec-surprise-2023-04-03/
https://www.fxstreet.com/news/usd-should-continue-to-struggle-amid-economic-concerns-commerzbank-202304040928
https://www.fool.com/investing/2023/04/04/us-economy-recession-what-investors-should-do/
A couple of articles from the past 24 hours pointing to weaker US economic data and possibly bringing forward timelines for US rate cuts but I have yet to find the reason why the USD sank this afternoon sending gold up to all time highs. Maybe as someone mentioned earlier, it was just a build up from earlier in the day
Gold up 1.84% at $2,037.95
Silver up 4.4% at $25.87
MMs beginning to move the ASK up towards 12p
Fire well and truly lit but still well below the 40-50p range we should be currently trading in with gold at $2,000/oz.
Thank you for sharing your estimation. it looks fairly conservative and I wouldn't be surprised if Singida guidance is higher given the details released recently;
From the 13th February update the Run of Mine stockpile at Singida was 13,581 oz and "equal to approximately 4 months of processing". Now we are six weeks on the RoM must be in the region of 5-6 months equivalent. This would also suggest Singida can now process 10,000 ounces each quarter assuming consistent grades, which is more than "previous LoM plan guided for approximately 32,000 oz pa".
The tricky part is calculating how quickly operations will ramp up as this will affect 2023 Singida guidance. The first full year of Singida production in 2024 will likely be higher than the 32koz mentioned in the annual results.
Quick summary of 2023 milestones to date and upcoming catalysts
West Kenya Resource Announcement (26 January 2023)
Very positive update confirming West Kenya Project Resource increases to 1.7 Moz with a substantial 91% increase in the Indicated ounces category.
https://www.lse.co.uk/rns/SHG/west-kenya-resource-announcement-ldo6p2rukkm1pro.html
West Kenya Project Resource Update (22 February 2023)
Another pretty remarkable resource update which went unnoticed by the wider market detailing the huge increase in Indicated resources at Ramula, Bushiangala and Isulu confirming open pit mining potential at the former.
https://www.lse.co.uk/rns/SHG/west-kenya-project-resource-update-ay3tpo75lnlrvm6.html
Group Reserves and Resources Statement (27 February 2023)
Hugely successful 2022 drilling campaigns extending the mine life at NLGM and adding new reserves across the group.
· Total Group-wide resources of 3.67 Moz comprising:
- NLGM resource of 1 Moz at 2.42 g/t
- Singida resource of 0.9 Moz at 2.36 g/t
- Kakamega Camp NI resource of 1.29 Moz at 10.60 g/t
- Ramula NI resource of 0.47 Moz at 2.41 g/t
https://www.lse.co.uk/rns/SHG/group-reserves-and-resources-statement-1bxsfvekud29675.html
Updated list of value adding catalysts coming:
- Completion of the Isulu Bushiangala and Ramula Mineral Resource Estimate in Q1 2023
- Hot commissioning of the full process plant with first gold pour by end of March 2023
- Singida production guidance to be released following commencement of commercial production
- Achieving increased group production and record half year production
- Record half year revenues (a possibility) and forecasting anticipated record full year revenues
- Increasing mine life once more at the New Luika Gold Mine and additional drill results at Singida and West Kenya
- Reducing net debt position in H2 turning net cash positive by Q4 2023
- Achieving 100,000 oz production on an annual basis by end of Q4 2023
Shanta to report improved second half production and an a significant output increase in the year ahead (+60% from current 65koz levels). Future annual cash-flow of 60-70 million dollars based on $1650/oz according to a late 2022 presentation so much more with gold trading at $1950/oz
Anglo Asian are transitioning into a primary copper producer so gold price fluctuations will matter even less for AAZ shareholders in the not so distant future. That isn't to say the company are overvalued right now. They generate plenty of cash and have paid dividends for years however they are and will be investing substantial sums of capital in the next couple of years to increase copper production and so are a few years behind the curve compared to CAML.
A stronger copper player that has a better track record than Anglo Asian would be Taseko (TKO) which has it's copper producing mines located in North America. Whilst CAML are in a very comfortable position today and worth holding for the dividends this is more of a hedge on the copper price than a growth play.
Depreciation is generally an accounting gimmick used to off-set profits. It is almost entirely non-cash, possibly cash losses from a previous year but has no operational effect nor does it have any bearing on the company's business health.
You could do far worse than holding CAPD, they are playing a straight flush quarter after quarter.
Link to presentation notes above
https://wcsecure.weblink.com.au/pdf/RSG/02635867.pdf
With regards the Ore Reserves and Mineral Resource Statement announced today
· Mineral Resources increased by 1.7 million ounces (Moz) to 11.2 Moz of gold, net of depletion
· Ore Reserves have increased by 0.6 Moz to 4.6 Moz, net of depletion
· Syama Mineral Resources increased significantly following exploration success at Syama North
· Mineral Resources at Syama North increased to 3.2 Moz and Ore Reserves increased to 854 koz, with 10% (85koz) of oxide material
· Further 126 koz of Mineral Resources at Syama Underground converted to Ore Reserves due to improved mining productivities
· Mako Ore Reserves and Mineral Resources reduced in line with mining depletion
Ore Reserves have increased to 4.6 Moz of gold and Mineral Resources have increased to 11.2 Moz of gold after accounting for the effects of mining depletion, improved productivities underground and exploration success.
At 31 December 2022 Resolute's direct share of Ore Reserves was 3.8 Moz and Mineral Resources of 9.1 Moz.
The exploration success at Syama North has added 2 million ounces of gold to the Mineral Resource this year and added 850,000oz to the Ore Reserve
Resolute's Chief Executive Officer, Mr Terry Holohan, commented:
"The continued success of the drilling program at Syama North over the second half of 2022 exceeded our expectations. The drill rigs are still turning on this contiguous strike discovery of over 6km which remains open at depth. At this stage the 850 koz of Syama North Ore Reserves focus only on the widest sections of the A21 pit, thus we expect further updates later this year as in-fill drilling continues delineating additional economic mineralisation. It is also worth noting that the 10% oxides delineated at Syama North now represent some of the highest grades of oxides at Syama such that they will get processing preference once mining starts in earnest.
Also due to recent sustainable efficiency improvements at the Syama underground operation over 2022, the Company was able to convert a further 126 koz of the existing Mineral Resource Estimate to Ore Reserves.
"The company now turns its focus to the Syama North pre-feasibility study (PFS), which is intended to be the first step in exploiting the sulphide reserve, due for publication in the middle of 2023. Significant additions to our Mineral Resources and Ore Reserves, such as Syama North clearly demonstrate that the Syama Belt is surprisingly under-explored and justifies the need for further exploration work to be undertaken along the prospective >85 km of strike."
Pleased to see the huge turnaround in fortunes since the backend of 2021. Resolute are now virtually net cash positive and will be certainly by the end of Q3 this year. Today's statement shows just how quickly the company are replenishing not only reserves (at higher grades) but also the resource base from which to delineate further prospective zones along strike.
The recent presentation summarises the more important events that happened last year namely;
• 5 consecutive quarters of incremental production growth to Q4 2022
• Gold production of 353,069 ounces (oz) at an All-In Sustaining Cost (AISC) of $1,498/oz
(CY22 Group guidance: 345,000oz at $1,425/oz)
• Revenue of $651.1m from gold sales of 357,447oz; average realised price: $1,819/oz
• EBITDA of $148.2m
• Underlying NPAT of $20.3 million (2021: -$93.5 million)
• 58% increase in Syama North resource to 34Mt @ 2.9g/t for 3.18Moz
• Successful equity capital raising of A$164m
• Year end Net Debt of $31.6m (31 December 2021: $228.8m)
Resolute has 130,000 ounces hedged at slightly more than $1900/oz in the latter three quarters of this year which is 5% more than current spot.
2023 Production and AISC Guidance is 350,000 ounces at AISC of $1480/oz
Capital Limited update today confirms "Singida mine site laboratory commissioned"
"MSALABS, a global provider of geochemical laboratory services for the exploration and mining sectors and a majority-owned subsidiary of Capital, is pleased to announce positive operational developments."
"MSALABS has now commissioned a mine site laboratory at Shanta Gold's Singida mine in Tanzania having been awarded a 3-year contract late last year"
https://www.investegate.co.uk/capital-limited--capd-/rns/msalabs-trading-update/202303060700039281R/
"The Group incurred $6 million of non-cash items including depreciation, depletion and share option charge). Profits are only booked after the payment of such items, so the Interims basically showed a $5M loss."
For non cash items such as impairments and depreciation there is invariably no payment due. I'm not sure if you're suggesting otherwise but it sounds like you may have misunderstood this looking at your above comment.
Very tempting Ask today. I can't remember a time when Pan African were trading this low and turning so much profit. The markets have been shunning precious metal miners for the best part of 20 months and certainly in the past 3 consecutive quarters which has coincided with rate rises across the board. It won't be much longer before rate hikes cease and then quite possibly reversals later this year as major economies begin to slow, job losses mount and we begin to see homeowners repossessed. Not expecting a major recession but even a mild one following this outlook should be positive for commodities and the sector at large. Not going to dip my toes back in here until the picture is a little clearer though as might save a couple pennies more. GLA
There are maybe two dozen of us posting here and almost certainly others reading who understand the potential for Shanta to multi-bag in a rising gold price environment. I would think our collective group-think contributions could be better spent than responding to non-holders who are seeking to disrupt the harmony here.
With a bit more time this weekend I'd like to go through Eric's video presentation in more detail. There were some interesting answers given when it came to the Investor Q&A session and these really should be repeated in text format for anyone who may have missed it.
On the whole everything is moving in the right direction with hot commissioning at Singida to begin in less than two months. For an idea of how quickly fortunes can turnaround one only needs to look at gold producer Resolute Mining which has risen 60% following a capital raise reducing debt and jumping to 6 month highs as recently as yesterday after announcing a huge increase to it's resource. Now if only we were due a resource upgrade soon..