Adam Davidson, CEO of Trident Royalties, discusses offtake milestones and catalysts to boost FY24. Watch the video here.
It would only require limited buyer interest in tight liquidity to spark this back to life and now we are in the wake of a bullish copper price trend in recent and surpassing gold to be top riser among all major commodities this year I would bet we see institutional interest return to small cap producers and explorers.
Net cash increased $20m this quarter and now stands at $34m (Q4 2023: $14m), less than I was expecting to be in the kitty but can be explained away by 1) timing of gold sales and 2) impact of hedging which meant average price received was only $1,950/oz. Also worth noting the net cash position which includes a sizeable sum of gold has increased in value since quarter end.
We should benefit from increased cash build this quarter now Resolute are unhedged and receiving an additional $250-300/oz on increased production and with the delayed Q1 gold sales added to boot!
https://www.rml.com.au/wp-content/uploads/2024/04/ASX-RSG-Q1-2024-Presentation.pdf
Golden Prospect Precious Metals latest fact sheet commentary is upbeat
https://ncim.co.uk/golden-prospect-precious-metals-ltd/
Remarkable average Gt68! It would take quite a few wild swings and a good deal of luck trading to get anywhere close to your average but knowing when to offload and wait on the side-lines is high risk now momentum is behind MTL.
HarChis / Grandalusia have you just outed yourself as a multi-ID time waster?
HarChris - I was referencing slide 4 of the presentation released yesterday which states Yanfolila guidance 80-90koz, likely a company error as I can see 75-85koz is referenced in the written update and in the end of year forecasts. Still taking a middle of the road estimate of 80koz that's a difference of $4m.
I was wondering how you might deflect but didn't expect you to score an own goal with the gold price estimates lol. Many seasoned investors and market analysts today would disagree with you about where the price of gold is heading. Today the gold price trades at $2,340/oz and you are suggesting my Q2 estimate of $2,100/oz and H2 estimate of $2,200/oz (with hedging factored in) is "opportunistic". We will have to agree to disagree on that. Rates are due to start falling in H2 and the global economy is flatlining. I sincerely hope you're covering your gold price short.
As for Coris being supportive they may choose to defer a portion of the debt at a higher rate or perhaps negotiate a new term loan with which Hummingbird may drawdown and repay existing loans. Either way Coris will benefit from increased repayments over the course of the repayments and Hummingbird will receive the additional time required. Given the project economics have improved markedly over the past few months with gross margins per ounce jumping $300+ there shouldn't be an issue improving credit lines.
This has bidding war written all over it. Speculate to accumulate!
Just to add in Q1 Hummingbird repaid $9 million debt due in 2024 and have drawn down a $6 million which almost certainly isn't due for repayment until 2025 at the earliest. I'd assume interest accrued at $4-5 million this quarter and Korroussa being loss-making contributed to a debt position unchanged. Welcome to correct if I've misremembered anything there
HarChris - okay I'll break it down for you as you are still not understanding the current outlook..
Yanfolila guidance is 80-90koz this year of which they poured 17koz in Q1. Let's assume a middle of the road outcome of 85koz weighted towards the second half of the year with 20koz in Q2 and 48koz in H2.
Average group sales price including sizeable number of hedged ounces of $2,030/oz vs Yanfolila AISC of $1,616/oz provides margin of $414/oz. For the remainder of the year Hummingbird are due to benefit from increased margins as a result of a forecasted fall in AISC to around $1,470/oz (for a FY average of $1,500/oz at the mine) while benefitting from
1) the recent surge in the gold price and
2) the agreement to improve the hedging arrangements.
The average gold price received is set to be higher in Q2 and will likely remain high in the second half given expectation will be, a conservative figure closer to $2,100 /oz this quarter and approaching $2,200/oz in the second half if the price of gold remains around the 60 day average ($2,230/oz).
The above figures suggest quarterly earnings are set to rise significantly:
Q1: 17koz at $2,030/oz with AISC of $1,616 (margin $414/oz) = $7m
* Q2: 20koz at $2,100/oz with AISC of $1,520 (margin $580/oz) = $11.5m
* Q3: 23koz at $2,200/oz with AISC of $1,450 (margin $750/oz) = $17.2m
* Q4: 25koz at $2,200/oz with AISC of $1,430 (margin $770/oz) = $19.2m
First three months $7 million earnings vs next 9 months roughly $48 million. There is scope for improved performance and meeting top end of guidance which would improve AISC forecasts and the unknown price effects. Most of us are here because we believe in the intrinsic value gold offers and see the price going higher as global growth wains, rates ease into 2025 and geo-political tensions remain heightened.
It is too early to draw conclusions on Kouroussa but even 50koz in 2024 would I suspect be enough to cover the vast majority of the $77m originally earmarked for repayment with the remainder deferred with the approval of Coris bank. The lender appears to be accommodating wouldn't you say? They have funded Hummingbird's operations for years, helping the company through a number of difficult periods in it's history.
45koz production over the next 9 months would still generate approximately $25 million in earnings and that is assuming weaker margins owing to reduced output and increased third party contractor expenses.
Management have already successfully renegotiated the hedging arrangements with our buyer during the quarter and arranged for other contractors to stand in for Corica. These are steps towards rectifying the current predicament, do you not think the bank will be accommodating? It appears you are discounting any possibility of Coris bank agreeing to deferring a portion of the 2024 debt repayments. I don't see why Coris would not want to alleviate the situation and provide an adequate financing solution.
HarChris - are you being deliberately obtuse?
The rising gold price in Q1 has yet to be reflected in Hummingbird's sales, mostly due to the company having to meet hedging arrangements with a reduced quarterly output. This left very little gold sold exposed to the prevailing gold price during the quarter. As the announcement makes clear the company have rearranged their hedging obligations so the price received will be improved on the last quarter. In an ideal world hedging wouldn't be a lender requirement nor taking on debts to build the mine in the first place but we are where we are...
Output is predicted to grow at both mines with the potential for Kouroussa to increase substantially once there is some form of resolution in place. In the meantime they are operating with third party contractors who may end up being more expensive in the short term but are going to get the company to where it needs to be. Nothing is certain of course and much depends on how quickly ETASI can achieve what Corica could not.
Interesting shake up here with Ariana dipping their toes in Zimbabwe. Caledonia Mining have been mining there for a decade or so and regularly pay dividends. As with most small caps in this part of the world valuations will be heavily discounted. With that said Ariana are effectively borrowing £19.4m interest free to gobble up a 1.2 million ounce gold project with two thirds proven reserves which equates to a mine life of more than 10 years using the previously announced PFS calculations. Given the PFS model uses an outdated base gold price of $1,650/oz it's immediately apparent the NPV of $72 million does not reflect the current gold price environment. A conservative jump to $1,950/oz base would probably increase the NPV to around $110 million overnight.
Not nearly as stupid as posting guff daily about a stock you don’t own..
Very much off the radar with the potential to revolutionise agricultural feed in our country and possibly abroad especially with feed prices highly inflated and likely to remain so.
Who are these jokers below trying to fool?
2019 FY results: Revenue $115m, EBITDA, $27m, Net Profit $10.4m
2023 FY results: Revenue $320m, EBITDA, $92m, Net Profit $38m
An almost three-fold increase in revenue, a three and half times increase in EBITDA and an almost four-fold increase in net profits does not indicate a "lack of growth in profits".
Silver price above $28/oz provides for £1 billion market value target.
Adriatic's world class, tier 1 asset Vares Project will produce silver, zinc, lead, copper, and antimony for 18+ years in the lowest cost quartile of silver producers globally, without the inherent risk of South American politics (FRES, HOC).
First production of silver-lead & zinc concentrates happened in February this year with first ore mined in July 2023 and offtake agreements in place with Boliden, Trafigura, Glencore and Transamine. The company's latest presentation highlights the shortfall in silver demand just around the corner and the protectionist stance the EU is taking with regards mines and company demand inside the bloc.
https://www.adriaticmetals.com/downloads/corporate-presentations/2024/20230325-adt-corporate-presentationv2.pdf
PAF hasn't performed terribly at this stage, certainly RSG and HOC are attracting more interest right now. Generally the more risk attached and the higher the AISC then the greater the volatility. PAF are keeping up with the likes of FRES, CEY, GFM, WPM, EDV, ADT1 but of course they pay a larger dividend than all of the above and should be well placed to increase it from here with gold trading $400 higher than the average gold price received during the prior 6 month period ($1,961/oz)
Both BRWM and GPM are set to benefit from the recent commodity boon, the former pays a dividend. I believe the latter is more exposed to precious metal producer price fluctuations and is therefore the more volatile of the two.
How do you all think RIO (49.75) and BHP (22.85) compare for value today?
They have forced it through no doubt by promising special favours and backhanders. The whole Board of Shanta hang your heads in shame!
Hummingbird should put out a statement to confirm if true as it is driving speculative buying.
Taking lower end production from 2024 guidance (345,000 - 365,000 oz) and higher end costs from expected AISC ($1,300 -1,400/oz) with a gold price of $2,200 going forward RSG are making $75m gross each quarter. Would not be surprised if they end the year with gold bullion / cash on the balance sheet equivalent to half their current market cap.