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Adriatic Metals (ADT1) brought the world class Vares silver mine to production last year and are forecast to achieve commercial production this quarter and nameplate capacity by July.

They conducted studies last year and due to commodity prices are now investing additional funds to fast-track production from 2025 forecast levels of 12-13 million ounces silver equivalent to around 20 million ounces by 2027, which would make it one of the largest producing silver mines in the world.

They intend to list on the FTSE Index in the near future for greater exposure also.

New day and new highs. Volume is up but not massively so, possibly the first news of an update leaked. Starting to believe in the 30p by April target HarChris!

Yes despite the price of rhodium retreating this week it won't have been lost on market participants just how volatile price movements are in this space when supply dries up. Very much expect further supply issues in this tight market with rare earth / precious metal commodities in high demand and resource stockpiling to become the prevalent position nations take in response to increasing trade war tensions. Aside from the excitement with rhodium we are benefitting from a higher platinum price, which has strengthened 10% or so since the end of last year.

I would be interested to understand the rationale behind profit taking at this point in Pan African's production cycle with gold at $3,000 and the share price yet to truly reflect the coming record profit generating year we are forecast.

Not to discourage profit taking but I am genuinely curious, is there a much better prospect out there!?

Listening to Keith Neumeyer of First Majestic Silver you would expect the price of silver to start playing catch up.

Interesting analysis on First Majestic Silver's acquisition of Gatos Silver and the wider M&A activity more recently. Some of the details regarding the silver sector including the gold silver ratio add to the case. Obviously take his triple digit target with a pinch of salt.

https://www.youtube.com/watch?v=2Iqh0wf7wyU

The price of silver has glided past year highs to set a new one above $35/oz marking an almost 40% year on year increase.

Gold dominating the news cycle after pushing past $3,000 resistance to new record highs. From what I can see across the NASDAQ, NYSE and LSE primary silver miners are lagging the gold producers over the past couple of months

Let's hold onto $3,000 and allow the share price to play catch up first.

The takedown of the 52 week high is gathering pace today, a little less than 14% off our 52 week high (42.5p)

Good timing buying just before the abundance of newsflow we are due.

Welcome tick up too! 23.80p (+13.33%)

Sotolo it's looking promising. I count Hochschild as one of the highly leveraged gold silver plays, one to buy during a trend like this and reduce when the commodity prices retreat. Improving margins compounded with the prospect of repaying the bulk of their debt sooner adds to the attraction in the medium term. For now short term, lunch beckons ;)

A rather odd reply to commentary on the gold price Noel and not the best timing as THOR has risen 9% today.

It's over the hurdle. A new era has arrived. Bottoms up lads 🍷

It's a remarkable run of late!

Appreciate the discussion yesterday HarChris. Admittedly while collating snip bits from across the quarterlies I was punching numbers without thinking.

I will make a note to check how net profit relates to quarter end cash reserves at the next possible opportunity like you suggest so we will have more data to crunch.

On the point of sizeable gold inventory being sold down and therefore boosting quarter sales that is encouraging although I have struggled to find commentary on that. Can you link the source / link please. Certainly that would be a welcome bonus on top of the 22-23koz Q1 production expected if most investors, like myself, are unaware of the company's intention to do so in this quarter.

On a sparkling note, the price of gold is at all time highs so it's shaping up to be an exciting couple of months with so much news flow expected.

Copper futures at 10 month highs (25% up on the year) whilst Zinc just 15% higher but overall dividend cover looks comfortable. Based on historic dividend pay outs this is yielding 9-10%

Kounrad producing copper until 2034 and Sasa is expected to be producing to 2039 and beyond.. more than enough room for growth in the interim.

Thank you for sharing Safaniya, very interesting to hear Amplats taking that kind of initiative.

To summarise

- Analysts say volatility to be expected in thinly traded rhodium market.

- Amplats allegedly cornering supply side prior to it's demerger from Anglo American next quarter.

- Amplats seeking to buy or borrow more rhodium than usual and normally available on the market.

- Amplats source points to stronger sentiment (Chinese demand, US car sales, EU easing of CO2 emissions)

- Coincides with lower first-quarter rhodium output in South Africa

- Amplats Tumela mine operations temporarily suspended a couple weeks ago, disruption that could become a regular occurrence with more unpredictable weather patterns.

- Amplats would be one of the first to know in any case and able to react with on the market purchases.

- Increased buyer demand going unfilled as only a small balance of rhodium supply is available on the spot market.

- Deficit in rhodium market expected to be 74koz (2024: 143koz) according to Metals Focus with an 8% decline in demand apparently although recent price action would suggest not..

Ignore what I wrote there. Not thinking straight, cash on the balance sheet at the end of Q2 would have been closer to $9 million.

HarChris - interesting analysis and certainly the quarter that is more similar to what we can expect.

These numbers look a little different from what I can glean from the updates but I haven't delved too deeply so may have missed something, link to Q2 below. Let me know if you're using a different set of figures (interim report?)

Source for figures below: https://www.lse.co.uk/rns/THX/q2-h1-2024-financial-operating-results-xi4l09mhghmq3yc.html

Q2 2024 net profit of $27.5 million

Senior debt facility reduced by $7.9 million to end the quarter at $6.5 million

Net debt reduced by $11.6m to end the quarter at $2.7 million by 30/06 (Q1 2025: $14.3 million)

I assume therefore cash on the balance sheet was c. $3.8 million (difference between net debt of $2.7m and senior debt $6.5m) although this is not stated, only $1 million more than at the end of Q1.

Cash had risen to $6.6 million by end of Q3 though so momentum did increase through the year and all the while they continued to make progress with their outstanding payables and reducing the senior loan etc.

Absolutely and appreciate the pointers on a number of details I had missed recently.

I would imagine others myself included would be keen to see your estimates HarChris particularly the higher revenue figure mentioned. Are you assuming higher production in the first quarter than 22.5koz? If you wouldn't mind sharing the workings here I would be glad to look over them and assess whether mine are too low.

I am largely in agreement with you that most of what will be considered 'net profit' will end up as cash on the balance sheet however I can't see how they retain 90-95% of net profit as cash at the end of the quarter. If Thor is able to convert 90% or more of net profit to cash gains, sat on the balance at the end of the quarter then all bets are off!

Q4 results will shed more light on this and I will re-evaluate but until then my assumption is cash added to reserves will constitute 50-60% of ongoing quarterly net profit at current margins.

Agreed those are just the financial results coming up, as we've discussed this week and you've pointed out there are around 7 or 8 near term items due for release before end of June :)

Hi HarChris, to answer your question I'm being cautious with my forward looking figures as these are essentially 6 months on from the most up to date figure (Q3 net cash: $2.7m).

Just to clear up any confusion also the $35-40 million estimated cash position is the end of quarter cash reserves on the last day of the quarter and not simply cash-flow generation. The difference being ongoing and additional group costs as well as schedule of gold sales which depending on the frequency of gold sale receipts can may cause estimates to fall short or overshoot. Without Q4 2024 figures to hand the scope for accurately predicting this is more difficult.

Call it a get out of free jail card or a caveat buy I prefer to use more conservative figures the further out forecasts go, especially since there are so many variables that could affect production numbers and the rate of cash build.

I would also add the reduction in accounts payable suggests the company will continue to pay down costs as they are incurred / within the quarter and this may be assumed for the wider group activities. Expenditure on all projects going forward will be higher. Segilola exploration is likely included in AISC as you mention, the other projects I doubt although more than covered by the cashflow being generated.

If you're right and revenue is as high as $70m this quarter that then of course my earnings, profit and cash reserve build estimates will be off by some way.

Interesting there are only 3 weeks to go before end of Q1 and the market is completely asleep. Buyers and sellers absent.

For anyone unsure of next results

- Q1 Operating Update is due third week of April - less than 6 weeks

- FY 2024 Results to be released end of April - less than 8 weeks

- Q1 Financial Results (relating to discussion above) due late May - less than 12 weeks

Q3 2024 - revenue of $40.2 million

18,167 ounces gold sold at an average gold price of $2,328/oz with cash costs $585/oz and AISC $766/oz

EBITDA: $27.4 million and Net profit: $17.5 million

Net cash: $2.7 million (debt $3.9 million)

Compare this to Q4 2024

24,936 ounces gold sold at average gold price of $2,497/oz with cash costs $600/oz and AISC $820/oz *estimates

Revenue (unaudited) of $62 million

EBITDA: $40 million and Net profit: $30 million *estimate

Net cash: $15-20 million (debt free) *estimate

The average price of gold this quarter has been trading a little higher than $2,800/oz so depending on the timing of gold sales there is a good chance Q1 2025 results are similar to what follows:

Q1 2025 *estimate

22,500 ounces gold sold at an average gold price received of $2,800 with cash costs $650/oz and AISC $880/oz

Revenue of $63 million

EBITDA: $45 million and Net profit: $33 million *estimate

Net cash: $30-40 million (debt free) *estimate

Estimates inclusive of sustaining capex, exploration costs and group costs. Difficult to predict rate of cash build until we have a better understanding of the amounts of cash generation being directed into additional exploration and life of mine extension works.

Despite funding the exploration and development works at its various projects the board must be confident they about the amount of cash being thrown off for them to pivot to dividends and buybacks so quickly.