Member Info for the_shareminator

http://minesite.com/news/caledonia-mining-offsets-the-falling-gold-price-with-increased-production-and-lower-all-in-costs

Sorry for not replying sooner, have been away for a week. HGM costs have been lower this H113 as announced in POG's recent accounts, however these are due to fall in the second half of the year for a variety of reasons (see my POG summary yesterday). POG have hedged 47% of their production at $1664/oz I believe and an additional amount for 3 months in 2014. Just to correct your point about production, POG expect it to be 760,000-780,000 ounces this year. Aye HGM opened a debt facility quite recently, it may have been in Q113... It won't be anything to worry about short term as it has yet to be drawn down on fully and won't need servicing for some years. Regardless of positive cashflow, companies prefer to arrange financing packages for CAPEX. POG had paid a dividend recently but scrapped their interim dividend.

http://minesite.com/news/aurum-exploration-when-the-going-gets-tough-the-tough-get-digging

Hi googledpeakoil, here is my take on HGM. I agree with your sentiments regarding gold and it's effects on those miners listed. They will all benefit when the gold price rises. I don't think HGM are cheap based on its peers current market valuations however which I will explain below using POG as an example. HGM still has a greater market capitalisation (£251m) than POG (£231m)! Before POG surged to 120 level the divide was greater. In May the difference was not so great at about £260m vs £243m. HGM and POG have risen and fallen in tandem for as long as I can remember up until recently. HGM is almost back to where it was in December 2012 when the gold price began to show signs of weakness, POG is not. I remember watching the POG and HGM prices fall below what analysts and commentators were suggesting and they both recovered some 30-40%. But since then HGM has barely fallen below that December low whereas POG has collapsed through it's December low of 320 right down to 115 today. The falling price of gold has not nearly had the same effect on HGM as it has on POG. Therefore the fall is probably debt related. Interestingly in April HGM took out a new $250m debt facility to acquire additional gold resources. With all this additional debt very little downside has been factored into the HGM share price - perhaps because it is 'new' and not due for renewal/repayment. If the falling gold price is the main factor at play here then HGM should fall along with the sector. The fact that HGM have no production hedged would suggest it is more vulnerable to gold price fluctuations in the short term than POG is. The recent steps to reduce expenditure by the BoD should provide a safer platform for growth. The prime reason for a significantly reduced market capitalisation in relation to HGM's based on their comparative history is that of the fear POG will not be able to service their debt. Recently and frequently the Petropavlovsk BOD have advised they are on track to reduce debt to below $1bn and that most will now mature later than previously arranged. POG are undervalued within it's sector in my opinion. Just to add HGM have no hedge in place so are selling at market prices, with costs in 2012 of $973/oz. The positive net cash position has been whittled away and the company are now taking on debt! This at a time when margins are being squeezed, hence why they should not be considered 'cheap' in relation to its peers. Also note... "additional financing will be required"... This might sound negative but HGM is far more susceptible to big rises and falls in the price of gold than POG. Therefore if gold recovers to $1600/oz HGM should rise faster than POG. Best of luck :)

Hi terry - An excellent update today. I think much of the rise recently from 1.5p range has been in anticipation of today's news. No doubt some would have been 'in the know' in regards to the Underground operation moving forward ahead of schedule! That in itself was surely not expected by the market which is used to missed targets and disappointing results. Looks to me like new management has got a grip on the management of Sekisovskoye. If 7.5koz a quarter becomes a regular occurrence (50% increase on targets) at this stage, we can look forward to plenty more of surprises down the line. In June, over 20% of contained gold came from just 7% of ore milled Underground (4% grade). This is encouraging because what was previously a 65-70kt ore milling operation can run at a 22-25kt ore milling size with grades at 4% and produce similar amounts of gold. There is much scope for growth in the coming years :)

Congrats with this one fella, completely off my radar until this morning.

http://www.investegate.co.uk/vatukoula-gold-mines--vgm-/rns/operations-update--q3---9-months-ended-31-may-2013/201306250930017879H/

That £40k buy is over 3% of the company's share capital so there may be a holdings RNS coming. Minesite presentation due later this week.

http://minesite.com/news/serabis-acquisition-of-kenai-resources-could-add-post-tax-cash-flow-of-us-10-million-a-year-to-projected-output-from-palito

mogo - if you've filtered me then how are you reading what I post? Anyway not getting involved with your games, take a look at the original post before commenting. I was responding to a point regarding the cash value of AFF, it being less than 55p per share and not the 75p one poster thought. If you read through my recent posts you would see why I bothered to look this up... *hint* BAO thread... Hardly a negative, posting facts... something you should try one day perhaps.

sovereign - It may well be a 'blip' but as the saying goes 'you should never try to catch a falling knife'. According to Tony Shearer “Like many gold producers, Orosur is reacting to reduced LONG TERM GOLD PRICE EXPECTATIONS. We are focussing on lowering costs to ensure we maintain an operating margin. The decision not to proceed with the San Gregorio Deeps pre-stripping will be reviewed as and when we have greater certainty. Implementing the results of the operational review will be challenging, and we will keep the market informed of progress.” ...my capitals there, but this is a clear effort towards down-sizing the operation and exposure to gold price fluctuations. It's now 16.5p... For anyone interested, keep an eye out for mogo - he tends to pick stocks that fall ... a talent or curse, only he knows...

In Affero's most recent update they state they "had cash, cash equivalents and short-term deposits totaling $89m on the 31 December 2012" - that is approximately £55m as of 5 months ago. So their current cash value per share must be less than 55p now.

http://www.investegate.co.uk/orosur-mining--omi-/bus/orosur-mining-inc---operational-update/20130429070000Z2638/

Enjoying this! Wonder if Jibbo is watching ;)

Good morning mate, impressive start to the week :)

Powering ahead today! :)

Thanks yes I'm also holding HMB shares now with a view of accumulating more on hearing the strategy new management will take. atb

Recap According to the HY report from 2012, Hambledon’s Sekisovskoye gold mine progressed steadily throughout 2011 into 2012 despite the Tailings Dam 3 (TD3) incident. "Waste stripping within the Sekisovskoye open-pit mine was completed on schedule [by end 2011], allowing for increased gold production at lower costs through greater use of Hambledon’s expanded mining fleet." We know the open pit operation has improved and is operating normally now with all waste ore removed, grades will be steady at 1.3g/t. The first five months of 2012 delivered low grade ore whilst the process of removing the open pit remnant waste continued. The company reported that production could grow now and costs fall as the distance the waste travels is reduced. No more underground expenditure until H1 2013. Edison figures suggested HMB would generate revenue of $46.2m for 2012 based on 26,000 ounces of production and credit from loans etc. Of this they forecast Hambledon making a profit after tax of $5.6m by end 2012. If we assume the difference remains the same ie. $40.6m liabilites and reduce the revenue by 5k ounces at a price of $1550/oz that equals $7.75m to be reduced from the after tax profit of $5.6m. Therefore HMB are looking at a $2m loss for full year 2012 potentially. However that does not take into account the increase in margins since the POG rose from $1550 to $1775 (Q4). Each ounce produced in Q4 effectively generated an additional $225/oz profit than in the previous quarter (assuming costs remained unchanged). Previous cash costs of $1262/oz were huge but are now set to fall - underground expenditure was factored in to OPEX. "Capital expenditure was $4.8 million. The main item of capital expenditure in the period was the development of the underground mine." So costs to fall (distance dumping waste now reduced, recoveries set to improve, grade steady, no underground costs which were massive in H1! etc). Previous production targets were for treatment of 70kt per month. Last February mill throughput was only 48kt/month but this increased to almost 64kt/month in June after the remnant waste was removed. This contributed to the poor production figures of just 10,700 ounce by the end of H1 2012. According to Fox Davies "part of the problems relating to the low mill throughput are that some of the mobile fleet is tied up with the remedial work associated with tailings dam 3 and the construction of tailings dam 4." This was expected to occur in the fourth quarter so hopefully an update regarding these two issues soon. To summarise 2013 should be a much better year with the restarting of production of higher grade underground ore, higher recoveries and the mill running at very close to its capacity of 70kt per month.

Any reason for todays fall? Given their recent falls both PET and RIA look good value in current market, but expecting a placing soon with the latter. Would be good to hear some more observations here

I'm not sure they have provide a loan / capital restructuring, if it wasn't in the terms or hasn't been announced. Plus I would think all the money they have spent acquiring a majority stake is enough in their eyes. They now have the access to funds via the market and I should think the arrangement with EBRD are still in place, see below. Funding through EBRD; "Hambledon has now met all the conditions for the first tranche (US$10m) of the US$15m loan from the European Bank of Reconstruction and Development (EBRD), which was first announced on 22 February 2012 and has now become available for use by the company." Remember the second tranche of US$5m is to be issued contingent on Hambledon achieving a production rate of 44kt in one quarter from Q1 2013 (from underground resources I believe). I think all underground ore mined had been milled already (see Q3 update) but I agree with your assessment, HMB should have had a fairly good Q4 in marginal terms and should be set to receive funds from EBRD at some point this year. We wait and see :)