Member Info for the_shareminator

I believe production is expected to grow to around 120-130koz from Luika and Singida during 2022-23. West Kenya is at least three years away but will add 100koz to annual production whenever it comes online (possibly 2024).

Agreed it's not really important if they spread the remainder of the hedged production in the long run. I think they could manage sufficiently, that was my point. Now the company's cash position has swollen they could comfortably fulfil the remaining hedged sales this quarter and begin 2021 with a clean slate.

It's an interesting point regarding the elections and the timing! I don't know enough about the opposition to offer a response but will do some reading this weekend, thanks atb

Singida project pp-capex will only cost $36.8m, the initial $26m for mine construction followed by $10m during commissioning phase for pre-stripping (1k tonne/day open pit).

Work (and therefore spend) has already begun and is due to complete Q422. So we need on average less than $5m per quarter from cash-flow to fund the construction of this mine, assuming nothing has been spent yet. Unless SHG buy up a West Kenya project each quarter we should easily cover this amount.

Q2 cash position of $2m would have increased to $9m for Q3 but for the payment of West Kenya ($8m). The sale of 12koz hedged ounces further reduced cash-flow. This is due to end in December and beginning 2021 the company's cash build should accelerate.

Recommend reading the presentation to get a clear idea what the funds raised will be used for.

West Kenya
- infill drilling (convert resources to reserves): $15–20m
- expansion drilling (increased resources): $6–13m
- technical studies: $4–6m
- working capital over 3 years + transaction costs: $8m

Singida can be advanced through cash-flows as the hedging programme draws to a close this quarter. Forward estimates suggest the company's dividend policy beginning April 2021 is covered based on a gold price of $1900/oz

Company Dividend policy
"It is the current intention of the Board to pay a dividend on a half yearly basis, beginning April 2021, which will be subject to completion of the Placing, the Company’s performance and market conditions."

The people who missed this announcement and possibly most people invested or contemplating an investment who would rather do without the hassle of setting up another online account and filling in numerous personal details.

With that said, I don't expect there to be sudden demand for stock tomorrow either.

In case anyone forgot the company has already announced 7.9p (10.3c) worth of dividends this year

"An interim dividend of 8.0 US cents per ordinary share was declared by the Board of directors on 29 September 2020. It is payable on 6 November 2020 to shareholders who are on the register at 9 October 2020."

This was the largest dividend the company has ever paid. If a special dividend is to be paid it will likely come towards the end of November similar to the 2016 special dividend.

https://www.lse.co.uk/rns/TSG/special-dividend-bfknhfwby9nbv7g.html

Further to the point on hedging

"Resolute maintains a policy of undertaking discretionary hedging in compliance with funding obligations, which require a minimum of 30% of the next 18 months of forecast production to be hedged."

The Forward Price agreed for this quarter is $1,647 for 60,000 ounces. Assuming they don't carry any over into next quarters hedged production that will likely result in two thirds of this quarters production being hedged so we are looking at 100,000 at an average realised price of $1740/oz this quarter.

· Total gold production of 87,303 ounces
· Realised gold price for the quarter averaged US$1,694/oz
· All-In Sustaining Cost (AISC) of US$1,284/oz
· Syama Sulphide recovery rate of 79.5%
· Tabakoroni Pre-Feasibility Study released (22% increase)
· Syama Union confirms cancellation of further planned strike action
· Mali interim government established and ECOWAS sanctions lifted
· Cash and bullion of US$106 million with net debt of US$234 million at 30 September 2020
· CY20 production is expected at the lower end of the guidance of 400,000oz to 430,000oz

There were quite a few negatives namely reduced production, lost value owing to prices hedging and costs rising but this was skewed by the strike action and compounded with Covid restrictions. Gold production at Syama during the quarter was 46,622oz at an eye watering $1,628/oz AISC! Production this quarter should be back to around 60koz at AISC of $1200/oz as the company are expecting to process higher grade ore at the sulphide operations and at the Cashew prospect which is already providing higher grade oxide material for processing in the December quarter.

Despite the operational difficulties there are positives to be drawn from the update. Namely the company sold 91,000 ounces at an average price of $1694/oz which compares to 111,000 ounces at 1446/oz in the previous quarter. Hedged sales should reduce this quarter which should lead to higher realised prices with gold trading steady around $1900.

Of importance for RSG, HUM, CAPD and CORA holders: An interim government has now been established in Mali following the Coup on 18 August 2020. This government has the support of ECOWAS which has lifted all previously imposed sanctions on Mali. As a result, supply links into Mali have re-opened and transportation of key consumables to Syama has been re-established.

Tabakoroni exploration success continues with intercepts like 5m @ 116.3g/t following the Mineral Resource update which put the total resource above 1Moz at 4.4 g/t. Mining during 2020 at the "Porphyry Splay" pit extracted over 40,000oz from a small shallow open pit, exceeding expectations. The company expect a remodelling of the area will lead to a restart to open pit mining activities.

Revised Guidance 2020

· Following the operational update published on 2 October 2020, the Company has rescheduled the open pit mining sequence and confirms 2020 guidance of 445,000-455,000 oz of gold produced, at cash costs of US$740-790/oz produced and AISC of US$950-1,050/oz sold.

· Q4 production guidance of circa 60,000-70,000 oz, at an estimated cash cost of US$950-1,050/oz produced and AISC of US$1,450-1,650/oz sold, which includes capital spend of US$30-40 million (a total of US$120-130 million for the year).

· Consequently, free cash flow expectations for Q4 are expected to be largely neutral, bringing 2020 full year free cash expectations to US$135-145 million. The Board expects to announce the 2020 final dividend with the 2020 Preliminary Results.

Outlook for 2021

· The company is working to increase the number of production areas available within the open pit, with an increased waste stripping programme.

· 2021 gold production of 400,000-430,000 oz at cash costs of US$875-950/oz and AISC of US$1,200-1,275/oz sold

The dividend yield of 7% (assuming 6c in each half) is starting to look generous at this price

ragnar - "What I have also realised is that the activity on results day happens whatever the result. So if I think the company is going to make $20m and its worth 100p, and it makes 20m but falls 10% to below 60p then I will buy every single time. And I have done so for the last 3 years."

Wise counsel old friend. I wonder if this time will be any different.

Last quarter production was effectively halved owing to the government's 6 week lockdown. With 12 weeks of uninterrupted production at near record quarterly average basket prices and a dividend hike insight I'm feeling very bullish this time around. The price of rhodium has gone back above $14,000 this month and with US stimulus around the corner commodity price inflation should follow swiftly.

ATB Sylvanians

MMs short of stock this morning. Could be a large buy being worked through that will appear after close.

The headline is reduced second half production guidance. Overall it's not nearly as bad as I feared. Only an indirect impact from the conflict (recruiting key personnel). Delayed sale of 50% of the quarter's gold production skewed quarter end cash position, now complete and cash received. Company credited with the timing of gold sales at a later date to achieve higher price.

Previous to Q3 results
First half production of 32,501 GEOs, with gold making up 27,922 ounces and the remainder copper + silver was forecast to rise in the second half. FY forecast production was in the region of 75,000 to 80,000 GEOs. AAZ were expecting approximately 42,000 to 47,000 GEOs in the second half. At $1900 this was expected to generate revenue of $80-90m compared to H1 revenue of $47m revenue. Net cash had risen $8m to $29.2 million by the end of H120 (this includes the advance tax payment of $2.9 million).

Q3 production
"Significant improvement in Q3 2020 production" comparable to previous quarter of 18,190 GEOs bring YTD production up to 50,702 GEOs. This would have left 24,000 to 29,000 GEOs to meet previous guidance. AAZ have suggested FY guidance may reduce by 5-10% or a conservative Q4 production estimate of 18,000 GEOs and H2 total production of around 36,000 GEOs.

Cash held at the end of the quarter was $21.4 million following the dividend of $5.1 million and Q3 corporation tax of $3.0 million. The sale of 6,335 ounces of gold (approximately half of the quarters production) "was delayed until early October to take advantage of anticipated higher metal prices" generating an additional $12.1 million. I assume this also includes the missing 900 dmt of copper concentrate (2900 produced vs 2000 sold).

With gold, copper and silver prices set to remain high and assuming 18,000 GEOs in Q4, AAZ's cash position should build to around $42-45m. The biannual 4.5c dividend is yielding 6.5% at todays price, with the possibility of a third special dividend in Q121. I would expect the FY and HY dividends to rise above 5.0c given the strength of cash generation and assuming a special dividend of 5c puts AAZ on a yield of more than 10% in 2021.

The release of 100 jihadists isn't likely to have much of a tipping effect to the balance of power in the region so if this is what the market is reacting to then it's short sighted IMO. When the Malian coup was announced CAPD fell but nothing like this.

I believe the mines we supply to are far from the contested Sahel region. Tasiast is near the coast, in the west of Mauritania whilst both the Syama and Yanfolila mines are in the far south of Mali. Altus Strategies Malian interests are also in the south of the country near the borders of Senegal and Cote d'Ivoire. The only tenements that seem to be remotely close to the region would be Arrow Minerals' Dassa project which is more than 150km (4hr drive) to the nearest border with Mali.

https://arrowminerals.com.au/wp-content/uploads/2020/08/20200526-AMD-Corporate-Presentation.pdf

Sell off before results later this week. Possibly a leak of bad news to come? Would seem a bit unlikely given the excellent outlook provided in the Interims a little more than a month ago:

Outlook

· Despite the uncertainty and disruptions caused by the impact of COVID-19, the business has continued to perform strongly;

· The gold price has continued to strengthen throughout Q2, reaching all-time highs early in Q3, a positive indicator for Capital given over 90% of revenue is derived from the gold sector;

· Improving gold markets have positively impacted cash flows of mining companies, which is expected to contribute to an increase in demand for services from existing customers;

· The strong gold price has seen a surge of activity in equity markets during Q2, a leading indicator for demand;

· Substantial increase in activity pipeline across all business units;

· Strong demand for drilling services anticipated following the completion of the West African wet season;

· Capital Mining engaging in a number of large tendering opportunities, with an improved tendering pipeline across all business units;

· COVID-19 continues to provide a level of uncertainty, however the current impact on Capital remains limited and positive recent developments include the easing in COVID-19 related travel restrictions, together with the resumption of smaller exploration projects in Burkina Faso and Côte d'Ivoire;

· Capital continues to closely monitor the situation in Mali, which has seen President Ibrahim Boubacar Keita resign and announce the dissolution of parliament. The safety of personnel at our operations and offices remains our utmost priority and focus; and

· Capital remains committed to its strategy of maintaining a strong balance sheet and providing returns to its shareholders.

The Group reinstates its revenue guidance, with expected revenue of $130 - $140 million for 2020 (versus $114.8 million in 2019).

Don't mean to sound like a cheerleader but I think both stocks look superb value currently. I thought the drop way overdone late last week, compounded by a market sell off after Trump was hospitalised. CEY will recover as it moves through the quarter. It may ever rerate if management are able to address the site issues and deem it safe enough to mine from. I'm sceptical about the revised forecast of 70koz but assuming it's accurate it shouldn't impact future quarterly production on the same scale. Management will take measures to ensure more stable supply going forward and hopefully mitigate the risks of this happening again at one of the other sites.

Anyone buying CEY sub 150p or HOC sub 220p today will do very well in the coming months. US stimulus package looks like it might be agreed before the US election now.

Wonder what the dividend yield is at todays price?

From a market valuation of £2.5 billion at 220p not long ago down to £1.8 billion at 156p today. Today's new has wiped half a billion dollars off the market cap.

Guidance for Q4 has been reduced by around a half. Production for 2020 will probably be 10% lower than low end guidance.
The Stage 4 West wall only contains circa 90,000 ounces of gold anyway so this shouldn't have much of an impact on 2021 guidance. Costs will rise this quarter, but with gold above $1900/oz does anyone actually think CEY are going to make a net loss this quarter?

120koz in Q3 - $230+ million revenue - $120+ million profit before tax

Y2021 we should be generating roughly $1 billion revenue and $500m profit and I'm assuming gold goes no higher than $2000/oz

If ever there was a strong buying signal, it's Noel going positive lol

Get in before you change your mind

Chaarat Gold - Armenia update

Chaarat Gold (AIM: CGH), the AIM-quoted gold mining Company with an operating mine in Armenia, and assets at various stages of development in the Kyrgyz Republic, provides an update on the current situation in Armenia.

Military action started several days ago between Azerbaijan and Armenia in the Nagorno-Karabakh region which is about 150 kilometres away from Kapan. After the events of Sunday, 27 September, the government of the Republic of Armenia declared martial law in the country.

The impact on the Company's operations has to date been minimal. Management and the team on the ground continuously monitor the situation, have business continuity plans in place to react quickly to any new developments and monitor supply chains on a daily basis. The Company will provide an update on the situation as and when appropriate.

Not holding but worth noting both AAZ (Azerbaijan) and CGH (Armenia) are exposed to this conflict escalate. If Turkey continues with it's sabre-rattling it may well draw in larger military forces to the conflict, namely France who have condemned Turkish military support of jihadists in Libya and more recently Mali.

https://www.bbc.co.uk/news/world-europe-54356334