If you would like to ask our webinar guest speakers from WS Blue Whale Growth Fund, Taseko Mines, Kavango Resources and CQS Natural Resources fund a question please submit them here.
Correction to Gold Sales at Realised Gold Price: Revenue (implied)
* Q2 2023: 29,406oz (NGLM 20,704oz + Singida 8,702oz) at $1954/oz: $57.46m
Data taken from the Q4 2022 results released January and each of the quarterly presentations for 2023 to date. Values are normally derived on the final day of the quarter although some figures like share price / market value are derived on the day the presentation is released.
Share Price (Market Capitalisation)
Q4 2022: 12.1p per share ($153 million)
Q1 2023: 13p per share ($170 million)
Q2 2023: 10.6p per share ($137 million)
Q3 2023: 10.5p per share ($135 million)
Debt vs Liquid Assets
Q4 2022: $24.1m gross debt vs $10.5m cash & gold dore: ($13.6m) net debt
Q1 2023: $29.6m gross debt vs $10m cash & gold dore: ($19.6m) net debt
Q2 2023: $29.6m gross debt vs $21m cash & gold dore: ($8.6m) net debt
Q3 2023: $21.4m gross debt vs $16.5m cash & gold dore: ($4.9m) net debt
Group Production
Q4 2022: 16,742oz
Q1 2023: 15,317oz
Q2 2023: 29,454oz (NGLM 19,338oz + Singida 10,116oz)
Q3 2023: 27,935oz (NGLM 18,271oz + Singida 9,664oz)
Gold Sales at Realised Gold Price: Revenue (implied)
Q4 2022: 16,621oz at $1,731/oz: $28.77m
Q1 2023: 15,995oz at $1,918/oz: $30.68m
Q2 2023: 29,406oz (NGLM 20,704oz + Singida 8,702oz) at $1954/oz: $40.52m
Q3 2023: 25,016oz (NGLM 17,447oz + Singdiga 7,569) at $1930/oz: $48.28m
In terms of known near term value drivers it sounds to me like the Board are adopting a policy of improving production efficiencies, a low capital and immediately beneficial route to adding value through improved rates of recovery, lower operating costs and maintaining good margins. According to the latest update Singida is currently operating at a rate above internal forecasts and assuming it can be maintained this quarter there is a very high chance of Shanta beating the upper end production guidance of 98,000oz - I believe they need to produce around 25,800oz to hit that level. From what it appears both at NGLM and Singida there has been a degree of stockpiling, particularly in the last quarter which will boost the next quarterly revenue numbers I'd imagine once they have been sold.
Should be looking at around 100koz FY23 production and net cash position of $6-8m, a huge improvement over the course of the year and with gold prices trading 10-15% higher than a year ago and 2024 set to be another record year in terms of production, revenue and cash-flow I'd be surprised if we don't see a gradual rerating through the quarter and beyond.
I'd wager every single sensible investors here is holding multiple stocks in their portfolios, some related via sectors, commodity prices, locality or geopolitical events. I don't see any problem with investors who want to discuss these things posting cross boards. As long as it's kept to it's own thread, it's easy enough to navigate around and if you're not interested, simply scroll past. On topic here all of my O&G stocks are performing poorly this month: SQZ, BP, ENOG, DEC, HBR, UJO, HTG and I3E... some more so than others. I wouldn't be selling I3E today based on current price vs fundamentals though
With gold futures up to $1997/oz and Shanta due to release what is anticipated to be another stellar quarterly update next week it's surprising we haven't broken 2023 highs already!
Interesting research note by Andy Murphy at Edison Group - PE trading below long term average.
Epwin Group — Strategic progress in tough markets
Epwin’s H123 results confirmed a solid performance that was characterised by weaker volumes offset by cost control, higher prices and some contribution from M&A in tough markets. Longer term, well-established growth trends imply that Epwin is well placed to leverage off increasing demand for its energy-efficient and low-maintenance building products. Management action contributed to overall margin expansion, a feature that we expect to continue in FY23 and FY24 as material cost pressures become less of a headwind. Epwin offers an attractive investment case with the potential for uplifts from additional self-funded M&A. We have maintained our forecasts but highlight the low valuation and attractive 6.7% yield.
Valuation: P/E of 7.5x vs long-term average of 10.7x
Our FY23 forecasts remain unchanged, which implies that Epwin trades on a P/E ratio of just 7.5x to December 2023, a material discount to its long-term average of 10.7x. The company remains acquisitive and has an estimated net debt to EBITDA ratio of c 0.6x at December 2023, with risks to the downside. Furthermore, even without M&A, Epwin is cash generative; we expect debt to decline over FY23–24 and note that the shares offer an attractive 6.7% yield from a twice covered dividend.
Plenty of positive headliners in the latest quarterly update!
- Q3 gold production: 8,738 ounces (+3% improvement on Q2 2023) at a gold price averaging approximately $1940/oz across the quarter with the highest quarterly mined tonnage and highest quarterly grades at Palito bodes well for Q4 needing just a little over 8,200 ounces to meet lower end guidance for the year.
- NI 43-101 Resource Estimate for Palito to June 2023 realised a 50% increase in Measured and Indicated category, highest confidence bracket and a 93% increase in average reported grades of the M&I resources at Palito Complex from 5.23 g/t to 10.08 g/t!!! Higher grades = lower operating costs and higher projected IRR. Even the Inferred resource grades increased 45% to 7.01 g/t. Improving grades at Palito are top tier!
- Cash held on 30 September was US$15.3 million (US$14.7 million net of cash held under the Vale Exploration Alliance) compared to US$13.3 million as at 30 June 2023.Net cash attributable to the Group has increased by US$2.4 million in the third quarter.
Gold just skimmed off $1925
Agree with the assessment picax, share buybacks are not ordinarily designed to be sustainable nor a long term solution to weak market participation. They are a short term fix for weak price action certainly and could be an option in the years ahead but right now Shanta are paying a paltry sum of around 2% per annum to shareholders, some of whom will have invested far higher (16p placing was only a couple of years ago) and have yet to see any rewards for their investment.
New Luika and Singida are throwing off enough cash at $1850/oz to easily support a dividend of 0.5p/share ($6m) with net profits projected to be around $25-30m in the following year. West Kenya aught not to be rushed through to production at the expense of a reasonable rate of return for shareholders.
A dividend yield that keeps up with annual inflation would be preferable and it should be affordable using today's metrics of sub 10p/share and a roughly 6%.
I think most long term investors have been very understanding of Shanta's decisions to delay hiking the dividend as the Singida mine build was priority number one. NL cash-flow was unloaded into Singida capital development. Now both NL and Singida cash-flows are being directed to a reduced sustaining capital expenditure programme and slightly increased exploratory spend there should be ample cash build up over the coming quarters.
Probably little financial incentive to repay commercial loans early and there will be an incentive to having cash sit on the balance, not least if interest rates remain higher for longer. At some point the interest gains alone will warrant a modest rise in the dividend but I'm hoping the board act prior to this!
TASEKO MINES ANNOUNCES THIRD QUARTER COPPER PRODUCTION OF 35 MILLION POUNDS FROM THE GIBRALTAR MINE
Taseko Mines Limited (LSE: TKO) is pleased to announce that the Gibraltar Mine produced 35 million pounds of copper and 369 thousand pounds of molybdenum in the third quarter (100% basis).
Stuart McDonald, President and CEO of Taseko, commented, "The 25% quarter-over-quarter increase in copper production was a result of higher grades, improved recoveries and increased mill throughput. Mining in the Gibraltar pit is progressing on plan and the lower benches are providing the ore quality we expected. Molybdenum grades have also increased as mining has progressed deeper into the Gibraltar pit, resulting in a 60% increase in quarterly molybdenum production."
A port workers strike in early July caused shipping delays and a build-up of Gibraltar copper concentrate inventory. As a result, third quarter sales volumes lagged production by three million pounds, and the excess inventory is expected to be shipped and sold in the fourth quarter.
Taseko is providing this third quarter production update in advance of an analyst and investor tour taking place at the Gibraltar Mine later today. Presentation slides to be used during the tour will be available at https://tasekomines.com/investors/presentations.
With the highest levels of sovereign debt on record, I would imagine we will soon see markets combust as they did when Liz Truss announced 'unfunded tax cuts'.. whatever ridiculous term the MSM concocted at the time. As if the current status quo is anything remotely better. Ironically when the 30 year gilt yield passed 5% this time the markets didn't panic and the left waffle have yet to pop their heads above the parapet! Governments are increasingly more reliant on paying ever higher yields on debt and at some point the weakest link will crumble. Once that happens the contagion will set in and assuming it sparks a major global depression, every country and fiat currency will be negatively impacted. Physical assets seen as a store of value like gold have benefited in such events in the past, one can only hope the response from governments and central banks addresses the problem of the welfare state and does not instead hammer the hard-working tax payer who are already funding vanity projects like HS2 and the transition to net zero..
https://www.ft.com/content/55fcce4b-0c1f-4e53-ab71-e4654c9b8cf9
As suspected the drop was nothing more than a fishing operation. "Resource nationalism"... instrumented by Micon... complete nonsense. Following that suspect Interim statement this morning with particular emphasis to the Group's future there has been intense buying of stock at these multi-year lows! Some people will make a fortune today. Those who wait will likely make a good deal more.
See latest update: Final Micon environmental report and restart of operations
Anglo Asian Mining plc ("Anglo Asian" or the "Company"), the AIM listed gold, copper and silver producer focused on Azerbaijan announces that the final Micon report (the "Report") has been delivered today, 26 September 2023 to the Company and the Government of Azerbaijan (the "Government").
Following the receipt of the Report, the Prime Minister of Azerbaijan issued a press release saying that based on the Report the Gedabek plant can gradually restart operations. The restart of operations will take place in accordance with a timetable to be agreed with the Government. The Company and the Government will also work together to implement Micon's recommendations for the Gedabek operation contained in the Report.
The Company will release further details as they become available, including a summary of the key findings of the Report.
To scan through the questions and answers from the presentation register at Investor Meet, click on 2023 Half Year Results and you'll find a list of Q&A
https://www.investormeetcompany.com/investor/meeting/2023-half-year-results-1
With your 4 shares I'm sure you have plenty of extra time to do some market research. You'd know for example the recent poor performance is sector wide and compounded by weakness across UK stock indices owing to a rapidly increasing base rate and high inflation. Shanta have also been investing tens of millions dollars into Singida development over the past few years, accruing debts and sinking NL cash-flow over time. All that came to a halt 6 months ago and recent results show just how quickly the cash-flow position has reversed.
I'd question an investor's motive for coming here, an investor discussion board, and criticise views that this stock could potentially double in value from the current £110m ($135m) market cap.
Shanta Gold are going to be producing 95koz and in the region of 115koz in the following year and each year thereafter for the foreseeable. Revenues of more than $170m this year and easily $200m each year thereafter. Generating enough free cash each quarter to cover all ongoing exploration across NL, Sing & WK while paying a dividend and adding cash to the balance sheet.
12 months from now Shanta will likely have a net cash position of $30-40m (must be around even at this point in time) and paying more out in dividend payments. Anything less than 20p twelve months from now is a bargain.
For future reference: https://www.londonstockexchange.com/news-article/RSG/summary-of-half-year-results/16093182
Wasn't the link I was hoping for but appreciate your highlighting of this catalyst. Earlier this year gold bugs (myself included) had hoped for a Q423 cut but this has been gradually pushed back, as you mentioned to around March 2024. Looking for a read in the markets, haven't seen any indication of a long awaited crash or capitulation, quite the opposite which likely indicates developed economics are better able to withstand current inflationary pressures than analysts were predicting earlier this year.
Not expecting fireworks but every slither of positive news for equities and in particular the resource sector is a boon for Shanta and the eventual realisation of value. Not fair value but something approaching normal metrics.
https://www.reuters.com/markets/rates-bonds/traders-bet-fed-rate-hikes-are-over-cuts-start-2024-2023-08-10/#:~:text=The%20Fed%27s%20first%20rate%20cut,down%20to%20its%202%25%20goal.
Company valuation of only £18m ($22.8m) is incredible but confidence here has been rock bottom for a while. Improving second half outlook with a stronger commodity market forecast has to have an effect.
- Gold production for the second quarter of 8,518 ounces (2022: 8418 ounces) for total production for the year to date of 16,524 ounces (2022: 15,480 ounces).
- Cash held at 30 June 2023 of US$13.3 million (31 December 2022: US$7.2 million).
- EBITDA for the six-month period of US$6.6 million (2022: US$5.2 million).
- Post tax profit for the six month period of US$5.0 million (2022: US$2.1 million),
- Profit per share of 6.58 cents compared with a profit per share of 2.74 cents for the same six month period of 2022.
- Net cash inflow from operations for the six-month period (after mine development expenditure of US$1.3 million) of US$7.8 million (2022: US$1.5 million outflow).
- Average gold price of US$1,940 per ounce received on gold sales during the six month period (2022: US$1,869).
- Cash Cost for the six-month period to 30 June 2023 of US$1,258 per ounce (six months 2022 : US$1,415 per ounce) representing an 11% improvement compared to the same period of 2022.
- All-In Sustaining Cost for the three-month period to 20 June 2023 of US$1,519 per ounce (six months 2022 : US$1,716 per ounce) represents a 11.5% improvement compared to the same period of 2022.
They seem to go on and on (as they do). Small explorers especially are drifting, submerged along with commodities and, until now, gold – still 5% off its US$ peaks against all the rumours of a new BRIC gold-backed currency – which the market obviously doesn’t believe.
I did say ‘don’t sell’ in my June update. But I didn’t see those doldrums continuing which is the only reason I can think that caused HUM’s shares to sink back 30% to just over 10p after publication of its operational update three weeks ago for the quarter to June.
The pessimists were able to walk the shares down at first despite there being no just cause that I can see. They latched on to the lack (yet) of any paydown of the debt built up over the last few years as a result of the poor results at the existing Yanfolila mine last year and the start of building its second producing mine at Koroussa this.
But I wouldn’t have expected any paydown yet. Kourossa only achieved (on time) its first gold pour a few weeks ago, while capital spending hasn’t quite stopped and, as I said in my June update “projecting this year’s results in any detail in such turn-around cases is impossible, because in addition to Yanfolila swinging back into a decent profit but at an unpredictable rate, will be Kouroussa’s contribution (swinging from consuming cash to build, to building cash – also at an unpredictable rate)”
So the optimists have pushed the shares somewhat back up, only to encounter rumours of war between Niger, and the West African States where Hum operates – although well away from the borders where conflict might arise.
HUM itself is optimistic, expecting debt payback from Kourousa to start in this second half, although it also expects costs to rise temporarily at Yanfolila while it switches from mining one pit to another. Maybe that, and the uncertainty, still, of what Kourousa’s ramp-up costs will be is another plank for the pessimists, but I would have thought the scope for initial revenues from Kourossa is now so large, that it will outweigh any further – probably minor – problems elsewhere. Hummingbird is expecting Kouroussa to ramp up from zero to having produced 30,000 gold ounces by the year end, compared with 51,150 ounces from Yanfolila in this year’s first half. The company isn’t yet guiding for Kouroussa’s costs, but will do so in its October operational update. Meanwhile, I suggest don’t sell even though the shares might drift for a bit.
Lowest price since the 2020 Covid fire sale and then I think you have to go back to 2015 so this may be a good entry level.
Despite cost pressures (which all miners are facing and are expected to peak to ease as inflation falls) the company is still one of the largest precious metal producers in the world. Precious metals which have underperformed as interest rates surged over the past year. As a store of value against the epidemic of currency debasement and record high debt levels, the effects of which have yet to impact most nations, I wouldn't bet against the price doubling from here as has happened before but the macro-picture will dictate what happens to a large extent.
Don't try and downplay the seriousness of this, I'm sure your wife would agree this is certain not just an innocent mistake. The BBC journalist in question called back the next day to confirm with the NatWest CEO that she was happy to put forward her version of events as a source. At that point, she could have retracted her statement and told the BBC not to publish her false version of events. It is extremely worrying the CEO of a major British bank should be divulging the personal details of a client and far worse choosing to publicly smear them by going on record when she must have known this was not the reason for the account closure. We have seen the top two people within NatWest and Coutts resign, so this is most certainly not a non story and your glib remarks are hardly helpful. The committee that drew up the 40+ page report will have to come under scrutiny in the coming weeks. Their report was wholly inappropriate and riddled with distorted, libellous propaganda