Member Info for the_shareminator

I have some exposure here, purely for copper. Market is difficult right now but copper price isn't tanking. Look at the price of Vanadium to see a real commodity crash and yet BMN still trading in the 21-25p range. CAML can afford the 7-8% dividend, assuming its unchanged and still repay it's debt looks to me. AAZ is a gold/copper play and has done very well this year despite increasing it's copper output and seeing gold ounce production lower. So I don't think it's as clear cut to avoid this stock. Don't lump all your spare change in here but I would say this looks cheap if the price of copper has reached a floor.

DRWHO319 - while I won't be, I'm fully loaded with nearly a million of these but I agree there is enormous potential, especially if ANS come in with an improved offer for the additional TKGP equity they appear to be interested in acquiring.

topsharepicks - I'd be surprised if ANS announced they were immediately moving ahead in the next day or two as they are still at the Conference. It would make for quite a spectacle if they did though! One can only dream.

If ANS are savvy and it sounds like they plan to invest more in the Ethiopian mining sector, then they would use this platform to gain further recognition. Best way to do that as of now would be triggering their commitment whilst they are attending this event. It would be hugely beneficial for all parties, not least the Ethiopian Government as the exposure may encourage more interest in the sector.

The realist in me thinks it will be at least a week before ANS announce to markets that they are releasing funds, assuming all is well, given the busy schedule over the next 2-3 days is followed by a weekend. It's difficult to know at what pace these guys will move to put the mine plan into action now they have received assurances.

I'm amazed anyone is short here right now!

Interesting reaction to todays update. Volumes are up on the back of news that the security report has been received and presumably passed along to ANS to review and confirmation that plans to begin TKGP development are still in line with expectations.

KEFI were likely to make an announcement at the Conference and to me this reads as confirmation that the security report is acceptable and should now encourage ANS to release the funds.

I think the reason volumes haven't been higher is very simple, ANS needs to commit to the project with their funding however once that happens, in the next week or two perhaps there will be a rerate. To what level? I'm guessing around 2p but perhaps the 1.8 range now following some of the recent dilution.

Ask has jumped to 2.4, word getting out. Long overdue a rerate with gold trading at current levels.

The presentation gives us a real hint that the security situation is being take seriously and possibly the report is in hand pending final checks.

Tulu Kapi Local Political, Administrative and Security – Intense Joint Preparations for Start-up Trigger

Expansion of the municipal team (Genji Woreda), including security specialists
Deployment of 30 Regional Government (Oromia) Specialised Police to Tulu Kapi
Re-arrangement of Tulu Kapi camp in light of these security deployments
Robbery at Tulu Kapi in May 19 followed up with recovery of stolen items and arrests
Federal (Ethiopian) Army around Tulu Kapi as part of zonal (West Wolega) security
Announcement of Command Camp (200 personnel) between Genji Woreda & site
TKGM office established in Gimbi for coordination with local authorities
Intensified community consultation in build-up to triggering start-up activities

Note slide 17 - MICON has signed off the full Risk Report on all project matters and also the Due Diligence Report for the infrastructure financiers. Independent Assessment Reports on Security and Readiness of Community and Government are being updated for start-up trigger.

Exciting month ahead for us!

Interest is growing and the share price is creeping up despite stock being dumped on the market by the loan facility provider. We now know this to be the case as indicated in the recent Issue of Equity updates from 14th August and 27th August, specifically mention of the loan facility provider continuing to "hold less than 3% of KEFI's outstanding share capital" following the issue of shares. I believe the total number of shares from these two updates totalled about 34 million shares yet 3% of the share capital would be less than 22 million shares. I am assuming there are not multiple working capital providers working in tandem with separate interests that are involved. If that is the case, they are offloading stock at what appears to most private investors to be depressed market prices.

As announced on the 27th August KEFI will be presenting at the African Down Under Conference this Wednesday running until Friday. With them will be representatives of the Government of Ethiopia and ANS Mining who are awaiting a project security update before triggering their investment in the TKGP

The corporate presentation being used is linked below.
https://www.kefi-minerals.com/files/presentations/kefi-africa-down-under-presentation-aug19.pdf

The cash offer to purchase Grasvally Chrome Mine caught my eye. Unexpected but a very welcome development!

Hopefully results have eased your fears johnpwh, the average price received was around the same level as Q1. For some reason I had copied across Q418 figures. So just to clarify the average gold price received in Q1 was $1,311 compared to Q2s $1,307/oz. With the silver credits in Q1 it was $1,477 compared to Q2s $1,496.

Very positive sounding update with mention of the rallying gold price up c.10% and the company confirming this increase will be reflected in Q3 results. The pushback of the southern wall is almost complete and the company are confident "ore production is steadily increasing during the current quarter" which should be well received come mid October when the Q3 results are announced.

I am not sure why they have added a recurring (annual) payment to cash costs but still it's nothing to worry about. Again I had copied across the Q418 cash costs figure, in reality it was $399/oz during Q1 and roughly the same in Q2 if the State Right payment is excluded, note the comment by Dr S "[cash costs were] in line with prior quarters".

Indeed there has been considerable selling up until fairly recently and fears of a Q3 repeat will be on some investors minds. No matter how confident those of us invested are we won't be able to convince those 'risk-averse' sat on the sidelines. Only the next operational update will relieve fears I think so I am not expecting LoM announcement to significantly change demand in the short term.

johnpwh - appreciate your points made however to be clear in the last paragraph I am referring to the current quarter for which we are almost two thirds of the way through. See the cash cost and production estimates.

With regards Q2 average pricing, I haven't seen any reason why it won't be around the same level as Q1. To clarify, the last 5 weeks of the quarter were volatile with gold moving from below $1,300 up to $1,440 an ounce before settling however sales in this period should have offset weakness earlier in the quarter when gold dipped below $1,300/oz. Perhaps 1-2% off Q1 for the first half of Q2 followed by a 10% swing higher in the last 5 weeks.

27,110 ounces sold last year generated gross income of $37.80 million for Zenit (the operating company). I believe this included credits for silver sold.

Quarterly income had risen to $10.62 million based on the average realised gold price of US$1,238 per ounce and 7,517 ounces sold. With the silver credits the average realised price per ounce was $1,413). Operating cost were $349 per ounce.

This quarter we might expect the average gold price to be at least $1,400 per ounce, costs no greater than $400 per ounce. Add in silver credits and it rises to about $1,600. If grades recover then 7000 ounces should be well within sight. These are pretty conservative figures and margins should be better in fact.

AAU issued production guidance for the year on 12 March 2019 targetting gold production of 25,000 ounces, 25% higher than the previous year, following the excellent performance in 2018. Of importance was mention of the expected average grade of gold at c. 5 g/t Au and gold recoveries to exceed 90%.

16th April 2019 - The day 2019 Q1 prelim results were announced. Gold production was ahead of forecasts at 7,296 oz at 4.83 g/t (slightly below expected grades for this year). Recoveries remained above average at 93.7%.

Note Dr K's comments regarding "scheduled pushbacks" which affected the transporting of ore from the open pit and their use instead of stockpiled ore to supplement production in the quarter. Combined with the "unusually wet weather" this had a negative impact overall and is not expected to repeat in the following quarter (see comments re 'summer period').

Fast-forward to 17th July 2019 - Q2 prelim results and I assume shareholders, myself included were hoping for production in the range of 7,000-7,500 ounces following on from the previous guidance and commentary. Instead gold production came in at just 6,438 ounces despite recoveries being higher and "one of the highest material movement rates in the mine's history".

Unprecedented wet weather through the last quarter appeared to affect production and operations suffered from the continuing "pushback underway on the southern wall of the pit" with grades of the plant feed down despite higher mined grades in the quarter.

What is encouraging is the noted "increase in fleet capacity" which will maintain production levels whilst moving ahead with pre-stripping of the Arzu North and Derya pits this quarter.

Two points to consider.

1) Production is ahead of guidance this year once again. This should be rewarded by market forces seeking to profit off the back of better than forecast estimates. The gold price has risen nearly 20% since the time guidance was announced although gold producers have yet to see the benefits of a full quarters production at these elevated prices. Gold began it's recent surge towards the end of May. Most producers have experienced strong corrections in the period with some trading more than 100% higher (AAZ, TSG, SHG). AAU has not held onto recent gains and sits barely 10% above where it was trading 4 months ago.

2) Grades have been consistently below target and combined with pushbacks and the wet weather are hindering market interest. Consider the terrible effect the rainy season had on HUM in 2018, the share price was hit very hard. The issues faced are clearly not the same and operations remain very profitable contrary to what happened with HUM. Nevertheless these are negative events and have been ongoing for two quarters or more (winter operations were also affected).

Catalysts
* Last JV loans repayments this quarter
* improved grades & margins (gold at $1,550/oz with CC of $400/oz)

AAZ have risen to £200m today on excitement of a potential state-backed takeover. They are looking at about 80-85koz gold equivalent ounces (GEOs) production this year with AISC of $550-600 per ounce. They are adding about $5m cash to the net cash position of $15m each quarter with gold at current levels and have been paying dividends for the past year or so.

HUM is valued at just £80m today. With the completion of the second ball mill the company is expecting production to be in the region of 110-125koz this year settling at around 130koz in the following couple of years. AISC are expected to come in around 900/oz this year with the second half benefitting from higher output. Increasing margins and output suggest net debt will fall by at least 12m this quarter and next reducing net debt to below $20m come the end of the fourth quarter with the prospect of dividends in 2020.

There may be some inaccuracies in the analysis above but I am quite sure the wider market is yet to fully understand the importance of the second ball mill and HUM's projected path to greater quarterly cash generation and the repayment of loans.

Fair price as of today? Perhaps we should be content with a £100m market cap (30p) until after next quarterly results are released. Arguably we should experience a much greater rise from current levels if our net debt position reverses at a quicker rate than AAZs net cash position continues to grow.

$4100/oz

Visitor - agree with your analysis, it certainly hasn't hurt holding defensive (and predominantly precious metal) stocks this year! Gut instinct tells me rhodium demand will continue to outpace supply in the event of a recession (in anticipation of further stimulus) or a rebound in global growth. Palladium I'm less confident about in the event of a continued economic slowdown. Platinum least of all, which has stopped behaving like a precious metal altogether bizarrely. Perhaps if gold continues heading higher it will drag platinum and silver up with it.

Good call jumping out of KAZ when you did. I suspect today's rebound is merely a dead cat bounce. Either way far too much risk for me. FRES the same. I've found sticking with what you know works is the best approach. Avoided POG for the longest time after the rights issue and only recently has it ticked up towards 10p. HGM in that time rose from around 25p to 240p recently (didn't hold all the way but should have). AAZ another obvious ride last year although looking expensive now.

SHG and HUM will be standout performers in the next 12 months, not only benefitting from high gold prices and good margins but perhaps more importantly they are both in a position to repay their debt ahead of schedule. Moving into a net cash position with the prospect of dividend payments sent AAZ flying.

A couple of holders here hold PAF which is expected to reduce it's debt in the next 12 months.

Rhodium pushing towards $4k today, basket continues to look strong despite the continued lack of interest in platinum. The rand has had a volatile month from a low of around 13.8 to recent highs of 15.42 against the dollar. South African stocks have been punished according to recent articles over concerns about it's economy.

https://ewn.co.za/2019/08/15/rand-bounces-back-after-steep-sell-off

Some taking profits over the past two days. Today the market has been particularly rough to ride. Even gold producers are falling although spot gold is up. I took the opportunity to buy SLP, HUM and KEFI today having sold stock in SHG and TSG. Looking for a bottom to jump in BMN. Hope no one here holding KAZ!

Keeps getting cheaper each time I pop in to look at this today. This drop isn't like a standard sell on news reaction. It's 15% down well below 52 week lows. I think it may have to do with concerns over future loan repayments or possibly potential breach of covenants if the trade war continues to dampen demand for copper. But I admit I am not aware of the projected debt repayment capabilities, it's simply a hunch having seen this happen many times over in the past with LMI, POG etc

micksnags1 - We are only waiting on the updated independent security report to satisfy ANS's concerns that came about following the failed coup earlier in the summer. Once this has been released TKGM will begin funding the community resettlement.

"ANS Mining has confirmed its first instalment of US$11.4 million (Ethiopian Birr equivalent) will be released to trigger community resettlement and other development tasks, upon the satisfactory receipt of the aforementioned updated independent reviews."

TKGP security initiatives were put in place immediately after the failed coup with the expansion of their community engagement teams and more importantly the deployment of additional armed security to the Project site as a precautionary and pre-emptive measure. The Project development plan has been re-sequenced after consultations with the mine contractor Lycopodium giving more time for the first phase of community resettlement. The first phase community resettlement is expected to trigger in September 2019 for completion in November 2019.