Member Info for TigerByTheTail

The last RNS was good - it officially confirmed the previous JORC announcement and added a lot of detail.
Then Jubilee announced on Friday last week the completion of their purchase of Sable - an absolutely necessary step for Galileo if they are to put Star Zinc into production. Yes, Jubilee also announced a delay in the start up of zinc processing (to Q2 2020), but it was always a question if Galileo could be ready any earlier.
Hopefully, we will receive news of the offtake agreement between Galileo and Jubilee in the next couple of weeks, and we will swing back up again. (Or do people seriously think that this deal won't be signed off, even though Colin Bird is the Chairman of Jubilee as well as the CEO (and 13% shareholder) of Galileo, and the two companies share another director in common as well?)
Oh well, I suppose wild swings like this come with microcap stocks. All you can do is buy on the dips!

Hi BigBangs!
The thing is, it's not going to be so easy for the shorters (as a group) to get out of a losing position - even if they are partially hedged with a long silver position, their losses could become very heavy indeed.
Most of Fresnillo's stock is held by Penoles, and that stock isn't available to buy. Fresnillo is a FTSE100 company, and a reasonable amount of the remainder of the stock is held by institutions, and that stock also isn't easily available to buy.
If 20% of the "free float" is really out on loan (i.e. sold short), then there is going to be an almighty scramble from the shorters to buy back in before the share price runs away from them completely. This could be one hell of a price spike in the making - one for the ages.
p.s. If the shorters held any devastating info on Fresnillo they would have already published it to force the price down to their target. They gambled on the bad interim results (and they weren't good, in truth), but they have been caught out by the runaway silver price, which changes everything.

That's a good piece of news. In effect, invest $4m (USD) to make $40m (USD), as long as the price of gold stays at current levels. Not world shattering, but very nice.

Hi Juxtapose!
Remember the shorters are not a unified bloc. Each one of them is out for their own good, and can't trust the others to do what they say they will. Given that situation, the optimum course of action for any one shorter now is to break ranks and buy back in asap. $18/oz silver should be enough to panic one into action.

Silver approaching $18 per ounce.
According to Short Tracker, 1.7% of shares are still disclosed as sold short (there are probably some undisclosed shorts around as well).
Since Penoles own a majority stake here, and the free float of shares is low, that means that we have all the ingredients here for a classic short squeeze. Looking forward to it!

Should get news of first platinum group metals production from Windosr PGMS (aka Eland) very soon.
Also, expecting further developments on Kabwe / Sable (exercise of option from BMR, offtake with GLR).

It's worth adding that China placed a tariff on US production of rare earths on Friday.
There is only one US producer of rare earths, the Mountain Pass mine in California. They don't have any processing facilities (yet), so they send their ore to China for processing. The Chinese move is aimed at driving them out of business, which may succeed, as Mountain Pass is a highly marginal mine anyway.
I'm amazed that given all the geostrategic developments, it's so calm here!

There are lots of ways Colin Bird could get the finance required to get Star Zinc to production and first receipts. Here are a few possibilities:
1. Obtain a pre-financed offtake (i.e. a loan against future production) from Jubilee;
2. Make an arrangement with the contract miner to delay initial payments in return for a share of the profits (i.e. make them a 10% partner in the venture);
3. Obtain a loan from a friendly Zambian Bank secured against Star Zinc;
4. Sell Ferber or Glenover (the latter seems possible if and when the mining licence for it is granted);
5. Raise equity by issuing shares.
It's a fact that Galileo raised 500K in April, and that they will have money for normal corporate purposes for quite some time. It's also a fact that Colin Bird owns a whopping 13% of the shares in Galileo. Thus, I think he will try and avoid diluting himself as much as possible, and if it must be done, it will be done much later (i.e. after the signing of the offtake and the grant of the small mining licence), when the share price is inevitably much higher than it is today.
I can understand Kalan's position of "wait and see", but I think he's wrong, and that he'll miss out on a big share of the profits to be made here. That's my gamble, if you like.
Separately, Jubilee's purchase of the Sable refinery completed on Friday. Now Jubilee have full legal title to the plant, I'm expecting that the offtake agreement will be signed and announced to the market in the next couple of weeks.

I can see why people are posting that there is a solid gain to be made by buying Avesoro at about 87p now and waiting for a formal offer at 1 pound to be accepted and formalised. I've looked at it and thought about it.
But it's too risky for me. Avesoro are all but bust if the offer doesn't complete. What if MNG withdraws his bid? That's a lot of downside for only a small gain. Who trusts MNG anyway? And who believes that doing any kind of business in Burkino Faso (Islamic insurgency) or Liberia (total corruption) is likely to work out long term? And isn't there more money to be made right now on investing in a well-managed gold miner in a safe jurisdiction?
So, even though I'm a gold bull, I'll take a pass here.

Hi Parfett!
What's not to love? How about the world we live in?
I think I'd be happy to see the gold price plummet if only it ushered in a new age of peace, prosperity, love for our planet, and understanding.
Anyway, since there's not much likelihood of that new age dawning anytime soon, onwards and upwards goes gold!

Hi Bring!
The General Meeting was adjourned without any votes being taken on the GM motions? Is that right?
That means that the share consolidation has not even been put to the vote, yes? If so, that could be a win for shareholders - though with Borelli you always have to mind your back.

I.e. the contractors (truckers and diggers) need to be paid from when they start work, but the revenue from the ore they are producing will only start to flow in several months later - after it has been refined and shipped and the invoice paid. You need working capital to bridge that gap!

Hi MinorMiner!
Other than any Star Zinc capex (tiny - 100K?), there is a need for working capital to cover the time (months) between the contractor mining the ore and Galileo actually getting paid for the finished product. Also, money for general corporate overhead will run out (on my estimation) by April 2020.
I also think Galileo need to find about 1m quid from somewhere once the SML is granted and the offtake signed (i.e. not yet). I also expect the share price to be very different by then, and so the equity dilution required to be relatively small.
It's just possible that the dilution can be avoided entirely, if Galileo can either get a pre-finance offtake deal from Jubilee, or get a loan from a local bank, or sell off Ferber or Glenover. Let's hope so., but I've included a 25% share dilution into my calculations and I'm very comfortable with the result. As Colin Bird said in his last interview, "it (Star Zinc) is a cracker".

Hi Portal!
It's worth adding that zinc and copper prices are low at the moment, and that vanadium (which is very volatile in price) is at the bottom of its cycle. So that revenue figure can easily increase.

Annual results (up to March 31st) fine, as these things go for a pre-revenue producing company.
Cash burn was about 500K in the last year (which included a fair amount of drilling). Galileo ended the year skint, but then raised 500K in April. That money should be enough to see Galileo through the winter and to getting the offtake agreement signed off and receiving the small scale mining licence for Star Zinc. However, capex / working capital for Star Zinc (1m quid?) will need to come from somewhere eventually. That probably (but not definitely) means that equity will need to be raised at some point. (But not for a while, I think).
Glenover actually more advanced than I thought. If they can get the mining licence, then things might move quite quickly towards a phosphate producing operation.

Hi Ivans!
I don't want to discuss Galileo here, but you're completely factually wrong in your post, so I must reply.
Galileo's annual report goes up to the end of the company's year, which is March 31st. At that time the cash balance was indeed low. But Galileo raised funds (500K) in a placing in April - most of which they should still have.
You might want to take a closer look at Galileo and read all the Star Zinc related RNSs. Who knows, you might change your mind!

Hi Zebediah!
Yes, willemite is easily discernible - by look, by weight (it's heavy!), and above all because it fluoresces green under UV light.
You can imagine a simple sorting operation with a few workers in a darkened shed with UV lights overhead picking out the willemite from the raw ore flowing by on a conveyor belt. Such an operation would upgrade the zinc content of the ore and reduce transport costs for very little outlay.

I think the delayed whopper trade (about 2% of the company!) will turn out to be a sell. f I remember right, the split at the time was about 0.62/0.64p.
I think the market-makers have at least one more delayed trade to print, from yesterday, from about an hour after the RNS came out. If I'm right, this too will be a big sell. Hopefully, the last one.
Anyway, the more volume the better, as it will soon wash out the seller for good.
As for the identity of our "seller in a hurry", for my money it's BMR (their critical AGM is tomorrow). But that's just my opinion.

Just to add, I believe Zambian corporation tax on miners is either 35% or 40%. (If anybody knows for sure, please correct!)
There would be no interest, depreciation, or amortisation to account for. Allow a generous $1m p.a. GLR corporate expenses.
So $10m per year Star Zinc EBITDA would equal roughly $5m per year profits at GLR level (ignoring any investment into Kashi'tu).
Allow a minimum initial P/E of 5 = mcap of $25m / assume roughly 20m pounds.
Allow rough 25% dilution to obtain working capital funds = increase in shares from 404m to 510m.
I count 53m warrants outstanding and likely to be exercised.
Total: assume 563m shares in issue.
Therefore, my target price = 3.55p per share within 18 months? (though AIM does overshoot and undershoot wildly, and Kashi'tu drilling may offer a lot of resource upside). Obviously, this target depends on the project being successfully executed and zinc price holding up, etc, but a possible 600% plus return is enticing...

Hi Jammer!
I need to point out a fair number of inaccuracies in your last post. I hope you don't mind.
First, production is planned to be 12,000t of contained zinc metal per year for six years - so double your figure. The three year average of zinc prices is around $2,700 per tonne, so we're looking at theoretical revenue of $34m per year or so (once the electrowinning circuit at Sable is operational and producing pure zinc metal). Call it $30m to allow for only 90% metal recovery.
The revenue figure quoted ($15m) is for Galileo's share of the revenue (which is roughly half of the whole). The processing costs will obviously come out of Jubilee's share of the revenue. Jubilee should do very nicely out of this piece of business ($5m earnings p.a. for 6 years from this source alone via Sable? BTW, if you read through the whole RNS there are some assumed processing costs in there at the end.)
Colin Bird has been clear that the $2m AISC for Galileo covers both the contract mining and the contract trucking costs. Given that the operation is very simple (1:1 strip ratio, very high zinc content in ore), I almost believe that figure. Initial capex should be pretty minimal, but there is a need for working capital to get the operation through to first payment from end user (I allow a generous 6 months for that, and assume that 1m pounds is required.
As you say, 5% of the Star Zinc earnings will go to the Zambian Government.
Allowing for a fair amount of overages etc., I think it's safe enough to assume earnings to Galileo of $10m per year for 6 (possibly 7) years from Star Zinc. (That's pre-tax, of course).
I agree that some of the earnings from Star Zinc will be invested in developing Ka****u, which looks like a really big zinc / vanadium resource, and which is next door to Sable. So there's a clear pathway to growth.
Obviously, we still need to see the offtake agreement with Jubilee and the small scale mining licence delivered. And, above all else, about 1m quid needs to come from somewhere for working capital purposes. This COULD come as an advance from Jubilee, or from the contract miner, or from a friendly local bank, or from the sale of Ferber or Glenover. But most likely, it will come from an equity dilution. Your guess is as good as mine as to if and when this raise happens, and at what price. But I make it that even the most clumsily handled equity raise and share dilution still makes Galileo a pretty compelling investment prospect. (And remember that Colin Bird owns 13% of Galileo, so he's not going to want to dilute himself too heavily).
In the end, Galileo's mcap is currently around 2m quid. I make that simply a misprice. And a big opportunity.
All IMO and DYOR!