Member Info for Tornadotony

Mine has arrived as well.

A 10 year graph of both stocks has them in the same place together in relation to each other. Over the last week both stocks are tightly correlated with one another HOC production is not far behind Kazakhstan's mines. I only post this as a casual observation.

HOC has always been more difficult to value compared to some of the other precious miners. The Canadian SNIP project has every chance of producing 750,000 ounces of gold for the company in future years. The Brazil mine acquisition is to yield 27% in future production volume and is partially a replacement of its ageing Peru assets that are themselves being extended for several more years. Volcan project in Chile needs water supplies and one idea is to possibly have a desalination plant that supplies the mine and local farmers and population. If that all comes together they have a workhorse mine with 8M ounces of gold and 1.7 g/t is useful for an open pit. Volcan offers another 25% replacement output on the older mines. Overall the company has a continuation strategy that is migrating over time from Peru dominated production into Brazil, Canada and Chile as its major sources of income along with its Argentine mine. The Peru mines once hugely dominating the company will gradually have other national mines in friendly host countries taking greater proportion of the annual outputs. There is perhaps a back drop of decreasing risks for HOC when compared with the two previous years.

Overall HOC is my smallest precious miner investments and I feel the 100-120p range is not to far a good entry to hold.
As for silver and gold prices, nobody knows how well or badly central banks will mange inflation or recessions. For those of us living in the UK, recession risks appear to be rising, our currency is getting weaker, inflation is going through the roof and the geopolitics is not providing much confidence either. On that basis HOC is a decent hold for me. It may not see the dizzy heights of 200p but it should supply a divi and hopefully deliver an inflation breakeven return for those buying the stock at this time.

To many holds! should check before posting

Looks like initial rain this weekend in some areas. This is important for the India farmers and could influence the gold price 3 months from now. Centamin sometimes rallies with the right monsoon rainfall in India. No hurricanes forming in the Atlantic thus far. Oil prices could hold therefore hold steady. Just need Centamin to deliver what they promised. Doropo reserves and resources is do any day now, their first target after paying themselves well (Centamin management) with free shares and dividend.

Hi JT

I am sitting on AAZ as the ratifications at some point will be made leading to an eventual re-rating. The Chairman thought it would be end of last month. I suspect the Azeri government had a very busy time table and I hope it will happen before a summer Parliamentary recess. If anybody knows when that will be it would help us to manage our expectations. Tony

430,000 inferred ounce increase in WK. All of what was mined out in 2021 was recovered on reserve additions plus all of Q1 and half of Q2 mined out in the current year. 78,000 ounces in the measured and indicated category in WK and a lot more to be added. Once they get to 700,000 MI or 200,000 reserves WK and 500k MI resources the company has to be worth a lot more than 9p a share.

Will be a buy. In case it appears as a sell.

What we do not know is whether institutions have put pressure on the dividend being paid, whether there is positive production surprise which we do know about or the Tanzania government has struck a deal to pay back remaining VAT. The alternative is a Board that somehow thinks its clever to go to a bank borrow $10M and hand to us as a dividend rather than complete new mine construction on time and can not see the poor optics from a business point of view of doing this.

I have written to the company and asked them outright to explain it to us and confirm if the dividend is able to be paid from free cash flow.

DP

We are talking cross purposes again. Your points are correct and I am not disagreeing with you. However we both know the baby is getting chucked out with the bath water in the present market. There are political problems in many countries at the moment not just UK. South Africa is not immune to the financial pressures and we saw what happened last July.

I will drop a line to Shanta about this.

A MoU is not a formal contract so we should not be too disappointed after what followed the RNS. It was pleasant to get some news, but it was not the data we were hoping to read in June and perhaps it will arrive in the coming weeks. The entire sector involving materials needed to deliver the energy transition to support climate protection is under pressure at this time.

We have politician’s not leading and some just giving rhetoric and avoid decisions and difficult choices to the last moment and often lack strategic depth in their thinking or they are undermined by other political governments not honouring what they may have agreed in the past. The Ukraine war has also played havoc in the energy markets and has left some nation states to postpone COP26 in order to get through the coming winter. We also have financers/bankers who want the politicians to take more responsibility as they do not want to deal with investor disappointment on returns or they do not want to take all the risk in delivering change where it has significant market risks in the background of recession risks. They also question the duplicity of governments that can cross sanctions over to the environment/energy agenda which was being heavily applied by the USA and only in the last few days has started to become more flexible towards some other nation states. The USA energy sector is still frustrated by the lack of communication happening in Washington.
In a few weeks’ time we will have China focussing on their November conference and USA with its mid-term elections. It will be interesting to see what happens in the hurricane season in between, along with the monsoons in India and how badly China gets hit with its typhoons on what is a stressed agriculture sector already. It will be interesting how central banks and governments deal with inflation and avoid widespread recessions as I personally think they are in a dreadful position. The fundamentals will impact all the equities and any assets of value we may hold. It may well require us to think longer than a year and take an outlook that is way beyond the events of a single RNS on a stock we hold. In the background we also have Goldman Sachs throwing cold water over the entire commodity space especially that part which helps deliver COP26 outcomes which may hide a short position they place or the long position they want to get into.

Overall there is a lot to be baffled about. There are many moving parts and if anyone succeeds in doing well out of all this, they will have earned every penny of it. Good luck to us all. Tony

I don't know barhut, but I do not feel confident of the pound currency. We have red hot inflation in the UK and a lot of recession on the horizon. As prices go up hotels, restaurants and swathe of businesses are looking more empty. I would not like to say how bad it will get. One advantage of holding Centamin is that the share price might re-rate as the pound goes down the plug hole. If the clown prime minster continues then the idiocy of what we endure in the UK can only continue.

GDX chart looks potentially bullish to me. I wonder at times if the market gives any future positives to particular precious miners at all. The costs are due to drop by $200 an ounce and production is going up substantially in the second half of the year. The Doropo mine has new resources and reserve data scheduled for release this month.

To support solar energy industry. Expect HOC to move up with silver price.

No mention of AGM minutes of December 2021. As Theo did not see them.
No mention of how Saltend and Angola mine funding are on a different time line as Theo did not hear of it in PAs last talk.
No discussion on what the financing deal of Saltend would be despite Theo's declared financial background knowledge.

All we have is a baseless accusation after his comments about the reasons for the departure of two Board members 12 months ago have been shown up as utter garbage. This of course is humiliating for Theo which most Pensana LSE readers may find quite enjoyable. My taking things further with Theo is like a cat playing with a wounded mouse.

https://www.kitco.com/news/2022-06-02/Metals-shortages-ahead-net-zero-targets-at-risk-BofA.html

I noticed AAZ also on with Pensana are on 7 June talks at the conference.

Gold was $1161 per ounce when CEY was last at 79p in January 2016.

Since I wrote GDX fall is now in line with Centamin.

Berenberg came out again today with a buy rating at 114p. Pound dropped a whole penny against USD. GDX goes down just 0.5%. 16p at least is cash in the bank. The projected annual profit is anticipated to be over $154M which is the same as last year. The company also expects to replace its mined out reserves and resources over the past 12-18 months. The only way to look at this is that we are being offered a buying opportunity. The company is on a major support line. If anyone has a good relationship with the management and can get confirmation that production, solar plant implementation and drilling for R & R is all going as scheduled and costs are broadly in line with forecast, we would have nothing much to worry about.