Member Info for Tornadotony

Winging don't kick yourself. A lot of us have done far worse and that is a promise.

Its carnage on most of the precious miners stocks. Furthermore it makes no sense at all. FIAT price of everything going up and the value in gold conversion goes down. So that semi- house costing 550 ounces of gold now calls for 600 ounces of gold a year later. So effectively gold is devalued against everything.

Analysts have given revision estimates after Eric's report. The drop in revenue expected was $6M on previous considerations and profit line was around what I said earlier after tax etc of around $11M. This appears to be based on a 2022 gold price average of $1769 and a production volume of 72,000 ounces of gold over the entire year.

MrBond and other readers,

For those of us in the investor position, is the best thing to do nothing and just come back in 12 months time and let whatever course flows happens? Tony

So called major gold support gone will God knows how many paper gold contracts. This is before Chinese New Year.

CD
Yes I was aware of the Chinese New Year trend but we have not seen a decent gold rally into it. It does not make sense to do another placing. The company would be far better off doing a loan if it were necessary without being forced into a hedge arrangement. I have been going through the numbers and lets say $20M was sought in year from production. Lets assume an average price of $1700 and they hit 70,000 ounces. Lets assume the AISC overruns by 31 December and is $1350. this gives $24.5M cash flow. Taxes etcetera take away $12M. However the Tanzania government is using tax owed to off set a lot of VAT. Lets assume half comes back. If 60% pre-stripping is held over to Q1 2023. The company delivers without a placing. For January the average price is over $1800. Similar may occur in February. A dip in gold price later averages numbers lower. However, gold often responds higher in a stagflation environment so it can also go higher. I have looked at the numbers as well as ratios. The company has spent $10.9M on Singuida last year. The crushing circuit is at least all bought in. Tony

Analyst was finding ESG shares investment funds were growing sharply quarter on quarter. Eventually some of those funds will find their way to HZM. Could do with an RNS to get a little bit more noticed.

Miss_Dollar I have fingers and toes crossed that you are correct about Putin. Tony

Can confirm gold is heading back up in pounds. Now just a £5 down on yesterday. So the FED has talked up the dollar value to try and help lower inflation perhaps. There is a limit what talking can do. I suspect gold gaps in charts to get eventually back filled.

Robbie it allows Pensana to meet ESG criteria which is huge access to funds at institutional level.

The share price is set up again for one of its huge rallies. I hope its on the basis of lots of good news being lined up. Bloomber (Peel- analyst surname, gave Bloomberg interview), ESG funds growing every quarter. Tony

Dollar strength has pushed gold lower this morning. It has gapped the charts in London and Asia. At some point gold will go up and we await the next move. Gold has barely changed in pounds say around $10 an ounce from its peak. We shall soon see how they play it.

https://www.londonstockexchange.com/news-article/POLY/polymetal-q4-2021-production-results/15303985

Good Q4 results higher AISC for 2022 as like everywhere else.

Hope to see you back as an investor CD in Q4 if we see Shanta hitting your expectations. All the best Tony

Certainly fits where gold has landed after FED speak so we should open with a flat tomorrow if Asia does not snaffle up bargain prices. After hearing the pretend hawk, I am not sure about the rest of you, but I thought it was a green light to ditch some FIAT one held and replace it with gold or for those who can stomach the ride crypto version of exchange. The FED are so far behind the inflation curve that it left me wondering if the committee had gone on a trip to Neptune.

I wish everyone good trading and investing for tomorrow and that Centamin heads closer to what the brokers have forecast for the stock.

A message to some of the board member contributors is that whatever we write on here its to everyone who reads what we say, and its better reading if we imagine them sitting across from us in a real conversation. Its fun to have different views and its more fun when we share them with politeness although we may passionately disagree and that is what is great in living in a free world and whatever we do express is just an opinion. Tony

Patryk221 and all readers out there,

I recall some classics when it comes to Directors selling. Its when family members who are on the Board that sell that you hit that button right away and apply that as a golden rule. Directors do lousy buys and sells as well as good ones. The price actually did go higher after Eric sold. He also got a lot of shares in January as part of his pay rewards and it is reasonable to take some of that off the table. He was after all spending some of his pay after delivering good results after several years.

The real issue was made clear by Eric in his July presentation when he said that he was highly focussed on the VAT discussions and it was taking up a lot of his time and it was VAT, VAT and VAT. Shanta was badly hurt in not getting its VAT rebates in 2017 to 2019. Tanzania has said to the world it was being investor supportive and making the nation attractive to invest money. They are slowly delivering in their response to Shanta Gold. The show case I mention before is in part Shanta receiving back over paid taxes and seeing the impact later when it is done. The economy in Tanzania is on 5.5% GDP growth and it buzzing. They received a $320M International COVID support grant in November. Its quite possible for Tanzania to make more VAT repayments to Shanta if they want to. If they do an extra mill for current production could be bought and in turn it makes more money and pays back more tax to Tanzania, and the time line for Singuida can made more secure as to when $10M is spent on stripping before they get to gold production ore.

Finally the book value price is 0.76 against a Shanta life time average of 1.1 times. The book value increases every time reserves and resources exceed what is mined out. So we are at a phase where 100,000 ounces could be uplifted with in the ground value when perhaps only 25,000 to 30,000 ounces get removed. This is a big deal as further price drops against increase resources create an incredibly low book value price on the stock. As I mentioned the other day, its time to hold low PE stocks with low book values under 1.0 multiples. I recall Lloyds bank hitting 0.25 when everyone thought it might go under in the financial crash. The book value trade on Shanta in 2020 was 2.8 times. We are holding a smashed up stock already. If the markets blow up this one has done it before all the others follow. What is key however is that Tanzania delivers its promises on VAT rebates otherwise we all lose further and they do as well ad if they do support the company Shanta will be an investor safe haven as we head into 2023. This happens when the Tanzania Government works with the Shanta in a constructive partnership and I hope this is possible as it is win win as a result for all stakeholders. Tony

Redhill and other readers,

There is little chance that investors would put up with another placing especially at a low share price we have at this time. Shanta has the opportunity to extract 2 Million ounces of gold for the Tanzanian Government to earn income over future years. That wealth is considerably larger then holding back on current owed VAT. The company can choose to leave it in the ground and nobody wins or they deliver what they say they are intending to do and the Tanzanian Government delivers what it said it would do. So far both parties are doing what they promised each other. Eric implied this is the hardest task in discussions that he faces and you can hear it in the presentation. If VAT monies flow back this is a win win result for all stakeholders from later in 2023 and all parties involved contributed to that success. Investors have a choice to continue in Tanzania or go somewhere else. The challenge or test in 2022 is whether promises by all parties are going to continue being kept. Success breeds success and both sides have to believe in that principle and generate confidence and provide the showcase for tomorrow and that is what also excites young people and their ambitions and that applies across all sectors of activity. I hope my own investment here is part of that showcase. I would be really disappointed if it is not the case. Tony

No its not double the AISC. The company guided the AISC at $1250 average over the year. The company is using the cash in the bank as it processes lower grade ore with no pillar blending in H1. Half way through the year use the pillar grade at 7 g/t which is blended with the remaining lower grade ore. The mine plan from January 2023 is 3g/t as per the presentation that some of us listened to. Its everyone's choice what they choose to believe from the CEO. In the meantime doubling of rock milling which is a modest cost of the total cost is not double AISC.

$15.9M undrawn + $4.3M Vat payable being returned (outside of historical $23M under discussion) + $4M debt facility to aid cash flow. Income net of all running costs and taxes at current cash flow per month in H1 is $1.6M at 1840 gold price but lets run with just $1M to give $6M. Second half the income is above $2M to give $18M projected for Singuida. So they have around $36M if the gold price holds above $1800 an ounce, they hit targets and do not have any significant problems over running on the AISC target. Singuida expenditure remaining is well under $36M as a chunk was spent late last year and the grand total original cost was under $32M. It is a tight, but can be done. If they pull this off it would be a huge achievement and the company value would be significantly more than its current enterprise valuation. I would say two mines with 90,000 to 100,000 ounces in production is 16p-18p range with minimal debt.

Derived as unrestricted cash and the sale value of doré available for sale at the end of the Period. Liquidity of
US$15.9 m excludes US$4.3 m VAT Verified for Refund by the TRA in January 2022 and excludes US$4 undrawn on
the Company’s US$5m Stanbic working capital facility.

Company presentation under footnote 1.

It has moved in line with USA close which was around 176p.