Member Info for Tornadotony

https://www.longtermtrends.net/m2-money-supply-vs-inflation/

USA Domestic credit grew by 15.6% from September 2019 to September 2020. The M2 January 2021 growth was up to 25.8%. The USA is in a place it has never been in a before as Confucius says "we live in interesting times".

I think its going up.

We are into ISA end of year buying for those who have exhausted capital gains tax and will have a new tax year buying wave 6 April. I dare say a few shares of Synairgen will be snapped up soon. I am sure somewhere here will have a heading Buy synairgen for their ISA.

I sold off at 150p ish the other day so that i can start putting into ISAs. I may not be alone with such moves. I will have a chance to add a top ISA in April as well. Will continue to add especially if AAZ pulls back further.

Needs to correct back to 167p. Otherwise we heading for an opportunity to buy cheap Synairgen shares.

My ISA opened this morning so copied my other half.

I just bought pensana into my new stocks and shares ISA at 151.2. Its just over half the profits I made a month ago and is a free carry. I have changed my plans from retiring on investing as I just do not believe the inflation is controlled story and suspect everybody will move out of cash in the next few months. Additionally the markets are all go to crash event has so far not materialised and some sectors appear to be safe like this one. If it drops back I can easily add more to average the buy. I suspect a lot of ISA buys may happen in the coming two weeks. I will try not irritate the board so likely to be a rather silent holder from now on. Tony

Noel what is perhaps more helpful here is that 9.25p Shanta stock price would require gold below $1505. At 11.75p buy for Shanta the gold price is $1607 per ounce. The miners are well advanced on their drop on what happens to gold price. As I mentioned before gold is cheap at $1470 in that it buys less hard assets than it could in 2018.

The one year chart of Shanta versus Polymetal International starts and finishes in the exact same place up to the close yesterday.

I sold out of AAZ at 149p last week in case this happens as I had 2k profit on it. It recouped my last 2 buys at 12.50p and 14p so as not to get more overweight on the sector overall.

The following is how I view the buying power of gold in terms of its spending power and it has given up 68% of its overpriced increased value of August 2020. At $1470 all of its value is given up and gold then buys what it did in August 2018. The reality is that new inflation is building and needs to be added back on to that base price. A 3% inflation rate over two years gives gold a base average value of $1560 per ounce as its long term average. Gold expensive range as in 2011, 2013 and 2020 becomes $2700 gold price. What is complete garbage are papers saying gold will have less buying power then it had in 2008. If it were to happen everyone would go out and buy gold as it would be incredibly cheap. The equivalent bear market bottom of December 2015 is now at $1400 gold.

At some point this will turn as gold becomes cheap in comparison to other hard assets.

The entire pharmaceutical sector dropped about 2% yesterday and Synairgen is just moving along the same path as all of the sector in which it operates. As the sector gets a bounce up, so will Synairgen share price and if the whole sector takes a hit, the same happens here. Its not company specific and all the babies are in the same bath water.

Furthermore they acquired the Kenya asset that has access to water resources from a proper river 4km away and has paved roads. The asset has audited losses of nearly $15M that cover the purchase price and are off set once the mine comes into operation and derives a profit. They have bought more than a useful asset because of gold ounces, they bought a good location as well. The IRR changes dramatically if the company drill results convert to 750,000 ounces in reserves and they still have 1.5M ounces in resources. The IRR based on $1700 can be reduced $1450. If further resource ounces are discovered that IRR drops to a $1300 project. The only reason why its $1700 at the start is that it needs all those drill results to infill. Hence why its 2 years down the road.

If we assumed Luika has 380,000 reserves ounces to mine out and only 600,000 ounces are converted to resources within the constraints of AISC data. The return generated at $1300 gold price after all taxes is $196M or £140M over 10 years. This would give a share price of 9.5p minima for this operation alone, giving no value for Singida and Kenya West. It assumes current cash wipes out all existing debt. This assumes £11M as a minima earned each year after tax and the company does not get its VAT refunded from the past overpayment.

If we assumed they sold the Kenya asset for $10M as a write off fire sale the share price hits 10p.
If we assume Singida was well below $1500 gold price on a much lower IRR rate The share price is 12.5 minima.
This assumes no effort to convert Singida resources into reserves and just write off all its resource value. If it was converted on an AISC rate of $1200 per ounce and profit net was just $50 per ounce on 600,000 ounces , the added value is just 2p more per share to give 14.5p. These are incredibly pessimistic figures and do any of us really think $1350 gold is coming back. If it did I can imagine the demand for physical gold would be astronomically huge.

The company has given very high IRRs for Singida and West Kenya assets but they have also scaled them back to give lower figures if gold was in a bear market. Those high IRRs give 30-40p share prices. 20p share prices would be hit at $1500 gold IRRs. I do understand lower calls on sentiment, but the bottom line is the real cash flow generated. In Q1 the average gold price sold is likely to hold $1785 per ounce. If the company was making net profit at $300 per ounce on 18,000 ounces they would have added $5.4M on the bottom line £3.8M or around 0.35p increased net value per share. They will of course pay a third of it on divi and the remainder towards debt repayments. The current share price on Shanta has gold somewhere between $1475-$1500. The share price is seriously smashed up here on fire sale estimates.

Woodfromtrees

Wrong they are not taxing at 75%. Look at Centamin they do 50/50 profit share and do not pay cooperation tax. Look at AAZ with a combination of tax and free carry and its 50%. try and do some research. (As always the case is untrue.)

On the link attached.

Change the annual Synairgen chart to just 1 month.
Then go to the add comparison tab, scroll to sectors and click on pharmaceutical.
You will then see how Synairgen is moving above and below the norm of its entire sector.
https://www.hl.co.uk/shares/shares-search-results/s/synairgen-ord-gbp-0.01/share-charts

Woodfromthe trees

We have dealt with this issue several times. It says in play English in the RNS what the arrangement was for Barrick Gold on a 50/50 arrangement overall from annual profits. If you could bother to look at Shanta accounts you will find they paid 48% tax on profits plus Royalties. So in essence its the same as the arrangement Barrick Gold has and is already in place. On top of that the Government owes Shanta $26M in overpaid tax. How many times does this same message need to be written on this Board.

Unlike previous time periods, Synairgen has now started to track closely with the Pharmaceutical sector over the last 4 weeks. The chart pattern is just an observation and it will be interesting to see if this weekly pattern persists. The correlation dovetails either above or below the pharmaceutical sector chart and it corrects from being below to going slightly above and vice versa. This influence is probably caused by ETF buying and selling of the pharmaceutical sector with similar trades then executed on Synairgen 24 hours or so later.

All the gains against USD lost for 2021 back to 4 Jan levels. Against Euro we are back to late February. I suspect it was the partly wage inflation print yesterday. A headwind for CEY is disappearing at least.

Slow stochastics on the daily is on zero and its heavily oversold. Either they follow it through with more selling or this goes back up very sharply.

The company share price was worth 18.3p on a gold price of $1850. At $1740 with an AISC of $1150 that is plus $590. The margin drops 16% or so that could explain a drop to 15.4p. Instead we have drill results suggesting 500,000 resource ounces of gold that would normally increase value by say a penny yet the devaluation to date is over 33%.

At 16.5p last year which was part of a 25% share dilution in having $35M cash arose at a time when the realised gold price sold was $1495 although costs were $150 lower. No matter how you dice all this, the valuation of Shanta makes no sense at all. Its absurd how cheap this share is based upon its own development and earnings related history. Its like saying they have found more gold , they are getting 10% increase margin over cost, but the share is devalued.