Member Info for Tornadotony

Fresnillo target range is 505p to 580p. It mainly depends on what happens to silver prices and gold holding above $2040 per ounce.

Fog

The two other elephants in the room was a 1M ounce drop in gold reserves which 610k was mined out and the remainder lost on economic to mine criteria. The second was the low level of profits post tax of $141M that was worse than in 2019.

The company has responded on the gold reserve front by undertaking more exploration and drilling to transfer resources to reserve ounces 10% budget increase. They have a $50M savings plan underway, gold prices are currently $200 an ounce on last year's sold price and hopefully silver can get pass $25 an ounce to improve on the bottom line. Tony

Fresnillo has huge in the ground value of reserves and resources. The value of in the ground material that only includes silver and gold is around $3.5B dollars. The company has debts and it has a great deal of plant and the net asset book value as confirmed by FT is around $4 Billion net. The key about Fresnillo is the silver price. If silver stabilised on a $25 floor then Fresnillo profits would move from the 2023 low to around 22% higher overall. Gold is currently lifting 4% higher and probably nullifying peso edging up and on-going inflation. The 2023 data is worse than 2019 and hence why the share price has fallen back. The next Q1 report is key for Fresnillo along with Mexico possibly making a rate cut on 26 March. Buying now is a bet that the company are making savings, discovering new reserves and that silver income is going higher in 2024.

I mentioned over the weekend how at 14p it makes it difficult for those who sold in trading accounts at 13.23 to get back in at 14p without knowing the deal price as 30 days bed and breakfast limits elapse.

Steve

We do not know if more than 3/8ths of our share holding will get taken up. This scheme makes a complete mess for ISA holders and they clearly did not consult with anybody holding Nanoco who could be at a higher price than 24p in that scenario. On second thoughts perhaps they did and decided to go out of their way to disadvantage holders in that position.

Tony

Yes steve we shall soon find out on the data point. ETFs have pulled back 2.6% putting Centamin on 103p.

Gold miner ETFs starting to sell off.

I am not sure how long it can hold daily RSI 78-80 kind of levels.

It all depends if they can take it to 24p in this tax year so that those with a CGT bill can off set a Nanoco loss against it. At 24p my partner can sell 10% of her shares and have no CGT bill. If it was 28p she would have offered the lot. Instead the whole thing suits LOAM who will sell all their shares and tank the SP and buy them back cheap. Those with small numbers of Nanoco shares are likely to throw in the towel and give up on this lot.

Cowichan,

If you can find a decent CEO let us all know. So many company CEOs are arrogant shyster used car salesperson types that I wonder if any integrity exists out there any more. I totally understand why people are giving up on equity investing. The low standard in politics and so many walks of life that the idea of someone resigning for incompetence is instead rewarded with promotion or a huge good bye bonus with generous pension plans attached. Tony

I can only buy more from Friday 15 March. If it gets near 14p it becomes risky for PIs to buy without knowing what a new offer price will be.

The only real beneficiary is LOAM. They probably have a consultancy deal for BT when he leaves the company. They found a way for most PIs to get nothing. In the end so many disincentives to investing are on-going for PIs. I will be quitting all this over the next 12 months.

Could well lift the SP this morning.

GGG

I have bought back what I had in the ISA. Since I pulled out 3 weeks ago, gold has broken through and several miners have now broken out as well like Ashanti on Friday. The pivotal case the Patels made via Saturn was that gold peaked in December. The Shanta Board agreed with that view. The forward statement they made has proven to be absolutely defunct. The bias against gold miners they made was true when they presented the documentation in December. By the end of this week or in the coming weeks that sentiment will be history and all of that argument is lost.

Once the story given in December was completely sunk it was noticeable that more funds from various sources were acquiring the Shanta stock. Saturn could not get it passed on 29th February. They waved the flag that nobody else came into buy the stock, but Saturn undermined the proposition by their media antics. Saturn also hid data that was to be disseminated as it was not favourable to their objectives. The Board at Shanta has been subservient to the bidders because they may have had no choice unless they wanted to resign without a pay off. Any judge looking at this paperwork is going to see what Saturn and the Patels are doing. If the opposition is making their voice heard or known then a better offer has to go on the table.

Saturn will argue they gave a 14.85p price as an offer they could walk away and nobody gave it. My bet is they offer the 14.85p with dividend to close it out if the institutional and legal fund holders agree it. Hence I came back in to get a better exit price on some of my SHG shares.

Do I think 13.5p goes this week. Well it certainly could if gold just keeps going up.

Tony

Apologies for the share total error . You are right and yes I now follow the logic. I will try and get my post removed.

The company cost reduction is mainly low lying fruit but it should reduce costs down by 2%. The dollar could devalue but the peso is also likely to depreciate against world currencies as well. I therefore believe the negative coming from the peso is now priced in. The company has given a 3% increase on costs for this year so the net effect is say a $20 equivalent price on gold increase over the $1940 price of last year. Fresnillo average price this year is a good 5% above the cost base and is probably 2.5% greater profitability over all of last year. This provides a floor price above 505p and assumes gold and silver average around $2070 for the year.

There is another issue and that is the increased value of all gold miners of reserves they have in the ground. None of the miners have been up graded on that basic metric for sentiment reasons. If the correct NAV value was applied Fresnillo share price would increase around 75p. This takes Fresnillo up to 580p on a sector wide corrected rating.

If the peso declined back to where it was Fresnillo costs per ounce decline to $1400 with a 40% increase in valuation gives a price of 707p without the NAV mark up and 782p with it. The same happens if gold stays at $2270 per ounce for the year and the peso is flat. I have not worked it out for silver ,but $28 per ounce and gold at $2070 may have the same impact.

The 400 handle is worth building up positions. I will keep averaging down if it allows me.

The company does a 5p dividend and the price goes down to 14p. They proceed with buying back the stock with $16M worth of buys and the shares end up at 18p in the following weeks. 75M shares are bought in treasury. Say we have 157M shares at 18p gives an enterprise value of £27M. The enterprise value before dividend was £60M. The company says it has $550k extra interest earned and has similar on other licence income coming in and another $2M works order. The share price gradually goes back to 20p. Holders de-risk either 4 or 5p depending on tax wrapper or not.

Yes troublesome.

The comment I raised was the word promised.

With the second tranche of litigation proceeds received, Nanoco will soon be able to make the promised return of capital to shareholders.

The key sentence is above.

1.Nanoco are likely to be aware that some institutional investors have legal departments. The first action open to them is to take legal action on the grounds of misrepresentation. Those institutional investors showing they have a loss caused by the company by not selling their equity earlier may seek damages in Court.

2. The FCA can be contacted and asked to investigate market misconduct and providing misleading statements in the Regulatory News Service.

3. The company could find the next AGM meeting very uncomfortable.

4. Many private and institutional investors would raise the conduct of the company through various media channels.

If Nanoco want to avoid all these issues they would honour what they said they would do. Hopefully in the coming week they will do so. Some of you asked me what would an organisation like HL might do if they heard nothing from the management and it is probably something under 4. Tony

Tony