Member Info for ViciousHippo

Everything appears to be going to plan. It seems to me from this and interviews with management, that Serabi is aiming to run itself to the standards of a major producer. You got to act like the company you want to become. If they achieve a good reputation within the Brazilian government and indigenous community for the thoughtful way they have approached the indigenous concerns, I sense their plan is to prove themselves a premiere Brazilian expert mine development team. With the cash being generated by Serabi, I should think they will look to make some acquisitions of partly developed mines (like Coringa) and grow into a better size, before a buyout by a major sometime down the line and cashing in a healthy profit on their shares.

These are my thoughts based on what I have read/ heard.

Achieving 200k in the next few years would be through an acquisition or merger. No debt and lots of cash opens up options.

That isn't growing in real terms. After inflation revenue is completely flat! Its pretty pathetic compared to many low cost retailers. THG have some real work to do to turn this mish mash of businesses they cobbled together with overly generous investor capital into a world class business. But at least they seemed to have stopped the rot. This should be on the up from here but it's no world beater yet. Ingenuity is just a start up still after all this time with no indications of exponential growth. Which is a shame. That was always the interesting bit and it's not shining

My calculations suggest profit with gold at $2300 to be £23m per year. Market cap is £44m = 2 years of profit. If you bought the whole business for £44m, invested nothing more and just run it off based on the existing licenses alone, you could most likely get something north of £70m of profits over 3-4 years. That's £25m straight in your pocket close to guaranteed for doing nothing. That is a very unusual situation.

£1850 for 2023. I cannot remember where that came from, I think it is in one of their statements. Or I made a conservative guess.

@MrBond - My calculations came up with £9.3m, so very similar to you

The ore sorter at Coringa will significantly increase processing capacity and reduce transportation costs. If gold continues to go up to the target of $2700 by the end of the year mentioned by GS, 2025 should be a stonking year. When the full Coringa license finally comes through, this discount on the stock will disappear. We'll see how it all turns out, but great to see a little miner like this flourish.

No mine producing Bushy? There are two mines already producing. The Vale venture was for copper. Not related to the two existing mines

My numbers are based on low end of expectations for the two existing mines

Your clown face was rude and unnecessary

I never said the share is worth £2. What I said is that my DCF calculation showed £2 based on current production. However we must discount the £2 as the Coringa license is for 3 years, and there is always a possibility it will not be renewed after that time. Against that however is that the gold price keeps racing ahead.

The DCF calculation assumed the following;

2023 33k oz @$1850 with mining cost of $1253 and overheads of $650k

2024 38koz @$2150 with mining cost of $1328 and overheads of $680k

2025 43koz @2300 with mining cost of £1408 and overheads of $716k

2026 50koz@2400 with mining cost of $1492 and overheads of $752k

Terminal value calculated FCF at a discount rate of 12% and multiplier of 6X.

My DCF calculation with current production and gold price says £2, so I dont understand the statement that SRB is overpriced.

How did you calculate that?

10,000k oz? That's quite a lot.

Whilst we are all used to THG tanking and then tanking some more, this time I am not too concerned. The results are OK. They are stabilising the business. It's not growing, but it will survive, and with the costly benefit of billions spent on automation, it should be a good little business. The current share price is there or thereabouts for a retail business. It is low based on the turnover, but having said that, turnover is in decline, especially in real terms (call it 6% on the ongoing business). For a business that is supposed to be in a recession resistant marketplace and is low cost and therefore could even benefit from a recessionary environment this is dissapointing. Nonetheless, the wobbly ship seems to be stabilising and I am sure it will do just fine going forward.

But looking back, the reason so many investors are so angry is that the IPO valued the business at £6. What exactly were they thinking? Perhaps the regulators should make them apologise...

Dunno I agree with this. The positive free cashflow suggests to me they are starting to manage the business properly. However a nominal 8.4% decline in revenue is a real decline of around 12%. 2023 was a mild slowdown in UK but strong economy in the US, and therefore this is a declining company. The question is why and can they turn that around.

To summarise the RNS - Matilda drilling so far hasnt really uncovered any copper worthwhile for Vale. There is a little gold in the area, but it's mostly not significant, notwithstanding the 18.46 g/t in one area. The news therefore is there is not going to be a significant upside on a copper partnership with Vale, but that was never priced into the shares anyway.

This RNS is neutral for existing Palito and Coringa, which remain undervalued at the current share price...

Cash will be negatively affected by the ore sorter for coringa. If I recall it was around $15m I may wrong. Nonetheless, this is a good investment and shouldn't be a negative

I'm going to wager 80p this week!

It will be interesting to see what the market makers decide to do on results day. Send it up 20% or send it down 20%...

Either way it ends up at £1+ before the end of the year I believe

Seems to be the AIM way. AIM needs some proper regulation. It's the wild west.

As far as I can tell, they should have enough cash to pay the 27m. I may be wrong. However, the numbers I come up withh are;

Cash at year end 7m, includes 5m from placement

Placement cash remainder 22m

Total cash at start of year = 29m

Then in theory they will have made some sort of positive cashflow in Q1, guessing 5m, so they should be sitting on cash of around 34m.

So I am hopeful it's not curtains.