Member Info for volmer

On re-reading Q4 results, one very important point was made. The gold recovery rate for Q4 2020 increased to 79.8%, a record high. But that’s not the point.

The feasibility study contained a recovery rate of 91.9%, which is the basis on which the mine was designed to operate.

At 91.9%, gold poured in Q4 would have been 22,925 oz whereas the actual gold poured was 19,907 oz. This is an additional 3,018 oz of gold for just the one quarter.

Assuming Q4 production levels, at 91.9% annual gold poured is 91,716 oz. This must be what the company is targeting and what we should look forward to.

If my understanding is correct, there is no addition cash cost to achieving 91.9% recovery. It flows straight through to the bottom line. It appears that plant improvements have already been made. Yearly production of 91,716 oz and gold at $1,900 produces an additional cash flow of $22.9m.

This gets better and better .

Neil, on 8th September RNS wording says · "There will be no set fixed principal and interest repayment schedule and there will be no requirement to repay any New Mezzanine Facility interest or principal until such time as the New Senior Facility is paid in full." I read "no requirement" as meaning that it is an option to pay interest if the company so wants. Given the interest rate it makes sense to make the payments.

Neil, good point about the mezz interest but the company has the option, but not the requirement, to pay Mezz interest. I will see if I can find out what has been paid.

Debt repayments will be paid out of future earnings that should show the progress intimated in the Q4 report. I will send you a copy of the updated model that illustrates future results and you can change the assumptions as you like.

CarefreeCarry, the Mezzanine Facility will convert into senior debt at 7% interest once the current senior debt is repaid. It will not be long with these results. We will probably be debt free in 2023.

I'm sure we cannot find another gold producer with the exciting prospects of Metals Exploration.

Phil, once the market realises this is a potential 8 bagger with a target price of 16p, it should move sharply higher . After all it's not blue sky exploration but a gold producer! It will probably be able to afford a dividend in 2023 equal to the current market capitalisation of £43m.

The results must be better than anyone could have expected.

Management have made tremendous achievements and some very important points.

“Whilst also looking to continue to build on this operational performance at Runruno for 2021 and beyond.”

This is a really good indication that further improvements are to come. Remember the mine is designed to produce 100,000 oz of gold annually. Indications are that we are heading towards this in 2021.

“Since the end of the quarter a further senior debt repayment of US$7.3 million has been made.

Should the Company generate sufficient cash resources, the Board may decide to make additional early repayments to minimise interest payments, in line with the terms of the restructured debt facilities.”

I had not expected early debt repayments.

This suggests:
1. gold production is going to be higher in 2021
2. cash flow is exceeding expectations
3. capital spending is going to be lower in 2021 now that the catch up in maintenance and plant improvement has been largely completed.
4. debt could be repaid during the next 2/3 years, subject to the gold price.

“Delays in the resettlement of the illegal miners have affected the 2021 head grade with high grade material from Stage 3 being pushed to the 2022 mining schedule.

The Company expects to have this access road completed during Q1 2021 and access to the higher grade ore by end Q4 2021.”

This indicates:
1. gold production could reach mine design of 100,000 oz in 2022.
2. cost of gold production will fall further to increase profits and cash flow. Cash cost of production in the feasibility study was $520.
3. debt could well be repaid quicker than we thought.

All very good news and a gold mining company excellently placed to benefit from any further increases in the gold price. Every $100 increase in the gold price should increase the share price by 1.5p.

For 2021 I’m looking for 88,000 oz gold production, an average gold price of $2000, cash cost of production down from $743 to $600. All this gives a present day share price (discounting future cash flows back to present day values) of 13p or 21p if you add in exploration potential.

Phil, like you I expect Q4 results in the next two weeks. DB runs a very efficient operation and now that the refinancing is behind us there are no distractions. We will see.

Good news about the website. Let's hope we see brokers research and some presentations/interviews as well this quarter.

By the way, I had my model reviewed by a geologist who incorporated a few improvements (if you want a copy let me know). These are extra costs but even so with gold at $1900, 80K gold production and $900 cash cost I still get a cautious NPV per share of 6p/8p depending on the discount %. Let's hope any brokers research reaches a similar conclusion.

Some chunky sells yesterday ahead of what is likely to be one the best quarterly results so far! The company has spent capex on the plant to raise productivity in Q3 and Q4, so I'm looking for higher gold output and falling cost of production.

QueensLandWinner, I can't see the drawdown facility being used if the current drilling continues to produce successful results. The reason being the conversion prices range from 1.45p to 1.85p. Upon success the company will find it fairly easy to make a placing at a much higher share price than 1.85p to fund further drilling.

Sorry for duplication - the first attempt didn't show up on my computer.

Turner Pope's excellent research note says

"Industry analysis suggests the global cruise line industry provides services to c.32m passengers annually with 1.1m full time employees. Based on onboard utilisation of both Microtox PD and Microtox BT and assuming one daily breath test for each individual (priced at £4.per test) plus five installed Microtox PD units installed on each ship for 24/7 monitoring, Deepverge calculates a prospective annual market opportunity equivalent to £2.6 billion. "

In the Daily Telegraph today it says that Carnival are to launch the full fleet by 2022. It puts this down to vaccines being rolled out worldwide and the development of low-cost testing that would influence the pace of recovery.

I wonder what part of the $2.6 billion will accrue to Deep Verge!

In Turner Pope's research note they commented

"Industry analysis suggests the global cruise line industry provides services to c.32m passengers annually with 1.1m full time employees. Based on onboard utilisation of both Microtox PD and Microtox BT and assuming one daily breath test for each individual (priced at £4 per test) plus five installed Microtox PD units installed on each ship for 24/7 monitoring, Deepverge calculates a prospective annual market opportunity equivalent to £2.6 billion."

DVRG's progress is confirmed today in The Telegraph. It says it expects to have all his ships back in action by the end of 2021, as vaccines rollout worldwide. It said the development of low-cost testing and vaccine distribution would influence the pace of recovery.

It looks to me that DVRG's plans for the cruise industry are coming to fruition in 2021. I wonder what part of the $2.6 billion will accrue to Deep Verge.

aprogerson, my son has recently opened an ii SIPP. Charges are £9.99 per month.

Looks like someone has tipped this today.

David and GB, thanks for the explanations. The issues surrounding the virus are complex and not easy to understand. With all that countries and people have gone through in 2020 continuing into 2021, I would be surprised if we are prepared to rely just on vaccinations going forwards. We have all been imbued with a sense of fear/caution of this virus. I suspect this caution will remain for some time, especially with the older generation and people who have been exposed to the virus at the front line.

I wonder when I will be able to put in my order for the Microtox BT Breathalyser!

Yesterday I had a text message from my GP that my vaccination will take place by 15th February, in Dorking and it will be the Pfizer one. Excellent, now I can continue with the lockdown safe in the knowledge I will be vaccinated soon and be free to resume life as usual. Or can I?

It appears that the Pfizer one-jab has approx. 80% efficacy. What does that mean? Will we stand a 20% chance of catching the virus if we mix with virus carriers? Will 1 in 5 people vaccinated catch the virus if exposed to it? For the AstraZeneca one-jab the efficacy is approx. 60% it seems.

This is my understanding. Please correct me if I am wrong.

If correct then, after prolonged safety measures, should we carry on with life as normal? Should we go to eat in pubs, to theatres/cinemas, universities, workplaces, sports events, on trains, planes and in hotels, ships as before?

Do we want to bet on the odds of 80% respectively 60% chance of not catching the virus? Or do we need greater security?

The obvious answer is we do need greater security. We want to know the pub, plane, hotel, ship, football stadium, hospital guarantees to us it is virus free.

My understanding is that vaccinations are essential but not a 100% solution to eradicating the virus and for us to become virus free.

Therefore, unless I am wrong, testing along the lines of the Microtx BT Breathalyser System is essential. Either that system or something similar.

Agree with all of that - but I think Rincon could do 5-10 bags long before GUN.. Someone said they could not buy Aussie shares via HL. I don't know if its true.

Slipperyslip, yes I held GUN in an ISA and used the proceeds to buy Rincon in the same ISA. I took the view in early December that my main interest in buying GUN was Rincon. Once the allocation of the placing showed that GUN help 16.5% and Rincon was then available to buy, it made sense to me to transfer into Rincon to get 100% exposure.

IMO Rincon is so undervalued - it's under the radar in Australia, not really followed in the UK except here, has so much successful drilling history for South Telfer and is cashed up for two years with a very clear drilling/exploration plan. So much to like about it. All for £12m.

Destiny continues to be under the radar of investors and the market. Today's announcement relates to the XF-73 drug, initially being developed for the prevention of post-surgical infections, such as MRSA. which cause significant complications and increased healthcare costs in the hospital setting.

Phase 2 B is now fully recruited and results are expected this quarter.

XF-73 has achieved FastTrack status awarded by the FDA. Quite an achievement when you look at companies with great drugs that have not achieved this status. It is well known that infections are becoming resistant to antibiotics and that a new form of combatting infections is needed.

There is also a significant commercial opportunity for XF-73 in the hospital setting which we estimate could generate peak annual product sales of $1 billion in the US alone.

We had a discussion a while ago about how to buy Rincon through a UK broker and I commented on ii as it is one of the brokers I use. A number of posters have an account with HL and said they do not allow Aussie trades. I have just finished moving my entire GUN holding into Rincon with the last final purchase being made through ii. The transaction was easy and worked perfectly. My main reason for buying GUN in the first place was due to Rincon and it seemed better to me to hold 100% of Rincon rather than 16.5% through GUN.