Member Info for volmer

asilad, I did think about the debt but concluded that a low PE of 5 reflects that. If the mine has a current life of 7/8 years , 2 years profit would more or less replay the debt.

Let's wait until the refinancing is finished to see the actual level of debt. Then a valuation of 7p per share might turn out to be conservative.

Then we also need to wait for results of drilling on the remaining acreage to see what the mine life actually is. We may find a PE of 5 is too low!

Roy, it's over 12m.

Can't understand this. If I had any more cash I would be going even more overweight by buying more shares. This is a no brainer.

I'm looking at 90,000 oz gold production in 2020, a cash cost max $875, an average gold price of $1500 for a net cash flow for the company of $45m/$50m before interest and tax. The current market cap is £32m or $41m

This company is valued at less than current year projected profits! It reasonable to put the company post tax profits on a PE of 5, which is £150m or around 7p per share.

Great news. On time. No price movement. suhailm3471, you must be right something is holding the price back. But why should market makers hold the price back to fill a large buy order?

Spencer, I totally agree. The thing is it's worth trying to buy shares at the lowest possible price in order to hold and get the best returns. Also, timing is important so as not to have too much dead money in a portfolio, money that is unlikely to earn returns until a later date. Rightly or wrongly I have taken the view that 2021 will give opportunities to buy PLX prior to FDA approval in Q3 2021. I may well buy before that date if the market offers me a price I cannot refuse. My other consideration was that market/trade/currency risks could well derail a buy and hold approach.

lee, the interest per oz of gold sold is interesting.

In the last RNS Darren Bowden said "These negotiations can be concluded swiftly, such that the Company's financial position becomes sustainable; allowing management to focus its efforts on improving operational performance at Runruno and to consider growth options for the Company."

To me this says three things. 2020 gold production will be nearing nameplate production of 100,000oz pa. Total debt level will be lower than $125m currently.
He has another project in mind to grow the company's gold production and share price.

Am I reading something that is not there? As none of this is in the share price, imo.

Sold out yesterday as planned but I would have been better off selling ahead of the news. Switched to add at MTL.

I am a long term fan of Polarean but the company does need to raise more funds as its cash is probably around $2m to $3m now. There was always the risk that the company would seek to raise cash on the back of an expected higher share price following the trials result.

In any case, if cash is sufficient for the time being, the FDA submission is due in Q3 2020 and the FDA decision is due in Q3 2021. Plenty of time here.

lee, we may never know the terms that the two major shareholders have paid to buy the banks debt.

What we will certainly know are the terms of the refinancing package for the company, i.e. the total debt that the two major shareholders have refinanced. After deducting the mezzanine debt ($56.5m) from the total debt ($125m) refinanced, we will know how much of the $68.5m bank debt is now being carried by the company.

If the two major shareholders have bought the debt below face value, then it would be quite normal and acceptable for them to gain some benefit and not to pass the entire benefit across to the company. Alternatively, they might wish to pass the purchased debt straight across to the company and seek their reward through some other means. Either would be completely acceptable to me as a shareholder.

DJ, totally agree re main shareholders. I think Darren Brown is a man of integrity and would only want to be associated with the best. He has performed outstandingly for them . They will want to keep him on side. I have little doubt about producing gold profitably. I think we may see the ASIC coming down to below $900 in 2020 and the cash cost below $800. I can't remember the original plan for costs but I seem to think they were around $700 and $600.

Three major milestones due in the next two weeks:
- Completion of the debt purchase by Candy/Edwards
- News of the refinancing of the company's debt
- Q4 2019 results

And these are for a company in just the right sector. With a global stockmarket correction overdue, major trade/currency problems and a dangerous coronavirus, sitting in a gold producer is not a bad place to be.

I am reading a lot of optimism on this bb. Yet no one is talking about the risks and why the future may not be quite as good as the many here expect.

We all know what the upside in gold production is and where the gold price stands. But why is the share price at 1.5p or so? Let’s not forget the refinancing package has yet to be concluded between the company and the two major shareholders. They did not buy the bank debt out of the kindness of their hearts. If the banks took a haircut, and they most likely did, then that might be good for the company. But our two major shareholders did this also for themselves as well. What that price is for the company we do not yet know.

I think there will be a price for shareholders but what and how I cannot guess. Also, I don’t think the price will be too costly. At least I hope not.

This may explain why the share price is 1.5p. Once the banks sign the sale of their debt and the refinancing is announced the de-risking will have moved on significantly, then we will see a truer share price and can speculate at what the future holds.

Have a look at the Corporate presentation January 2019, slide 12 and you can see what gold the company is sitting on.

http://www.metalsexploration.com/pdf/Presentation/Corporate_Presentation_Jan2019.pdf

The most important asset this company has is Darren Bowden. This extraordinary man came to MTL to achieve something and build a successful business for shareholders and for himself. He did not come to work for a private company but came to a listed one where he has a market profile and the opportunity to share in its wealth creation. No one wants to lose this man. So you can forget a takeover.

maxreturns, it is a no brainer.

The RNS says Candy/Edwards are buying the debt from the two banks. These businessmen are two very successful money making machines. They will not have bought the debt at face value. So they will either keep the debt or sell it on. Either way I expect the company's renegotiated debt package, including their mezzanine finance, to be substantially less than the previous total of $125m. For example, if it ends up as $90m, that effectively transfers past debt into shareholders funds of $35m or £27m or 1.3p per share. So you could see a share price increase up to 2.8p just on the restructured debt alone. Then we have to take into account reduced financial risk, good cash flow, successful gold processing and so on....

In the RNS Darren Bowden said "Negotiations with our New Lenders are well progressed. Hopefully, following the completion of the transfer of the Senior Facility, these negotiations can be concluded swiftly, such that the Company's financial position becomes sustainable". They key words here are "Company's financial position becomes sustainable". This gives further weight to a lower overall amount of debt.

He ends up by saying "allowing management to focus its efforts on improving operational performance at Runruno and to consider growth options for the Company." To me this says that he has projects in mind that will enhance the value of the company.

We have got what we have waited for. Very shortly the company will formally be on a sound financial footing, a new mine plan can be published, drilling results to extend the source ore for processing can be announced and I look forward to 100,000oz, or very close to it, production this year.

Q4 results tomorrow?

Hi Mac19, I thought yours was a very good summary. My basis for 20,000+ oz in Q4 is based on an ultimate gold recovery rate off 90% that I thought DB had said was possible. But I can't find my record of that. Last quarter gold recovery increased from 66.1% to 77.6% . Gravity and Biox recoveries were not mentioned in Q3 but were 35.4% respectively 74% in Q2 - plenty of scope here for improvement. If 90% is indeed targeted then 31.12.2020 might be a realistic date for its achievement, having seen the progress that DB has made in his first year. So I am looking for recoveries of 82% in Q4.

While the mined ore grade has been below the original mine plan from the previous management, DB has put more ore through the plant to compensate for this. I am assuming the same mined grade of 1.39oz and same ore mined of 464,000 as in Q3.

I think you are right about the gold price and costs. I thought there was some downtime in Q3 but I may be wrong on this. Like you I am expecting similar costs in Q4 but at the end of 2020 we should be much lower.

What are the estimates for Q4 gold production? I am looking for 20,000+

CV7Blue, I have seen these sort of posts we have to contend with before. The most effective way of dealing with posters like that is very, very easy. Simply ignore them. Don’t say a single word in response. They can’t stand it. They want to generate a response and discussion on their terms. By ignoring them we make the person irrelevant.

So all, please ignore such posters. We can then continue meaningful discussions.

Many thanks.

bloodninja+, on what basis do you think it will take that time period to clear the debt?

Having said a final outcome is expected during Q4 2019, DB must be quite disappointed at having been let down by one of the parties. The question is whether an refinancing update can await Q4 results or is a separate RNS is needed. It can probably wait.

If Q4 results come first then I would expect that all costs have been thrown in, including the kitchen sink, leaving a totally clean sheet for 2020. For the first time we will then see the true earnings and potential for this company.

Isn't this frustrating! But I haven't found one reason not to continue holding or to buy.

If it was a simple rescheduling of the debt it would not of taken 11 months. Darren Bowden only took 45 days from taking office to providing a rescheduling of the debt coupled with additional equity. The two major shareholders did not want to provide any additional equity. You could say some of the loans they provided went to pay interest to the banks.

This is about more than a simple debt rescheduling.