Stephan Bernstein, CEO of GreenRoc, details the PFS results for the new graphite processing plant. Watch the video here.
Appreciate we're in a conspiratorial mood now, but aren't there at least some things that suggest the company is being run sincerely if poorly? And absent de-listing, isn't everything else is survivable?
One big thing, I would have thought, is directors converting fees to shares, which four of them did in October. The price was 5.9p then, so they're all sitting on a pretty big loss. Unless they're getting shafted too, or there's a longer game I don't see?
And a small thing – why launch a new website?
On the other side, is it not possible that this is a small company being run on a shoestring, with low free float and low liquidity, and sure enough, they've mismanaged a number of things and seen the SP plummet with not much to catch it? That makes as much sense to me, and doesn't involve any conspiracy.
Sounds like a fair summary, Wasa. Need to increase profitability/productivity, and convince investors of the potential again. That’s why I feel positive about the latest news. As someone said previously, the company is currently priced as though it’s expected to fail. But I don’t believe that at all. And with £2.4m added, the money is there to improve recovery and increase resource, and thus to directly increase profitability.
When I was buying this at 9p before they even had a permit, and then higher, I remember wishing I knew about it when it was 3p. Well, here’s my chance.
Good to see some buying today. I bought a bit at 3p and would top up (i.e. average down) more if I had the cash.
This share's been a real education, but the RNS and the subsequent drop did crystallise it for me. Basically, if you've been holding on this long, you're in it the for the long run. And if you know you're here for the long run, it starts to look a bit different – and weirdly, even starts to feel better, especially if you're buying.
You step back and look at it with new eyes, like someone fresh to it. And maybe you see it as a share that's been battered by sentiment and a lack of communication. But maybe you also see a producing mine in a rising gold market, that would have been profitable if not for a theft, that's improving recoveries, that has supportive investors and a lot of privately held shares, that's drilling to expand the resource – potentially transformationally.
Sure, maybe it still feels like a punt. But you're more likely to kick it a mile from a 15M market cap and 3p.
So yeah, buying again. Because we're long term here. Remember the optimistic days when we used to think about dividends? Just for fun, do it again. We know dividends are a priority for the management. And with less than 500M shares in issue, it would take less than £5M to pay a 1p dividend. So close your eyes, say a little prayer, and imagine just £5m paying you 1p on a 3p share...
DJ, what’s your basis for they can’t extract the gold economically? The last AISC I remember seeing was something like $1200. So still a 50% margin at current prices.
They would have made a profit in the last accounts if it weren’t for the theft.
Disappointing to see this touch the 4s – we've all been hanging on so grimly! All the usual stuff applies: the company's never been good at comms, never bothered much with PIs, and we're here to ride the coat tails of their considerable personal positions and self interest. Same same.
But on a positive note: gold back over 1800. So check that instead of this.
Three things, because I'm in a good mood:
1. Sellers seem to be gone.
2. Gold price looks to be recovering slightly, while diesel is on its way down. I'm watching these in particular, as both have an immediate impact on costs and profits.
3. While it feels like we're in for a slow period of Homase news, there's always Akrokeri, and drilling results could drop and wake this right up again. More than one iron in the fire here.
I'm far from the most experienced investor here, CBAx. But I'll tell you what I tell myself.
For me, it's about separating all the things currently affecting the share price from the long-term view. No doubt there have been setbacks: delays, low initial recovery rates, the theft. But I think the macro picture plays a large part too: if you bought almost anything with the last six months, you'd be down 20-30%. Add in the AIM factor and money moving out of riskier equities, and it seems obvious that GRL has been hit by factors way beyond its control.
Set against that: Although the forecast was recently revised down and costs up, if they hit those numbers, the company still makes something like $7M in profit this year. GRL has very little debt, all of which (I think) is held by its largest shareholder. So no issue if they need/want to extend repayments. And the chairman saw enough value at 6.55 that he chose to convert the loan his company made to GRL into shares. He could see how much potential upside he was buying at that price. In effect, he made another direct investment in the company.
Finally: they're expanding Homase and drilling at Akrokeri, both of which add huge potential upside to the current production profile. And while the small number of shares in issue does lead to low liquidity and sharper falls, when this share heads upward, it really flies.
It's been hard going lately, no doubt about it. But I see enough in the setbacks that's either temporary or external, and enough in the future that feels fundamental and transformational, that I'm okay to watch (occasionally through my fingers) and let them get on with the job.
I think that's a bit selective. (You may be right, but there's enough pessimism round here.)
The comment about extending the loan repayments (with interesting rising from 14% to 17%) is specifically related to potential risks IF there are further delays or problems. Not saying there won't be, but it's worth having the full quote:
"The Group is now generating revenues from commercial production. The financial models and projections prepared by the Board in order to monitor cash flow demonstrate that the Group is a viable going concern. However, if there are further delays or problems encountered with production, the ability to meet the repayment schedule of the Gold Loan would be at risk. The Board believes the flexibility and support afforded to the Group by AIMS to date demonstrates that, if required, this would be forthcoming. AIMS have confirmed their intention to continue to support the Group by agreeing to further extensions of the payment plan, however the interest rate would revert back to the default rate of 17% from September 2022."
Feels like an ‘operational matter’ could be anything from a cave-in at Akrokeri to a takeover bid. Just glad it’s not an operational ‘issue’.
Very glad they took the opportunity to tell us they’re still pulling gold out of the ground at Homase.