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• A new round of quantitative easing, $700 billion in asset purchases, was changed to “unlimited”. The Fed also announced a $300 billion credit program for businesses and consumers. That was followed by a $2.3 trillion lending program announced on April 6, whereby the Fed can purchase up to $600 billion in loans, buy downgraded corporate bonds, and purchase $500 billion in bonds from state and municipal governments.
• The unfettered printing of fiat currency by the global Central Banks is gathering pace with each passing week.
Thus, disregard the ‘head fakes’ (MM antics), that will undoubtedly be popping-up as the City boys run thin on stock (small free float), and go LONG.
Howard Stanley Marks, the serial value investor and founder of the multibillion, wealth management firm Oaktree Capital Management, once opined that:
"All intelligent investing is value investing — acquiring an asset for less than its value means seeing what everyone else sees and thinking what no one else thinks."
ATB and stay safe.
.
Another good post:
marketanalyst117 Jun '20 - 10:18 - 4316 of 4340
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In my last post, I cautioned private investors not to fall for the 'head fakes'. Well, today, some of them did and, consequently, lost their shirts at 3.75p.
And within a span of 15 minutes, the price had moved from 3.8p to 4.3p, with the City boys flushing out all the weak holders to get their hands on limited GRL stock; classic text book antics that work over and over again, and that repeatedly suck-in gullible punters.
So, for those new to GRL, here's a recap (of my previous post) of what's at stake:
The company’s current market cap is £10.50m (4.2pence per share). Allowing for cash and cash equivalents of £3.5m (does not include the £2.1m gold loan available for drawdown before June 30, 2020), the market appears to be valuing the company’s flagship asset, the Akrokeri-Homase Gold Project (AKHGP), at £7m.
Think about that for a moment...
£7m, against a current post-tax NPV of £23m (at US$1,735/oz gold price), is simply ridiculous!
But it gets worse…
The £7m valuation assigns ZERO value to the asset’s significant post code; AKHGP lies 7 miles along strike from AngloGold Ashanti’s Obuasi Mine which is targeting 350,000 ounces of gold production in 2020.
The £7m valuation assigns ZERO value to Paracale Gold and BCM’s presence on the BOD. PG and BCM are globally renowned, hardened, and highly respected gold investors who collectively own 48.2% of the company.
Finally, the £7m valuation assigns ZERO value to the fast approaching inflection point – gold production. Remember, Ghana's EPA is due to issue the Environmental Permit imminently. The issuance of the EP will then trigger the immediate commencement of mining operations. So gold production (and subsequently cash flow) is likely to commence next month.
Thus, the shares, which currently represent an extraordinary market anomaly, should be trading at 12pence per share (fair value) ahead of any production news.
However, that being said, and valuing the company on a DCF (Discounted Cash Flow) model once cash flow commences, throws up significantly higher values.
In the meantime, all the factors for a $2,000-plus gold price are firmly in place:
• Global GDP is anticipated to slide 3% this year; triple the slowdown in economic activity during the Great Recession.
• The US national debt in November surpassed $23 trillion. Gold rises proportionally to debt.
• The debt piles of countries across the world are rising fast as they wrangle the coronavirus. A second wave now appears a real possibility.
• The US budget deficit this year is expected to reach nearly $4 trillion, after Congress pumped about $2.5 trillion into the economy to stem the bleeding from coronavirus lockdowns.
• A yield curve inversion, when short-term yields push higher than long-term yields, is a predictable recession indicator. On March 9 the entire US yield curve fell below 1% for the first time ever.
Some good posts on ADFVN and no trolls.
marketanalyst113 Jun '20 - 21:37 - 4280 of 4283
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Trader536, you’re absolutely right; the chart looks incredible.
But that aside, the company’s staggering fundamentals should trigger the market to re-rate the shares sooner, rather than later, as the stock is profoundly mispriced.
I mean, take a look at the company’s current market cap of £11.25m (4.5pence per share); allowing for cash and cash equivalents of £3.5m (does not include the £2.1m gold loan available for drawdown before June 30, 2020), the market appears to be valuing the company’s flagship asset, the Akrokeri-Homase Gold Project (AKHGP), at £7.75m.
Seriously?
£7.75m, against a post-tax NPV of £23.3m (at US$1,750/oz gold price which was hit yesterday…), is nothing short of vacuous nonsense.
But it gets worse…
The £7.75m valuation assigns ZERO value to the asset’s significant post code; AKHGP lies 12km along strike from AngloGold Ashanti’s Obuasi Mine; boasting a total endowment 70Moz Au (historic and current); assigns ZERO value to Paracale Gold and BCM’s presence on the BOD – who are hardened, and highly respected, gold investors, and who collectively own 48.2% of the company; and, finally, it assigns ZERO value to the fast approaching inflection point – gold production.
Yes, feel free to bark the unsavoury but apt remark, “What the ….!”
And so you should.
The shares, which currently represent an extraordinary market anomaly, should be trading at 12pence per share (fair value) ahead of any production news.
In the meantime, all the bullish factors for a $2,000-plus gold price are firmly in place:
• Global GDP is anticipated to slide 3% this year; triple the slowdown in economic activity during the Great Recession.
• The US national debt in November surpassed $23 trillion. Gold rises proportionally to debt.
• The debt piles of countries across the world are rising fast as they wrangle the coronavirus.
• The US budget deficit this year is expected to reach nearly $4 trillion, after Congress pumped about $2.5 trillion into the economy to stem the bleeding from coronavirus lockdowns.
• A yield curve inversion, when short-term yields push higher than long-term yields, is a predictable recession indicator. On March 9 the entire US yield curve fell below 1% for the first time ever.
• A new round of quantitative easing, $700 billion in asset purchases, was changed to “unlimited”. The Fed also announced a $300 billion credit program for businesses and consumers. That was followed by a $2.3 trillion lending program announced on April 6, whereby the Fed can purchase up to $600 billion in loans, buy downgraded corporate bonds, and purchase $500 billion in bonds from state and municipal governments.
• The unfettered printing of fiat currency by the global Central Banks is gathering pace with each passing week.
Thus, disregard the ‘head fakes’ (MM antics), that will undoubtedly be popping-up as
Who are interested investing here not time wasters:
Good post on the ADVFN poster:
marketanalyst111 Jun '20 - 17:27 - 4244 of 4262
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Private investors would be wise to note the following about Goldstone Resources:
• Formally awarded a 10yr mining lease on the Akrokeri and Homase Licences on the 14 February 2020 by the Government of Ghana. Both licences are situated in the Ashanti Gold Belt, Ghana.
• The asset boasts a gold recovery rate of 87.5% and an IRR of 143% (at a gold price of US$1,300).
• The asset boasted a Net Present Value of £14.9m (at a gold price of US$1,300 per ounce) on September 2019. However, at the current gold price of $1,700, the asset boasts an NPV of £19.37m.
• The company raised £3.4 million on 16 March 2020 from sophisticated investors to finance the advancement of its Akrokeri-Homase Gold Project (AHGP) into production.
• The company withdrew £235,000 from its £2.35m Asian Investment Management Services gold loan. Drawdown period extended to June 30, 2020 should they need the remaining £2.1m.
• Heavy weight gold investors Paracale Gold and BCM Investments took part in the bond issue.
• The company confirmed, on 30 April 2020, that it was on track for gold production in H2 2020 at its AHGP asset.
So, with a current market cap of £11.75m (4.7pence per share), and less cash of £3.5m, means the market is valuing the company’s Akrokeri-Homase Gold asset at a paltry £8.25m. Compare this to the asset’s current value of £19.37m.
Thus, a base valuation of 12pence per share (or a £29.3m market cap), that factors-in the current NPV of AHGP alongside the company’s cash balances seems eminently sensible.
But here’s the real kicker;
Valuing the company on a DCF (Discounted Cash Flow) model throws up significantly higher values, especially considering that the company is only a couple of months away from production; implying an extraordinary upside on the stock, and underpinned by a waning global economy that is accelerating the unfettered printing of fiat currency, and which will gradually lead to a $2,000-plus gold price.
Thus, take cue from the shrewd money taking LONG positions in the stock today.
Https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00-b741efd5af67
Good post on the ADVFN board poster:
marketanalyst111 Jun '20 - 17:27 - 4244 of 4262
0 2 0
Private investors would be wise to note the following about Goldstone Resources:
• Formally awarded a 10yr mining lease on the Akrokeri and Homase Licences on the 14 February 2020 by the Government of Ghana. Both licences are situated in the Ashanti Gold Belt, Ghana.
• The asset boasts a gold recovery rate of 87.5% and an IRR of 143% (at a gold price of US$1,300).
• The asset boasted a Net Present Value of £14.9m (at a gold price of US$1,300 per ounce) on September 2019. However, at the current gold price of $1,700, the asset boasts an NPV of £19.37m.
• The company raised £3.4 million on 16 March 2020 from sophisticated investors to finance the advancement of its Akrokeri-Homase Gold Project (AHGP) into production.
• The company withdrew £235,000 from its £2.35m Asian Investment Management Services gold loan. Drawdown period extended to June 30, 2020 should they need the remaining £2.1m.
• Heavy weight gold investors Paracale Gold and BCM Investments took part in the bond issue.
• The company confirmed, on 30 April 2020, that it was on track for gold production in H2 2020 at its AHGP asset.
So, with a current market cap of £11.75m (4.7pence per share), and less cash of £3.5m, means the market is valuing the company’s Akrokeri-Homase Gold asset at a paltry £8.25m. Compare this to the asset’s current value of £19.37m.
Thus, a base valuation of 12pence per share (or a £29.3m market cap), that factors-in the current NPV of AHGP alongside the company’s cash balances seems eminently sensible.
But here’s the real kicker;
Valuing the company on a DCF (Discounted Cash Flow) model throws up significantly higher values, especially considering that the company is only a couple of months away from production; implying an extraordinary upside on the stock, and underpinned by a waning global economy that is accelerating the unfettered printing of fiat currency, and which will gradually lead to a $2,000-plus gold price.
Thus, take cue from the shrewd money taking LONG positions in the stock today.
Https://www.ft.com/content/ecd9c6d5-6c42-4aa2-ae00-b741efd5af67