African Barrick Gold Share Discussion Threads

[undervalued companies] 23/7/2013 07:46

Koo you are about as balanced as jimmy savills was to kids.

I don't have a position you do I set my case that's it I don't need to bang on history shows what happens to rampers or traders who pump and dump.

My position been to wait for the results and see the costs, dividends and writedowns

[kooba] 23/7/2013 07:28

You are a strange one ...I just posted research out which was balanced...Takes all sorts I suppose...but I figure you must have a bigger angle than me!No more research folks upsets some on here!

[undervalued companies] 23/7/2013 07:20

Talk about pumping this up with multi posts classic then selling on results just got to hope they don't cut the dividend and no write downs.

Going to be Interesting to see the results guess non of you read interesting article about Tanzania and the future of abg.

[kooba] 22/7/2013 22:13

Looks like gold moving over its 50 day moving average...Short gold still a crowded trade over on comex but with this momentum I would expect some stops and momentum buying to take it higher...maybe Asia will pick up the baton again?

[kooba] 22/7/2013 21:55

Now am I missing something but I thought results as per rns were 30th July African Barrick Gold plc (the "Company" or "ABG") Notice of Results and Conference Call ABG announces that it will be publishing its Half Year Report for the six months ended 30 June 2013 on Tuesday 30 July 2013 at 07:00 BSTNow that JPM note is saying this Thursday ...now what do they know ? have they brought them forward slightly to catch the shorts out?

[kooba] 22/7/2013 21:50

Targets actually 110p prior to review but they seem more upbeat than MS I grant you!ABG has lost 76% YTD to an EV of just $426m. JPMe current mine plans burn $389m of FCF 2013-15 at spot prices. At H1'13 results on 25th July we expect a radical and value enhancing operational restructuring will be communicated. We expect Buzwagi will be high graded with a shortened mine life; on spot JPMe it would be $296m NPV accretive to mothball Buzwagi due to the current mine plan's unprofitability at current prices. We expect streamlined operations and a focus on the high grade Bulyanhulu and North Mara mines will enhance profitability, reduce FCF burn and enhance NPV. Our base case £1.10/sh NPV would rise to £1.23/sh if sustaining capex was cut by just 10%. A solid balance sheet ($248m net cash H1'13E) and an anticipated operational restructuring at H1'13 results, mean we expect the shares will find a floor at current levels. We therefore upgrade our rating to Neutral with a £1.10/sh PT but believe an imminent expected operational restructuring could provide further upside.

[pineapple1] 22/7/2013 21:29

African Barrick Gold rallied 5.3 per cent to 112.6p after JPMorgan said its problems seemed to have been exaggerated. An operational review expected on Thursday only needs to cut capital expenditure by 10 per cent to set a 126p floor for the shares, it said.

[kooba] 22/7/2013 18:05

To keep the bears happy...MS summary.ABG faces heightened downside risks: We expect all-in cash costs to be c.$1,245/oz in 2013, which would pose significant risks to cash generation if current prices persist. Cash flow would not be sufficient to maintain dividend payments at 2012 levels, capital spending requirements (despite being optimized) would reverse the company's broad net cash position as early as this year. Furthermore, ABG uses a $1,500/oz gold price to measure reserves, so faces a higher likelihood of reserve downgrade and life-of-mine reduction. That said, ABG has the highest gearing to the gold price (we estimate a 1% change = 1% improvement in FCF yield).

[kooba] 22/7/2013 18:02

Yep think TW must have a very thick skin to still refer to himself as a Guru...having met him a few times I believe he genuinely believes he is the voice of reason and investor champion...but behind him is a trail of disaster of his own making.Rather negative research out by MS on this today but obviously sees it as a highly geared play on recovering gold...prefers randgold for risk aversion.That should please robrah!

[pineapple1] 22/7/2013 17:04

lol.
Questor is another TW.Do the opposite.

[kooba] 22/7/2013 11:47

9th jan 2013 price 352phttp://www.telegraph.co.uk/finance/markets/questor/9788684/Questor-share-tip-African-Barrick-Gold-could-be-an-interesting-punt.html70% down on that tip... And now they're cautious!Dyor!!!

[kooba] 22/7/2013 10:58

FalklandIf you care to look back only started posting on this counter end of June...bought in at 96p and have traded around a position since.May well take some off the table before the results on the 30th... And take a view from there.Have been long of some POG where I got in too early above £1 but having seen them down to 63p they to are looking firmer though the balance sheet there is continued cause for concern.In the meantime the firmer backdrop in gold helps the numbers.

[kooba] 22/7/2013 10:45

Pretty sure an historic yield of 10% is already discounting at least a halving of payout perhaps in the circumstances a complete cut for this year is appropriate...I personally would not want dividends paid that were not covered by earnings.I also think that write downs in the carrying value of assets in the ground is also discounted across the sector.... One has to remember these are non cash items and should the gold price recover more of its lustre then values can be written back up when appropriate.

[falklands] 22/7/2013 10:40

But my question is are these the same who said the exact same posts 12 to 6 months ago I recall reading all kinds of hype in January ?

Good fortune to you I think some on here pointed the dangers.

[novicetrade68] 22/7/2013 10:08

Sell the rumour, buy the fact...I completely agree that this is what's going on with all goldies...markets are always forward looking and may now well start to price in something completely different, future inflation for example.

Let these gold miners climb the 'wall of worry' as you put it , whilst in the meantime loads of new posters have recently arrived on the gold threads trying to talk people out of their shares...it's so obvious, but plenty are no doubt still falling for it.

[pineapple1] 22/7/2013 10:04

Well if the torygraph are negative its time to get bullish.Questor used to pump POG when it was £8.

The prospect of writedown is well flagged across the industry.The rumour has been sold hard. I suspect the fact will be bought as the news is already discounted.
I don't think its time to be getting bearish a sector after falls of 90% in some cases.

[undervalued companies] 22/7/2013 10:00

Really well put it this way on abg RNS if they do what the telegraph hints cut the dividend reduce it and declare write downs there will be a slump in share price

Fighting against abg share price frankly is silly at present but I guess post RNS views might be different.

It's funny I pointed all this out on Sunday at least the telegraph is on ball with this seasons writedowns

[kooba] 22/7/2013 08:29

Yep the good old media shutting the stable door after the horse has bolted...maybe just maybe the 75% fall over the past 6 months is discounting a very negative scenario already on a number of miners...just a thought as the very crowded short trade in gold starts to run for cover.Mad maybe...but forming views on the back of the mainstream media undoubtedly madder!

[falklands] 22/7/2013 07:48

telegraph dated 21st abg and Pog Worst gold stocks along with other named uk stocks write downs dividend cuts to come.

Conclusion further falls to come in the article

Your all mad would not go near gold stocks yet. Talk about falling knife it's going through your holdings in gold second half when results come out.

[kooba] 22/7/2013 06:50

Almost 11% of short gold positions covered in the last week according to CFTC Commitment of Traders' data. That is the largest weekly drop in net shorts for four months and the combined futures-and-options net long position jumped 13,287 contracts or an impressive 48% (the most since Nov 08). Following the ubiquitous "sell-while-Bernanke-is-speaking" dump last Wednesday gold has risen almost 4% touching $1320 this evening as Asia opens. So with Asian physical demand remaining high and COMEX vault's running dry (and JPMorgan's on fire), we wonder - now that Taper is off (according to equity market pundits) if this is the start of the long-awaited short-covering rally back to reality for the precious metal.http://www.zerohedge.com/news/2013-07-21/gold-breaks-above-1300-shorts-cover-most-4-monthsI'm no technical analyst but looks like break above $1300 puts us in a gap to fill upside so maybe further to go?

[smurfy2001] 21/7/2013 15:16

The leverage is probably related to the following;

1. The extent of having to use diesel as the energy source for electricity as opposed to national grid sources. Diesel is 4 to 5 times more expensive to use than say hydro dam supply.
2. The extent of your gold reserves being underground are in sulphate form. as opposed to oxide which is near surface and chemically less expensive to process. This also relates to maintaining and protecting water supplies from what the company uses and what locals need to use as well and this is expensive for ABG.
3. The grams per tonne head grade as Buzwagi has fallen to 1-1.5g. Only two mines have high head grade.
4. Tanzania has high inflation around 9% so has high inherent wage pressures and a Government not keen to devalue their currency. The company had reduced non-Tanzanian workers already to reduce costs.
5. How a mine is worked. Some mines it is know where the high grade stopes are. At Buzwagi they have no real idea and hence why it has to be shut down at these gold prices. Mara has a high yielding area but for how long. The high content stopes at Buly need paste back fill for most of the year so accessibility would have been only more recently.
6. Cost of surrounding land acquisition owned by locals. Surrounding land of value near the mines is hugely expensive in Tanzania as locals understandably speculate near mining territory. ABG may not be able to expand the estate as to develop mines as they wish.

ABG could save some costs but they have little chance of making any profit at all with the present gold price. I have noted the price has stabilised but not sure if I could bare getting hammered here again. I can see folks yo-yo back and forth recovering losses but the pattern does not always follow gold price.

Wish you folks well here.

Tony

[smurfy2001] 21/7/2013 15:15

Further research led me to this post on iii

[...]

[smurfy2001] 21/7/2013 15:11

Thanks kooba. First time I'm looking at gold stocks.

Think it's worth a punt at this price, I.e buy 1 slice of 4. Reckon any dividend cut or write down is taken into account.

[jungmana] 21/7/2013 15:01

Can you point out which randgold presentation?

[undervalued companies] 21/7/2013 14:01

It does look at a basic bar graph on randgold presentation to see costs of 10 other miners.

I hope for some with Rose tinted glasses abg don't cut the dividend or write down assets as most goldies will this reporting season worldwide.

Anyway enough from posters views now let's read abg real RNS on what the costs are ? Is the dividend to remain ? And are there any write downs ?