Metals Exploration Share Discussion Threads

[hutch_pod] 23/2/2016 13:55

Looks like the shorting brigade have arrived :)

Hey LB, did the company respond at all?

[lord badger] 23/2/2016 09:37

Cripes, the big guns are moving in now. First trade of the day, £3.94! Hold tight!

[lord badger] 11/2/2016 19:31

Now would be a good time for an announcement!

[hutch_pod] 10/2/2016 11:25

Great! We just need to know what cash is being paid out this year to service the debt.

[lord badger] 10/2/2016 08:53

HP, I e-mail them yesterday. What I didn't spot was that the chart in the Jan 16 RNS is the same as the chart in last June's interim results! So I think we can be forgiven for being a little confused. I'll let you know what comes back.

[hutch_pod] 10/2/2016 08:22

Hi LB

I do see that the $75m was supposed to include rolled up interest. But the half yearly talks about interest payments for June and Dec 2015, as well as the first capital repayment of $13m in Dec 2015. It also mentions fees of $1.25m for the cost of rescheduling.

So it does seem that the June and Dec interest payments were not included on the $75m schedule.

Possibly I should email them.

HP

[lord badger] 08/2/2016 18:57

If this negative sentiment actually translates into a full blown crisis plus if the US reverses its interest rate hike, lord knows were the PoG will end up this year. $1,300, $1,400! Granted a third of this year's production is pegged by the hedge at around $1,250, but the rise for the other two thirds could be quite a nice uplift from the $1,000 the company was working on. $1,300 average across the first 12 months of production would see approx another $29m in the bank.

[lord badger] 08/2/2016 18:36

HP, I was confused on that point. It does imply that this is a capital repayment schedule, which could exclude interest, but the interest on the loan was capitalised and the $75m included fees. So I think we're looking at everything aside from the $8m overrun facility, which I'm positive they have drawn down but I'm not sure how they repay.

I think the RNS wording is a little imprecise and the bit about having made an "interest" payment in December is possibly incorrect given that a) there is a total of $75m showing in the restructure schedule from March 16 to the end of the loan term b) there is no mention of additional monies being payable and c) it says in the para about the restructure chart that they didn't have the cash flow to make the December payment.

All very confusing. What a day for the PoG! $1,197 and testing $1,200.

[hutch_pod] 08/2/2016 17:24

Hi LB

I might be misunderstanding you.. but I think the schedule only shows capital repayments. So the timing has been pushed back but maintaining the overall $75m repaid.

The wording of the RNS does seem contradictory. Did they mean that the Dec interest 'of' $2m (this matches 6 months of 4.75% + 0.5% US libor) was pushed into 31 March? (Ignore my calculation of $1.8m above).

So that would mean interest payments of $2m due in March (delayed from dec) and June, as well as capital repayments due of $2m in March and $15m in June.

HP

[rupert1] 08/2/2016 17:14

If you are Japanese, gold is starting to look like a good investment. At least it pays 0% return, which is more that you get in a Japanese bank these days!

[lord badger] 08/2/2016 15:27

Blimey, PoG is on fire. At this rate we'll end up on the wrong side of the initial hedge!

[lord badger] 08/2/2016 13:16

HP, It's really odd because according to the wording of the Jan 26 RNS, the 31st Dec interest payment was paid, which really doesn't make sense. Here's the text from below the chart in the RNS:

"The 31 December 2015 interest payment has been paid in full and the only amendment to the original interest repayment schedule is to include the interest payable on US $2m into the first quarter of 2016, payable 31 March 2016.", which begs the question, why has an additional $13m been spread across Mar 16 to Jun 17?

On the face of it to RNS wording appears incorrect: a big oversight if so. The chart above the text appears correct and does not indicate any form of penalty or overall increase in the total owed, which seems out of character for banks in this day and age;)

Where did you get your March and June figures from? The RNS states $2m in March and $15m in June. I wouldn't be surprised if they could cover the $2m in March, which could then leave them looking at just $15m out of production in June, which does seem very tight…and the unknown is the price per oz they will achieve on the first quarter's production. We're still working with a finger-in-the-air all in sustaining cost (AISC) and have no idea what state the rolling hedge is in given the delays. The upside is the current spike in the spot price; currently $1,181.

[hutch_pod] 05/2/2016 18:21

Hi LB, I think they rescheduled the December capital repayment of $13m, and only made the interest payment - of c$1.8m?

So from the new payment schedule, repayments of $2m and $15m are due in March and June, with interest also due in June, total of maybe $18.8m by end of June.

They originally (24 Sept RNS) thought 6 months would be enough to generate 2 interest payments + one $13m capital repayment, ie >$2.75m a month ish. 3 months might give $8.25m.

Of course they did raise $14.6m odd in cash and debt, so maybe some spare there plus the cash they had at end of August.

Seems tight, although commissioning in March would help to give more like 4 months of cashflow - unsure if possible?

HP

[lord badger] 05/2/2016 14:07

HP, I'd refer to the January 2016 RNS, which describes the new debt repayment schedule. They've made the December payment of $13m, which was what the recent fund raising was all about, and thy've now got an interim interest payment of $2m to make at the end of March.

I guess as long as they can get a quarter of the annual projected production out of the ground between now and May/June, it should be fine. As to what price they'll achieve for that production is a bit of a mystery in my mind as I've no idea what state the hedge is in given the production delays. The only up side is the company are working to $1,000 per oz and PoG has climbed from circa $1,070 30 days ago to this morning £1,160, although it's just dropped $12 in 1 hour so don't hold your breath.

[hutch_pod] 05/2/2016 12:03

Must admit it isn't clear to me how the 2016 repayments will be made, esp the June one, given that revenues won't flow before March.

The September RNS on the debt rescheduling mentioned entering commercial production on the 1 Dec 2015. Adding a few months seems to put the revised repayment schedule under pressure.

[hutch_pod] 04/2/2016 09:57

Hi, I just realised the $35m profit i guesstimated above is of course before the debt repayments - $32m in 2016, $28m 2017, $15m 2018. Am I in the ballpark...

[holism] 02/2/2016 18:13

This looks a good bet for an ISA

[lord badger] 02/2/2016 13:56

I don't know what actual spread - as opposed to advertised spread - you're getting, but I'm getting 4.05 bid / 4.06 ask with Barclays. And the market size online has massively opened up on both bid and ask…especially the ask. I had max £500 a few weeks ago and just now I gave up at £30,000.

[lord badger] 02/2/2016 13:47

R1, nice to see buys actually impacting the share price I'm not sure stock overhang could have explained the various odd movements in price the past 6 months…past 6 years come to that. Perhaps it's coming in to play now.

Was it your question to the Chairman which prompted that outburst from Westhouse? Can't wait for you to ask it again at this year's AGM. I'll do the one about medium/longterm strategy first, to tee you up.

I don't know if anyone follows Medusa Mining - an exclusively Philippine-focused miner quoted on the Australian exchange. I had a little look at their fundamentals the other day and it makes MTL look like a gift horse. They have larger reserves, just over 2oz - although I've not compared their JORC categorisation - they pulled 97,000oz out of the ground in the 12 months to June 15 - roughly the same as MTL are projecting in year 1 - but they have an all in sustaining cost of between $1,000 and $1,200 US!!! Add them to the pile of gold miners teetering on the edge.

Interestingly, I read an overview piece recently which suggested that 2016 will see the first global drop in gold output in 7 years, based on miners mothballing unprofitable mines and also those miners that are teetering, plunging over and into the abyss. Net result; constrained supply should help cushion any decline in PoG. One for the positive column.

In the negative column you have India promoting gold recycling to try and reduce reliance on imports, as they have no gold resources of their own. I'm not sure what impact this will have but it's all part of the mix.

So, we're in February and it's D-month. Let's hope the the RSI works are completed on time and the partial suspension order can be lifted. I wonder how long the various commissioning stages will last leading up to full production.

[rupert1] 02/2/2016 12:38

Looks like someone has made an effort to get the share price moving this morning. 5 trades between 8.15am and 9.30am for either 50,000 or 100,000 shares each, and at an incremental price each time.

Whoever you are, you are very welcome.

[hutch_pod] 27/1/2016 16:40

Thanks LB, hopefully I can make a couple of AGMs this year, sounds worthwhile.

Looking at the sums again, I guess $35m PAT seems entirely possible on full production, $1100 gold (ignoring hedging), $550 AISC and 35% tax, while is 1.6p per share.

Is it so crazy in this environment to sit at a Fwd PE of 2.5x given the remaining (albiet diminishing) uncertainty?

[lord badger] 27/1/2016 16:01

HP, it is worth attending. There's what they do say, what they don't say and what they're clearly avoiding saying. You get a far better picture of what's going on. Perhaps that should be braille rather than picture because it's not glaringly obvious what going on behind the scenes, but you do get a feel for it. Aside from the boring stuff, it's a chance to ask the company anything you choose; like "as shareholders, do we get a little bit of gold", which was met with a stony-face "no". How we laughed. There are, of course, the sherbets that follow.

I know myself and others keep saying this, but based on the fundamentals, today's share price simply defies logic.

[hutch_pod] 27/1/2016 15:11

Yes those recent ones do look like sells - I have actually once purchased at the bid price over summer. Very surprised to get that quote.

I guess the sells are very small amounts though so perhaps not possible to draw any conclusions?

You make the AGM sound very worth attending :). Think it's the same advisor but different name..

[lord badger] 27/1/2016 14:11

Looks like some of the links in my previous post have been redacted!

HP, I was glad to hear something…anything. Silence is corrosive. I'm really foxed as to why there have been sporadic bouts of selling. The trades at 3.75p over the past few days were definitely sells as they were bang on the bid price; and I can't believe the ask price on the phone to a broker, as opposed to the ask price when trading online, was at the bid. I've seen wafer thin spreads before on MTL but never at zero. This being the case, who would be selling with imminent news of the commencement of production and a sharply rising PoG; despite this rise being counter to the overall trend and medium term outlook for PoG? The sells had me doubting what was going on in Philippinesland and thinking that those close to the company had the jump on us. Surely another delay, this time around a month, isn't enough to prompt a sell, and it's not likely to be profit taking based on the 3p offer price, given that the offer was for existing shareholder and their uptake would simply have averaged down their purchase price from levels far higher than 3.75p. Selah.

I see the company have changed their nominated advisor. Perhaps the old advisor's outburst at the AGM was too much!

[hutch_pod] 27/1/2016 10:00

Hey LB, I was quite pleased with the update, though of course not there yet!

Price has held up quite remarkably I thought.