Metals Exploration Share Discussion Threads

[achillesheel] 06/1/2017 12:38

Buys flooding in now £97.97 and £153.75 could we be in for a Monday morning RNS, wouldn't want to be out of this over the weekend :P)

[holism] 06/1/2017 08:40

Yes in theory a multi bagger potential, however the game is being played by 4 major investors. They could simply launch a steel takeover bid, sell the company when producing at a decent rate or use the company as a vehicle in the far East. The Candys are property boys used to long term plays but they will want to make a proper return. Our return is in their hands. Any ideas LB?

[peterpowell21] 06/1/2017 08:35

lord badger

thanks, interesting reading

[lord badger] 05/1/2017 21:08

Hol, yes, I was referring to Mr Beardsworth, who also spoke of Runruno as a 2.5m oz play with output of 200,000oz per year…admittedly he did say this during the early stages of in-fill drilling and whilst driving the investment pony and trap around the city!

Dave, you’re right, 600t/h was the upper mill throughput figure mentioned, but I think Ian said the ore was bouncing around all over the place at or around the upper rate. Re your figures, how did you work them through? I ended up at the same number but via a different route: 200t/h = 1.752m p/a @1.85g/t = 114,330oz p/a @ 91.4% target recovery rate, so 104,497oz p/a. So that’s the 100,000oz + figure mentioned, but I’m now struggling with the 15-20% increase in recovery rate given that the design spec is 91.4%! Any thoughts?

Peter, re the cash sweep, you’re probably right. The banks will want to recover their money a quickly as possible given the various risks involved - typhoons, government, etc.

Regarding the 2P (Proven and Probable) resource figure of 1.06m oz over the 10.4 year mine life, my understanding is that this is not intended to be a hard and fast estimate of the total resource within the Exploration Area; its simply the figure arrived at in the feasibility study, which was intended to establish the commercial viability of building the mine. Given that drilling is expensive and, during early-stage exploration, money is tight, they’re only going to drill out an area to hit the commercial viability mark plus a bit on top. Obviously, having looked at the magnetic / geochem data, they will have placed the mine in the sweet spot, but just because the early drill mapping doesn’t suggest the presence of gold doesn’t mean there isn’t any there, it simply means they haven’t looked - and there are a number of interesting anomalies in the aeromagnetic mapping. Based on comments at the AGM I’m assuming that once the mine is operating at the design spec and the gold circuit has been optimised to achieve the best possible recovery rate, the company will look towards step-out drilling to increase the total resource. Bear in mind that based on previous company statements they have only drilled approximately 15% of the EP area and, from a mine operation perspective, the mill is over specified and design drawings of the Tailings Storage Facility indicate capacity to 15 years.

Based on the above one could make a case for 100,000oz p/a + say a 15% uplift in the recovery rate, so 115,000oz p/a over 15 years = 1,725,000m oz at $1,150 per oz less AISC of $534…so $1bn of gold after costs. With $85m of debt, 5p per share and a market cap of $127m I’d say there’s some value here. This is of course all wild speculation not the least because there’s no way gold will stay stable at $1,150 for the next 15 years, expanding the reserves will come at a cost, etc., etc., etc.

[peterpowell21] 05/1/2017 12:50

interesting reading here today, thanks.
it just a shame we have not updated the market yet.
with gold on the up again we seem to be missing out.
but a friend told me that the market is still not up and running a full speed yet.
so from monday i expect there is more chance of an update.

the more i learn here the more this looks cheap.
well time will tell.

ps
re repayment of loan.
i wonder if this has anything to do with the fact that they could increase production significantly.
"The facility includes an accelerated cash sweep repayment of 35% of available free cash".

[davegk] 05/1/2017 12:05

Lord badger - mill capacity, it was said at the last AGM that the mill had done 600 t per hour and that it was designed/specified to do 200 t per hour.

Working 365 days 24/7, 200 t per hour gives 135,000 ounces of gold per year. At a 75% utilisation rate that would be 100,000 ounces of gold per year, so there is plenty of scope for increased production.

And don’t forget it was said at the AGM that they would produce more than 100,000 ounces of gold per year, the inference being that it would be significantly more.

[holism] 05/1/2017 09:19

If you are referring to the personable Mr Beardsworth- he also said that the mine would still be producing in 20 years time, what he did not say was when the company would start producing. 20 years sounds like a great deal of gold.

[peterpowell21] 05/1/2017 08:10

lord bager

good post.
thanks

[peterpowell21] 04/1/2017 14:14

lord bager
$5.5- $6m per month is after operating cost, which were forecast to be $477/oz.

average production of 96,700oz of gold per annum over a mine life of 10.4 years, at an average forecast operating cost $477/oz.

so i make that $9.25m a month from just the gold, before costs.

i think it is time now that the company gave the market a update.
the company has been a serial miser of targets for many years now.
it needs to start showing that things have changed and they are on track.

with a spread showing to be 10.5% will not encourage many to jump on board.

[jailbird] 03/1/2017 22:33

Thanks LB,Good info...

[lord badger] 03/1/2017 21:27

Jailbird, as a very rough rule of thumb, $5.5m - $6m per month based on $1,150 per oz & 35% hedged at around $1,260. The loan plus additional interest (the original was capitalised) and costs is more like $85m over three years. I'd suggest the additional $10m is largely spoken for as it was raised to cover working capital and possibly early interest payments. Also factor in the tax holiday - 5 years or until pre-operating expenses (circa $200m) are recovered, although certain taxes are due during this period.

Bear in mind that an increase in recovery rate of up to perhaps 25% has been mooted and also that the current stated resource hasn't been updated (no additional exploratory drilling has been conducted) since 2011 - Runruno is a pretty big property and they're currently only mining part of it.

[jailbird] 03/1/2017 17:56

market cap of 103m..this includes the $81m debt that has been just rescheduled.

I am not sure how much the Co will be making monthly..anyone?

[jailbird] 03/1/2017 17:54

you must remember after the last spike to 10p..the Co has diluted , 166M shares raising $10M...so this money needs to be invested wisely.

[giantpeach2] 30/12/2016 13:56

Yes lets see if we can have a really happy start to the New Year.

[achillesheel] 30/12/2016 11:28

Well let's hope we have a great new year, plant should be fully ramped now, gold should be flowing sales have hopefully been continuing since the last RNS.


Onwards and upwards for 2017, happy new year to all holders

[peterpowell21] 30/12/2016 10:53

yes they move the ask up and then put the 5p buy through as a sell.
i just done a dummy sell and the the bid was lower at 4.65p.
they need to drop the ask price back to 5p.
but that would mean any buys would show as buys and not sells.
only in AIM you have to try and find out the facts for yourself.

anyway,happy new year to all.

[giantpeach2] 29/12/2016 16:40

There is the reason, 500k share buy.

[peterpowell21] 29/12/2016 14:38

well news is due on the ramp up.
i did not expect it this week.
so into the new year.
i was very surprised we got no reaction to the news that gold sales had started turning the company into a money making company at last,not many of them in AIM.
Even more after the debt Facility Agreement had been rescheduled.
i think we will have to wait for the RNS telling us the amount of gold we are producing daily and what amount has been sold.
i expect the main holders are not happy with the share price and will want to see the news out and get the share price moving north, sooner rather than latter.
They after all have been waiting a long time for this day.

[achillesheel] 29/12/2016 13:51

yep someone buys 800quids worth this morning and we are up 2.56%, wait for the £300 sell and we will be down 5%.

[giantpeach2] 29/12/2016 13:22

we have life!!

[peterpowell21] 22/12/2016 13:34

lord badger

thanks for explaining your comment, i was not sure what you meant on first reading.

achill

yes they seem to be dropping the price on any sell.
the same old AIM market, they want hard facts, the news we have been given has been positive, but without any meat on it up to yet.
the market wants to know how much gold has been sold and what amount is now being produced, don't we all.
but it looks like we will have to wait till the new year for that info.
it looks as if there will be a chance to buy in even lower over the next few weeks.
but then again they could shoot it up.
you just never know whats going to happen on AIM.

[lord badger] 21/12/2016 15:40

Sorry, I should clarify that Q4 2015 comment. Baker Steel sold and Ruffer bought a big chunk of stock but there was a residual amount that Ruffer did not buy (increased the free float) which blew the barn doors off. All at about 3-4p. It was a huge averaging down opportunity.

[achillesheel] 21/12/2016 15:04

Thanks Lord Badger, would make sense on the matching trades, the mm's have been dropping the bid on tiny trades all week.