Metals Exploration Share Discussion Threads

[achillesheel] 16/1/2017 14:07

Sorry Peter meant Baker Steel

[peterpowell21] 16/1/2017 14:00

To me if you look at the daily chart they are trying to make the 4.95p buys look like they may be sells.They seem to be selling at 4.95p and 4.99p.
No one is interested in selling,only bakersteel that looks like they have to sell some.

[peterpowell21] 16/1/2017 13:45

achille

You must be right.
All those sold by bakersteel would have gone last week.
So they must still be selling.

blueclyde

Well we will be getting a good ops update sooner or later.
The amount of gold they have sold alone should give this a good lift.
But we know that every day that passes, gold is coming out the ground.
Ever day that passes is another day closer to full production.
Thats if we are not already at full production.

[blueclyde] 16/1/2017 12:58

Just requires a good ops RNS to confirm everything is on track to get it going.

[achillesheel] 16/1/2017 12:55

It was from the Ruffer sale, the NED buy soaked up half and the surplus stock with Cantor hence the RNS, maybe they are still offloading

[peterpowell21] 16/1/2017 12:24

all buys and they lower the offer price.
it would be interesting to know how many shares there are in free float now.

[jailbird] 16/1/2017 11:58

Probably an overhang from placing Cantor selling the stockWill clear eventually

[achillesheel] 16/1/2017 11:53

Someone's got to be still selling, 2.5mill gone through so far today mostly buys, overhang should have cleared by now.

[jamdan1] 16/1/2017 11:05

Big delayed buys coming through now...it's got to move soon.

[peterpowell21] 16/1/2017 10:29

i keep adding to my IG account at 5.01p.
i keep looking and thinking i wont get another chance to buy something this cheap again.Well in my eyes its cheap.

[achillesheel] 16/1/2017 10:11

Td 0.049002 to sell, 0.04999 to buy, it's getting ready.

[lord badger] 16/1/2017 09:12

Actual spread has certainly tightened up. 0.1p. Could be an interesting day with some chunky trading.

[jailbird] 16/1/2017 09:04

Cantor (CFEP) is only MM on 5p( stock from placing I assume)The rest are on 5.5p or higher.

[jailbird] 16/1/2017 08:57

2v1Same as Friday

[peterpowell21] 16/1/2017 08:19

i see the bid is moving up when you get a quote.
i just got offered 4.899p for all mine.
i dont know what the offer price is, if its the same as friday its a very tight spread now.

[davegk] 15/1/2017 14:02

Lordbadger & Peter, thanks for update on mining fleet

Blueclyde, Ian Holzberger said at the last AGM, that the mine can produce significantly more than 100,000 ounces per year, he didn’t want to be drawn to quote a figure, but I believe easily 110,000 and I think he is targeting between 120,000 & 130,000. The main emphasis will be refining the extraction process to achieve high extraction rates.

[peterpowell21] 15/1/2017 11:40

lordbadger

i found this in the 4 july 2016 presentation.

 Komatsu mining fleet – 6x100 t haul trucks, 2 excavators 2 bulldozers and
ancillary fleet, commissioned on site.
Mine establishment including fleet $18.4m.
Mine fleet purchased new,

[blueclyde] 14/1/2017 22:29

Looking at the latest presentation 5 entities own over 90% of the company so I guess that explains the lack of PR; it's not needed. Will also cause the share price to surge if this gets on the radar.

[blueclyde] 14/1/2017 22:12

Great posts. To back up market cap, don't know if anyone remembers Medusa Mining back in 2012 they were in the Philippines too and had pretty much the exact same JORC resource as this and hit a market cap of a Billion due to being one of the lowest cost producers like this will be. To be fair gold was on a good run too.You only had to hear Trump speak last week and how the gold market reacted to see gold will recover over the course of the year. The extra 10 trillion of fiscal spending will also see gold rise if it happens. Regarding PR it's good that they haven't being doing much of it as it shows the company has been well backed and doesn't need it to raise funds. I note 15 trades just on Friday which tells you this is pretty much on nobodies radar at present. I only stumbled across this by accident.Can not believe that you can buy this for 5p and it is fully funded to produce 100,000z ounces pa. As has been pointed out the shareholders that backed this at 5p aren't going to settle for doubling their money.It can't possibly stay under the radar for much longer. I will look to add more once a detailed RNS is released with production figures to confirm everything is on track. That surely can't be too far away!

[lord badger] 14/1/2017 19:59

Dave, is the mining fleet now leased? I remember they were originally going to lease but then went in favour of purchase. I can see a reference to this in the November 2013 op update where they reduced the Operating Cost figure:"reduced by US$ 35 per ounce attributed to the removal of the mining fleet operation lease in favour of outright purchase." Did they change their mind again?

[lord badger] 14/1/2017 19:33

Dave, I agree re AISC. I’ve been wrestling with the depreciation issue so thanks for the N.B.

Jailbird, a market cap for next year really is an exercise in pure guess work. As Peter has pointed out PoG is a fundamental, however, recovery rates via the gold circuit and step out drilling to increase the reserves/resource are equally as important. With regards PoG, my gut feel is PoG will enter 2018 between $1,125 and $1,200 (but then what do I know: see post 1096). Don’t forget the hedge, so 35% of output over the life of the loan (roughly 3 years) hedged at around $1,260). On recovery rates, as eluded to by the Chairman at the 2016 AGM, we are expecting good news on that front. A big jump in recovery rates could have a big impact on the value of the business. Then there’s an increase in the resource/reserves, which is a bit of an unknown although prior to the suspension of exploration drilling in 2013 they were identifying favourable mineralisation in a number of areas close to the existing pit - personally I think we’re going to see some fireworks in this area. With regards the extent of current exploration they are indeed only mining approximately 15% of the exploration permit area (see post 1060). Bear in mind the mill is specified to handle 3 times the ore throughput currently targeted and the tailings storage facility is currently designed to handle a 50% increase (over multiple phases) with a design contingency for more, so the company is clearly planning/expecting/hoping for increases across the board.

If you want to go “Blue Sky” on market cap over the longer term, there is a presentation floating around which compares Runruno with the only other comparable flow dome complex in the world, Cripple Creek in Colorado, which is over 100 years old and has produced many millions of ozs of gold. This would certainly support an argument for a $500m + market cap.

Peter, I don’t necessarily agree on the PR front. The company has a very good PR agency, however, it’s all about timing (see post 1029) plus the company hasn’t really needed to PR Runruno over the past few years because, aside from the the loan, the development funds to date have come from a very small number of large private investors. The PR will come but only once any potential banana skins have been dealt with. Personally I don’t expect any PR until we’re in full production and have at least a full quarter of trouble free production under our belt. Bear in mind that we may well be in full production at the moment so this may not be very far off. Don’t forget, PR is fundamentally about reputation management and if you jump the gun and then have problems it can do more harm than good. Better to keep your head down whilst dealing with the complex issues of developing a mine in a heavily regulated and often problematic territory.

At the end of the day, a very small number of very well informed investors (currently hold 92% of the stock) have put large sums of money into Runruno - and including a NED continue to do so at 5p - and have fought very hard for control of it, and I don’t see why they would have done this if they weren’t expecting a very health return.

[peterpowell21] 14/1/2017 16:50

dave
thanks for the info.
so a very healthy profit margin.

[davegk] 14/1/2017 16:34

All in sustaining cost (AISC) is the cash cost, plus head office costs and sustaining capital.

The cash cost is $474 per ounce. At the last AGM it was said that the main component of the cash cost was running the mining fleet, which the company had been doing for over a year building the infrastructure. As a result of this experience the company confirmed that its forward guidance for the cash cost was $474 per ounce.

At the last two AGM’s the company was asked what it’s AISC was. Ian Holzberger said that head office costs are very low, there are no corporate offices or anything like that and he estimated a figure of around $50-$60 per ounce to cover this. That just leaves the sustaining capital to consider.

In general Sustaining capital consists of costs associated with
Mining e.g. fleet replacement, and underground development
Processing e.g. mill motor replacement
Infrastructure e.g. tailing dam maintenance, replacing generators at site powerplant, lift maintance
Reclamation / closure cost

Applying these to MTL
Mining. The mining fleet is leased and there is no underground development of course, so minimal sustaining capital expenditure in this category.

Processing. Probably this is where most of the sustaining capital cost will occur. The process plant cost around US$56 million to build - estimate that around 5 to 10% of this cost/ year would be required to maintain production levels. At hundred thousand ounces a year that’s $28-$56 per ounce.

Infrastructure . There will be some (small) costs to maintain the site roads and tailing facilities. The site is connected to the National Grid and there are no lifts to maintain so no costs associated with these items.

Reclamation / closure cost. This element will not add any cost to the sustaining capital. The site is being reclaimed as they mine and the cost associated with this is built into the cash cost. By last June they had already planted over 1 million trees. That just leaves the closure cost for the processing plant, at the AGM they said that they could probably make money out of this.
This is not too fanciful, I can remember some years back, in another junior minor (I think it was CEY) they bought a second-hand processing plant from a mine that was closing down in South America.

I have read estimates for our AISC in the $550-$650 range and these seem to be entirely feasible.

N.B. sometimes depreciation is used as a proxy for sustaining capital in AISC

[sleveen] 14/1/2017 12:47

What are the AISC?