Serabi Gold Share Discussion Threads

[cotton4] 18/8/2016 15:29

I have been thinking about the latest RNS, the content and the timing.
Fratelli have forfeited a 12% return on the loan conversion, a return guaranteed given that SRB are cash positive. In the process they have diluted the share price, not only for us but more significantly for themselves. Why, IMO, opinion would they do this unless they felt it would be worth their while.
The other thing I have been thinking about is the following statement from the AGM statement.
" I am keen to grow the Company, as I believe that we will benefit from greater critical mass and runway to attract wider investor support and a concurrent re-rating of the Company's shares in due course. "
As long as I have held SRB, Mike has been on the whole conservative regarding his comments on the company's development and such a statement is slightly out of character and somewhat bullish imo. Which brings me to a sentence from the latest financial statement.
"During the second quarter, underground exploration drilling has commenced at Sao Chico. A programme of approximately 6,000 metres is planned to test the down dip continuity of the central ore zone. The first hole, completed within the last seven days, reported an intersection of 46.2 g/t of gold over a drilled width of 2.32 metre, approximately 240 metres from surface and 100 metres down-dip from the current lowest developed level."
We've had grades before in excess of 100g/t, so I didn't read anything into this but I just can't help but feel that the two are inter-linked. Perhaps I am adding 2 and 2 together to make 5, but it would be interesting if anyone else have been thinking along these lines.

[rajaster] 15/8/2016 09:45

Most of the shares fratelli bought were 6p a few years back..so to be fair to them they could hardly sell out just yet.. But i agree colin if gold hits 2k+ there will be major fireworks.

[colinvest] 15/8/2016 09:31

It's all behind us now, hopefully, unless Fratelli drip feed some sales of shares they now have at a healthy 60% profit. Hardly likely when they now have such a strong position to profit many times over with a mouth-watering slice of SRB's equity. What price SRB when gold lifts off to $2,000+? All Fratelli needs to do is to sit back and watch their capital grow into the 100's of millions; - with a faithful following by the likes of ourselves ..!

[cotton4] 15/8/2016 09:17

3.6p was at a premium to the company's share price when the loan was made.

[hraj] 15/8/2016 08:32

RNS today, fratelli have converted their loan to equity, although i'm disappointed that they were given shares at 3.6p when the current share price is near 6p. This RNS may explain why there was no mention of this fratelli loan on friday. Surely it would have been better just paying the 10% interest and retaining the loan instead of converting to equity for such ridiculous prices, stinks of another kind of market fraud.

[hraj] 12/8/2016 13:14

interesting points gents, i also saw that the min life was seen as 10 years. it was covered by mike around 1 year ago in one of the webcasts or try the corporate videos from jan 2016, should be in the end of year financial results too.

[tightfist] 12/8/2016 12:41

Hi Cotton,With their imminent cash generation I wouldn't discount a bid but M&A with narrow vein miners that seems less likely because of operational and resource challenges. That's why I thought of Fratelli who must be comfortable with those issues.I saw some figures from Chip recently which highlighted that SRB enterprise value is very high relative to reserves. Hence my query about life-of-mine visibility; that would hold back the share price (like it has at Medusa if you follow that story!).I wouldn't be surprised to see SRB dip back to around 5.5p if impatient investors need to fund their next favourite go-go PM stock purchase. The SRB headline figures this morning were maybe not sufficiently exciting to keep loose holders on board?Cheers, tightfist

[cotton4] 12/8/2016 11:24

Can't see a bid early doors from Fratelli. Think that they will be reasonably pleased with their investment at this time given the achievements of the current management. I and probably they will be looking for a re-rating of the shares in due course as mentioned in the AGM statement. As for life of mine I remember reading a couple of years back that 10 years was mentioned for Palito but wouldn't swear to this. Have no idea with regard to Sao Chico but I do take comfort that Mike Hodgson was comfortable concentrating in Brazil which would indicate that the management team that there are still plenty of opportunities yet to be targeted. I believe that they are also looking at any viable M&A opportunities and there is always the possibility that there may be a takeover approach for Serabi. I also believe that the management have always been prudent with regard to their forecasting, which I like. All in all its still early days but very much encouraging given that they are now cash positive. Getting the debt down will be and added bonus with a saving of ~10% there.

[hraj] 12/8/2016 11:13

question is can the share price hold water above 6p?

[tightfist] 12/8/2016 11:00

Hi Cotton,Yes, let's hope that the Reis and PoG can offset each other. I guess the short-term Olympics FX effect is substantial versus routine Brasilian transactions, but the longer term economic drain will be there for decades?I have not seen reference to the 10% reduced mine tonnage output in Q2 vs Q1. Palito seems to be plateaued compared with Q2 2015, and Sao Chico isn't (yet) setting the world on fire. I note that they have acquired another tenement to the West and there was that one-off early very high grade deep intersection, and they are rapidly going deeper with the declines.Even if they keep going the way they are it's becoming a nice cash machine, providing it's not squandered. Do you foresee a bid from Fratelli? I haven't looked at life-of-mine visibility, have you? Cheers, tightfist

[cotton4] 12/8/2016 10:05

Totally agree tightfist. The Real is I feel a short term concern but if the pundits are correct, this should be more than compensated for by an increase in the pog. A successful exploration program is also potentially on the cards.

[tightfist] 12/8/2016 09:59

The H1 results require careful reading. If one follows the cash accumulation it looks promising but the headline P&L is disappointing due to an interim $(1.0)m accounting treatment of the Fratelli convertible loan which will be reversed-out at the year end.Today's and June's brrmedia videos are encouraging; July was the best-ever production month and there is the sentiment of progressive month-on-month production increases, positioning for exceeding 37,000 guidance, as expected. Next year we should see that the surface stockpiles (and tailings?) have finally been worked-down and the third ball mill will enable a 25% increase in mill processing of higher grade run-of-mine ore.At the start of 2017 we should have the Sprott and Fratelli loans paid-down, a corresponding reduction in finance costs AND cleaner accounts, and significant cash accumulating on the balance sheet.My biggest concerns are how far the strength of the Reis will run (reference to carry-trade investing) and grades from Sao Chico. The upside is the organic growth opportunities at both mines.Cheers, tightfist

[hraj] 12/8/2016 08:26

RNS today... 38% increase in revenue.. drop in debt to 2million$.. further june 2016 just over 1 million, however Brazilian real strengthening (high interest+olympics affect with in ward flow of money) has lead to an increase in AISC.. now looking at $985. sao chico production only started jan 2016.. so not included in accounts for previous years guidance(if i read that right).

[cotton4] 05/8/2016 07:57

Second half results will be out next Friday or a week on Monday. Expecting at least a 33% increase in profits with sales coming in close to $13m and profits over $2m. Current quarter should be even better subject to costs and the pog holding up. We also have the exploration results possibly before the end of the year. A positive result here will be welcome. All in all a lot to look forward to. IMO

[cascudi] 18/7/2016 15:22

gold price last year went down just before august and then it started to climb again. i don`t think gold climbing is over but for sure people are taking profit...

the world economy does not change every 2 weeks otherwise usa will have increase interest rate in the last meeting.. but they seem to not be able to predict their economy..

if gold has climbed in the last 6 months is because there are people in us who think that usa market is too high and start to be risky...

this is my modest opinion.

[bsg] 18/7/2016 14:46

Who thinks gold is going to fill the gap down to $1260?

[bsg] 18/7/2016 14:16

A divi would be nice.

[hraj] 18/7/2016 13:54

definitely an interesting RNS.. hopefully once debt is paid off and thes a freeflow of operating profits we can start seeing the company buy back shares from frattelli.. or a cash buy out from them for multiples of the current price(we wish).

[rame4] 18/7/2016 10:46

This is really worth keeping an eye on...

"During the second quarter, underground exploration drilling has commenced at Sao Chico. A programme of approximately 6,000 metres is planned to test the down dip continuity of the central ore zone. The first hole, completed within the last seven days, reported an intersection of 46.2 g/t of gold over a drilled width of 2.32 metre, approximately 240 metres from surface and 100 metres down-dip from the current lowest developed level."

[colinvest] 18/7/2016 07:31

High potential is being realised, and reflected in the 1/2 yearly statement out today. Good possibility of shares being re-rated any time soon.

[hraj] 14/7/2016 16:15

interest rates remain the same... gold weaker for now.. gbp strenghtens.

[hraj] 14/7/2016 11:25

carneys bank of england interest rate decision will decide what happens to gold.. interest rate cut will see gold move higher again(so i think).. lets see what happens.

[tightfist] 14/7/2016 09:40

It seems to be working a little more this morning. On the face of it, a curious time to be selling with H1 results imminent, but I guess there are other Goldies to buy into, going in the opposite direction...

[mofan] 13/7/2016 14:34

If the drop was to acquire shares it dose not seem to have worked.

[hraj] 13/7/2016 12:11

yeh..golds fallen.. but not by enough to see this type of drop.