Shanta Gold Share Discussion Threads

[jc2706] 06/6/2019 09:22

The hedge made little difference to the last quarter results as it was rolled over. I expect the same again in Q2 as they seek to make as much revenue in a period where they have debt repayments scheduled. If the gold price should take a nose dive I wonder whether those bemoaning the hedge will congratulate the company for their foresight!

[redhill] 05/6/2019 18:55

More a question of buyers holding back after paying off a large chunk of borrowing.Waiting to see the cash position at the end of June.

[juju44] 05/6/2019 16:52

Shanta benefit pittle because of a very poor hedge

[jasper2712] 05/6/2019 16:47

Pity the rise in gold hasn't impacted on the share price!

[jc2706] 05/6/2019 14:28

Whilst I wouldn't wish it on the world, stagflation is actually the best scenario for gold. However, I don't foresee such an outcome with weak oil prices as this seems counter intuitive. But whatever the ultimate outcome with inflation/deflation/interest rates, gold is currently benefiting and so are gold miners as a result.

Given the debt repayment due this quarter, I fully expect SHG to continue with strong production numbers and rolling the hedge over this quarter. It should be interesting to see what the figures are when they are released in July.

[redtrend] 05/6/2019 14:01

The problem the US Fed now find themselves in, because of QT and Trump's trade wars, the global economy has been slowing significantly as has the velocity of USD (i.e. deflationary).

However because of Trump's trade wars and tariffs the US is going to experience price "inflation" on goods.

So they appear to be in a worst of all worlds stagflation scenario.

Do they cut even when their inflation gauges are showing 2%+, noting that it is "transitory" due to the tariffs (so FED blame Trump)? Perhaps collapse in oil price will help them out and offset some of the tariffs price increases.

Interesting times and this fear driven scenario is perfect scenario for gold miners and their margins. A rising gold price, with input costs (labour & oil prices) remaining relatively static or even declining if there's a major stock market collapse, bringing oil tumbling down with it.

[qs99] 05/6/2019 13:46

POG heading for $1,350? Can it get to $1,400? Effect on SHG should be material, even with hedge IMO ...DYOR

[qs99] 05/6/2019 12:31

Agreed, POG motoring again today, let's hope it can hold and progress from here.

[jc2706] 05/6/2019 09:36

Certainly the indicators are pointing towards a cut sooner rather than later in the US. This is likely to be a positive influence on the gold price.

[338] 05/6/2019 09:02

Canada will follow the Fed with rate cut...

[jc2706] 05/6/2019 08:21

The shift in interests rates has come earlier than expected. The most significant one will be the Fed where the market were pricing in rate cuts early next year until recently. It will be interesting to see when they actually do start cutting.

[338] 05/6/2019 08:13

Rate cut in Australia as retail sales MoM contracted... positive for PoG


AUD/USD
The Aussie pair remained seesawed throughout the day in the middle of RBA rate cuts. Australian economists and market experts had already expected a reduction in the interest rates this time. The policymakers declared a 25 bps rate cut marking the new interest rate near 1.25% over previous 1.50%. The Bank has performed a rate cut for the first time in the last three years. Following the RBA rate statement, the AUD/USD pair made a sudden jump of 0.30%, reaching near 0.6993 levels. However, the spike vanished within seconds and dropped back to 0.6965 levels. Also, earlier the day, Australian April MoM Retail Sales reported -0.1% over 0.2% estimates. Later the day, RBA Governor Philip Lowe mentioned that rate cut was to support the employment growth and maintain the desired inflation target. The Board also said that it would continue to monitor the developments in the labor market and adjust the monetary policy accordingly

[redhill] 05/6/2019 07:40

Gold now $1333.

[redhill] 04/6/2019 16:33

Wow that's two days running a convenient 200000 sale has gone to the MM's.

[jc2706] 04/6/2019 10:01

Pound weakness against the US Dollar benefits earnings translation. More significant is the value of the Tanzanian shilling against the US Dollar as costs are borne in this currency.

[jc2706] 04/6/2019 09:54

That is difficult to say precisely given the hedge position. Do they seek to unwind the hedge, thus missing out on (some of) the gold rise or do they just keep on rolling it forwards? I suspect that they will roll it forwards given the fact that the debt repayment requirements are the priority and if that is focused on at the expense of missing out on the potential for more substantial gold prices in the future, so be it. At least, this is what I would do.

Within the context of the debt repayments (or any other context for that matter), the current gold price is a boon and the EBITDA will increase in a leveraged fashion to the gold price as it flows through to the bottom line.

[qs99] 04/6/2019 09:18

What does pog at say $1,350 do to SHG EBITDA. In peoples opinion?

Also does £ weakness not help?

[qs99] 04/6/2019 07:29

POG heading North again on the start

[qs99] 03/6/2019 21:59

thanks. Looks like POG could continue a very decent rise. let's see GLA...

[338] 03/6/2019 19:37

Manufacturing in the US slumped to its lowest level in 30-months. The ISM manufacturing index fell to 52.1 for May, compared to expectations for 53. That was the lowest reading since October 2016.

The biggest detractor in supplier deliveries, which slumped 2.6% to 52, and inventories, which declined 2% to 50.9.

Construction spending also disappointed, with a flat reading compared to expectations for a 0.4% growth in April.

[338] 03/6/2019 18:38

PoG is now $1324

[redhill] 03/6/2019 16:18

I think the MM's need to shrink this visible spread a bit as the actual numbers are more 6.2p-6.4p