Altyngold Share Discussion Threads

[roguetreader] 25/7/2019 13:52

I think re timing we are finally moving to the tipping point i.e. They are going to get / take the funding on offer (possibly after the results which will hopefully be v positive) and the share price starts to seriously re-rate OR they end up buying the remaining 30% of the company and take it private. I think selling it is unlikely given the current Market Cap and the amount of capital they have invested, but I'm no expert. Personally after a long wait I will be disappointed if it is anything other option 1.

[jc2706] 25/7/2019 13:11

To use a cricketing term, they just need to play with a straight bat and the rewards should be pretty good from here.

Let's ignore the baggage and look at the company with a fresh perspective.

This is a company that is sitting on a resource of 5m oz, with the potential for another 3m oz, with reserves of 2.26m oz. That last figure is worth repeating - 2.26m oz reserves. That is more than most gold companies on AIM have as a resource and can easily support the targeted 100k oz production per year.

By borrowing $13m they can move towards the target production rate with the addition of internal cash flow.

They can break even at a production rate of 15k oz with gold $130/oz less than it currently is.

With the current limited capital injection they should be able to increase production to a rate above 20k oz in H2, at which point I would expect them to be securely profitable.

They have limited borrowings.

They have another asset, Karasuyskoe, that they are exploring and paid $27.5m for the exploration database (it had better be good for that money!). The fact that they didn't impair this when they went through confirmatory exploration suggests that it was what they expected. We do, however, know little about the potential of this asset.

The market capitalisation is £11m.

So, ignoring history and the lack of communication that appears endemic within the company, the actual assets of the company and the potential for development appear suggestive of a much higher market capitalisation. It requires that trigger and some time to realise this and the risks remain but the rewards seem worthwhile.

[excellance] 25/7/2019 12:53

Do this company even do PR?

[excellance] 25/7/2019 12:51

They are well under water then, lost 80% of their capital value, and they won't want to sell at current prices.

This means surely that any good news will push the share price up significantly towards at least 2.5p before they even consider selling any.

The good news is already here. High gold price, doubling of production, don't know about grades, but revenues aught to be gushing in right now.

[vish65] 25/7/2019 12:40

AR acquired its initial 60% for 2p.

Since then it has placed at 1.97p , 2.175p, 2.8p and converted loans at 3p and bought out Blackwill Trades for 3p to get to 69.8% holding.

But the price has dropped to around 0.4p

They operate a low profile business and someone building a stake from the existing share base it would be high risk and difficult. AR are well under and are acquiring shares not releasing them . But they keep doing it at a higher price . Yet buyers are needed to drive the price up. Altyn havent indicated a desire to raise via equity rather from loans

We dont know the significance of these trades or the financing outcome (good or bsd) but this is certainly on a knife edge IMV

They tried work the market with their 3p'at a ptemium' transactions and it backfired.

Anything is possible now.

[jc2706] 25/7/2019 12:07

If I was the majority shareholder I would prefer the bank loan to dilution. The impact on the bottom line of the capital would be so large that the bank loan could be paid down pretty quickly. Bite the bullet and get it done.

[excellance] 25/7/2019 11:53

The problem is how to inject capital for development.

Clearly directors aren't happy about the terms offered by banks.

Another solution could be inviting a new partner and placing shares to give then equity for a cash injection.

This seems to be the most likely outcome.

[jc2706] 25/7/2019 11:44

We don't know is the simple answer. Governance may prevent them from simply loaning the money.

[sloppyg] 25/7/2019 11:34

I believe AFR currently own 69.7% of the equity.

Am i right in saying if they cross the 70% threshold they are obliged to bid for the entire business ?

.....was just thinking that this is perhaps what is preventing them injecting any more capital themselves as previously they have done this via the convertible route (aside from the recent 1m USD); hence 70% threshold would be triggered

Either way, given the NPV of Seki at current POG and how much they have already injected, I am struggling to see why they would not invest the final tranche to expedite matters here. They are clearly well resourced and the payback at current POG would be fairly swift;all this presuming of course they have confidence in the project !

[jc2706] 25/7/2019 08:45

It was similar on the 19th and 22nd as well. I await tonight's trading with interest!

[tightfist] 25/7/2019 08:29

Me too! Very strange transactions reported last night. Wait and see......

[jc2706] 25/7/2019 08:26

I think what I mean is that I haven't a clue what is going on!

[jc2706] 25/7/2019 08:25

I don't believe that this will go private. They have had years to do this and have shown no inclination to do so. I am also sceptical about this transferring to the bank potentially funding the operation. However, the trading has been odd over the last few days with several large transactions each night, some being reversed.

[platonl] 25/7/2019 07:20

As regards these massive off-book transactions, would it be too far-fetched a thougt that African Resources is transferring shares to Bank CenterCredit as part of a funding arrangement to be announced? Or am I dreaming?

[excellance] 25/7/2019 02:09

More likely a deal of some sort

[vish65] 24/7/2019 20:18

Volume was over 100 million on 19/7.with 78 million buys.

High volumes at the bottom usually signal something !

Maybe its going private .

[excellance] 24/7/2019 19:35

50m shares sold today at 2.56 pm
How extraordinary!
And the share price remained at 43/47
Bizarre.
Any explanation?

[excellance] 24/7/2019 18:21

I think the chart proves that. A measured, constant and relentless regime of selling, yet no holdings rns, very odd, but a picture says a thousand words,

[tim000] 24/7/2019 17:23

I suspect there's an institutional seller in the background, which is unloading shares as and when there is PI buying. Another reason for the lack of progress on the share price.

[tim000] 24/7/2019 17:17

Your third para is spot on JC. Unless people crunch the numbers they haven't realised just how transformational recent economic events have been for ALTN. Hence the buying opportunity until the company publishes its results (although I expect H2 to be much stronger than H1, partly due to the new equipment only recently coming online, and partly the recent increase in gold price).

[jc2706] 24/7/2019 17:05

Indeed. The combination of an unprofitable business, bank punitive interest rates as a result and what is effectively a family business was enough to put off the company from accepting the loans offered (incorrectly I believe as the benefits would have been transformational).

With production improving from the new equipment and the gold price providing a timely uplift to revenues, the bottom line should be looking a lot more attractive to lenders.

I am not sure that the market realises just how transformational this whole process could be to Altyn. The target production rate is 100k oz. Sure, it is a target but in large part it is one supported by both the ore body and the plant so it is actually one that is realistic. Both the target production and the ore body are larger (much larger in the case of the gold in the ground) than SHG or AAZ.

[tim000] 24/7/2019 16:53

The reason is that the mine has not been consistently profitable. No bank is going to lend large amounts of money to a consistently loss-making business. But the management seems to have been working hard to address that, eg converting debt into equity. It’s almost certain that the company is now very profitable. There’s a good reason why the company expects to conclude the bank finance negotiations in Q3. It’s not because they’ve been talking incessantly for a year.

[excellance] 24/7/2019 16:42

Why?

Because the bankers are greedy and always put horrendous penalties and subjective clauses, and often want offtake arrangements and hedging with mates in the city.

In short, if "we" can do this without dirty city money then that's got my vote even if it takes longer.

[roguetreader] 24/7/2019 16:21

They need a total of $47.4M to complete the underground development programme that has been slowly progressing for the last 2-3 years, however they are only looking to borrow $13M of this externally the rest they are looking to fund from cashflow. Their current market cap is £11.68M (approx $14.68M), so in terms of market cap the borrowings look quite demanding percentage wise. But given the mine is a producer, with practically no current debt, where the NPV for Sekisovskoye alone is $257M at $1200 gold and $325M at $1400 gold, the borrowings are peanuts and the total CAPEX required small beer. The question is why it has taken two years + to obtain funding (assuming they get it in Q3 - not holding my breath), when the case looks so good from a feasibility perspective.

[excellance] 24/7/2019 15:56

We are still struggling to break out from the long term down trend, but break out we will...or go bust!

The current price of gold, and medium term future prospect for ths pog are supportive in the sector. We know altn need a lot of cash to develop their assets into a viable money spinner but in the meantime can increase revenues with relatively small investment, ie the recent digger and dumper truck.

The cash must be gushing in by now!