Altyngold Share Discussion Threads

[homebrewruss] 07/11/2019 12:45

Has anyone ever had a reply from the company via email or other method?
I've sent an email today (to the [e-mail] address) asking if we might get more regular updates and when we might next hope to get one..

[tightfist] 07/11/2019 12:39

Hi Chip,.Thanks for your clarification, I had not appreciated the modelled CF projections in #1217 were post-Capex. (I am probably missing the blindingly obvious but the Vermyn report has $117m/4 year Capex whilst you mention $54m outstanding - are you figuring $63m has already been effectively spent or will be loaned?). An NPV projection of $325m at $1,400 PoG is pretty compelling for a £12m MC combined with a 6% loan capability..I don't have any qualms about modelling the future as long as one is thoroughly cognisant of its assumptions. For me the real issues at ALTN are (1) the short-term operational management of the company and (2) the long-term control/objectives of the family/AR. The potential upside is cherry-picking Kara/T-S in parallel to generate some additional early cash-flow..Cheers, tightfistPS: I see that this morning's MML AGM voting let the inward-looking BoD off the hook; must surely have made some great reassurances to the larger ii's?

[chipperfrd] 07/11/2019 11:22

TF,

The after-tax cashflows by year that I posted yesterday are after deductions for Capex. Namely: UG capex, Infrastructure Capex, Ore handling Capex, Process plant expansion Capex and Contingency Reserve i.a.w. the Deloitte 2014 report. In total some US$54m over years 0 - 4.

I know how careful one has to be in placing too much reliance on forward models as there are so many variables that can make a mockery of such work - but how else are we to try and make good investment decisions?

Sometimes such models work well and sometimes not. But by factoring-in changing events and actual results it can be possible to reduce the rose-tinted speculation and help to sort the wheat from the chaff on the market.

ALTN is a good case in point. They have seemingly marked time for a considerable period whilst attempting to raise the necessary funds to kickstart their growth plan. Recent news would appear to indicate that finally they may be in a position to get back on track - time will tell!
Chip

[tightfist] 07/11/2019 09:50

Hi Chip,Like you I see the $17m as a kick-start to self-funding. I just wondered if you had looked at self-funding the remaining cash-flow requirements of the original 2014 Capex schedule and elapsed timing?.Of course, if they can demonstrate progress on the ground, expanding operating cash generation and share price progression maybe they will be able to enlarge the loan?.Cheers, tightfist

[excellance] 07/11/2019 08:57

and the odd $17m loan to help the self funded expansion...

[chipperfrd] 07/11/2019 08:55

Hi tightfist,

As I said in an earlier post yesterday, I expect an organic, self-funding expansion.

[tightfist] 06/11/2019 17:56

Hi Chip,Good to see you around. Thanks for the 2014 Deloitte report reminder. In that report they had a projected total CAPEX requirement of $117m, plus $13m contingencies. It's front-end loaded too. I don't have a feel for how much has been funded/spent in the next 4 years (until H1 2019) but it cannot be significant?.Have you taken a look at an alternative scenario with slower self-fundable expansion through potential FCF generation? Or are you presuming an additional dilutive fund-raising at a far higher share price to hit the expansion rate; (BTW a placing was recently rejected on this BB)..I would love to see the original planned rate of expansion, but is it still feasible?.Cheers, tightfist

[excellance] 06/11/2019 17:26

So, with funding sorted, new equipment delivered, DB shares dumped, and don't forget the new website...is this the bottom in terms of sp?

I think it probably is.

[excellance] 06/11/2019 16:51

Very wide variation of prices today from 41 to 53, very illiquid.

[jc2706] 06/11/2019 16:24

Chipperfrd,

I can live with that production profile. Hitting 15k oz this year would be an achievement in itself and based on the equipment bought before the loan. Even at that level of production they should be generating a decent amount of cash considering how low the operating costs are currently.

[excellance] 06/11/2019 14:16

It's clear as day to me, full steam ahead!

[chipperfrd] 06/11/2019 13:52

JC
I agree!

Again, using the Deloitte report as a guide, progress should be close to the following:

Year .. Milled .. Grade .. Au produced0 ..... 150kt ... 3.7 .... 15koz1 ..... 500kt ... 3.7 .... 50koz2 ..... 650kt ... 4.1 .... 72koz3 ..... 850kt ... 4.4 ... 101koz4 .... 1000kt ... 4.4 ... 120koz then grade averages c. 4.12 for the next 14 years and production averages c. 107koz pa


So over the next couple of years we can use the above yardstick to judge progress to plan taking year 0 as 2019 ish!

[excellance] 06/11/2019 13:35

I'd be happy with 50k pa for a couple of years as we ramp up.

Still good profit and values altn a lot higher than today.

[jc2706] 06/11/2019 13:29

Chipperfrd,

I agree that, given the proven reserves and recovery rate, processing of the underground ore to produce 100k oz per annum implies a capacity of 1mtpa. The problem at the moment is that the underground ore is not achieving the grades suggested in the reserves and is not of sufficient quantity to negate the need to process low grade stockpiles. As such, whilst I am confident that production will move forwards from here, I will require considerably more evidence going forward that we are on the way to 100k oz. There is certainly some merit to the suggestion that lower grade blocks are being worked on the way to the higher grade underground ore. Whether the speed of this progress is to a design or otherwise is another discussion and, ultimately, irrelevant as we are where we are.

[chipperfrd] 06/11/2019 12:43

Based on the original Deloitte technical report (2014) the Seki plant would need to expand capacity from the current 850ktpa to 1mtpa in order to sustain a c. 100koz pa Au production. Rebasing the start to 2019 it should take until 2023 to meet that level.

Using the costs/grade/recovery/tax/etc metrics from that report the annual after-tax cashflows at differing gold prices would be as follows:

PoG ... CF
1200 .. US$44m
1300 .. US$52m
1400 .. US$51m onset of additional super profit tax!!
1500 .. US$58m
1600 .. US$65m

My interpretation of the 'super profit tax' may well be in error.
All of the above subject to achievement of production at the grades and costs as per Deloitte!

However, although Altyn is a very long way from achieving such a rosy outcome and given that my calculations may well be subject to significant error, the possible cash flows do serve to indicate that should Seki achieve it's target rates, organic growth through getting TS into production might be smoothly achieved.
Chip

[chipperfrd] 06/11/2019 12:03

So far the family (AR) have personally funded c. US$75m of Altyn.

Based on the current issued shares they would need a share price of c. 2.34p to just break even.

Realistically, they would likely be better served by finally getting ALTN up to the targeted 100koz pa from Seki and then drawing 70% of dividends over a LoM of 20-30+ years.

Clearly TS is likely to be an even bigger project and will require significant pre-production CAPEX to move it into production from multiple open pits. So likely it will demand a slice of the Seki free cash flow if organic self-funding is going to be the way forward.

In this scenario Seki has to be the cash cow that both funds TS and also rewards AR through dividend payments. I doubt that the London share price has much of a direct bearing on all this as I doubt AR will be too interested in selling down their stake.
Chip

[excellance] 06/11/2019 11:20

I think the plan was always to get the mine into production then sell off some of the shares for vast profit.

[homebrewruss] 06/11/2019 11:14

Do we need II's? Probably too small/risky at the moment for most of them.
AAZ has done fine however with a mostly retail (and board) shareholder base

[sloppyg] 06/11/2019 11:05

Picked up some more at 0.435 which honestly didn't expect to see again.

The flip side of the concentrated family ownership is that dilution is far less likely ,as has been evidenced so far.

I do think however there is some reputational risk factored in to the current share price Some of the events that played out at Kemin and Kazakh Gold will no doubt be a consideration for Compliance at any II's considering investment.

[excellance] 06/11/2019 10:46

My opinion is that the chaps on site knew they had 300,000 tonnes of low grade ore to shift before mining could realistically take place.

They've worked for three years shifting dirt, getting a bit of gold to cover costs, molding the landscape of the site ready for phase 2.

Thr next phase is to capitalise on the work done by accessing higher grade deeper ore and getting into full production.

I think the comms problem will resolve itself from now on.

[roguetreader] 06/11/2019 10:43

Now that the finance is in place IMO it is now 90% plus about delivery, delivery, delivery. Management (BOD / Assuabayev's)have to deliver, there is no longer any room for giving the lack of finance as the major constraint to progress. They may well come up against additional operational problems as they apply their plan(?), but it will be how they manage and overcome these that should be key to increased production and profitability. If done professionally this should lead to a huge improvement to both and a rerating of the SP; assuming this goes hand in hand with corresponding improvements in communication to shareholders. The next twelve months are going to be v interesting here.

[jc2706] 06/11/2019 10:18

And you need an II to invest here because.......? There is already 70% taken out of public hands which is far more than most on AIM so an II would be a chocolate teapot to be honest.

I suspect that ownership structure may be something of a disincentive to invest here but I also suspect that this is minor compared to the lack of communication, poor production numbers over the last few years and lack of investment. The last of these looks like it may well be ameliorated by the recent loan which should have a beneficial impact on the second. Which means that address the first (communication) and we should progress much more readily.

[excellance] 06/11/2019 10:09

And that's the biggest negative for me.

Hopefully these can get mine development under way then sell a chunk of their holding onto the open market for a nice profit.

[vish65] 06/11/2019 09:42

Stevea171. Thats interesting . However what is the share structure like? Is 70% held by a single investor and the management run by blood relatives ? To me thats what will always go against Altyn. Lack of diversity of holders ,( no voting power) and management taken fron family rather than the best on the market. Theres alwaya an air of uncertainty here. How can an II buy a sizeable chunk 10 - 15 % and be secure in that investment.

Having said that the Gold fundamentals alone should push this alot higher which is why I'm here . But the corporate structure is still IMV off putting to many and may be a drag on the sp

[chrisis33] 06/11/2019 07:37

good post stevea171. additionally, at Teren-sai, Altyn also has a total exploration target (as stated on their website) of 9m ounces. lots of gold in the ground.