Altyngold Share Discussion Threads

[roguetreader] 03/9/2018 17:09

Cheers Chip / SG, yep finely balanced between glass half full / half empty. Financials are stringently managed and as Chip points out moving marginally to the positive.

With regard to the financing, I find it increasingly both frustrating and interesting. The Assaubayev family (AR effective owners) are one of the prominent business family's in Kazahkstan and reputedly worth hundred's of millions ($) if not a billion $ ?? (hard to find out their actual net worth. So on the face of it the funding for Altyn is small beer to them, therefore why take so long procuring funding elsewhere? My current guess / take on it is that they are not in a hurry with gold at these prices and are maybe happy to sit on the Sekisovskoye and Karasuyskoye as assets that tick-over at the moment and that they will be happy to speed up development or sell them on later, when gold takes off.

[sloppyg] 03/9/2018 16:24

Does it not seem a strange decision to effectively mothball development when have already committed significant sums to date and the remaining funding required does not appear, at least on the face of it, to be overly significant ?

[chipperfrd] 03/9/2018 15:06

Thanks RT, I agree with all of your post.

I was discussing all this with an investing chum this morning and making the point that, at least, the small earnings achieved in 1H18 have tipped the main financial metrics into small positive percentages, the first time since FY2013!!

However, overall they are just hanging on until they have their mining operation working at an optimum level, and that appears to be totally contingent on their long-awaited fresh capital spend.

Still very much "wait and see", but this underfunding has been going on for far too long now. I am assuming that US sanctions against Asian countries may well have impacted the expected loan from Freedom Capital. But I could well be wrong about that!

Like many small goldies the share price is now at a capitulation level. The PoG is certainly not helping and appears totally at odds with world debt, real inflation, developing countries currency crisis, et al. The mind boggles !!

All the best
Chip

[roguetreader] 03/9/2018 14:16

My take on the half-year:

- Gold Production of 8,461 ounces was a little disappointing as I was looking for between 9 to 10k. This is partially explained by the low production in March / April due to the ‘planned’; maintenance. There was however no mention of this planned maintenance in the April report.

- Ore Production hit 38K tonnes in June (March 11K), with forecasts of between 30 - 35K going forward until financing completed and new equipment procured.

- Op Cash Flow $2.5M with a pre tax profit of $600K achieved due to the costs reduction program and gold priced at $1322

- Looking at the overall current Assets & Liabilities position in the current report v the EOY 2017 position in the April report. Inventories, Receivables and Cash $2.3M up, with Payables, Liabilities, Provisions and Borrowings $1.5M up. Therefore, net improvement of approx. $800K in the short term.

- Long term total debt now down to $2.9M after the conversion of $9.7M to equity held by AR. Total debt now stands at approx. $4.4M (ignoring cash).

Overall at face value the above looks reasonable. However, there are a few concerns and uncertainties:

Cash is very low at $200K and Altyn are wholly dependent on AR backstopping them as a bank.

The financials above were achieved with gold at $1322; it is currently around $1200. With the drop in the gold price financing is unlikely to get easier in the near term, so further delays are possible. So the question is can Altyn tread water financially with gold at these price levels? I think they probably can but IMO it is finely balanced. As per my post in May, the irony is that if they could crack on with the finance and the development the likelihood is that they should be producing at a lower cost base and be able to manage the lower gold price more easily.

AR are looking to take on most of the long term borrowing in Q3 by converting the debt to equity, which will take them over 70% equity owners. There must be some doubt as to whether or not they will not eventually take the company private if it is beneficial to them.

Transparency and reporting to shareholders remains poor. Overall, it remains a waiting game.

All IMO.

RT

[pj 1] 31/8/2018 16:51

5PM Friday RNS.....

[roguetreader] 31/8/2018 10:26

Half-Year report due out today??!! Has been late in the past, should be interesting read.

[roguetreader] 13/8/2018 11:29

Chrisdgb
Yes, progress has been painfully slow, but to date (previous update in April) there has been progress. I'm looking for this to continue with the half-year, but won't be holding my breath re them meeting all objectives i.e. it won't be a surprise to me if some or all elements of the financing have moved out again.

[chrisdgb] 13/8/2018 10:39

So, not too long to the interims now...really need some newsflow as it is just guess work..the 3p looks a long way off at the moment...

[roguetreader] 12/7/2018 11:23

SG, agreed. I decided a month back that I am going to wait until we receive an informed update, before I invest further. I see the current price as very low and a bargain, but IMO there comes a point, when concrete progress is required before further funds are put forward.

[sloppyg] 12/7/2018 11:18

Indeed continued radio silence is very frustrating.

What is strange to me is that AFR have already invested significant resources, yet appear on the face of it, to be prepared to slow down u/g development whilst we await to secure a relatively small final tranche of funding to get us over the line.

The flip side of course is that I am sure they would not let their investment to date go to the wall.

All a bit bemusing and cannot work out if will regret not adding significantly more at 1p or not.......just about sums up the situation here !

[chrisdgb] 04/7/2018 09:22

So frustrating................

[roguetreader] 02/7/2018 16:51

Well AGM statement out, BUT zero update on progress, so looks like the we will have to wait for further news.

[roguetreader] 29/6/2018 18:17

Yep, looks like we will have to wait for an update......so nothing new there :)

[timgw] 29/6/2018 17:30

"Next week" has just ended. Hey ho.....

[roguetreader] 22/6/2018 15:13

The last two years have seen the AGM results out on the 28/06 - which has been accompanied by an update of sorts; 'hopefully' we will get something next week.

[sandeels] 15/6/2018 13:14

It's a w. You're not alone and may yet turn out to be the best you've ever made. We live in hope...

[its a worry] 15/6/2018 11:23

It does seem to be very slow moving . . . . i've had these since they were Hambledon . . . one of the worst investments i've ever made . . .

[chrisdgb] 12/6/2018 15:02

Can't believe we are now under 1p on the bid.....

[chrisdgb] 31/5/2018 09:09

Would be lovely to have some positive action here...............!

[stonefold] 24/5/2018 15:50

News that the two toddlers Kim and Trump are no longer playing nicely in the sandpit, immediately added $10 per oz to the gold price.

[timgw] 11/5/2018 15:36

I would take 3p to come out even!

[bo doodak] 01/5/2018 19:38

AR haven't chosen to bridge the (quite small) finance gap themselves. They surely can afford it. The continuing opportunity cost so far of choosing not to has been high given the G price.

Tie this in with the paucity of updates, and as said, ongoing Karasuyskoe spending.

One has to look for a rational reason. Delisting, at 3p or less has to be a real risk if by Q3 this finance gap stays unresolved.

Hopefully this is not what AR intend.

[chipperfrd] 01/5/2018 13:27

Good summary RT !

Like most, I am pretty fed up with the lack of progress and paucity of information supplied by the company. It is hardly surprising that the share price sags when they do the bare minimum in terms of updates and move at such a sluggardly rate to boost CAPEX.

There are small positives in the 2017 report (eg. small +ve FCF and EBITDA) but progress is just too slow.

I hope they finally secure the US$15m from Freedom and move a bit more quickly to set up an equipment lease deal (presumably with the Chinese?).

I understand that the US has imposed some financial sanctions on Kazakhstan. I hope that has not been a stumbling block to obtaining their loan.
Chip

[roguetreader] 01/5/2018 12:07

IMO not a lot in the announcements that was not already available. The financing seems to have slipped further (Q3) for the underground equipment needed to produce the ounces, which seems strange to me in the scheme of things as surely the faster they get it financed the sooner they start producing cash!!? They have repeatedly stated that they need to get the right deal for the company, which is good, but if getting that deal takes an eternity then there is the ongoing cash burn to offset it as a negative. Where is the balance between the two?

They are stringently managing costs whilst they get the financing sorted out for the mining equipment and have stated that AR will backstop any short term cash needs. AR are also intending to roll their outstanding loans into equity, which will further increase their percentage ownership (Not sure AR increasing their percentage ownership of the company is a good thing but without them Altyn would be struggling)

They have made progress in the mine despite the lack of investment and the ounces are v slowly ramping up, which makes the delays on equipment more frustrating. The work on the Declines and the ore bodies appears to be in place ready to ramp up to 40K tonnes per month for Q3/4, subject to the equipment be available in Q3 (or thats how I read it).

The wording of all forward looking statements (2018 production) is so heavily caveated against the acquisition of the additional mining equipment in Q3 that any 2018 forecasts are almost impossible. However, the indication as I read it is that the rate of ounces produced should be no worse than H2 2017 until Q3, at which point it will start to ramp up. That's IF they get the funding in place and get the equipment by Q3.

Finances are on a knife edge in the sense that cash is $700K, Receivables have come down $500K and Payables have gone up $2M. The cash position would be a worry if it wasn't for AR backstopping the company. However, overall debt has come down and is not unduly high given where they are in the mine-life cycle. Given the financial tightrope they are walking, i'm not sure why they are spending anything on Karasuyskoe at this time unless there is a contractual / political reason to do so. Surely every $ at this time would be better spent on Sekisovskoye.

I haven't looked at the Capex in any detail so I don't know if this has changed since they last published their forecasts.

Overall a bit of a curates egg. They definitely seem to be progressing, but progress is so painfully slow at times I sometimes wonder if it will all grind to a halt. That said the risk reward here is enormous, so I'm continuing to hold, but not a buyer until they start producing profitable ounces. If they do that and actually meet their targets and timescales, then I'd be happy to double up.
RT

[sandeels] 01/5/2018 10:41

Regularly updating PIs would go a long way towards improving confidence and share price
As usual, kept in the dark and fed on...