Chaarat Gold Share Discussion Threads

[casual47] 28/8/2018 18:53

Polymetal has been busy selling non-core assets this year (including ones which it only acquired in 2016) so certainly appears to be a logical step for them

[casual47] 28/8/2018 18:48

Suggestion over on LSE that the acquisition is the Kapan mine from Polymetal.

It certainly fits the bill:

1. It is in a CIS country (Armenia)
2. It is a polymetal mine producing gold, silver, copper and zinc
3. It produced 50k oz gold equivalent in 2017 (according to 2017 report)
4. Its EBITDA was 20 million USD in 2017 (according to 2017 report)

Polymetal 2017 report:

My guess is that, if this is true, that Polymetal is completely pulling out of Armenia and that the sale will comprise both Kapan and a mile 70 miles away from it called Lichkvaz.

In 2017 total cash cost was $871/oz and AISC was $1292/oz which is very high but this is probably due to the significant work they did in 2017 to upgrade the underground mine as evidenced by a 90% increase in gold eq. oz output and 233% increase in EBIDTA result, compared to 2016.

Polymetal bought the Kapan mine from Dundee Precious Metals in 2016 at a total consideration of just under $60 million: $32.5m loans were secured against it, Polymetal paid $10m in cash and $15m in shares and gave them a 2% net smelter royalty on future production (capped at $25m).

[casual47] 28/8/2018 14:34

Thought it was interesting they added the line below.

"The notes can be repaid early in cash upon 10 business days' notice provided that the minimum accrued interest payable on early repayment is 5% of the nominal amount"

I expect the vast bulk of these 2021 loan notes will be rolled into new ones at a much higher share price at some point, so shouldn't be too dilutory / cause share overhang which might hold back the share price

All in all happy with the minimal dilution to achieve quite a lot:

-2018, 2019 loan notes cleared/replaced with 2021 notes
-40m to start Tulkubash (I imagine that includes 2019 drilling season)
-a solid G&A buffer
-a 50k pa gold equivalent producer with nearly 20m pa profit before tax

[oli12] 28/8/2018 13:20

Nice update and addresses the concerns I voiced in my post last week about a lack of plan B. It would have been nice to know WHAT we are buying though.

[casual47] 28/8/2018 11:57

As far as I can see AAZ is not in the list of gold mines it included in its July powerpoint as potential "consolidation assets":

Kupol+Dvoinoye
AMMC
Kumtor (Centerra Gold)
Petropavlovsk plc
Yuzhuralzoloto
Nordgold NV
Altyntau (Kazzinc)
Highland Gold Mining
Susuman Zoloto
GV Gold (Vysochaishiy)
Seligdar
Zapadnaya GRK
Arbat Group
LLC Poisk (Yakutia)
Priisk Solovyevskiy
Kamchatka Gold
Vitim
Pustynnoye
Kazakhaltyn
Kurilgeo
Karalveyem
Vasilyevsky mine
Oina coop.
Oimyakonye
Mayksaya MC
Tal coop.
Druza
Trans-Siberian Gold
Priamurye MC
Oimyakonskaya GMC
Pavlik
Mangazeya Mining
Bozymchak
Ishtambery

[casual47] 28/8/2018 11:43

Malcontent by name, malcontent by nature ;)

Drilling results should be due next couple of days - can't complain about the newsflow!

[malcontent] 28/8/2018 11:00

this wait is starting to test my patience

[casual47] 28/8/2018 10:21

Would there be another fundraise after the "up to 100m" one?

From the "up to 100m" only 20m will go towards the acquisition, which means at least 55m will need to be found in addition. I suppose that could be a regular rolling bank financing facility secured against the new asset and paid for with its profits rather than convertible loan notes/placing?

[pjackson2] 28/8/2018 10:05

But no rns there. They would have to rns it

[pjackson2] 28/8/2018 10:03

Market cap of sax is about 48 mill according to lse

[fishhead1] 28/8/2018 09:42

From reading the RNS, I would assume that is the total price.

The location and the mention of a "polymetallic asset", production rate and LOM certainly fits in with the AAZ. Just not sure the valuation does.

[casual47] 28/8/2018 09:23

Do we assume from the RNS that the total price of the acquisition is $75m or that it is just the cash component and they may also get paid additionally in shares?

[casual47] 28/8/2018 08:48

Is AAZ's current LOM ending in 5 years?

[fishhead1] 28/8/2018 08:45

Cats - A decent shout nonetheless, but obvs can't be that.

[catsick] 28/8/2018 08:38

Well aaz is a gold producer with 50k production in the area although I doubt they would sell up anywhere close to that cheap ....

[fishhead1] 28/8/2018 08:23

Key here I think is the transformation from "developer" to "producing" company and the re-rating that should follow

[fishhead1] 28/8/2018 08:22

Interesting developments.

Anyone make any educated guesses who we are acquiring?

[casual47] 28/8/2018 08:17

Good news - addresses a lot of the niggly issues we had re. having something to show for all the talk when suspension is lifted.

Have to admit the ambition of the deal is toward the lower end of the scale I had expected; placing at "only" 37p, 50k oz pa (with current LOM remaining of 5 years).......but it is only the start so onwards and upwards!

[catsick] 28/8/2018 07:52

Interesting new transaction, seems like good value and the fact that the cbs are being exchanged at 30 and 33p indicates these will trade much higher when trading actually starts !

[richgit] 27/8/2018 16:49

Whilst some suggest I am a conspiracy theorist,I will simply point out the dilemma
that many seem oblivious to.

In the Dot-Com era (for mere example) an early investor in say Infobank(that became
the busted Izodia)and getting out at the right lucky time- £10,000 would easily
have become £1 Million.

If that happened today-just exactly where do you stash that £1 million ?
Euro Banks are under the Euro rule of "Bailin" not bailout.
Most US Banks were verging on insolvent in 2008.

I note that Deutsche Bank,and Morgan Stanley are currently a mere say 3.5% asset value decline away from insolvency which I think is less than the busted Lehmans,so how many other Banks are hiding the truth.

How many will take a hit from potential Debt defaults from other Countries and their currently progressively struggling currencies against their $Dollar debts.

No wonder the stock Market is one huge fraud machine to keep those asset values up
and hence,presumably,why QE to infinity is next,albeit infinity is the wrong word
as it will be QE until it all finally implodes and then the horrendous pain of start anew and chaos.




The UK supposedly Guarantees £85,000,though the UK is now so bust that such a promise may be more a fantasy like paying future pensions.

At some point I am going to drain my nominee accounts by at least 50% ,possibly turning some shares back to Certificate and transfer most relased funds to more vaulted Silver and Gold,as I fear what may also be an eventual looming question as to the financial state of such nominee accounts when the carnage comes.


Merely food for thought,as we all need to have some plans for what is eventually coming.

[richgit] 27/8/2018 15:43

casual47

In time you will discover that that so many so called conspiracy theories are denied facts.

I don`t suggest the bigger Western boys are interested in Kyrgistan,albeit I asmittedly did originally think the Chinese would be interested in a Gold friendly Kyrgistan /Charaat that would undoubtedly allow most of the Gold production to go to China.

My point about about the Consolidations and Takeovers is that at some point more
and more such takeovers, including now early days of Hostle bids will be at prgressively higher values of Gold in the ground etc .

That always leads to a "The last men standing"scenario, so concluding that a strapped for resources Market doesnt/wont include the likes of Kyrgistan is bunkum.

Hopefully now CGH will progress to proving its potential considerable worth
to the point none of us will have to worry about opportunistic valuation albeit
many of us may yet undervalue its potential multiples, until the days of the boss of the Comex Fraud Casino`s (Terry Duffy)strange comments of a Gold $5000+ event !?

Maybe before that "event" we will will witness Comex Gold at $800 and Physical at $1300 as nobody truly knows what $Trillions of becoming worthless confetti can still distort,most especially if the ESF has a percentage of the $21Trillion of Dark pool, off the books, $Dollars.

Isn`t that why we take our chances with Gold and Silver,as opposed to Tesla or Netflix etc ?!







IMHO

[casual47] 25/8/2018 12:01

Richgit - it is a fact that the Bigger Boys are not very interested in Kyrgyzstan or wider Central Asia.

The average $/"oz in the ground" for Central Asia is much lower than e.g. Latin America's for that exact reason.

Your conspiracy theories only work so much for Kyrgyzstan and the specifics of Chaarat.

[richgit] 25/8/2018 11:53

casual,

Let us hope for those of us invested,that this beast will be unleashed into a far more receptive Market.

It certainly now seems that JP Morgan is fully locked and loaded to make even more
obscene profits from their Comex double cross, as they are now the least short in paper gold and Silver since their entry into the Casino, when they inherited the Bear Sterns silver shorts.

Opportunistic ( and not so opportunistic)takeovers are accelerating as the Bigger Boys are desperate to add resources whilst multi-million ounce situations like CGH are now a remaining rarity due to the years of no budgets for exploration.

We can have our dreams of what CGH could achieve,and we certain;y do not want
those dreams to be stolen in any opportunism,albeit it will be some time before
the numbercrunching of what multiple would still be oportunistic.

A nice dream to hold.

[casual47] 25/8/2018 09:54

Cheers Pabs.

If you were cynically minded you could think that the BOD leaked the Kumtor offer info timed with the share price rallying towards 25p (friendly buys?) to then give them 6 month breathing space while they get drill results out and negotiate a financing deal for Tulkubash.

It would certainly be convenient to remain suspended as long as possible while they optimise the Tulkubash prospect as much as they can.

The original leaked article was very professional - it had graphics and everything, basically a full presentation of why the deal makes sense.

I believe this was the original "leak":

[2pablo] 25/8/2018 09:44

Casual - nothing back from Bob B. yet, nor did I copy to [e-mail].

Yes, it's strange that the Govt has virtually said nothing. Not sure if they commented very early on alongside Centerra when the latter completely ridiculed the idea.

Anyway, it must be game still on - the only reason I can think of that it could be off and not yet released to us, would be another deal needed to stop tanking on return from suspension.