Chaarat Gold Share Discussion Threads

[casual47] 24/10/2019 10:57

Step 2. Will be tricky as he needs:

1. enough money to cover 2021 loan notes (a small percentage may convert into shares, I expect most will be happy to roll over but some may want to cash out)

2. Enough money to pay back the $17m "short term" loan

3. Enough money to bridge working capital needs for 2020 ($15m?)

So that would be about $35-50m, depending on how many of the 2021 cohort prefer to exit.

So far the loan notes uptake has been rather.....sluggish....so this may be rather ambitious.

[casual47] 24/10/2019 10:54

If I was Mr A my strategy would be:

1. Consolidate shareprice above 2021 loan note 37p conversion point

2. Get new investors and write out new 2022/2023 loan notes either at or above 42p (the conversion point for employee options)

3. Consolidate shareprice above 42p and have a coordinated option take-up by management

[2pablo] 24/10/2019 10:15

Looks like Martin A's strategy is clear with these fairly small trades he's making too, 'what we have, we hold'

[2pablo] 24/10/2019 10:13

Down to earth sort of chap that Darin.

With regards that 38.444p trade, not really much to write home about, a £75 Buy - lol

[casual47] 24/10/2019 08:06

Morning. New highest price paid: 38.444p

[casual47] 23/10/2019 14:25

Promotional interview with COO Darin Cooper



Some interesting points in it. E.g. more focus on North America re. investors.

[jc2706] 23/10/2019 12:07

That might well be the case but I am not sure that we will ever know what it is. I suspect that we will only see revenue, cash costs, AISC and EBITDA from Kapan reporting.

[casual47] 23/10/2019 11:55

Yes, of course true on the group level, but Kapan itself should be delivering a net profit on its own balance sheet.

[jc2706] 23/10/2019 11:51

Yes, but we aren't that and won't be for years. The water is going to be very muddy as regards net profit for many years owing to the development at Tulkubash, Kyzyltash and the M&A activity. Plenty of depreciation, amortization and exceptionals to come!

[casual47] 23/10/2019 11:47

For a mature company which will remain largely unchanged through the years you would want to see some net profit, I think.

[jc2706] 23/10/2019 11:39

I wouldn't put much emphasis on profit. I always look at cash generation as the ultimate determinator of value for a producing asset. The statement around cash costs is quite comprehensive - more so than most companies where cash costs are to be relied upon about as much as Trump not putting his foot in his mouth.

[casual47] 23/10/2019 11:26

Quite.

Meanwhile, we have a new highest price paid: 38.296p

[richgit] 23/10/2019 11:17

A sequence of Market events that will eventually take place,as the Fed is now in reality at the beginning of QE to Infinity,will inevitably eventually push Gold through $1600.

As some Majors will be relatively cash rich as they add at least $100 dollars to
their Profit per ounce,the games of bidding for Juniors etc with decent resources will begin and end in a gutter brawl of name your price over time.

That will inevitably force up virtually all considered valuations for "Gold in the Ground" which CGH is going to have plenty of + more !!!


My next additional investment into CGH will be when it comfortably passes through 50p,with my own view of £2 at some point. (all being well)


IMHO

[casual47] 23/10/2019 10:55

Yes, bigly. The best you can do as a PI is look at the trend within the company (e.g. reducing/increasing TCC) but mainly look at FCF and net profit as that's what really matters, imo.

[2pablo] 23/10/2019 10:53

Minefield - lol

[casual47] 23/10/2019 10:47

I also don't know if the TCC takes account of smelter penalties for impurities such as lead content (they make the difference between "contained metal oz" and "payable metal oz", there's about an 8% difference between them so significant).

I'm quoting from memory as can't be bothered to look it up, but e.g. I think Feb-jun they produced about 27k oz but they received payment for only about 25k oz as there were penalties for the lead etc. So if TCC is based on "metals contained" rather than "metals payable" and TCC for the 27k oz was $1000/oz then actually the "real" TCC is 1080$/oz as they only got paid for 25k oz.

[casual47] 23/10/2019 10:45

Sustaining capital this year will be up to $33 per ounce i believe, up to double that next year. (According to slides: $1-2m this year, $3-4m next year to then return back to $1-2m after that. I presume the tailings dam work next year accounts for a chunk of that).

[casual47] 23/10/2019 10:42

Different. There are definitions and breakdowns of each of their constituents online if you want to google it but I wouldn't count on those being the same for Chaarat. It seems to be a bit of a wild west when it comes to these terms. E.g. I have seen TCC defined as containing sustaining capital but also explicitly exclude it elsewhere. We may have to wait for the financials to get a better understanding.

[2pablo] 23/10/2019 10:38

Thanks Casual, is that 'Total Cash Cost' similar or the same as AISC All in Sustaining Cost ?

[casual47] 23/10/2019 10:05

TC/RC: Treatment Charge (TC) and Refining Charge (RC)

[casual47] 23/10/2019 09:12

To my earlier remarks:

The cash cost figures given in the Q3 update are indeed TCC. I spotted that they added a footnote in the second version of the webcast presentation:

*Total cash cost incl. TC/RC, royalty payments, tax and other costs

[rhuvaal2] 22/10/2019 16:32

pablo ~ been lucky (or astute!).

[2pablo] 22/10/2019 12:43

rhuvaal - the gift that just keeps on giving !

[rhuvaal2] 22/10/2019 12:19

I recently sold 10% of my large holding at 37.5p leaving the rest in at around 6p cost: good housekeeping in a manner of. Been with Chaarat c' 5 years.

[jc2706] 22/10/2019 11:50

Intriguing. You have long suspected that the EBRD are likely financiers here and that does indeed make sense. Closing the finance will be another value accretive step but in the meantime the share price is well underwritten by Labro buys. Normally I would suggest that a correction is due but the potential news combined with the supporting buys suggest decent upside with little downside.