Chaarat Gold Share Discussion Threads

[casual47] 24/4/2020 11:04

At this point, Chaarat has some of the biggest short term upside of all UK listed goldies as all others have already bounced back and then some....

[2pablo] 24/4/2020 10:58

Maybe a bit of on-market Buying as we speak

[2pablo] 24/4/2020 09:54

Today’s the day our placing @ 26p closes. Roll up, roll up!

Soon, hopefully, Martin might get round to some on market purchasing to refloat our sp

[casual47] 23/4/2020 11:12

There is a link on the Chaarat website:

[2pablo] 23/4/2020 11:01

Must have thought they shouldn't have without permission or something - I realise the link I posted above doesn't work but it did from Twitter last night

[2pablo] 23/4/2020 10:58

Standard AGM stuff.

@ChaaratGold tweeted the finnCap note yesterday but have now deleted their Tweet at 17:49 last might?!?!
media-exp1.licdn.com/dms/document/C̷0;

[casual47] 23/4/2020 09:01

No special resolutions:

1. To receive the financial statements of the Company and the reports of the directors and the auditors for the financial year ended 31 December 2019.

2. To re-elect as a director of the Company Robert Benbow who is retiring in accordance with Regulation 12.7 of the Company’s articles of association (the “Articles̶1;) and who, being eligible, offers himself for re-election.

3. To re-elect as a director of the Company Gordon Wylie who is retiring in accordance with Regulation 12.7 of the Articles and who, being eligible, offers himself for re-election.

4. To re-appoint BDO LLP as auditor to hold office until the conclusion of the next general meeting at which accounts are laid before the Company.

5. To authorise the audit committee of the board of directors to agree the remuneration of the auditor.

[casual47] 23/4/2020 08:38

Annual report and AGM notice now online.

For the dorks, this paragraph is still in the AR:

"Contingent incentive fee arrangement
Mr Volynets benefits from a contingent incentive fee arrangement in relation to one potential and future M&A transaction, subject to such transaction closing prior to 30 July 2020, after which date such arrangement expires for nil consideration. Should such transaction close by 30 July 2020, Mr Volynets will be awarded 12,564,874 Ordinary Shares, subject to a clawback for 12 months following completion in the event of him ceasing to be employed by the Group within this period. Mr Volynets would not be a participating board member, or carry a vote, on this future and potential M&A transaction."

[casual47] 22/4/2020 16:54

Actually. I forget - the $110m capex is actually $78.5m as the other $31.5m is covered by the Ciftay JV.

So....I still have no idea how they arrive at their numbers. Even with project finance added in across 2020 and 2021 there is an additional $35m or so of debt for which I cannot find a reason for being.

It could be debt to cover e.g. G&A, drilling, etc

[casual47] 22/4/2020 16:19

The sales figure for 2020 doesn't seem unreasonable: $84.4m compared to $68.1m in 2019:

If you use an average realised gold price for 2020 of e.g. $1600/oz you get to 52,750 ounces.

So that rules out a second source of EBITDA.

The adjusted EBITDA difference of $24.2m could be explained by: 1. The difference in sales revenue ($16.3m) and 2. What else?

If not an M&A then the only way I can explain the increase in gross debt is that they have already included the project finance:

Gross debt according to Finncap rises from $79.6m at end of 2019 to $119.8m at end of 2020, an increase of $40.2m, this is despite:

1. The Labro loan has been reduced by $5m as part of the placing
2. The Kapan loan will keep getting paid down quarterly, about $8m in total over 2020
3. The placing includes another $10m or so on top of the $5m that Labro is converting.

This would imply that debt will increase by ~$63m

Note that the gross debt for estimated 2021 seems to increase by another $41.9m (or ~$50m if you take into account the ~$8m Kapan repayment)

Together that makes ~$113m which is close enough to the $110m initial capex figure.

At the same time gross cash and cash equivalents according to their figs will rise to $37.5m by end of 2020 (rising even further to $50.7m in their estimated 2021).

[jc2706] 22/4/2020 15:25

I haven't had a chance to read it yet but based on your musings I would say 'no'!

[casual47] 22/4/2020 15:17

JC - can you make sense of the estimated 2020 figures?

[jc2706] 22/4/2020 15:11

It sounds a bit odd that they could be speculating on a M&A target so specifically.

[casual47] 22/4/2020 13:07

Could a creative way of financing another M&A be:

Debt (either bank or loan notes) + second JV on Kyrgyz assets?

E.g. TSG is about 70% majority owned by one shareholder, UFG, who are an asset management company. Would it make sense for them to divest their mine in exchange for cash/loan notes and an equity stake in the Kyrgyz assets?

Remember: Charles Ryan from UFG and Mr A are no strangers and have done business before.

[casual47] 22/4/2020 12:48

The analyst coverage page on the corporate website has been updated with Finncap, including a link to their initiation report:

[casual47] 22/4/2020 11:54

Interesting takeaways from the Finncap report:

1. adjusted EBITDA of $10.9m for 2020 estimated vs minus $13.3m actual 2019. This is for the whole Group, not just Kapan. Does this imply there's going to be another source of EBITDA? (How else could the Group adjusted EBITDA jump up by $24.2m?)

2. Year end gross cash and cash eq of $37.5m for 2020 estimated vs $3.6m actual 2019

3. Gross debt to increase by about $40m but net debt to remain virtually the same

4. This paragraph: "Two key points regarding Chaarat’s various loans are: 1. The third-party debt used to acquire Kapan is being paid down. The principal started at US$40m and was reported to be US$32m on 16 April 2020. 2. The balance of the debt is predominantly owned by shareholders of the company, including the Chairman Martin Andersson"

These figures are probably derived from Chris so looks like something big is pencilled in? Another M&A? Or partial project finance for Tulkubash?

Increasing gross debt by $40m but having net debt remain the same can be explained by:

1. $40m debt (or more if refinancing) provided which remains largely as cash in 2020 end of year account
2. M&A funded by $40m debt but which delivers an EBITDA contribution which increases gross cash

(Do tell me if you think I am drawing the wrong conclusions)

[2pablo] 22/4/2020 11:25

Thanks, see what you mean but I've registered now and got the report from Charlie Long - Long by name and hopefully, long by nature !

[casual47] 22/4/2020 10:37

Pabs,



Though it will probably be quicker if you just ask Artem to send it to you

[casual47] 22/4/2020 10:30

Pabs, I only actively "manage" a few shares myself at any time. I don't think I could keep track of 20 stocks.

I was intending on reducing my self-managed portfolio even further but then Covid came along...I was going to put the proceeds toward passive long term things like e.g. index trackers. Silver linings and all that...

[2pablo] 22/4/2020 10:08

By the way, I know you're totally obsessed with Chaarat (!) but do you have a broad portfolio ?

I've got stuck with many a dog through the years but have about 20 other stocks still interesting

[2pablo] 22/4/2020 10:06

Have you got a link for Finncap's note or does one need to register somewhere?

Did you get any more shares, I didn't but still might but never tried the 'offer' ?

[casual47] 22/4/2020 09:56

"finnCap today initiates coverage of Chaarat Gold Holdings Ltd (LON:CGH) with a corporate investment rating and price target of 53p."

Huge grain of salt etc as this is their paid-for in-house broker report.

Finncap has opened their research so anyone can download it.

[2pablo] 21/4/2020 08:39

Looks like you're going to get your way, Casual, with Buying possible just below 26p on market?

[juju44] 20/4/2020 20:16

the way this is going it would be hard to see a pension coming out of it . Gone nowhere in 2 years . Big talk but no delivery

[casual47] 20/4/2020 19:39

Fingers crossed you get to sell the other half