Chaarat Gold Share Discussion Threads

[casual47] 26/6/2020 19:29

In the first instance any II who wants in will try to buy via e.g. placing rather than on the market, imo, as there is no way they can acquire a meaningful number of shares on the open market without paying (too much of) a premium.

There will probably be scope for either a placing and/or a convertible debt arrangement later in the year (not much more than $10m, imo, if it is just to cover normal expenditure and provide a comfortable buffer, more if there is an M&A, refinancing or Tulkubash funding deal)

So realistically, imo, we will be left with either:

1. Rerating event (finance/funding deal, M&A etc)

2. Private shareholder frenzy (I.e. not just us happy few....and Juju)

3. Labro buys

4. Mysterious AT buyer(s), not Labro, who have already at least on one occasion before moved the share price from 20s to high 30s.

Both Labro and Mystery AT have so far appeared happy to stick to high 30s but they can very easily push it well into the 40s.

We know the loan notes convert at 36p and they mature next year, so at some point it would be desirable from a management point of view to entice these holders into converting. The share price should be well above 36p in that case (taking into account liquidity).

The Ciftay JV puts a valuation of ~31p on the Kyrgyz assets. If you believe that production will happen then that gives a good starting value and depending on e.g. the project finance structure and gold price it could be worth a lot more. If you are more pessimistic then that 31p could shrink all the way down to zero, of course.

Kapan alone is worth up to 26p at current gold prices, imo, maybe 18p to be on the more conservative side (gold at ~$1600-$1650/oz longer term). 13p if you believe the gold price is set to go back to $1500/oz longer term.

News that funding for Tulku is agreed should instantly put the 31p in the bank with plenty of upside.

[jc2706] 26/6/2020 18:30

I should imagine that would flush out some sellers but it will clearly take higher prices than here. Looking for this to break 40p to move to a new trading range.

[wilmot666] 26/6/2020 17:10

So illiquid. What happens if someone wants to buy in volume? BOOM.

[casual47] 26/6/2020 16:54

Nice way to finish the week:

UT closing price of 38.5p

[casual47] 26/6/2020 14:10

Extract from local Kyrgyz press interview with Kyrgyz ambassador to the UK:

=============
What did you do as an ambassador to increase the investment attractiveness of Kyrgyzstan and promote our country in the UK ?

"We all know that London, the capital of the United Kingdom, or the City of London, is the heart of the global financial system," he said. No matter where you are in the world, no matter what industry you are in, it is here that you decide where and under what conditions investment flows will go. So, even before I came here, the source of the largest investment projects we have is in the UK. For example, here are the investors of the company "Chaarat Zav" in Chatkal, which we now have high hopes for. They themselves are very interested in improving the investment attractiveness of Kyrgyzstan. Because the more our country is considered a safe and well-invested country, the more favorable "Chaarat" will be able to attract loans and investments.

[casual47] 25/6/2020 17:45

Either it is a buy which was able to complete after a lot of sales from today and previous days or it is a sale which got accepted because the MM has buy orders yet to fill.

I think an MM is more likely to take a sale if it has AT buys lined up than buy up shares to fill an O trade

[jc2706] 25/6/2020 17:41

On the face of it, it looks like a sell but this is always muddied when you have O and A trades. The direction would suggest a buy otherwise the trading looks odd. Unless if course there is a buyer permanently on the bid that hasn't completed buying.

[wilmot666] 25/6/2020 15:46

Not sure. It went through around mid price. I wondered if it was a buy given the upticks in price. Unless something is being worked in the background. Either way great to see some upward movement.

[casual47] 25/6/2020 15:35

The 162,442 at 33p looks like a sale. If so, it's quite unusual as usually it's hard to shift that many shares in one go but also it was followed shortly after by an AT at 34.5p

[casual47] 24/6/2020 16:49

The full Monty of UTs today.

[casual47] 24/6/2020 07:27

Imagine the boost if a company like QRC would invest in Chaarat like that - should instantly put the company on the radar both in North America and Australia.

[casual47] 24/6/2020 07:22

If Chaarat can refinance the Kapan loan into a boring interest-only loan it would instantly free up $8m cash per annum to be put to use elsewhere - that kind of money alone can 100% fund the drilling expenditure in Kyrgyzstan.

If the LOM gets updated this summer to a new 7 years then it ought to be a no-brainer to secure $30m against it on e.g. a three year maturation term.

[casual47] 24/6/2020 07:10

My fantasy scenario:

QRC, Gilman's billionaire club resource financing company, has about US$30m cash left to invest from an initial CA$80m fundraising. They already spent half of it providing funding for a uranium explorer.

A good bet would be for them to use the $30m to refinance Kapan as it will be secured against a producing asset and provide a fairly safe and steady income to QRC. The upside would be in the convertible element and any warrants: while their money is secured they get a "free bet" on a multi-million ounces development asset.

The bank loan should be $30m by now as it was $32m according to the April presentation.

[casual47] 24/6/2020 06:59

My own rough and ready calculation has Kapan stand-alone at 26p

As soon as Tulkubash gets funding the valuation should be nearer to 50p.

Once Tulkubash starts producing the combined 150k oz pa of Chaarat as a whole would deliver a valuation nearer to 75p.

Imo etc

[jc2706] 24/6/2020 05:00

Yes. The whole company is becoming fairly valued based on Kapan alone with the rising gold price which is incredible considering it was not even part of the company a couple of years ago. Will another acquisition do the same? What of Tulkubash? Kyzyltash? Lots of potential value adding aspects to hear about in the future.

[casual47] 23/6/2020 14:24

Revenue for 2020 should be ~$25 million higher than in 2019, just shy of $100m.

This corresponds to a nearly 40% increase YoY.

[casual47] 23/6/2020 14:17

If the average gold price for 2020 remains above $1650/oz then there should be a decent profit for the year, the first time in the whole history of the company.

If they can refinance the Kapan debt (combined remaining bank loan and $17m loan) then the profit might be even higher.

I don't know what the Ciftay liabilities amount to but having those lifted off the books can only add further to the overall profit.

[jc2706] 22/6/2020 17:05

Spain haven't reported brilliantly. Their recent non-reporting of deaths that didn't occur and registered the previous day is politically motivated.

[casual47] 22/6/2020 15:41

Lots of AT buys which make up 15k

[casual47] 22/6/2020 14:23

I'd be especially interested to see what was behind Spain's Covid outbreak. I can't immediately see possible explanations for it having been so much worse.

[casual47] 22/6/2020 14:12

Will be interesting to see a report on it, though I imagine it may take a few years to see the wood for the trees (and unclutter the politics from it).

While I personally rubbished the idea of climate early on we may have to reconsider this given the high incidence in meat packing factories and slaughter houses seen in USA, UK and Germany.

Preparedness and compliance for West vs Far East (which have had many more recent occurrences of virus outbreaks and already had infrastructure in place plus habit of mask wearing.)

Centralised vs regional healthcare management (UK vs Germany?)

Testing laboratories, reagent chemical production in-country vs outsourced (again, UK vs Germany)

Old people being sent off to care homes vs living with family (West vs Rest of World, though Italy and high incidence with BAME may contradict that?)

Extent of social care integration with healthcare vs what we have in e.g. UK

[jc2706] 22/6/2020 13:39

Ah yes, the ski resort.

New Zealand is a special case as it has a very low population density and is isolated geographically.

I was more interested in the fact that many developing countries have not been hard hit. If you want a country that has done exceptionally well (on the fact of it) then Vietnam looks like a pretty decent candidate but most developing countries have managed better than I would have expected. Lifestyle? Climate? Demographics?