China Nonferrous Gold Share Discussion Threads

[mattjos] 06/3/2020 08:24

Just have to wait for sellers & spread to narrow

[jeanesy] 06/3/2020 08:08

Matt you say you are still accumulating . I have barely seen trade recently so are these buys being hidden on NEX ? The price here continues to hover around recent lows.

[bo doodak] 05/3/2020 21:29

Our risk profiles differ somewhat but as I still hold a reduced amount from earlier I do agree this apparent valuation anomaly can't continue indefinitely.

I find POG comparable in some ways to CNG. They appear to have begun their long awaited transformation, with POX finally on-stream. Rapid payback of debt should commence, with the resultant revaluing of equity already having begun. Hopefully, CNG will do something similar.

[mattjos] 05/3/2020 20:56

Bo Doodak, some good points & well made. However, I would disagree on one key point in your post.

There are really not many other gold stocks offering good value .. most are up with events.
Yes, they all offer upside according to pog but, i don't believe there are any others that are currently as cheap as CNG. There will be speculative spikes in explorers as there always are, irrespective of price of gold but, its producers that folk should focus on, as explorers will simply use the current pog for equity issuance.

I seem to be the only person bothering/minded to run the detailed numbers & analysis on CNG figures and to post my analysis and maths. I am unaware of anyone else publicly attempting same.

As pog rises, so more and more investors will be drawn to the sector and therefore more and more gold producers will have the slide rule run over them … at some point, others will do the maths here and conclude as i have.
Until then, I am simply continuing to accumulate more and more. The valuation anomaly is all wrong & will revert at some point. If i end up having to declare at over 3% before that occurs then, so be it.

[bo doodak] 05/3/2020 20:20

Resolution of the debt issue could well be the reason CNG is so sluggish. Although it likely should have happened by now if it was going to happen, it is still difficult to see past the Chinese angle and accurately quantify the risk of confiscation, and thus CNG is still viewed as a punt. This issue is crucial, whatever the price of gold. Once there is clarity...

There are many other gold stocks are offering good value, arguably safer right now, so not surprising taking on this all or nothing binary risk is not relished at present. The share price will be higher if a satisfactory outcome is announced in due course, but there will still be plenty upside left at that point.

[mattjos] 05/3/2020 19:59

this is my Gold chart I've been plotting for the last 10 years. Weekly Candles.
So far, behaving itself perfectly.
I'd be very happy for gold to take the next 45 months to get to $2,600/oz .. during which time, CNG will have paid down all its debt and still have 10 years at Pakrut producing 100koz+/year.

It maybe that we simply dawdle around between each operational & financial update but, at some point, the penny WILL drop amongst more and more investors:

[mattjos] 05/3/2020 19:43

it will be interesting to see at what price of gold the market finally cottons on to CNG.
No particular hurry. The longer we drift sideways around 10p support, the more 135oz days we have under our belts & the bigger the disconnect gets between mkt price and sensible valuation.

[jbe81] 05/3/2020 19:33

Big rise in price of gold

[mattjos] 05/3/2020 13:36

$1,650+ for the 135oz we will produce today

[mattjos] 04/3/2020 18:52

Jeanesy, we just had a fantastic update - for those that actually did the maths.For now, I really believe best we leave them alone to get on with what just about every company in the world is doing and that is managing & preparing for the Coronavirus epidemic & this is very much a day-by-day management exercise.Those recent figures prove the mine is going terrifically well & the recent CIL optimisation has clearly been a success.Meantime, 135oz/day at $1,600+ / oz. keep tucking them away, imo

[jeanesy] 04/3/2020 18:34

Has anyone else tried to contact the company about the debt refinancing ? I have tried but no reply .

[mattjos] 04/3/2020 11:39

Let's see how they get on with the debt refinancing.
They're in a much stronger position now than ever before & gold is well above any/all assumptions giving them a good +ve cashflow
Global interest rates are low and going lower so, I believe they can refinance at much better rates than they currently have on the books.
They have the cashflow and the necessary cash on hand to compete Phase II of the plant and that will take us to 100koz per year.
At that level of production and strong gold prices, the debt will be falling rapidly

[jbe81] 04/3/2020 10:04

It seems that my question on chip's thread brought about a big decline in the share price here, and the early sellers timed it well. But the idea that CNG aren't in a much better position with the increase in the gold price makes no sense to me.

[hari] 03/3/2020 22:06

Sorry to sound negative but I wish I had waited and considered the size of the debt before investing .. I really think this is the reason it is being held back .

[hari] 03/3/2020 22:03

I am trying to understand why you are so bullish . I understand there maybe some upside but the debt is huge and so are the interest payments .

I am sure you know through investing in AAZ , it was stuck in a range for a long time and then had a step change upwards and then consolidated for a while again . It was the reduction in debt , low AISC production costs and then finally ability to pay dividends that brought the market cap close to NPV .

You called that right and maybe you will call this right too . But I am not expecting this to move much in between half yearly updates as we have little news on progress or any problems that may arise etc
If this gets to 20p this year , I would be happy . But at the moment the market is not interested in this one .
Co does not help itself by not reporting quarterly

[mattjos] 03/3/2020 15:51

it'll come at some stage … $1,600+ pog & 50koz for this year.
We may not be spotted by everyone today but, hidden gems don't stay hidden for ever.

[walter walcarpets] 03/3/2020 15:45

Pity there is no nice corresponding rise in CNG :-(

[jbe81] 03/3/2020 15:21

Nice rise in gold

[mattjos] 02/3/2020 18:16

Closing Price today gives CNG a Market Cap of £39.3m ($50.3m)

Annualising the Sept - December Production rate gives (near as damn it) 50,000oz Au

50,000 * $1,500 = $75m Revs


H1 P&L was $20.89m from 15,557oz @ $1,342 / oz
Cost of sales was $13.6m therefore, giving Gross Profit of $7.3m

H2 P&L looking like:

(37,552 - 15,557) 21,995oz @ $1,450/oz = $31.89m
Let's assume cost of Sales is $15m & therefore Gross Profit is $16.89m

Call it Gross Profit of $24m for the FY 19


FY 20 should be something like:

50,000oz @ $1,500/oz = $75m Revs
Cost of Sales $30m, therefore giving $45m Gross Profit

Valued at 90% of FY20 Gross Profit

I keep chopping up the figures and looking at it from many different angles and it just keeps coming out as too cheap at current price.
At some point, this has to re-rate. I've no idea as to when or what will cause it to do so but, valuation anomalies like this do not persist for ever.

[jbe81] 02/3/2020 17:36

Nice to see a blue day

[mattjos] 02/3/2020 09:49

will add the header as we go along. Drop in pog under short-lived has proven very fleeting today

[jbe81] 01/3/2020 23:08

Thanks for setting up the thread Matt.

[jeanesy] 01/3/2020 16:37

I understand what you are trying to say Matt but the comment i am making is with reference to a paragraph in there statement from September

'The Group commenced production in January 2019 and accordingly is now cash generative. As mentioned in previous announcements, in order to facilitate the repayment of existing loans, a broader refinancing package will be required. Discussions are ongoing and further updates will be provided in due course.'

Surely 6 months down the line that refinancing package should have been sorted by now ?

[mattjos] 01/3/2020 16:21

Jeanesy, given the continued support of the majority shareholder even through the avalanche disaster & beyond, at what point in time would you choose to renegotiate the debt, were you in charge of the company?A). When the mine is not yet operational or producing to plan or;B). When the mine is fully operational, producing to plan & therefore has a resultant cash flowTrying to force the issue at point A, leaves you with absolutely zero to bat with during the negotiation whereas, going in to bat at Point B clearly puts you in a much stronger relative position.We may have to wait for the FY Audited results too learn more on this subject ie. the management would then have an audited set of accounts to backup their position in such negotiations.Of course by then, half of 2020 will also be in the bag at over $1,500 pog