China Nonferrous Gold Share Discussion Threads

[mattjos] 28/7/2020 17:40

Goldman Sachs raise their 12-month Gold price target today from $2,000/oz to $2,300/oz and silver from $22/oz to $30/oz.

Hopefully I should no longer need to do the maths here for folk.

[mattjos] 28/7/2020 09:45

tiny bit of buying and the spread goes out to 25%.

[mattjos] 27/7/2020 12:10

it wont be a perfect 'step up' increase tied in to first and last day of each year. That's just not feasible.

All we want to see if that they are still following the mine plan and that production is ramping up towards that 1.32 Mtpa target in the 4th Year of operation.

[fozzie] 27/7/2020 12:03

Thank you for all your postings here Matt. I am sat at around breakeven at 10p having bought between 3 and 14p. Large position for me here, happy to wait and doing well with my other goldies but i kept buying here and have ended up slightly overweight, that said i will buy more if we drop into single figures.

[mattjos] 27/7/2020 11:48

8.7 Designed Capacity

The designed capacity of the processing plant is 4000 tpd or 1.32 Mtpa and plant construction is to be completed in two phases.
In Phase I, the designed capacity is 2000 tpd or 0.66 Mtpa.
The capacity of the first year in operation is 0.4 Mtpa, 0.66 Mtpa in the second year, 0.99 Mtpa in the third year and 1.32 Mtpa in the fourth year, when the plant will reach full capacity for the first time.

2018 trial production commenced 1st July (1st Year)
2019 was declared Full production and achieved 0.69 Mtpa (2nd Year)

So, 2020 will be 3rd Year of operation and the mine plan is for 0.99 Mtpa (50% increase from 2019)
& 2021 will be 4th Year of operation with target of 1.32 Mtpa (100% increase from 2019)

[hari] 27/7/2020 11:15

Hi Mattjos Great reply as always .. you are are tough man to counter as your points are so well put and makes me want to add . I guess I am comparing the behaviour of other gold miners .. trading back , AAZ is a good example , took a while to move up but it was paying down of debt and more so dividend starting then turned the share price I am just hold until see signs of debt can start to be paid and a strong buy thereafter It is a waiting game , without having to look back again , when it production expected to double ?

[wanobi] 25/7/2020 14:17

many thanx for all your hard work and efforts here Mj, it's much appreciated by me and others I'm sure and I/we greatly appreciate you sharing your detailed analysis and considered thoughts in regard to progress over the longer term,,, makes one think about things a little differently and that's always a good thing in my book... Cheers Wan :-)

[mattjos] 24/7/2020 20:39

Soon as that debt figure shows signs of reducing, the mkt cap should start to rise .. probably a little beforehand given how the market will be anticipating this effect.Debt is something like $1 / share, 80p / shareThere's the upside potential and, all things being equal with regards production, the biggest single influencer on the business is Price of Gold. In case it has escaped anyone's attention, we are in a huge bull market for Gold.With a spread that can widen out to 30% in a flash, whenever buying turns up, it's a case of get involved when its quiet here or, just move on but, these will not be changing hands for 10p in a years time, imho.Good weekend to all that read the thread & let's hope for a bit of a drop in the price next week when the results come out .. it's usually the case that happens.

[mattjos] 24/7/2020 20:25

Yes, that is a very good point kingyon .... as an example, just look at the length of the conveyor from the mine to the processing and tailings facility. The satellite photos don't lie ... it's a big, mine at PakrutFwiw, i do believe that Gold will average well over $1,900 next year.Let's say CNG achieve 90k oz in 2021 at $2,100. That's $189m+ Revs. That debt will start to tumble fast and so too the attaching interest payments. Once Phase II is complete the mine is entirely self-funding. no further debt required.Anyway, one step at a time. Let's see how we go at the 2020 Interims in couple of months.That's when i believe the penny will finally drop in the market.

[kingyon1] 24/7/2020 20:02

I for one am very appreciative of the effort you put in here Matt.
The debt here doesn’t worry me when you look at the scale of the plant involved, they have constructed a huge site not to mention service roads I think of some fifty miles. None of which can be constructed for peanuts. Seems to me they’re filling their obligation to carry out the plan. I would also point out that whatever you think of the Chinese they are superb engineers.

[mattjos] 24/7/2020 18:57

I fully appreciate that I am beating a lone tack here (eke also) but, the company has a mine development plan which they paid a lot of money for & as far as I can possibly determine, they have moved forward & are moving forward per the plan.

The Chinese culture is very much a command and control one … Management message, will be consistently very simple; "Here's the plan, follow the plan!" & progress will be monitored against the plan and the necessary corrective action will be taken if there is deviation from the plan & its intended results.

I've done my best here to detail all my analysis .. how other investors interpret what I share here is entirely up to them.
Probably my investment timeline is longer than other people.
I generally look at a 5+ year timeline for my investments so, assuming progress is approximate to my expectations, I fully expect to be invested here through 2024/25 & to have a higher number of shares then, as compared to today.

If, as I believe is feasible, the debt is virtually paid down by 2025 then, there is the potential for some extremely attractive dividends and/or further expansion towards the mid-tier target expressed by the company ie. a further doubling of company production to 200+k oz per year.
This is not a one-man band lifestyle AIM company. I firmly believe this is a future major gold producer just now in its infancy & taking its first unaided steps.
It's growth story I want to be invested in and be a part of.

[hari] 24/7/2020 17:08

Mattjos

How many years has the Co been in production now ?
Approx $340m debt
Current production will probably just service the interest on the debt
So I do not we get how 3.36 years payback , it is impossible .
We still need confirmation of the AISC gold price too .

I will become more bullish once production doubles but not yet.

Also I think you underestimate the impact on the balance sheet of the current debt .
How many gold miners do you know get close to their NPV when there is this much debt on the books

If gold was $1500 or lower , this would be in single digits today.
The only reason it is double digits is because gold is this high .

I have to agree the Chinese effect may be there but it is the debt that will hold it back

[mattjos] 24/7/2020 14:38

Chinese label or not, once these results are out the way, I fail to believe this will remain overlooked with Gold now at $1,900

Let's just get next week out the way please and then we go forward from there to the Interims based on price of Gold for H1 & H2 Gold production underway with gold threatening to break out to ATH's.

As a final reminder for all here:

Gold revenues have been estimated over that period at a price of:
US$1,500 per ounce in year 1,
US$1,400 per ounce in year 2,
US$1,300 per ounce in year 3 and
US$1,250 per ounce from year 4 onwards.
which was based on external sources of information. The calculation assumes a mining capacity of 2,000 tonnes of ore daily ("Phase I") increasing to 4,000 tonnes per day after 3 years ("Phase II").

Based on these calculations, the net present value after tax (NPV) of the Pakrut Gold Project is US$263,863,220.
The internal rate of return after tax is 29.26% and the payback period is 3.36 from the start of production.

[eke] 23/7/2020 11:35

Unfortunately they carry the"Chinese"label which isn't the flavour if the month right now with the countries Human Rights,Hong Kong etc etc issues.If you have been here as long as Mat and I you would have experienced the companies ups and downs having suffered the worst of all natural disasters,and rebuilt with the strong support of their parent company.Skullduggery,NoI expect nothing other than a favourable progress report with a revised Phase II update and plans to reduce dept asap.I'm a backer, and not a ramper with a long term goal.Next week will be interesting for sure.

[mattjos] 23/7/2020 10:58

Personally I am sat here waiting for the sell on news brigade as I believe there will be an opportunity

[actony] 23/7/2020 10:58

How come this companies share price has gone down and languishes while nearly all other gold plays have gone up substantially with price per ounce now more than $1860. The market must know something is very wrong with the governance and potential financial skullduggery when it is producing substantial gold bullion.

[mattjos] 23/7/2020 10:57

Quicker they get these backward looking results out the better here .. then the market will start looking forward, specifically with a gold price nearing $1,900.

It's only these results that are causing hesitation, imo .. folk will assume the price will drop on the day, as is so often the case for AIM companies on Results day.

I'm really not too bothered about most of the metrics as they have been well telegraphed already but, its the Management commentary on going forward from here and how they are getting in with Phase II that is most important read

[mattjos] 22/7/2020 18:55

The spread just wont come down here, other than for very brief periods

[misterdeb] 22/7/2020 13:59

The reason for the drift and wide spread is the Volume of trades, some days there are none.

Just look at the volume chart over the last 2 years!
(compare volume to this time last year) Other than the FY19 results what is the next catalyst to generate interest?

At the moment funds invested here looks like dead money for a good while yet.

Regards

[cflather2000] 21/7/2020 22:57

I don't think the price action is cause for suspicion. But I do think the suspicions are the cause of the price action

[actony] 21/7/2020 22:36

Gold is up to $1840 and CNG has not moved and still at 12p.Some allege and I believe them that this share owned by a Chinese company, formerly Kryso is now completely manipulated and may well be a future scam. Buyers beware. Cost of Production is approximately £600-700 according to others on this thread and still at 12p. Ridiculous and very suspicious

[actony] 21/7/2020 19:16

Gold is up to $1840 and CNG has not moved and still at 12p.Some allege and I believe them that this share owned by a Chinese company, formerly Kryso is now completely manipulated and may well be a future scam. Buyers beware. Cost of Production is approximately £600-700 according to others on this thread and still at 12p. Ridiculous and very suspicious

[kingyon1] 21/7/2020 10:28

An update on phase II progress would be nice.