China Nonferrous Gold Share Discussion Threads

[mattjos] 03/6/2021 18:04

Hari, you have to get used to these often very wild swings in valuation with junior mining entities. The pre-production ‘hope’ phase is very often a time of elevated valuations which subsequently come crashing back down as the reality of the timeline and inevitable problems of startup dawn on investors.
It’s exactly at these lows, when the sentiment is overall still bearish & folk can’t see any immediate reason to buy that those more familiar with such things are indeed buying in the background.
Then, as if by magic the sellers at those low levels are exhausted and the share price springs up .. causing the inevitable ‘what’s going on here, surely it’s still not worth buying response’ & the general audible bearish tone simply persuades a few more to bail out, albeit now not quite at the lows.
Once that stock finds a new home, we move ahead a little further etc etc ... by the time the audible commentary turns bullish, the price is likely 100-200% up off the lows & then the subsequent buying pushes it further ahead.

Let’s see how we go but, i am not ruling out near ATH’s here before the year is out.

[wanobi] 03/6/2021 17:32

like to think I'm a refreshed & rejuvenated bull here Mj :-) LOL
Cheers Wan :-)

[hari] 03/6/2021 17:28

"April 2016, the mkt cap here reached $217m .. on the basis of what 'might be'Today (at 8p) the current mkt cap is $43.4m ... with the mine now built, in steady-state Phase I production and Phase II due"the thing is in April 2016 the Co was grossly overvalued, so not really relevant

[mattjos] 03/6/2021 17:19

Got rid of some more stale bulls here today

[mattjos] 01/6/2021 20:58

It will clock it after some point wanobi .. at least those that bother to read beyond the headlines.CNIM are not fools .. they are pulling the strings behind the scenes here & what they have achieved in term of building the mine, interest rates on the debt and the depreciation methodology are most impressive .. far beyond the ability of 99% of most AIM listed management. The business is now well set .. operational delivery to plan, at these gold prices, is soon going to be irrefutable, particularly at these Good prices.We'll be back on exploration this time next year and then we'll start to see what else we have on our doorstep .. with luck some higher grades just up the road at Rufigar.

[wanobi] 01/6/2021 20:36

mister market is a fickle creature Mj :-) fingers crossed it begins to see the light,,,, Cheers Wan :-)

[mattjos] 01/6/2021 14:41

Going to be interesting to see the Depreciation charges in the Accts going forward.
The company has stated that now the mine is in Production; 'Depreciation is now, and henceforth, calculated on a per unit rate' … ie, the more they produce, the greater the Depreciation charge in any one period.
This won't affect the cash flow but, will suppress profits for the purposes of Tax liabilities.

There's $389m of rolled up CAPEX that was transferred from 'Mines under Construction' to 'Producing Mines' on the Balance sheet meaning, the Depn. figures are really going to get quite chunky once we are into Phase II production.

The way I see it, we've taken all the pain over the years of constantly rolling up the Capital Investment but, only now starting to see that come back in our favour & this method of Depreciation is even more favourable than a simple straight line basis.

When folk see the Accounts their initial reaction is going to be at the headline level with such big Depn. charges but, one needs to examine it in the context of the Tax benefits we are now going to enjoy & that means we keep more of the cash in the business / for debt repayments.

Whatever you think of the company, the Accountants know exactly what they are up to here.

[mattjos] 01/6/2021 10:59

looking much perkier here now … really only takes a small swing in sentiment and smidge of buying

[mattjos] 28/5/2021 11:51

Put it another way.

April 2016, the mkt cap here reached $217m .. on the basis of what 'might be'

Today (at 8p) the current mkt cap is $43.4m … with the mine now built, in steady-state Phase I production and Phase II due to come on stream imminently.

Yes, I know there is a lot of debt but, its backed by CNIM, is at incredibly low rate of interest and will quickly start to reduce once Phase II hits its stride.

How else did folk think the mine was ever going to get built? If the equity route was taken, there'd be at least 2Bn shares in issue now, assuming they could ever have got the deal away(which I firmly believe would have been impossible anyway, given the equity structure & funds required).

The market cap is all wrong here at the moment. Completely wrong. Should be at least $65m right now & the rise from there as Phase II delivers

[mattjos] 28/5/2021 11:07

3 month US$ LIBOR Rates have only gone in one direction since the company refinanced its debts ---> DOWN.

More than 25% down in fact.

At 3.25% over 3-month US$ LIBOR, the total interest rate is now less than 3.5% … as compared to the 10% Discount rate assumed in the Pakrut Bankable Feasibility Study!

So, cost of debt is actually just 30% of that assumed in the BFS, Gold price is 50% higher than assumed in BFS

NPV is over 6x current mkt cap

[mattjos] 28/5/2021 10:15

Good to see the House on Bid

[novicetrade68] 28/5/2021 09:33

Good to see some buys going through at 8p, it has been a while, the weather has also improved around the mine itself, so should hopefully see the company running at full capacity the coming months..

[wanobi] 27/5/2021 13:52

you're most welcome JW, although Mj's version is far far superior LOL LOL :-)

Cheers
Wan :-)

[wanobi] 27/5/2021 13:50

great chart Mj,,, makes mine look positively neanderthal :-) LOL LOL,,, many thanx for posting it along with the commentary,,, much appreciated,,, cheers Wan :-)

[mattjos] 27/5/2021 13:49

Big, big 20-month pattern been painted on the chart

There was an initial spike in the chart back in Nov 2018 when the company first advised that Phase 1 had produced some initial gold & then a much more impressive move from 2.6p to 22p when the confirmed it was now running at steady state production.

Then we've had this huge, huge flag forming over the last 20 months which has found support each time at/around the 7p level.

Successful Phase II implementation, with a doubling of production, could/should finally get this moving back up and over that 22p prior high, particularly with current Gold prices.

[joey wilson] 27/5/2021 13:33

Cheers Wan.JW

[wanobi] 27/5/2021 13:01

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Cheers
Wan :-)

[joey wilson] 27/5/2021 12:54

To be honest Mattjos I am surprised you have continued to keep the faith. Testiment to your original beliefs. I remember you even selling AAZ at some point before buying back in at a much better price. I am surprised you haven't felt the need to do that here. However, for me I have put on what I can afford to lose on this as an outside punt, but I have always respected your ability to find that winner. AAZ, point in fact. CNG just needs to get rid of the monkey on their back. THE DEBT. As gar as updates from CNG they have always been poor. Mattjos you are not a typical contributor on these bb and although you have called it wrong so far all the way down to 6p, the worm must turn and I think it is due.... Thank you once again. Hoping this turns into a world cruise......lolJW

[mattjos] 27/5/2021 12:45

I believe there are grounds for some renewed optimism. per the mine plan timetable, Phase II should be coming online in June

[joey wilson] 27/5/2021 12:32

Back in for 102k also......JW

[wanobi] 27/5/2021 07:47

just got to let/hope gold does its thing :-) :-) :-) Cheers Wan :-)

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[eke] 26/5/2021 13:28

Followed Matt for may years (pre-avalanche)and his analyses has been as good as you can assume based on scanty /little info from the Co with timeline and forecasts no better than a"Chocolate Teapot"! Patience is the key, we all know the fundamentals and the POG now improving so as Matt said in the summing up "eyebrow -raising cashflow " is not too far away.
Still holding from very low levels with no plans to sell until MY "eyebrow" are painfully too high to live with.

[mattjos] 26/5/2021 11:20

good man, wanobi. Glad to hear you are still keeping tabs on things here .. sometimes one just have to be brave according the sums as you see them.

I'm still sat on all that I have purchased.

The Gold chart is looking very robust and I still expect to see the price remaining elevated far above the assumptions here. In fact as some stage in the not too distant future, I expect to Gold trading at more than double the assumed price.
A doubling of production with gold in that region will make for some eyebrow-raising cashflow,imo