Cluff Gold Share Discussion Threads

[taffer87] 12/5/2012 19:06

When is the Sega transaction expected to close? Thought it was Q1.

Also the resource updates are late (supposed to be end of April) and now its mid- May.

The good thing is the DFS seems to be on track for next month. Any ideas on early next month or towards the end?

[ronnie corbet] 11/5/2012 10:17

what about a 50/50 split and free carry up till production

[fitton] 11/5/2012 08:32

Re financing of Baomahun. Cluff are actually in a fantastic position.This is a very rough and simplistic view on financing the project.Calculations are based on a price of $1300oz.All current costs of producing existing gold from Kalsaka/Sega and later in the year Yaoure are put at $1000oz.Why not arrange a $200m credit facility similar to a very large overdraft costing about 10% pa or better.The project should take about 15 months to complete.Draw from the overdraft at $40m every 3 months starting from November.Interest in the first 3 months would be $1m.Because Cluff is cash flow positive, by Novermber they should be producing 8000oz per month from Kalsaka/Sega and Hopefully Yaoure.8000oz x $300 = $2.4m per month in cash.The Calculation goes like this.
1st 3 months cash in $7.2m - Cash out $41m = Company owes $33.8m
2nd 3 months cash in $7.2m - Cash out $41.9m = Company owes $65.5m
3rd 3 months cash in $7.2m - Cash out $42.7m = Company owes $101m
4th 3 months cash in $7.2m - Cash out $43.6m = Company owes $137.4m
5th 3 months cash in $7.2m - Cash out $44.5m = Company owes $174.7m

Baomahun completed and producing 8000oz month = $28.8m cash per year
Other mines 8000oz month = $28.8m cash per year
Pay back for the whole project 4-5 years worst case.Financed from cash flow and leaving the company to pay big dividends in 4 to 5 years.
I would much prefer the company to be taken over and the project be financed by a large company with lots of cash. This is a very simple calculation to show one form of financing the project.

[ronnie corbet] 10/5/2012 15:16

abg might want it.

[amargosa] 10/5/2012 15:13

I mean sell SL, leaving BF and IC (and Mali); a robust BFS should make SL easy to sell on as a stand-alone package, if that's what the shareholders wanted to do. A predator might want to buy all of the company, but perhaps that's not what the shareholders want - they have to decide in the end.

[taffer87] 10/5/2012 15:07

Amargosa: you mean sell BF post DFS? And develop IC/Kaslaka/Sega...

Maybe a good option.. who are the likely buyers? If someone is buying BF at a decent price: why don't they just take over all of CLF given the price they would have to pay will be above the current MC for BF alone?

[fitton] 10/5/2012 11:32

Was $200m mentioned a while ago to finance the project?

[amargosa] 10/5/2012 10:13

The BoDs is very aware of protecting shareholders' interests wrt to dilution. They have talked about staged financing and placings as the construction phases go ahead, as well as other less conventional forms of financing.

The best form of financing for this project would be a large company to buy the whole project and finance it from what they have down the back of the sofa.

Bearing in mind the enhancements made to IC and BF, that may be a better strategy for shareholder value going forward. There is very little point in producing over 250k oz in 2014 if the share price is still 70p.

[taffer87] 10/5/2012 10:02

I would say at best it would be 50:50 debt:equity, if no hedging. At current share price this will be massively dilutive for PIs. Thoughts?

And management were looking at alternative financing options towards the end of Jan, as the 91p share price then was deemed as too low.

[amargosa] 10/5/2012 09:57

I am not concerned about getting the finance, just the type of finance; the higher the share price the better terms the BoD will be able to get for the existing shareholders.

[fitton] 10/5/2012 09:30

I don't think the financing is going to be a problem unless the gold price collapses.The company have good cash flow and no debt.

[amargosa] 10/5/2012 08:44

I don't think that will happen this time, the BFS will be out by the end of H1, but what will they do about finance at these share price levels?

[fitton] 10/5/2012 08:03

Sithuk - I wouldn't bank on it.Pardon the pun.Cluff have been very poor at coming up with information in the stated time

[sithuk] 10/5/2012 06:23

Max 6 weeks until the BFS for Baomahun?

[fitton] 10/5/2012 06:20

The gold mining sector as with other mining sectors does look very very cheap.Companies such as Cluff with good cash flow and lots of great ongoing potential and resources must be well and truly on the radar of a few of the larger companies.

[pineapple1] 10/5/2012 00:54

Bottom for gold miners ETF.

[taffer87] 09/5/2012 13:18

I am in at 72p as well.. don't expect strength in the short term though.

[taffer87] 09/5/2012 09:42

Share price now same as July 10 (and Jan 12).. the Co. has generated a lot of cash since then.. the upcoming DFS and resource upgrades will be key for the future..tempted to buy today/tomorrow. Its up to 73 again from 70 in the morning.

[pineapple1] 09/5/2012 07:42

I,ve been a bear here much to the annoyance of some.
But i,m now turning bullish on the sector.Hey its better to be a buyer at 70p than £1.
Can these fall further? Of course ,but if they do i will be a buyer from these levels for what its worth.Downside risk 20% ?, upside a hell of a lot more.Those are risks i can take.....imho

[errollc] 09/5/2012 07:33

These go down when the POG goes down, but never up when the POG is strong.

If the global economy is in a mess and Europe is a basket case (both true), then Gold should remain strong and the miners should make a fortune....look at Centamin today. It's on 3x current.

Share buy back is the only answer for the sector. Cheap as chips.

[amargosa] 08/5/2012 20:15

Good entry point? That depends on the markets imv; they are in charge of what happens in the short term. Fundamentals shmundamentals.

[taffer87] 08/5/2012 17:54

another fall.. and gold below $1,600 right now. Good entry point? I was thinking of putting a small amount in at 85p only 10 or so days ago and thought that was a great entry price with resource updated and a DFS both due soon.

[amargosa] 06/5/2012 12:10

Well the only consolation is that it wasn't just CLF, other gold miners were clobbered too. Oh and the POG has held up. Other than that, you have to like being punch drunk.

[taffer87] 05/5/2012 23:10

Surprised at the fall last week, even with Blackrock increasing their stake. Any thoughts?