Petropavlovsk Share Discussion Threads

[apple53] 02/11/2020 20:15

Midas - I can see where Officehead gets the 86.3m figure from. He is careful to say "in-house". So strip out the 'Third Party' row and you get 30.8+29.1+26.4=86.3. This compares with much higher figures in Q1 and Q2 and in Q3 2019.

You made a mistake in you 22:26 message above when you gave the 126.4 and 8.8 figures as though they were 2020, but they are 2019.

As you say, there are reasons given for the reductions at Malomir and Albyn.

[stevea171] 02/11/2020 14:25

And this is why there is no discussion on dividends because the debt load of $615 million they are paying interest on is still way too high.

[stevea171] 02/11/2020 13:22

Weemonkey & Jimbobs. When is debt not debt? When you have had indigestible amounts of it over the past 8-10 years so you want to call some of it 'pre pays' on which interest is payable but refuse to acknowledge it's debt. Yes, its coming down but from a level of $187 million at the beginning of the year.

A year ago they said no more hedging of their gold sales when their hedges ran out. The hedges have resulted in losses. So instead they came up with this new wheeze to avoid borrowing $200 million as a medium term loan we have 'pre pays' which is not debt!

[jimbobs147] 02/11/2020 12:47

Does this suggest that the new board are being more transparent than the old Steve?

[weemonkey] 02/11/2020 09:41

Real debt trend is down though isn't it Steve.

That is a pleasing trend.

[stevea171] 02/11/2020 09:23

As I expected POG is using creative accounting to misrepresent debt whereby the interest bearing prepays for gold deliveries are excluded from their disclosure of net debt.

From LSE.
The latest financial report is much clearer in showing the Gold prepays than those produced by their predecessors, but they still do not classify these cash advances as loans, hence they are completely excluded from the Net Debt figures. So if anybody wants to know what the actual real debt figures are - see below.

Real debt at 31st Dec 2019 Total = US$ 812.4m
Ordinary Bonds US$ 500m
Convertible Bonds US$ 125m
Gold Prepays US$ 187.4m

Real debt at 30th June 2020 Total = US$ 746m
Ordinary Bonds US$ 500m
Convertible Bonds US$ 125m
Gold Prepays US$ 121m

Real debt at 30th Sept 2020 Total = US$ 615.1m
Ordinary Bonds US$ 500m
Convertible Bonds US$ 42.8m
Gold Prepays US$ 72.3m

[midasx] 02/11/2020 08:32

Gold prepays reduction : The Company continues to prioritise settlement of the interest-bearing gold prepays which stood at c.US$121.0m as at 30 June 2020 (US$187.4m as at 31 December 2019), a net decrease of US$66.4m over the period.

The Company continues to prioritise settlement of the interest-bearing gold prepays which stood at c.US$ 72.3m as at 30 September 2020 (US$121.0m as at 30 June 2020), a net decrease of US$48.7m for the third quarter

Gold prepays reduced by $115.1 since 31 Dec 2019 which will greatly reduce our interest payments.

87 Million of the 125 Million Convertible Bonds have now been converted greatly reducing our interest payments.

The $122.2 non cash fair value accounting loss relates to the bond conversion at 13.5p compared to the actual share price that is much higher. This is just an accounting requirement that does not reflect company performance and has no bearing on actual company results.

[weemonkey] 02/11/2020 06:14

Count the cash they say..

Net cash on the books is up to $73.5 million from $48.2 million (up 52%)

And Net cash from operating activities: 2020: $112.1 2019: $11.9 (up 940%)

The reason there is not more cash lying around on the books is that the company have to pay more for the third party concentrate the price of which has gone up in line with the gold price. And this of course is an upfront cost.

Take away the shenanigans in Moscow and the bad press in Amur (a lot of which sounds like resistance to change and sour grapes to me) and these results are good results.

These results have arrived in the middle of negative news flow and thus tainted the market's reaction to them.

If we had had these exact same results under the previous management the shares would be trading over 50p by now.

[midasx] 01/11/2020 22:26

Total Gold SALES for the 3 months to 30 Sept 2020 were 126.4 koz including 8.8 koz from 3 party concentrate ie 117.6 koz own production sales with an average realised price of $1,919 oz an increase of 38% on 2019.

[midasx] 01/11/2020 21:50

officehead,

as the company has outlined the Albyn non refractory ore is depleted and is set to be replaced by Elginskoye. Your shocking revelation is well documented and fully included in company projections.

Forgive me but I can still not see where the Q3 production figure you outline as 86.3oz is shown?

The total production to 30 June 2020 was 320.6 Koz

Total gold sales to 30 Sept 2020 was 433.4 koz ie 112.8 koz more than total production at the half year 30 June 2020.

[officehead] 01/11/2020 20:49

The table shows that total in-house gold production for the 3rd quarter was 86.3Koz. Bearing in mind that this is historically one of the stronger quarters for gold production. Even Q1 inhouse production was over 100 Koz, and Q2 was 111.6 Koz.

I take no pleasure pointing this out, but the latest update tries to gloss over this, and the reality is that profitability in the 3rd quarter will have been significantly impacted by the low inhouse production.

[officehead] 01/11/2020 20:19

Midas - its in the table below the 3rd Quarter Sales report update that you quoted in your post.
Albyn Q3 2020 - 26.4 Koz ---- Q3 2019 - 47 Koz - That 44percent by my calcs.

Perhaps you can see now how the SALES report has been carefully worded.
Albyn runs around one and a bit grammes per tonne, so that would mean they have been processing at far less than a gramme per ton for the whole quarter...

[midasx] 01/11/2020 19:58

The non-refractory ore depletion at Albyn and replacement by Elginskoye has been well reported and planned for. Can you post the Q3 production numbers you are referring to officehead?

There has been a 23.33% increase in Gold Sales and a 38% increase in realised Gold price achieved.



Third Quarter Sales Report

Gold sales

-- A marginal 4% decrease in total gold sales to 121.1koz (Q3 2019: 126.4koz) primarily reflecting the depletion of Albyn non-refractory reserves that are planned to be replaced with Elginskoye reserves per Company development plans and also decrease of Malomir production reflecting transfer to refractory ore processing

-- Brings total gold sales for the first nine months of 2020 to 433.4koz (first nine months of 2019: 351.4koz), an increase of 23%

-- Average realised gold price increase of 38% to US$1,919/oz in Q3 2020 (Q3 2019: US$1,388/oz)

[weemonkey] 01/11/2020 19:57

This is ludicrous.

I have been over the interim numbers again and again and as far as I can tell those were the best operating profits ($146million) at interims ever in Petropavlosk's history.

The next best interim operating profits were in 2009 being $111million. (source Sharescope)

The headline loss announced Friday was a deeply technical loss and was caused by "a negative non-cash adjustment of US$(122.2)m related to a fair value loss on the conversion option (H1 2019: US$(9.2)m) reflecting the increase in the Company's share price"

When you add the current interims to even the downwardly revised production estimates for the second half you are going to get some highly respectable figures at the full year. Current share price is bargain.

If if dips Monday I will buy a few more.

[10p here we come] 01/11/2020 15:46

How low can this thing go?

[officehead] 31/10/2020 12:25

I am pleased the results have come out, in terms of the first half results, ok but would have expected better headline numbers, but of course that is to be expected, due to the corrupt misreporting over the last few years....

However, its the ugly numbers for the 3rd quarter that should be of concern, production from the 3 mines down 24 percent compared the last year.

No wonder they issued a guidance warning earlier.

Lower grades at Albyn - well yes I can get that, but a 44 percent reduction in output for the 3rd quarter ... you have got to be kidding.

When the revised guidance was given earlier the reduced full year numbers were down to a lack of 3rd Party Concentrate.

Strange as the 3rd Quarter production results actually looked quite healthy. It was this that kept the total 3rd quarter figures looking respectable.

Form your own opinion, but the third quarter figures suggest that there are issues beyond low ore grades.. Thank goodness for the gold price.

[robertstronghand] 31/10/2020 10:05

The paltry growth in cash and where has it been going is why a majority of shareholders thought management needed changing and why a forensic investigation is proposed, and I am bemused why you think H1 is a basis with which to bash the new management. The FY figures, and really next year's, will be when we start to gain a clearer picture of where this company is. The new management has made clear that they have the funds to pay the convertible bond payments, thankfully much lower due to conversion, and access to further funds for the bond payments. The money being illegally held back will be recovered in due course. If further funds are required I doubt they will be on similar terms to the crippling debt the previous management was so fond of.

[robertstronghand] 31/10/2020 09:54

I don't see anything Strukov has done that deserves condemnation, if there was I would condemn him. Initially I thought the manner in which the management was booted was wrong, even if the intention was right, clearly though the shareholders who went with that method have been proven right. That illegal delay for a month has proven costly and I should hope there will be legal ramifications for those involved.

[undervaluedassets] 30/10/2020 16:19

Midas. The share price tells you everything you need to know.

[weemonkey] 30/10/2020 16:14

Hang on a minute before we all kill ourselves.

Operating profits went up by 52 times. (5740%!)

Cash generated from operations up 214%

It ain't that bad.

Few wrinkles to be sorted out on the ranch and a bit of disorder amongst the rank and file. But the fact remains that these are performing gold mining assets.

These results fall into weird times and a weird context and yes they are late. But 6 months ago these same results would have sent the share price up 20% .

It ain't that bad.

[midasx] 30/10/2020 16:03

You are a bit thick UVA!

But keep on de-ramping!

[undervaluedassets] 30/10/2020 15:34

been comparing the H1 2020 numbers with H1 2019 numbers from the RNS from on 10/09/19 and it is really hard because some of the numbers do not tally.

Some the 2019 number in todays report do not tally with those from the half year report on 10/09/19.

Really annoying

I am assuming some were unaudited. hence the changes.

It dont look good anyway..take a look



They do not match

[undervaluedassets] 30/10/2020 15:19

thank you wilmot i am just fine but bless you for your concern

[wilmot666] 30/10/2020 14:59

Undervaluedassets - I can't figure out if you are deliberately deramping or simply don't understand how to read an RNS. If the later are you confident that investing in shares is for you? Maybe a fund or cash ISA would be more appropriate?