Serabi Gold Share Discussion Threads

[rajaster] 01/2/2016 14:49

sleveen, i hope so.. The gold monthly chart is still looking to be showing the bear trend however the weekly and daily have been more positive. we need gold to really head back to 1400+ for most gold stocks to rerate. i've held the likes of aaz and sgh also in the past along with like of cey. if the market recovers theres going to be fireworks.

[sleveen] 01/2/2016 13:24

raj

It will, I followed SHG for 18 mths and it is now recovering following operational improvements.

SRB is currently making operational improvements, which will improve the financials and hence earn SRB a rerate towards 5-6p in the short term. IMHO.

[rajaster] 01/2/2016 12:44

price is half what i paid for some of my shares.. i wish i had some money to buy now, need this to recover.

[sleveen] 01/2/2016 11:12

tighfist

all the trades were buys this morning.

Mine was the 50k @3p

[sleveen] 01/2/2016 11:11

Agreed.

Sprott look as though they think the POG is on the rise, which it has been recently.

With the gold call, they stand to make easy money assuming POG continues to rise.

[tightfist] 01/2/2016 10:51

As I understand it, through the Call Option, Sprott have the right, but not the obligation, to purchase up to 2,500 Oz of Gold from Serabi at $1,125 at any time up to June 2017. If exercised, they will be paid in cash by Serabi for the difference between the (higher) PoG spot price at the time and $1,125. For example, if Sprott choose to exercise if/when PoG is at $1,225, they would receive $250,000.

It looks like a sweetener to get Sprott to grant the loan extension, which costs Serabi nothing unless the PoG rises - and Serabi would still receive an elevated PoG on the remaining 92% of planned production. A sort of Win-Win outcome.

Extending the Sprott loan gives more funding flexibility for the remainder of 2016, AND avoids the significant shareholder dilution if the Fratelli loan is extensively drawn-down.

Biggest concern with me is that Hodgson possibly has his eyes on yet more local acquisitions - need to be watchful how that cash is deployed.


Cheers, tightfist

[cotton4] 01/2/2016 10:14

2500 ounces

[rajaster] 01/2/2016 10:12

I misunderstood what a call option is, its is sprott making an obligation but not a commitment to buy upt 25000 ounces of gold valued at $2,812,500, thats not hedging the price dropping but the opposite which is positive imho. I still think the $4 million should have been repaid as interest rate is still 10%.

[rajaster] 01/2/2016 09:48

i dont understand this:

"The Company has granted to Sprott a call option over 2,500 ounces of gold at a strike price of US$1,125 per ounce. Sprott has the right to exercise its call option, subject to a minimum of 500 ounces, at any time up to 30 June 2017. The call option if exercised will be settled in cash."

if sprott loan was renegotiated.. we should have just paid the loan of using the fratelli loan.. why give them a call option. is that collateral incase gold drops?

[tightfist] 01/2/2016 09:35

Hi Sleveen,

Yes, the market likes it albeit in small volume - however, trading maybe isn't quite the way it seems. I tried topping-up at 8:01 and around 8:25 and both time was quoted an Offer of 3.241p for 35k, which I didn't take. Meanwhile, two trades went through at 2.999p and 3.00p, so I guess there is a Buyer accumulating in the wings and that all the declared trades so far today are Sells.

Cheers, tightfist

[sleveen] 01/2/2016 08:55

Hi tightfist

Yes , the operational efficiency looks like the financial tightrope should be safely crossed.

The market seems to like the update...which is good.

[tightfist] 01/2/2016 08:22

Hi Sleveen,

Generating sufficient early-days cash from Pallito to fund Sao Chico start-up was always a big ask; we could see that in the numbers. They are now developing their approach with some agile moves along the way, particularly acquiring the two ball mills, presumably at distress prices. Eliminating the surface stockpiles through the 3rd mill should be self-financing in 2016, I guess.

The deferral of paying-down the Sprott loan doesn't concern me - the recent agreement with Fratelli gave Hodgson some extra negotiating leverage!


Cheers, tightfist

[sleveen] 01/2/2016 08:09

It's the financials that really matter with SRB.

Operations are going as expected more or less.


The extension of the Sprott loan combined with the recent convertible loan suggests to me some financial pressure.

[tightfist] 01/2/2016 07:58

A Q4 update this morning and a fresh brr media interview; all looks encouraging to me (especially that Sao Chico is becoming more manageable) but no financials yet; last year they were issued 31st March.

The renegotiated Sprott Terms dropped off the bottom of the ADVFN news; here thy are - interesting that Sprott have agreed (wanted?) a Call option on PoG! The times that are a-changing?:

Revised repayment terms with Sprott Resource Lending Partnership
The Company also announces that it has agreed an extended repayment period for the remainder of the loan with Sprott Resource Lending Partnership (“Sprott”;), the outstanding balance of which amounted to US$4 million as at 31 December 2015. The balance of the loan had been due to be repaid to Sprott by 31 March 2016. The Company has now agreed with Sprott that the balance of the loan shall be repaid in nine equal monthly instalments commencing 30 April 2016 and ending 31 December 2016. In the event that the Company elects to make any early repayment a penalty fee can be applied which depending on the time of repayment could be a maximum of 5% of the outstanding loan balance at that time. The interest rate applied to the loan remains at 10% per annum.

The Company has granted to Sprott a call option over 2,500 ounces of gold at a strike price of US$1,125 per ounce. Sprott has the right to exercise its call option, subject to a minimum of 500 ounces, at any time up to 30 June 2017. The call option if exercised will be settled in cash.

[sleveen] 21/1/2016 16:51

I like the way he mentioned that the mine was an operational success, meaning that it is not yet a financial success (read between the lines here).

[rame4] 21/1/2016 09:56

hxxp://brrmedia.co.uk/event/141174?popup=true.

[rame4] 20/1/2016 18:08

hxxp://news.goldseek.com/PeterSpina/1453323600.php

[loganair] 07/1/2016 11:28

06th Jan - Serabi (LON:SRB) up 9% to 3p. The Brazil-focused goldminer has made an initial US$2mln draw down of its short term loan facility of US$5mln that has been provided by Fratelli Investments.

[rajaster] 06/1/2016 19:46

Id be happier seeing this at 12p+.. But would need gold at 1400+ to get that rerating.

[rogen83] 06/1/2016 15:30

and another, next stop 5p

[abergele] 06/1/2016 15:22

another nice buy just come through...pos.delayed by it's size?


ooops a bigger sell,gone in,but the markets absorbed it well enough..

[rajaster] 06/1/2016 15:20

Gold ticks up 1095today

[rajaster] 06/1/2016 14:18

Is 3.6o thr ceiling now?.. All depends on thr market price of gold and how it all progresses..but chinese jitters are increasing.. So thats good for gold. The real has further weakened also.

[tightfist] 04/1/2016 20:44

Here is new brr Media interview with Clive Line, talking about the new Fratelli Loan facility, and the ongoing short-term Sprott facility too; overall, he does sound quite cautious about the SRB cash situation. The very brief foretaste of the Q4 figures at the end sounds reasonably encouraging for the latter part of the quarter..

hxxp://brrmedia.co.uk/event/141139

There have been no comments here about the conversion premium of 30% from the current 2.75p to 3.6p within the Fratelli loan arrangement.


Cheers, tightfist