Serabi Gold Share Discussion Threads

[gregpeck7] 28/2/2018 11:39

Just enquired for 300,000, this looks very interesting, but broker saying best price would be 5.44. Is stock really tight?

[gregpeck7] 28/2/2018 11:30

Online limits just plunged from around 3 or 400,000 to 100,000....

[ileeman] 28/2/2018 11:02

I am no expert but I think we are seeing the final small correction in gold between $1280-$1340ish then we will smash past $1400.

Not hard to see why gold will be an investor favourite soon, economy is not as strong as the the government etc makes out.

I have been loading gold stocks, SRB was standout.

[loganair] 28/2/2018 10:01

The chap who runs the Shanghai Metal Exchange says if Gold can make a bottom at $1,300, he predicts that the price will move up from there to $1,500 with in 2018.

[uen_investor2] 28/2/2018 08:59

1 mm selling at 4.7... Looks a very interesting play.

[kinloch] 27/2/2018 19:53

Good to see some action with the share price the last few days have seen some strange share numbers being reported in dealings could they have some meaning time will tell.

[ileeman] 27/2/2018 15:45

Cant buy any below 4p.

Looks like someone can see how cheap this is and is taking up the stock, market makers have nothing.

[ileeman] 26/2/2018 08:19

SRB is not the only one lagging gold price/increased cashflow, if you look across the sector many small cap gold producers are relatively flat.

Sometimes the wider market is slow to take notice, the herd will come after the event and I think the event will be once gold breaks into $1400 which we are not far from. Hopefully multibaggers across the board.

Also continued strong production will help.

[loganair] 23/2/2018 13:01

I know one of the biggest challenges for junior miners is the high cost of financing they often have to pay.

With the price of gold expected to continue to rise, all things being equal much of this rise in price should go straight down to the bottom line as profit.

[ppvn] 23/2/2018 12:01

Hi – I don’t think you are missing too much to be honest, but you only need to look to the trading volumes to see why this share isn’t doing much. The company itself is actually much more profitable than the p/e ratios would lead you to believe – for the first 9 months of 2017 they made sales of over $36mm with costs (excluding amortisation and depreciation) of around $24.5mm. The issue is that they are having to amortise their mine property (read: stockpile values) at the moment (9 months of 2017 @ -$5.5mm) as well as depreciation of mining plant & equipment of $2m in the first 9 months of 2017 – considering the small nature of the mine this is accountancy adjustments that’s really impacting on the profitability reported (basically FX moves have really had a negative impact on reported profitability). This should slow going forward. I find it somewhat frustrating that they continue to utilise Sprott finance; but I assume this option was really only tapped to ensure sufficient cash was on hand to ensure closure of the Coringa acquisition. Not only is the interest rate fairly punitive, an arrangement fee plus the granting of call options over 6,109 oz of gold @ $1,320 is, from the outside at least, an extremely high price to pay. That being said, if gold continues its upward path, the acquisition of Coringa should prove to be well worth it. I say this because obviously the derivative cost to us increases, but remaining profitability for the oz produced that are not subject to the calls will also increase. In any case, there is enough for me to think this co could and should change materially in value (and the share price to actually rise) once the accounting expenses and balance sheet revaluations slow (or indeed move in our favour). To have gone from $3mm cash to $10mm in a year speaks to the generation potential of this company (all that with a lower gold price) and at a £25m market cap (£22.7m at bid and £28mm at ask!? – go figure!) it looks, to me at least, a solid purchase at these levels.

[loganair] 23/2/2018 09:47

There is something I am not getting, I am not understanding when it comes to this company.

In the length of time I've been invested in Serabi, another gold mining company that produces approximately the same amount of gold, around 40,000oz, their share price has increased 4 times while Serabi's share price is down some 50%.

The price of gold is up around 30%, the company is profitable and the target price being over double what the share price is today....What am I missing?

[ppvn] 16/2/2018 20:30

Glad to see I'm not the only one seeing value here. A p/e of 14.8 here is way off what this company is actually capable of reflecting (i think they are presently way above that, p/e of nearer 3 or 4 is the cash generation they are currently giving) and soon I'd hope they will be throwing cash off rather than having to adjust stockpile values due to fx moves. Fortunately, due to the incredibly low float and close to zero trading it shouldn't take much to get the share price back up. I note management have not been shy of saying how strong, excellent, etc results have been recently. Let's hope the cash flows reflect soon. I'm of the view this share should be close to double figures currently and think If they achieve 80-100k that could be doubled. Happy to wait.

[ileeman] 16/2/2018 20:14

"Even more pleasing is the relative financial strength of the Company at the end of the quarter, with cash holdings increasing to over US$9.7 million. We have benefitted during the third quarter from a relatively weak Real and a good gold price and with so much of our costs being in Reais, it is the gold price in Reais that really dictates our margins and cash generation"

That was with gold at around $1200.

Cash growth at $1300 should be significant. Cash will be used on new drilling etc but that is creating value to get production towards 100k+.

I would say SRB are well placed.

We will see.

[rajaster] 16/2/2018 19:43

I think their banking on gold moving higher to 1500 which is possible this year..that would be a massive rerate.at the moment theres lots of problems as cash burns too high.

[ileeman] 16/2/2018 19:34

Put 2 and 2 together....

Clearly they do not want to dilute shareholders otherwise why not do the aquisition via a placing round, secondly cash generation at $1300+ gold is significant, they can pay back $12million (and the rest).

[ppvn] 16/2/2018 18:02

I'm not sure why a placing is required? For Coringa they have paid $10m out of FCF and the balance of $12m is not required until either first gold or 24 months after acquisition. Cash flow generation here is actually pretty decent which is why I'm keen to see this reflected in the accounts as opposed to disappearing into amortization or depreciation. Only my tuppence worth but this company looks very undervalued to me. I doubt they could get a placing away in any case, the volumes aren't there.

[sleveen] 16/2/2018 17:36

A bank loan at reasonable interest rate now that ongoing cash generation has been demonstrated, rather than a Wonga/Sprott loan, for most of the payment.

I still think a placing will be required for a proportion(20%)of the loan though.

[ppvn] 16/2/2018 13:41

I'm looking forward to the 2017 results here. Appreciate those won't be available for another month or so but with BRL remaining stable vs. USD this year the amortization and depreciation costs booked in q3 should be improved throughout q4 and there should hopefully be a significant uptick in profitability. Hopefully a rerate of p/e ratio will be forthcoming. Tiny freefloat and indeed market volume on this name so with any luck it won't take much to get this shareprice back up to the highs. Hope the coringa addition can begin adding too (in time); sprott finance didn't come cheap so one would hope there is something there...

[ileeman] 15/2/2018 09:16

If you take into account current gold price then cash will increase significantly.

[sleveen] 15/2/2018 09:11

Narrow vein mining is expenses, AISC is circa $950/oz, so not as much cash as say AAU which produces from open pits.

AAU has 2/3rds the MC of SRB.

My view is that there will be loan funding but a part fund via a placing will be one of the conditions of the loan.

[ileeman] 15/2/2018 09:09

I dont see a dilution coming, they just increased working captial with a loan.

At 1300+ gold the production will be pumping out a huge amount of cash.

So it seems to me people dont like the aquisition but it gives them scope to increase production from 40k to 100k and they done they aquisition without diluting. It should not be hard for them to pay back $12million in this gold market.

[ileeman] 14/2/2018 22:26

Why is this so cheap?

[rajaster] 26/1/2018 16:13

Yeh i still feel like the market makers are not moving this and keeping it low to possiblt pricr in some dilution.. It makes no sense why its still so cheap?

[fz13] 26/1/2018 15:26

Spread here is getting silly

[rajaster] 24/1/2018 20:35

More debt from sprott.. So long term means less dilution.