Serabi Gold Share Discussion Threads

[tightfist] 04/8/2020 08:05

O/T: IMO ALTN has more ultimate potential than SRB, however management has been far from transparent over the years, and it is going to take time (if at all) for this perception to be finally overcome, now they have something's very positive to talk about..Reading through the ADVFN BB would be a good starter exercise - Wrighty, tim, ODR, Highly Geared and JC make a lot of sense over the months..Cheers, tightfist

[borisjohnsonshair] 04/8/2020 08:03

PPVN - did your sums try to tally with US$2M? I thought we thought US$1.5M. Does it make sense and tally now?

[borisjohnsonshair] 04/8/2020 07:54

Wow - it's up 500% in 15 months! Be nice if SRB can copy

[borisjohnsonshair] 04/8/2020 07:52

ALTN worth a punt? Is it producing?

[tightfist] 04/8/2020 07:50

tim000,.Welcome aboard! IMO SRB has great potential and has very committed, communicative and transparent management which unfortunately can not be proven (yet?) at our other mutual interest, ALTN..Good luck, tightfist

[tim000] 04/8/2020 07:46

I've decided to join you here tightfist, and have acquired 25k shares in the past week. Wanted to diversify into more gold holdings. SRB looks good value.

[tightfist] 04/8/2020 07:34

Hi Bomber,.Many thanks for your thorough analysis of prospective SRB cash flow potential. And only hours later the company confirm the direction you advocated - and I get my minimal dilution wishes, often expressed here!.A lot less cheap CLN's/shares in the short-term for Greenstone, but contingency provision extended to June 2021..Will today become Blue Touch Paper day with the 94p resistance level comprehensively broken over the next few days?.Cheers, tightfist

[borisjohnsonshair] 04/8/2020 07:27

Our 85% output Q2 generated US$4M FCF. Output also not max so no benefit in the or sorter. A normal Q would be US$6M. US$24M FCF annually and an MCAP of US$60M. This is daft based on Palito alone. Double for Coringa and then add whatever for the exploration potentiometer which is anyone's guess - US$100M-US$2B???? This is sale of the century bargain - what's wrong with the market???? Covid cases dropped very substantially over the past few days. Two milestones to pass - Coringa license and more confidence Covid clearing up.

[borisjohnsonshair] 04/8/2020 07:14

Very good news. The CLN extension lines up with the date Coringa will be fully paid off with free cash flow. US$9.5M to go. If the cash generation continues as is, we will also have adequate funds to pay for the mine development. What an awesome steady ship in rough seas. Fantastic. The future is great and not that far away. Stupid MCAP ....... under the radar and must rerate. 200p min, 500p in 24 months.

[ppvn] 04/8/2020 07:07

Ahem... slightly good news then!

[bomber13] 03/8/2020 22:15

We are due Q2 financial results from Serabi in the next 2 weeks following on from their Q2 production statistics that were released towards the end of July . These latter figures confirmed a relatively benign effect from COVID 19 with quarterly production of 8504oz being way better than management’s original expectations , and this was only a small amount down from the 9020oz produced in Q1 in spite of there being one-third fewer employees at mine site . But the real star of the show has been Serabi’s cash performance in Q2 . Despite paying off the final US$3.5m owed to Sprott over the 3 month period , cash balances rose from US$9.1m at the start of the quarter to US$9.6m at the end of the quarter , implying a free cash flow improvement of US$4m , a record result .

The cash flow improvement is largely down to the gold price and the exchange rate . Over Q2 the average gold price received by Serabi in Brazilian Reals per oz rose from R6908 in Q1 to R9700 , a 40% increase , which is made up of the rising US$ price of gold and the falling US$/Real exchange rate in almost equal proportions . We are promised much the same levels in Q3 with the July gold price averaging around R9800 , as against today’s level of R10200 , which is close to a record high , and with the exchange rate settling at around R5.3 to the US$ , its average rate in Q2 . Serabi’s CEO has told us that accommodation at the mining camp is currently being expanded by 50% in order to allow for social distancing , which will allow the workforce to return to its normal level of 370 people by the end of August . This will enable full resumption of the ore sorter’s operation in Q4 together with all exploration activities .

Taking a similar level of production , gold price , exchange rate and cost environment in Q3 to Q2 , one should reasonably expect another US$4m of free cash flow in the quarter . For Q4 , however , a more “ normal " quarter is anticipated , which implies production of at least 10000oz , but even this level is some 15% to 20% short of where Serabi expects production to be once the ore sorter is working at full tilt . Taking the same metrics as Q3 on 10000oz of production , but adding , say , US$1m to costs as a precaution , implies some US$6.5m of free cash flow in Q4 . On which basis , before any payments to Equinox for the balance owed on Coringa or any capital expenditure on commencing construction of Coringa , Serabi’s cash balance might very likely be a pro-forma US$20m at end 2020 .

At end June , Serabi had drawn down US$1.5m of Convertible Notes from Greenstone , and paid Equinox US$1m of the US$12m balance owing on Coringa . Under the terms of the revised agreement with Equinox , Serabi will also have paid US$500/- to Equinox on 1st July , and from August , repayments will have risen to US$1m per month , meaning that by end 2020, the outstanding debt to Equinox will be down to US$5.5m . So , should Serabi decide to stop taking Convertible debt from Greenstone as of now , and utilise its cash instead , the calendar year end cash position could still be a very respectable US$14.5m on the above assumptions .

Which , into 2021 , would leave cash of US$14.5m , US$5.5m of debt still owed to Equinox , and , at worst , a US$25m bill for fully constructing Coringa over 12 - 18 months . Were free cash flow to continue running into 2021 at a rate of at least US$6.5m a quarter , then there is the very real chance that Serabi could juggle all of its commitments from cash and cash flow without further recourse to dilutive Greenstone Convertible debt?

Either way , Serabi is now firmly on ramp up to being a 100/-oz plus gold producer , even before the exploration comes good .

[borisjohnsonshair] 03/8/2020 12:09

This is odd. Is it good odd or bad???

[tightfist] 03/8/2020 11:47

All my data is secured from Stockopedia, their broker Peel Hunt would not deal with me as a third party PI; maybe other BB'ers have a customer relationship? I assume the forecasts are from PH; SRB is covered by only one broker..The target price (for some time in the future) was revised up to $1.92 during w/e 4th April, at which time the forecast 2020 FY eps was 25c. From w/e 27th June the 2020 FY eps forecast was reduced to 18c and a forecast of 31c has been implemented for 2021 FY. NB: Since 27th June $PoG is up 12%......whilst the BRL/USD has strengthened by 5%..The overall aggregate Stockrank now stands at an impressive 99! tightfist

[borisjohnsonshair] 03/8/2020 09:43

Which forecast was this and when was it updated? Do you have a link pls?

[tightfist] 03/8/2020 09:24

On the former thread we touched on the broker's target, now set at 148p or $1.92..This was established w/e 4th April 2020. I don't know what prospective PoG was assumed, but it's worth remembering that spot Gold has risen 21% since that week! tightfist

[tightfist] 03/8/2020 09:12

Hi BJH, according to the 22nd Jan RNS Greenstone etc already hold 25.27%. Are there any rules that would prevent them potentially drawing-down on that existing shares holding and then potentially converting CLN's into shares later on? .We would only see a reduced holdings RNS statement after they had finished dealing - but maybe by then they will have completed the conversions...... Just a thought..Good volume again at this morning's kick-off, tightfist

[tiger60] 03/8/2020 09:02

'An 'off-book' trade refers to the process of trading shares away from an exchange or regulated body. They are usually executed via the over-the-counter (OTC) market. Off-book transactions are made directly between two parties, outside or 'off' of the order books.'

Completely legit and I don't think we have anything to worry about in terms of the share price

I would like to see the crux interviews be a bit tougher on MH. They have a symbiotic relationship so they don't want to push but would like more detail on the share options issued a month or two back - strike price, why not performance based etc also more about environmental impact (something that never gets a mention but should be ever present in their thinking)and justifying MH wage packet.

That said they need to get their story out to more potential investors. The company profile needs boosting, broker coverage is minimial.

[borisjohnsonshair] 03/8/2020 08:34

Ummmm. How could this be done. Seems underhand if true. CLN deal done with pre arranged sale to another party? Is that what you suggest or have I misunderstood? Something going on but unclear what!!!

[tightfist] 03/8/2020 07:29

Interesting thought, share price is holding pretty steady although volume is extremely high. If starting from zero, a new ii buyer would only currently need to be in for $3.3m before holding to be declared above 5%. Watch this space in late Autumn? tightfist

[tiger60] 02/8/2020 14:09

Don’t think it is relevant to the share price All the off book trades are going through at market price with a buyer already sourced. Yes the buyer would of had a harder time accumulating via the market but the opposite is equally true of the company selling.

[borisjohnsonshair] 31/7/2020 16:19

Very odd weeks trades in SRB. Don't get it but hope PPVNs on the right track. If so this is going to rocket, prob next week. If they are sure they'll get the full US$12M CLN, then this could go gone a lot longer - however the MCAP is not going to stay like this when Coringa license is in the bag. It's stupid. They'll also have nearly 50% of their MCAP in cash in a few quarters. It's all tooooo low. I'll buy more as it's not gunna stay in this range.

[kennyp52] 31/7/2020 16:09

Thanks Boris . Topped up a bit on dip

Just took a look at the Covid numbers .. still not great .. let’s hope the vaccine tests over there are saving lives and they can get control of this damn thing .

[borisjohnsonshair] 31/7/2020 16:03

Latest from MH was that one more meeting pending. Hoped they'd do by zoom with the next few weeks.

[cotton4] 31/7/2020 15:52

Wondered where everyone had gone