Serabi Gold Share Discussion Threads

[borisjohnsonshair] 29/12/2020 12:05

Hi Tightfist - happy days for you at HUM!! Well done and all the best in 21.

[borisjohnsonshair] 29/12/2020 11:22

Also the valuation of Coringa is higher than the MCAP!!! That's with a gold price of US$1,750!!!

[tightfist] 29/12/2020 11:20

Hi MTM, welcome back aboard!.IMO the short-term rot set in after they missed Q3 production guidance in the RNS of 19 Oct. All the good news since of organic cash generation, final funding of Coringa purchase, bottoming of PoG?, new tenements, exploration expanded to Toucano, new presentation at Mello and corporate on www, etc have largely passed by - apart from close SRB followers. .IMO the prospective EV on Slide 7 of the new presentation summarises the opportunity! And that takes no account of the exploration upside......Cheers, tightfist

[borisjohnsonshair] 29/12/2020 11:07

Welcome. These are £5 tokens for £1, exchangeable in 2022.

[morethanme] 29/12/2020 10:53

Brought back in here today after a little time away. Really was not expecting to get back in under £1, definitely under the radar of many here.

[borisjohnsonshair] 29/12/2020 08:44

Correct, sorry

[kennyp52] 29/12/2020 08:41

Who said 60p at Xmas Boris ? They must be demented ?

[tightfist] 29/12/2020 08:35

Wrong thread...

[borisjohnsonshair] 28/12/2020 11:01

Agreed. Gap up tomorrow to 110-120p I suspect.

[bomber13] 27/12/2020 19:43

Punchier than normal in both tone and content , the presentation is a step change from previous efforts , and includes many more interesting maps and diagrams to support its organic growth ambitions .

Serabi has declared itself a target of over 3m oz of gold resources ( first time mentioned I think , and no time frame given ) , which in the context of normal mine production of around 40/- oz pa is a fairly ambitious aspiration . I can't find a more recent resource update for Palito and Sao Chico than end 2017 when total resource was a little over 500/- oz , so adding in Coringa's 541/- oz gives an assumed total of a little over 1m oz as we stand today ? More than trebling that with the drill-bit would be eye-catching indeed , or will there also be M&A , which they do seem to hint at ?

In 2021 the Coringa project should finally begin construction with initial gold production planned for early 2023 , and , according to the table on page 10 of the presentation , assuming current gold prices , AISC of $852 , capital spend of $25m , and production of 38/- oz pa , the mine would have an amazing IRR of 100% . Moreover , given that Coringa's 750 tpd plant will have ample spare capacity , and that the area around the mine is highly prospective for new resource , there is obvious scope for a meaningful uplift to Coringa's production in the medium term , possibly helped by an ore sorter to boot .

It is also stated that Coringa will lower the group's overall AISC to a range of $950 to $975 , targets not mentioned previously . As Serabi states on page 8 of the presentation , the group is confident that the ore sorter will increase Palito's steady state production to around 50/- oz pa , therefore giving a targeted total group production of at least 88/- oz pa from 2023 onwards . At current gold prices this would mean annual profits of slightly more than the current market capitalisation of Serabi .

Obviously , not everything is paid for yet . The initial purchase price for Coringa in late 2017 ( when gold prices were $1250 ) was $22m , and , as of December , 2020 , $5.5m is still due to Equinox . Serabi is paying this back at $1m per month from cash flow , so by June , 2021 , Serabi should be debt free . The $25m required for final construction , which from memory includes at least 10% contingency , should be funded by project finance and/or cash flow , but , given the very high potential IRR , this should be of no burden at all . Moreover , cash was $11m at end September , 2020 .

Finally , the chart on page 7 is compelling , because , with peer group comparisons , Serabi's shares should already be valued at more than twice their current Enterprise Value , and more than three times that level post Coringa's first production .

And what if they make a large bulk tonnage open-pittable discovery ?

[borisjohnsonshair] 27/12/2020 19:31

Oi Sherry - see the Plan???

[borisjohnsonshair] 27/12/2020 10:28

Hi Tightfist - not sure the market is unwilling as everyone's out for a bargain if they know about it. Unaware maybe. This report makes the potential crystal clear, but only if read and analyzed. MCAP now represents production only. The scale of SRBs area is bewildering and exploration potential could increase existing proven resource 20-50 fold. They seem to be flying the flag more now but the presentation isn't announced, nor the DISCOVERY it appears to contain. I believe they can issue it formally and give a headline about the new discovery. Good movement on Xmas Eve. Movement alone gets people's attention. This should pop to over 150-200p immediately, but let's see. Hopefully 125p by end of the year.

[tightfist] 26/12/2020 13:08

I anticipate we will see an RNS reporting on core analysis from those first three SD drill holes during the next couple of weeks - how shallow will be any strikes? Agreed, the scale of open-pit mining seems to be far more up the street of a major (one wonders how the garimpos focus on their targets using more rudimentary methods?)..I have formed the perspective that narrow-vein mining is not suited to a major (info on contrary precedents welcome!) but can ore-sorting change that viewpoint? That more mechanisation can now be OK and dilution need no longer be a terminal curse?.The market seems unwilling to appreciate/value the breadth of Serabi's operations? The same syndrome IMHO appears to afflict Humingbird (HUM) which is some months behind SRB in its various expansion endeavours which now span three jurisdictions. However, both have seen a useful tick-up in the last few days..Happy New Year! tightfist

[borisjohnsonshair] 26/12/2020 09:43

Anglo America more likely to farm in for open pit mining. That's up their street.

[borisjohnsonshair] 26/12/2020 09:38

The MCAP of US$70m (page 7) includes zero for Coringa, which conservatively has an NPV of US$146.9M (page 10). Also with zero value is the exploration potential value. It's odd that the MCAP ignores the other asset value and exploration simply because it is a producing mine. Sao Domingos (page 16) is essentially a gold discovery and should have an official RNS. I'd imagine this is imminent, perhaps on Monday. Palito & Coringa justify a 270p share price. The almost inevitable finds will add 100p a pop each. It's hard to avoid that this is ridiculously cheap. It should double immediately and then rise continuously with exploration news and as we get closer to output from Coringa. It's a sitting duck at this price. I'd not be surprised to see Anglo America offer the two major holders 300p.

[tightfist] 24/12/2020 12:56

Thanks for the great spot of the new SRB/SBI presentation PPVN! There is a lot of fresh info hidden in there - and I mean lots. The enhanced ESG perspective is good, complements a more promotional stance. The outlook for substantial production increase over the next three years with well-understood technology is firmed-up..The aerial view of São Domingos is especially good, and particularly the news they have already drilled 3 holes and intersected 4 veins - and adjacently traverse-channelled with 18m at 12.8g/t..Looks like potential early New Year news flow...... So (like Cotton) a Happy New Year to all Serabites and let's look forward to a truly good one, in all senses..Raise a glass and cheers! tightfist

[borisjohnsonshair] 24/12/2020 12:52

Thanks Kenny. Merry Xmas all.

[kennyp52] 24/12/2020 12:44

Feels like it’s starting to re-rate ... good luck all . Hope you get your target in the New Year Boris 👍

[rachael777] 24/12/2020 11:52

moving up on low volume - augurs well for the crazy days between xmas and new year - suppose theres no chance of any early exploration news ?

[cotton4] 24/12/2020 10:09

Merry Christmas to one and all and a prosperous new year.

[borisjohnsonshair] 24/12/2020 08:50

Re-rate to 150p then to 350p as Coringa gets closer to production. Plus plus on good exploration news which is EXTREMELY likely.

[tiger60] 23/12/2020 17:42

Good spot.

I see they are showing production for 2020 at 33,000. So assuming qtr 4 to be a touch over 8,000. AISC 1298 for 2020, but will reduce with a restoration of production levels.

Good to see talk on M&A but mainly in terms of accretive acquisitions but there is a mention of major interest in our new tenements

Coringa producing mid 2023? Not sure I will be there for that but hopefully over 2021it will get priced in.

Nice to see

[ppvn] 23/12/2020 17:08

New corporate presentation out today - I note this one includes talk of potential majors interest, as well as a lot more flesh on the expansion of resource base etc. Particuarly interesting slide on Serabis relative undervaluation when compared to its peers.