Serabi Gold Share Discussion Threads

[golden prospect] 10/2/2021 22:38

Thanks PPVN for your link in post 1856.

Page 8 makes for a great summary of Coringa. The covid factor provided a 2020 payment holiday, and now SRB sit pretty. Look at that C$65m historic value spend acquired at US$22m, now looks a bargain especially given plant ready.

Page 19 is the most worthy slide, simply ignored by the market.

A rare opportunity awaits.

[tightfist] 10/2/2021 13:09

Hi PPVN,.Thanks. Always struck me as a little strange that Banadõs (when serving as an NED) gave an interview to CRUX? One wonders what was going on behind closed doors versus Mel Williams - were they (Fratelli) unhappy with funding through the prospect of dilutive CLN's??.Anyway - more than happy with the outcome! Cheers, tightfist

[ppvn] 10/2/2021 12:12

Hi Tighfist,

Thanks for that! I either missed your original post or forgot to watch the video - reminder appreciated!

To me it all seems v positive but suppose thats why I'm here. Nice of them to take the time to do an interview also!

[tightfist] 10/2/2021 08:31

Hi PPVN,.Seven months after that interview Nicholas Banadõs became Chairman of the SRB Board last June. As well as managing the Fratelli mandate at Megeve, he holds 1.8% of the SRB equity personally - almost £1m valuation (post #1736 has more details)..Cheers, tightfist

[francisthornhill] 09/2/2021 22:35

Good video. Great to see them positive.

[ppvn] 09/2/2021 13:30

Thanks for that link; its not a video I've previously seen. Nice to hear directly from Fratelli about thir plans with Serabi and they seem to be a great shareholder. I'm assuming they are expecting a decent return on their money also - and our share price here is probably around break even for them.

Either way; over the course of the next couple of years this company should really transform and my personal rationale here is to watch it happen.

[swanvesta] 09/2/2021 13:01

Fratelli seemed quite happy late 2019, before Covid struck:

[ironstorm] 09/2/2021 11:26

P.s. wondering what Fratelli make of this. They have been in throughout and stumped up but have not really seen a return.

[ironstorm] 09/2/2021 11:25

Tiger good post.

The production / AISC progress is quite damning. BUT . . . .

I believe SRB now in a good place - but pace needs to be accelerated.

I want to see more activity (though focused and not scattergun).

Lets see the tenements progress every month or two not every 6 -12 months.

Lets do something to bring Coringa forward. They have the cash now. Spend and speed up into the future.

My one nagging doubt is leadership. MH has been here throughout and done rather nicely out of it.

[cotton4] 09/2/2021 10:03

Hope your right. I'm modelling on 35,000 oz production @ $1,800.

[ppvn] 09/2/2021 09:59

Hi Cotton,

Tough to call what the 2021 numbers will be; it largely depends on the POG as well as the BRL fx rate which as we've seen can move an awful lot very quickly! I'm still v bullish on gold as I think everyone here is probably well aware by now.

Its very useful imv to have some more sanguine posters challenging my personal ideas about serabi; whilst I'm comfortable with my investment here I'd not really like it to go up in smoke and having a good discussion is a useful way of challenging investment rationales. I'd like to think the pre-tax for 2021 will be closer to $20mm than $15, but we'll see!

[cotton4] 09/2/2021 09:38

We have started this year with the pog higher than this time last year and I am looking for ~$15m pre tax profit for 2021 which would value the share price nearer 2 quid on a pe of 10 (bit optimistic?)

[cotton4] 09/2/2021 09:33

PPVN - I agree with your comments - As far as I see things,the grades need to improve and given the recent exploration results I think this is more than possible. Any additional production capacity will imo be nearer Sao Chico than Palito. Still lots to look forward to this year with exploration results, Corigha etc.
I take comfort in the ''stable 40k oz production '' from the January presentation. Why so bullish when they forecast 33-36k oz for this year unless they see their way to improving production.

[ppvn] 09/2/2021 09:20

Tiger,

Agree with everything in your post above however production doesn't necessarily include the things that have been going on "behind the scenes" or rather what isn't included in your post.

Serabi got the funding from Fratelli to develop the mine back in about 2013 from memory; its before my time here but think that was about it. They have a small 500tpd plant at palito and it hasn't been expanded since then - so realistically they can't get much more than 40k oz per annum. However in that time they've also brought a second mine, Sao Chico online, as well as buying Coringa for $22mm which will offer synergies (i.e. no additional management costs) that'll being their AISC down as well as making them a close-to-100k oz producer. They've also bought an x-ray sorter that really hasn't given any benefit so far, though this should change. So whilst I agree that the results don't show much progression, the development of two further mines beyond Palito, including the acquisition and payment for one is a fantastic result. True, not yet reflected in the aggregate numbers, but the foundations for a great little company have most definitely been laid.

Add to this all the exploration that is now continuing apace and I'm certainly still very excited. I try to analyse my investments and remain detached as you say - but I do still think this is an unbiased view and when all the progress they've made is laid out its a really decent strategy they've implemented imv. Not short-termist, but I think it'll pay off big time. Only imo.

[imastu pidgitaswell] 09/2/2021 09:18

I can't disagree with any of that or the previous posts on 'marketing' - it's the issue of accountability. Proper institutional investors would be holding the management to account - that hasn't happened, it's a question of whether it is happening now (finally) or will happen.

I'm happy (for now) to sit on it as a relatively small part of a portfolio - the upside is very large.

[tiger60] 09/2/2021 09:02

I think there is definitely a feeling of the words/rhetoric not matching the facts.

Production:
2016: 39.4 (AISC 965)
2017: 37 (AISC 1071)
2018: 37.1 (AISC 1093)
2019: 40.1 (AISC 1081)
2020: 32 (AISC 1298)

We are not really seeing year on year progression. Granted 2020 is an anomoly but headline costs increasing year on year whereas production not.

As I said they seem to be getting their act together and actually acknowledging the issues causing the share price disconnect to peers but I see a trust issue as the last ten years have proven this to be a place to avoid if you expect your money to grow.

But they need to use this unique moment in time with all the macro benefits to push forward. Unfortunately Coringa now begins H2 and we will see no uplift to production related to Coringa until mid 2023 (?).

The game changer for me will be the exploration. Identifying and firming up an open pit resource, along with collaboration with our bigger next door neighbours will release the value we all want to see.

The issue here is there is no physical evidence that the 'improving liquidity and visibility' mentioned in the presentation is being addressed (so far)

My dilemma is I love the tenements, the potential, the jurisdiction but the execution is lacking. I am willing them to succeed but I need to step back and take a detached view.

Another item to watch out for this year is will the production and associated high AISC costs , along with the gold price/FX rates still be enough to keep SRB with the great free cashflow they have utilised to pay off Equinox and boost their bank balance. Sept balance was 10.8m, Dec was 8.1m (i know it was a costly quarterly but they did sneak in a post 31 dec bullion sale into those figures)

I should also add I am a half glass full type of person (it helps me to temper my expectations) but I would not have my money here if I did not see the potential for big gains.

[backinblack80] 09/2/2021 00:49

tiger60, like I've been saying...we are not in the loop!! My analysis is that SRB are not attracting any new Investors because their PR is a major fail. Hence the share price This BOD need to start marketing the Company properly and soon! If SRB were more vocal and announced, properly, the recent stellar results I reckon the share price would have at least doubled!
tiger60, what do you think??

[sherry35] 09/2/2021 00:28

The most recent move north in POG started around the same time on FOMC raised rates. Approx 2.5 years ago.

Here is a "first-rate-hike-estimate" prediction from our good friend Goldman Sachs. Same institution that was in the article on POG forecasting for 2021 and 2022.



Enjoy ...

[tiger60] 08/2/2021 10:09

It is definitely a frustrating time. The 5000 sales keep coming....expect a holding RNS at some point. Realistically can only be 1 of 4 parties.

86 to buy so going further. Got the feeling that we are not in the loop.....

[imastu pidgitaswell] 08/2/2021 09:34

Added back the 5000 just now (and a few more) - headline spread is not the real price, only paid 86.2

[backinblack80] 07/2/2021 23:28

I'll repeat my view....very few know about SRB and the few that do, are perhaps, discouraged by the spread and illiquidity. If this was an AIM explorer and published the recent findings the share price would have gone ballistic....

[ppvn] 07/2/2021 21:21

Tiger, I think you've also noticed that the supply of shares doesn't seem particuarly tight when we approach 90p. My view is there is a seller at or around that level which is currently the source of the share price stagnation.

We saw it a couple of times before; then when the supply dries up the previous reratings have been swift as volume is relatively low here. But with a few days of 300k+ volume with a bit of luck hopefully it won't be too much longer. That's my best guess anyway.

[plat hunter] 07/2/2021 16:20

HUM now shifting 100k ounces with no debt from May this year on a mcap of 89 million..


All goldies, relative to the market and it's overall confidence and exuberance is somewhat lagging. CEY, 400k ounces no debt and profitable, yet you can still pick it up at less than book value.


DXY up from circa 89 only several weeks ago to 91.50. I think the sell off in gold and gold stocks lately has been the first phase of an all of market correction. time will tell but I reckon the wider equity markets are in for a bloody shock very soon.

[tiger60] 07/2/2021 14:28

The question here is what will be the catalyst for the re rate the management believe is due as illustrated in the presentation? We have seen peers double, treble and more over the last year but the year on year movement here is negligible.

Are we waiting for the gold price to perk up? Although this will benefit all producers so not company specific. Movement on Coringa and final license approval? Doubt it as pretty much a formality and timelines 2 years down the track for production have been published. Exploration success? Well the news just two weeks ago whilst very positive has done little. Increase liquidity? Well again this is a mgmt target and Mello etc helps along with other planned activities but still nothing has resulted in a rerate of 150p the last presentation calls out.

A farm in or buy out by a near placed major would of course do it but that is above and beyond SRB’s current situation. By that I mean that would be the investor dream but the rerate referenced in the presentation is deserved based on the current state of the business according to mgmt

Is it purely down to market awareness of SRB, a weariness of deep vein mining ventures with small confirmed resource and relatively high AISC, or simply due to a management that historically have failed to meet forward statements?

Looking at the good and the bad I tend to agree a rerate is warranted but any views on the trigger because it has been a hard watch when comparing to some other miners.

It is only when other investors agree, whether retail or institutional, above and beyond current investors that that process can begin. So what is the trigger?

As a small indicator the number of new contributors to this board over the last year is in single figures. New broker? More presentations? Or do we have to wait until the company consistently meet targets? Maintaining share price growth momentum is key

Just to add for the mgmt to call out a disconnect between current valuation and the markets failure to recognise a fair valuation to peers seems a bit ironic to me.. As the intangible that’s is mgmt experience is a significant consideration. Personally believe the latest presentation calling out stable 40,000 annual production (only achieved in one year 2019) and the estimated production for 2021 circa 36000 is maybe one factor holding this back. But overall happy to hold and expect the narrative to change.