Serabi Gold Share Discussion Threads

[borisjohnsonshair] 05/10/2021 16:21

Come on Mike - give us a wave from Brazil!!! "Monthly" exploration update .... overdue but forgivable as they had no impact prior to 2020 audit. Should announce MASSIVE discovery at San Domingo.

[tightfist] 05/10/2021 11:33

Hi Kenny,.To add more flesh, according to the June 2021 presentation they have, at current production levels, about 13 years in LoM in M&I and Inf. Reserves and Resources at Palito. Maintaining that position/cost fits with my expectations of Sustaining at a narrow-vein mine - however, some investors may be looking for more years. (Incidentally SRB $AISC has risen remorselessly (+45%) in the last six years whilst the Real/$ has weakened 51%.....)..However, they are now pursuing >3MOz and "immediate focus on increasing production". That looks to be playing a transformational ball-game and outside the scope of realistic AISC, in my opinion..We just need a few HNW folk to take notice of SRB!. Cheers, tightfist

[kennyp52] 05/10/2021 09:40

AISC is important from the point of long term sustainability ; i.e. what will the project actually cost over time as you cannot pretend the initial exploration costs and capex will not have to be repeated .. or the mine dies . Who wants to invest in a mine with a life of 5 years with no exploration ? Short term I prefer to see FCF but to ignore AISC completely is dangerous .

[tightfist] 04/10/2021 10:38

IMP; Totally agree, AISC is a very blunt weapon; cash flow and disposition wins hands-down.However, in this Sound-Bite era headline numbers (such as AISC) seem to have become more important when quickly skimming prospective goldies..Meanwhile we'll see how SRB/CL handle the situation next Spring; I am confident Posters on on here won't get sidetracked. And I trust that SRB production doesn't become lumpy - just a progressive quarterly rise will do nicely!.Cheers, tightfist

[imastu pidgitaswell] 04/10/2021 08:57

Good summary - it's a relatively recent 'innovation' by the industry, and inevitably involves an element of subjectivity, particularly as you say around the word 'sustaining'.

I personally think too much attention is paid to it - it is a residual measurement and not a driver of performance, the result being impacted by what costs are included (note that it does include sustaining capital costs), but more importantly be the denominator, i.e. production. Production within consecutive fixed 12 month periods can be 'lumpy', especially in smaller providers, but also in large ones as mines start up and decline. AISC in a start-up phase is stratospheric, much lower in 'steady-state' and rises again during mine decline.

I just find it too blunt an instrument and would much rather focus on cash generation.

[cotton4] 04/10/2021 08:55

Tightfist

That's clear and I agree that P/SC should be included but not the cost of Coringa development. IMO that should be capitalised.

[tightfist] 04/10/2021 08:48

Hi Cotton,.Thanks - I'll try to explain - I had an interesting experience elsewhere recently regarding elevated AISC reporting..Consistency within a company initially seems reasonably straightforward, but the nature (hence cost) of the company's activities can change and the AISC trend becomes clouded. [This precise issue arose at MML.AX when expansion activities commenced and AISC understandably escalated - the MD there is a ultra-prudent and market-insensitive accountantant!.After declaring an escalating AISC figure they came under market pressure and later decided for the future to exclude expansion costs and quote AISC on a historically comparable basis].The key seems to be interpretation of the word S=Sustaining....... To my mind SRB drilling immediately around P/SC is Sustaining, but costs of Coringa development and exploration drilling around SD, Cinderella, (and possibly LoM extension?) etc isn't simple Sustaining - it's expansion potential and should be excluded from AISC IMHO..If costs of future SRB expansion were to be assigned to current production (as in "All-In") it could be at least +$400/Oz for the next two years and the HEADLINE AISC figure could become misleading in my mind. .Is that clearer? - A bit of a dilemma? Cheers, tightfist

[bad gateway] 03/10/2021 20:08

Isn't exploration drilling already in aisc?
From seeking alpha..
"Formula of the All-in sustaining costs or AISC:
All-In Sustaining Costs = Cash Costs (including by-product credits) + Sustaining Capital + Exploration expenses + G & A expenses."

Noted in their interims exploration drilling had jumped from $1m to $1.8m and took it that was a fair part of last half's aisc?

hTps://seekingalpha.com/article/2799985-the-concept-of-aisc-in-the-gold-mining-industry-strength-and-weakness

[cotton4] 03/10/2021 19:42

Tighfist

Consistency is required for accounting purposes. So if SRB change their reporting of AISC, then it will be made known to investors and prior years figures adjusted for comparison purposes. I'm not sure what you are referring to in you're last post.

[tightfist] 03/10/2021 18:02

Not quite so fast....... Beware of what is/is not included in AISC. Another goldie I hold (MML.AX) has just adjusted its AISC metric exclusions to deduct expansion Capex. So what will SRB include?..... Coringa development, drilling around P/SC to increase (not sustain) LoM, exploring around Sao Domingos, Cinderella......There's at least $400/oz/pa at their discretion with which to bewilder investors! Cheers, tightfist

[borisjohnsonshair] 03/10/2021 08:59

Yes the "start of August", so two months. So, no Covid shut downs, no audit suspension and our CEO has been on site for 2 months. Key time for the initial development of Coringa.

[cotton4] 02/10/2021 09:20

They will also have to set a date for the AGM.

[borisjohnsonshair] 02/10/2021 08:22

If they can get 10k plus the ore sorter can kick in, which provides an extra 2k cheaply, hence the AISC cost will plummet. If they can grow production to 10k / Q, the price will rise significantly in the build up to Coringa production. Any good exploration updates will also put a rocket under it.

[ironstorm] 02/10/2021 08:09

For Serabi that would be a breakthrough

[cotton4] 02/10/2021 05:55

Eventually got round to listening to the BRR interview with Clive Line.
So Mike has been out in Brazil since August which is positive. But more importantly
grades are still improving so I would expect a 10,000oz qtr and possibly 12k for qtr4.
If these are achieved, we are looking at a profit before tax close to $20m for the year, which would be a substantial improvement on 2020. We should get qtr3 figures in the middle of the month so fingers crossed.

[cotton4] 01/10/2021 17:38

Must be due an exploration update soon. Didn't get one last month.

[borisjohnsonshair] 01/10/2021 15:41

Hows that gunna happen!! It's the same as palito.

[ppvn] 01/10/2021 14:47

Could do. Equally they could find a massive deposit and pit resource in the next 18 months and get the mine built on time...

[glasswala] 01/10/2021 13:35

18 month could turn to 6 years

[glasswala] 01/10/2021 13:34

The BODs are totally clueless as is evident from the 2m US Dollar fraud perpetrated by the senior managers for 6 years in Brazil

[loganair] 01/10/2021 12:05

Serabi seem to be saying 18 months until first gold from Coringa which put its first or second quarter 2023.

[ppvn] 01/10/2021 10:49

A very good post tightfist, thanks for putting that meat on the bone as it were.

I personally am of the view here that serabi should just be getting started. As soon as they announced the purchase of Coringa this share moved to a more long term hold for me and my position has been adjusted accordingly. Despite all the setbacks I personally think this share has really excellent prospects, and with the co now debt free (they were paying a lot of high cost sprott loans when I first invested) we should start to see increasingly good numbers. Only my opinion.

[tightfist] 01/10/2021 10:25

Hi PPVN and kp52,The facts (deduced from Stockopedia data) are that at the end of 2015 SRB had an Enterprise Value of £24m. Over the next 5 years to end 2020 they generated cumulative Operating Cash Flow of £63m, of which 63% was spent on CAPEX. At the end of last year the market awarded an Enterprise Value of £49m, (in the those five years they cumulatively issued ~91% more shares)..Yes, for sure, we now known that Op. Cash could have been significantly better (by £1.3m or ~2%) and the company left untainted by fraud. However, taking a helicopter view that IMHO is a pretty respectable operational outcome..If they can lift their ROCE (witness the Coringa PEA IRR forecasts) above the current 22% than we should IHO have EV/sp lift-off..Stick-or-Split time: Do we believe in the robustness of the latest countermeasures, the BoD and their ability to deliver the plans for the future - or is it time to sell-up and move on? E&OE. GLA tightfist

[ppvn] 30/9/2021 23:20

To be fair to the BOD whilst they have done a couple of placements in my time here they have acquired Coringa for just over $20mm, will be spending a similar amount getting it up and running, and are in the process of a rather large drill campaign ($5mm from memory?) - so yes there has been some dilution but a lot has indeed come from cashflow.

I'd like to hear their goals for when Coringa is up and running. I'd dearly like to think they'll start paying dividends when they are chucking off cash as its been a bit of a torrid time to now holding this share. It is to be fair difficult to make a huge mark with a mine that processes 500tpd and is basically limited to 40k oz pa.

[kennyp52] 30/9/2021 20:18

This “debt free” claim .. how was this achieved .. cashflow ? No .. placement and dilution . They can claim no great success .. yet .. but the potential is there . CFO should fall on his plastic sword